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Remembering Milton Friedman

by Elaine Schwartz    •    Jul 31, 2012    •    322 Views

Split down the middle, opinion about the US economy puts private initiative or government first. Those who place individual enterprise first believe most private income belongs to those who generate it. By contrast, government’s advocates see a growing share of private income as tax revenue that is fairly collected and redistributed.

Nobel laureate Milton Friedman, who would have been 100 years old today, had an opinion about “fair” government.  According to Dr. Friedman, being “fair” to one group meant less fairness to others. If government is more equitable to consumers, then it is less fair to businesses. As he said in a 1977 Newsweek column, “To a producer or seller, a ‘fair’ price is a high price. To the buyer or consumer, a ‘fair’ price is a low price. How is the conflict to be adjudicated? By competition in a free market? Or by government bureaucrats in a ‘fair’ market?”

Dr. Friedman reminds us that neither the Declaration of Independence, the Constitution nor the Bill of Rights contains the word “fair.” He says that instead, government should be “policeman and umpire.” It should provide “a framework within which individuals could pursue their own objectives in their own way.”

So yes, we have always had a mixed economy with some government limiting freedom. The question for each of us is how much of each. The coming election will probably provide an opportunity to select a tradeoff.

You can read the entire Milton Friedman (1912-2006) column, “Free Versus Fair,” here. And, for further discussion of America’s 2 economic perspectives, you might enjoy this WSJ editorial column from Daniel Henninger. Finally, during presidential election years, I always ask my classes to read Arthur Okun’s Equality and Efficiency: The Big Tradeoff.

 

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