“A society that puts equality—in the sense of equality of outcome—ahead of freedom will end up with neither equality nor freedom. The use of force to achieve equality will destroy freedom, and the force, introduced for good purposes, will end up in the hands of people who use it to promote their own interests.”
—Milton and Rose Friedman, Free to Choose, p. 148.
“I think that the most effective way one could possibly move toward greater freedom in the United States, toward a smaller role of government, would be if we could only have a more democratic society.”
Who said that? A Democrat?
No.
The speaker quickly added, “I don’t mean a capital-D, I mean a small-d.”
“That is, I mean if we could have referenda,” the late Milton Friedman explained back in 1987.
The Nobel Prize winning economist — and co-author with wife Rose of the bestselling Free to Choose* — was referring to the initiative and referendum process, whereby citizens vote on laws, and in the case of initiatives directly place measures onto the ballot.
Citizens enjoy initiative and referendum rights in twenty-four states and roughly 60 percent of cities throughout the country.
“The public at large has always shown itself,” Dr. Friedman observed, correcting himself, “has almost always shown itself to be more libertarian in its views than have their elected representatives.”**
Friedman was not suggesting that a bad law becomes good because it was passed at the ballot box. He simply weighed the odds between two distinct sets of voters. Legislators are a small group, the personal power of each one so closely tied to government that politicians’ personal interests often compete against the public’s. Conversely, the much larger group of voting citizens almost defines the public interest.
Perhaps I was channeling the great doctor of economics when I was once asked, “Do you trust the people?”
My reply?
“No. But I trust the people a whole lot more than I trust the politicians.”
This is Common Sense. I’m Paul of Jacob.
* The book was first published in January 1980, in tandem with PBS’s airing of the popular “Free to Choose” series.
** He spoke this at a California Libertarian Party conference. Tough crowd.
Kim Kataguiri — a founder and the most prominent public face of the Free Brazil Movement, which recently led millions in protest against high inflation, high taxes, and economy-crippling cronyism — is an unusual man.
First, there’s his age: 19.
Second, there’s his background — atypical but hardly unique, given the country’s substantial Japanese-Brazilian minority.
Third and most important, there’s the fact that he’s influenced by the ideas of free-market thinkers like Ludwig von Mises and Milton Friedman, ideas communicated online by Brazilian and American think tanks. In consequence, Kataguiri’s popular, social-media-conveyed critique of Dilma Rousseff’s tax-happy socialist government is openly liberal in perspective.
“Liberal,” of course, as in “having something to do with freedom and responsibility.” Classical liberal. Libertarian. Not warmed-over socialist-leaning liberal, as in America’s Elizabeth Warren and Bernie Sanders.
Do his free-market ideas and those of other young Free Brazil leaders mean that most Brazilians inspired by the Free Brazil Movement are just as principled? No; they may just be angry at the destruction wrought by an openly socialist government. Consistency may be the furthest thing from their minds.
But they do seem open to a new, positive alternative.
Kataguiri is perhaps overly optimistic, predicting that “in the next decade or two, most of our society will not only understand classical liberalism, but defend it too.”
But I like optimism. Especially since, whether you call it “classical liberalism,” libertarianism, or “small-government conservatism,” freedom isn’t exactly winning here on our fertile soil.
Still, I invite Kataguiri to drop by the United States when he has a chance . . . and do what he can to convert us to classical liberalism as well.
This is Common Sense. I’m Paul Jacob.
How do you get a body of professionals to go along with your program?
Pay them.
It’s an old idea: He who pays the piper calls the tune.
The pipers are economists. The paymaster is not you, but the Federal Reserve. There’s a suprising amount of agreement amongst even disagreeing economists that the Federal Reserve is, on the whole, “a good thing,” a necessary thing, even an institution whose existence and rationale must not be questioned.
Shocking, but less so when you apply what is called “Public Choice” analysis to economists themselves. Assume that economists are self-interested. Assume that they like to get paid. Opinions turn out to be somewhat elastic, even given some very hard facts. The results?
Don’t bite the hand that feeds you.
Nicely, a few economists bring this up, every now and then. Garett Jones on EconTalk did, reviving a letter monetary economist Milton Friedman wrote to researcher David M. Levy in the early 1990s. Friedman summarized the situation concisely, saying that the Fed
hires directly roughly half of all economists specializing in the field of money, and indirectly provides funds for a large fraction of the remainder. I have no doubt that is a major reason why the Federal Reserve, despite such a poor record of performance, has such a high public standing.
This also helps explain why there was a major shift away from laissez faire amongst economists. In the 20th century, the “worldly philosophers” developed a new labor market; they found that they could make a great deal of money working for government. And they don’t get paid for telling the government not to do what it wants to do, or to fire most economists.
This is Common Sense. I’m Paul Jacob.
Nobel Laureate economist explaining why drug prohibition makes no sense:
If you are like me, you are not a monetary economist. I’m familiar with the main positions, I guess, and — if I dug information buried deep in memory — might be able to sound coherent on monetary policy when asked. And if given enough time to collect my thoughts. But you wouldn’t come to me to gain specific advice on specific issues relating to the Federal Reserve and money management at the rarefied level of the central bank.
Perhaps, like me, you’ve accepted or rejected positions based on analogous realms where you know much more.
And sometimes it all depends on The CreepOut-o-Meter.
My CreepOut-o-Meter just hit red.
Britain’s Business Secretary Vince Cable was recently quoted as saying, “If a monetary deal’s going to work, the central bank has to have unlimited powers to intervene to support economies, and indeed banks, to prevent collapse.”
Did he really say, “unlimited powers”?
That’s a long way from Milton Friedman’s reserved talk about a “monetary rule.” One of the biggest of Britain’s bigwigs isn’t talking about tinkering or refining. He’s pushing for an unlimited bailiwick to bail out Europe’s banks, credit, and the euro itself.
So you can see why I tend to promote old-fashioned money, money that wasn’t intimately controlled and bolstered-by-bailouts. Money like gold. Or silver. Or a set of commodities.
With that kind of money, it’s governments that are bound, limited.
It fits better with my idea of a free society.
This is Common Sense. I’m Paul Jacob.