Free-Market Testimony


Free to Choose: A Personal Statement, by Milton and Rose Friedman, New York: Harcourt Brace Jovanovich, 1980, 338 pp., $9.95.

It is doubtful that many readers will be unaware of the gist of the message contained in this "Personal Statement" by the Friedmans. The book accompanies the current PBS series "Free to Choose" (which itself is something of an irony, inasmuch as the authors' political position hardly sanctions the maintenance of a largely taxpayer-financed broadcasting network, even if in this particular case the financing of the production was almost entirely accomplished via corporate contributions).

Essentially the book advocates a free-market economy, with the familiar night-watchman state to take but the most limited role in economic affairs. The Friedmans do not, however, advocate complete laissez-faire: "Freedom cannot be absolute. We do live in an interdependent society. Some restrictions on our freedom are necessary to avoid other, still worse, restrictions. However, we have gone far beyond that point. The urgent need today is to eliminate restrictions, not to add to them." (This talk of restrictions on our freedom is, I submit, a misunderstanding.)

The Friedmans apply this basic viewpoint to several topical spheres of concern. We are shown the power of the market, as on the television program, through several examples, in particular by a description of Hong Kong's bustling and largely free commercial atmosphere. The authors then go on to demonstrate the deleterious economic consequences of government controls, especially in the area of international trade, protectionism, and special legal privileges granted by government to various industries or firms. Lamentable as these consequences are—and it is made clear that they are—the Friedmans attack even more vigorously the loss of human liberty they involve, their limitations on our freedom to choose: "Restrictions on economic freedom inevitably affect freedom in general, even such areas as freedom of speech and press."

We are also treated to a summary of the well-known explanation for the Great Depression advanced by Milton Friedman and Anna J. Schwartz in their monumental Monetary History of the United States. 1867–1960 (Princeton, 1963), in which that economic crisis is attributed primarily to governmental monetary policy. The welfare state comes under harsh criticism in "Cradle to Grave," followed by a discussion of the problems of our educational system and of what, in the authors' view, could be done about this—for example, institute the voucher system Milton Friedman has advocated for some time.

This is followed up with a somewhat weak discussion of efforts to establish equality by governmental edict, and thus coercion. Its weakness stems in large part from the authors' unwillingness to squarely reject that unfairness even applies to an evaluation of the different economic, social, and related circumstances of human beings in their various communities: "Much of the moral fervor behind the drive for equality of outcome comes from the widespread belief that it is not fair that some children should have a great advantage over others simply because they happen to have wealthy parents. Of course it is not fair. However, unfairness can take many forms." The whole idea of unfairness is inappropriate here because it presupposes that some kind of condition or procedure is owed to someone but is not being provided.

(It is, in general, a weakness of the Friedmans' book that their social and political philosophy lacks anything like a clearly conceived and articulated moral frame of reference. One just cannot adequately defend the supremacy of the free market without a theory of individual rights, which itself must rest on an ethical base of individualism or the morality of rational self-interest. The authors, instead, subscribe to the muddled view that everyone does "seek his own interest," an easily refutable assertion.)

Consumer protection the governmental way is scrutinized next, followed by a clear-headed examination of governmental protection of workers. As one might expect, the authors do not approve of either of these efforts, finding that on the whole they lead to enormous distortions and outright harm, even for those whose interests are used as the excuse for the policies involved. Then we are provided with another look at Milton Friedman's analysis of and cure for the problem of inflation. The book ends with what I would have to say is a somewhat unrealistic assessment of the current intellectual and political scene as promising developments leading toward a freer society.

This is an exceptionally clear statement of the authors' position, filled with much that is welcome to those who prize human liberty. Yet the Friedmans cannot escape the charge that they are largely addressing the already converted or, at best, those who are without opinions on the various topics they discuss. What is missing is a careful consideration of the challenges incessantly offered to this position, epitomized in the discussions presented in the second half of each of the televised segments on which the book is based.

One of the most pervasive and appealing claims leveled against the free-market economic system is that its days are gone because—as the Marxist Michael Harrington kept stressing on the first program of the show—each historical epoch has its different economic principles. On this view, we have rightly "progressed" beyond the "19th-century" system that the Friedmans advocate. This historical relativist viewpoint is rampant on university campuses—professors of all stripes repeat it, even when they are not explicit advocates of Marxism. But the Friedmans do not take up this challenge. Nor do they adequately answer the charge—made on the TV show by one union chief—that protectionist tariffs and quotas are justified because foreign governments subsidize certain industries. Protectionist measures, then, are merely a response analogous to forbidding a thief to sell his stolen wares, even though the buyers might thus be able to purchase goods at a lower price.

Both these charges, and many more offered to free-market supporters, can be and should be answered. Generally, the authors of Free to Choose fail to perform a service I am sure they could have performed with but a bit more effort, namely, to put to themselves some of the more clever, even formidable objections to their social and political position.

For example, Michael Harrington's apparently persuasive point is entirely self-defeating—if all systems of thought are historically relative, surely so are those of Mr. Harrington and his mentor, Karl Marx. More constructively, one must counter that the value of liberty is not relative to some stage of history but to human life itself, which is what all of history is about, however little the value has been or is being appreciated and implemented.

As to the claim that governmental protection of domestic producers is just like laws against the sale of stolen goods, this is plainly false. With stolen goods, there is ground to believe that the thief's loot can be returned to the victim; but there is nothing like this prospect when people are stopped from buying foreign goods kept at an artificially low price by their government's policies. If the domestic buyers will not gain the benefit, it isn't as if some rightful beneficiary will be sought out and reparations made. Instead, protective tariffs effectively multiply the crime—a rather perverse application of the alleged principle of fairness, if you get my drift.

Given the relatively few works in print defending human liberty, Free to Choose is not unwelcome. But given the plain fact that most attacks on capitalism are issued from a hopelessly irrational but pervasive ethical point of view, it would have been even more welcome to see the Friedmans advance something closer to a defense of the moral appropriateness of the kind of life only a free society can make possible—namely, a life led in pursuit of one's own happiness and prosperity; a life in which self-development and individual success, something now apparently in need of apology, are prized, a rare turn of events in the history of mankind.

Unfortunately, the Friedmans appear to suffer from the misunderstanding that moral ideals are in some sense inherently authoritarian and coercive. So they have largely eschewed the province of values, leaving the impression as have so many economic defenders of freedom, that morality and virtue are on the side of the enemies of human liberty. Yet there is nothing further from the truth.

Tibor R. Machan is on leave from the Department of Philosophy at SUNY Fredonia and is currently teaching courses in the Economics Department at the University of California, Santa Barbara.