Whatever happened to Milton Friedman? Back in the day he was hailed as the bringer of small government, and a minor media sensation. When I talk to libertarians today, he hardly gets a mention.
How did he lose his standing in the libertarian movement? Why is it that the intellectual backbone of Libertarianism is Mises and the Austrians and not Friedman and his Chicago school?
This is somthing I’ve been wondering for a long time, could someone hook me up with an analysis of the chicago school? It didn’t help that Friedman was pro fed I think
The Chicago school is very free-market, however generally believes in some government intervention, particularly in the terms in money and banking. Milton Friedman is no exception.
I know that much but how and where do they differ from the Austrians in things like analysis? And what kind of interventions do they approve of? And if they do approve of intervention how was David Friedman an anarchist? Also how big are they compared to the Austrian school?
There was a relatively recent article on Mises.org, I believe, on Milton Friedman and honoring him for the several contributions he made to liberty. His limitations are taken into consideration (his original support of the central banking, for example; he would later rescind on his opinion in regards to the Federal Reserve, but I don’t think that was his opinion on central banking in general).
Sorry, neither of the articles published on Mises.org are “relatively” recent. Here they are:
Milton Friedman was against the Fed controlling the money supply, only because he wanted the Treasury to do it instead. Friedman believed in price stabilization, which in a growing, productive economy necessarily means monetary expansion. So he promoted long-run, constant, monetary expansion, which is a death sentence for a sound economy. Also, he played a key role in positivism’s takeover of the economics profession.
Yes he got a lot of things right, but the things he got dreadfully wrong, money and method, were huge.
Here’s a piece by Rothbard: Milton Friedman Unraveled.
Much like the Austrian School, the Chicago School is very large and incorporates many different views. However, in general The Chicago school differs analytically by using statistical and mathematical inductive methods as opposed to logical deduction. Both schools blame the business cycles on central banks and an expansionary monetary policy, they just differ as to what is important, Austrians say money supply, interest rates and the structure of production, Chicogoites say money supply, real wage rate, and unemployment. Interestingly enough, Milton Friedman himself has admitted to the possible validity of the Austrian Theory.
You’ll find members of both schools differs as to what kind of intervention is acceptable and what isn’t.
That was just the thing I was look for. Thanks Lilburne! I didn’t realize the differences were that deep, and kind of assumed it had something to do with the Pinochet slander that gets tossed about whenever his legacy comes up in conversations.
And in his he final Charlie Rose interview he painted the 200 7 economic situation as pretty rosy, which is not what Peter Schiff was saying at the time..
(BTW Peter Schiff is an investor based on Austrian principles, am I correct?)
Where do you get this from? As far as I know, his only response was that ABCT “doesn’t correspond to the facts.”
To be fair, Friedman did recant many of his previous views after 1971, basically stating that the government need no role in the money supply. And further clarifying many of his questionable positions.
This - “I would like to be a zero-government libertarian” - has even made me more sympathetic to the guy.
“Friedman identifies ‘first round effects’ of monetary expansion through variations in interest rates, which may affect various asset classes differently”
Read Vienna and Chicago: Friends of Foes? by Mark Skousen.
He really only critiqued the ABCT in the 1960s and didn’t do much further inquiry, Roger Garrison corrected him quite well.
Yeah, Milton Friedman proves to me a lot of things.
A) Liberty can be packaged in incremental doses that point us in the right direction. I like to call this the “freedom train.” Basically we point the train in the right direction and people can ride it as far as they want to. Be we want to set up the “train” in a place where most people can get on. Milton Friedman provides a “station” for budding libertarians that is closer to “home.” Later people can ride that train of ideas deeper and deeper into the ideas of liberty.
B) It shows me that, while important, methodology is not completely and utterly critical as a make or break of an economist. There can be different ways of doing economics. There are better ways, but positivist methods can work to an extent. Milton Friedman was a product of his academic environment. He was trained as a Positivist. He was more interested in just doing economics than anything else. I’d wager to guess if he were trained in the causal-realist approach, he’d be an “austrian” style economist.
What specifically do you mean by analysis? As for intervention, Chicago economists generally favor government intervention in things such as security/defense, money, perhaps roads, some include education. Stimulus packages and welfare are generally not considered Chicago-style economics. David Friedman being an anarcho-capitalist is an exception, not the rule. As for their relative size and influence, they are MUCH more widely accepted than Austrians, but they seem to be losing out to Keynesians, which is most unfortunate…
Do you ever visit cato.org? Their views are considered archetypical Chicago-style economics with Constitutional Libertarianism.
Did I help at all?