Tax Lawyer's Blog

No matter how often, sincerely and eloquently a free-market conservative states his position, anti-capitalist liberals still insist on mischaracterizing it.

Of course, it’s an old rhetorical tactic to incorrectly set forth your opponent’s argument and than proceed to knock it down with your own. But dismantling a fabricated argument, one that no sane person has ever made or would ever make, is the demesne of fiction writers like John Grisham and Scott Turow. Academicians who allegedly traffic in the world of non-fiction should know better.

Law professor Linda Beale of ataxingmatter writes in Richard Abrams: Debunking Free Marketarianism (emphasis and footnotes added):

I’ve often written here about the problems of the naive, black-or-white view of economics¹ that has been fostered by the Chicago School and Milton Friedman acolytes who talk of “free markets” as though markets exist in vaccum tubes unaffected by the social, cultural and legal context around them. Debunking that “free market myth” is important, because without understanding the mythology of it most ordinary Americans will continue to be misled and fooled by those who devise and enact policies that affect our everyday lives.

From “tea partyers” to Congress, from “the national association of manufacturers” to the US Chamber of Commerce, the “free market” is spoken of with almost reverent tones as though the market works on its own, as though businesses always do everything better than government, as though human liberty were intimately connected with letting mutlinational corporations set their own standards and make their huge profits without protections for the little guys along the way. 

Wrong, wrong, wrong–this pseudo-concept of free market has little to do with human liberty and lots to do with corporate profits for managers and shareholders.  Time that ordinary Americans understood that.

A dandy little diatribe, indeed, were it not for the fact that serious conservatives like Milton Friedman have not made and do not make any of the arguments Ms. Beale attributes to them.

Here are several aphorisms from Mr. Friedman that tell you what he truly believed:

• History suggests that capitalism is a necessary condition for political freedom. Clearly it is not a sufficient condition - Friedman didn’t believe, as Beale asserts, that free markets always do everything better than government. He merely believed that they usually do.
• The government solution to a problem is usually as bad as the problem - Here again, Mr. Friedman was careful too use the word “usually,” implying, of course, that sometimes government solutions are appropriate.
• The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy - Friedman did not believe that the free market is flawless, but rather, that it is generally a better alternative than government intervention.
• The most important single central fact about a free market is that no exchange takes place unless both parties benefit -The salient difference between free marketarianism and government control is, according to Friedman, that in a free market no one is compelled to buy or sell a service or product. The opposite is true when the government forces terms on private individuals and businesses. In short, Friedman believed that freedom is greater in a system that relies on private will rather than public fiat.
• Underlying most arguments against the free market is a lack of belief in freedom itself – If anti-free marketarian intellectuals believed that people were as smart as they believe themselves to be, they wouldn’t favor government interference in or regulation of contractual relationships between private citizens. But, alas, they don’t believe that. Instead, they believe that people in general are too stupid to act in their own best interests. The left is unwilling to accept that the word freedom, if it is to mean anything at all, must be defined to include the freedom to make bad as well as good choices.
• Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another – This is a not a naive assumption on Mr. Friedman’s part, as Ms. Beale would suggest, but rather an attack on naive assumptions. Anti-free marketarians almost always start with the assumption that win-win contractual arrangements are impossible. Consequently, they assume that one person’s gain is always another person’s loss.²
• Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own. So if you want efficiency and effectiveness, if you want knowledge to be properly utilized, you have to do it through the means of private property -History has proven Friedman correct on this point. For proof, all you have to do is look at this country’s third party payor health insurance system. People who receive healthcare services that are paid for by either the federal government or a private insurance company rarely, if ever, question the cost of those services. Apathy invites waste, inefficiency and outright corruption.

So, Milton Friedman did not believe, as Linda Beale contends, in the perfection of the free market or that free markets exist in vacuums, but rather, that the “cure” of government interference in the markets is almost always worse than the disease.

I believe that, too… generally.

Footnotes:

¹  This is another tried and true tactic of the left - attack the intelligence and intellectual vigor of your opponent by calling him “naive” or “simplistic.” Of course, making that label stick to someone like Milton Friedman, who has proven his intellectual mettle sufficiently enough to have been awarded the Nobel Prize in Economics, is extending the tactic into uncharted territory.

     It’s one thing to call me economically naive and simplistic, and quite another to call one of the most respected and revered economists of the 20th century naive and simplistic. But, sadly, some ideologues are so wedded to their ideologies that they refuse to allow anyone opposing them to be “smart,” or, for that matter, well-informed, well-intentioned or sincere.

²  If you see the world only in terms of winners and losers, of oppressors and oppressed, it is understandable that you would feel duty-bound to demand that a benevolent, centralized government intervene in interactions between private citizens to force equality of results.

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• Strawman Argument Used in Tax Debate
• Two Professors, An Angry Bear and Hate the Rich Syndrome
• Professors Maule and Beale Respond; Pappas Cowers then Regroups
• Wealth, Taxes, Politics, Jim Maule’s Surrebuttal, and the Heirarchy of Needs

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