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22 WebMemoPublished by No. 1266 November 29, 2006

Feulner on Friedman: A Tribute Edwin J. Feulner, Ph.D.

The extraordinary life of Professor Milton Fried- mitted to a free society in the United States and man has been extolled in every major newspaper around the world. around the world. His contributions to economic He was one of the ’s four theory and the free society merit a celebration of founding members, who organized the group in a the life of this extraordinary individual. hotel in December 1964. His role Friedman was small in stature but a giant in the with the Cato Institute, which awards the Milton world of ideas. His passion and wisdom extended Friedman Prize, the Institute of Economic Affairs in well beyond the field of economics and combined London, the , and a variety of to make him one of the most compelling advocates other pro-freedom entities around the world testify of human freedom the world has known. to his willingness to promote the free society at His ideas earned him the Nobel Prize. But more every available opportunity. than that, his ideas have been translated into public With this short collection of comments about policy in this nation and in countries around the , I join the legions who have world. And these ideas have empowered millions of praised his work. people to pursue their destiny, opening for them new Edwin J. Feulner, Ph.D. economic and educational opportunities that have President made them more productive and more prosperous. The Heritage Foundation Over the last 30 years, Friedman enjoyed a close On September 28, 1998 in San Francisco, The relationship with The Heritage Foundation. He was Heritage Foundation awarded the Clare Boothe the featured speaker at the 1979 dedication of our th Luce Award to Drs. Rose D. and Milton Fried- headquarters building, our 1983 10 anniversary man. Edwin Feulner offered these remarks: “Heritage 10” celebration, and other occasions. In 1998, I awarded Rose and Milton Friedman The The price of liberty, Thomas Jefferson reminded Heritage Foundation’s Award, us, is eternal vigilance. You, Rose and Milton Fried- our most distinguished honor. Friedman and Heri- man, have been second to none in your vigilant, tage have been closely linked in the policy arena for a very long time. Even though he was formally affiliated with our sister institution, the Hoover Institution on This paper, in its entirety, can be found at: War, Revolution and Peace at Stanford University, www.heritage.org/research/tradeandforeignaid/wm1266.cfm Published by The Heritage Foundation he never failed to lend his name, his credibility, 214 Massachusetts Avenue, NE and his energy to building other institutions com- Washington, DC 20002–4999 (202) 546-4400 • heritage.org Nothing written here is to be construed as necessarily reflecting the views of The Heritage Foundation or as an attempt to aid or hinder the passage of any bill before Congress. No. 1266 WebMemo November 29, 2006

tireless, and effective defense of liberty. At a time Republic, South Korea, Portugal, Spain, and Chile, when it was intellectually fashionable to assert that where the “Chicago Boys,” including some of Fried- collectivism was the wave of the future, you stead- man’s students, created a free-market showcase by fastly championed the moral and practical superi- cutting public spending, attacking , reduc- ority of free markets. At a time when “economic” ing tariffs, and inviting foreign investment. Martin freedom was widely held to be less important than Anderson, former domestic policy advisor to Presi- “political” freedom, you demonstrated that they dent Reagan, concludes, “If you step back and look are, in fact, inseparable. And when others looked to at all the sweeping political and economic changes the power of the state to accomplish their social in the United States and even in other countries, a lot objectives, you reshaped American politics through of people have had an important effect. But if you your advocacy of monetary restraint, deregulation, had to say one person who had the most impact, it’s the volunteer army, school choice, and the flat tax. Milton Friedman.” Rose and Milton, for showing us how to advance Friedman’s continued active involvement in the the cause of freedom with academic rigor and pro- political and economic debate serves as an inspiration phetic zeal, and for strengthening the foundations to all of us involved in the conservative movement. of liberty in America and around the world, The The following is an excerpt of Edwin Feulner’s Heritage Foundation is proud to salute you. President’s Address to the Mont Pelerin Society in On May 26, 1999, the American Conservative Barcelona, Spain, September 1997: Union held the “Conservative Century” Dinner In 1968 Clarence Philbrook of the University of to celebrate the accomplishments of conservatives North Carolina, who was then the Treasurer of the in the last 100 years. The following is an excerpt Society, invited me to a general meeting of the Soci- from a speech delivered by Edwin Feulner: ety in Aviemore, Scotland, as one of the Society’s Another attendee of that first meeting of the guests sponsored by the Earhart Foundation. I have Mont Pelerin Society was Milton Friedman. A pro- been intimately involved with the Society’s affairs moter of free markets and free minds, Milton Fried- ever since. The first meeting of the Society that I man is the spokesman and a symbol of the attended as a full-fledged member was down this remarkable revival of neoclassical economics in our mountain in Montreaux in 1972, and it is still vivid time. Evidence of his dazzling brilliance ranges in my memory today, not least because Milton from discoveries in statistics made 50 years ago— Friedman used the occasion to argue that the battle still known as the “Friedman Test”—to his early of economics had been won; our work was done, advocacy of school choice, deregulation, and the and we should dissolve the Society. I was quite flat tax, which have reshaped policy debate in taken aback by Milton’s argument. At home, Presi- America and around the world. Friedman has dent Nixon had just imposed wage-and-price con- become, in the words of the and the esti- trols. Abroad, the Soviet Union was bent on mation of countless others, “the greatest economist changing the “correlation of forces” while the West of the 20th century.” Although his continuing influ- fruitlessly pursued a policy of détente. If this is Mil- ence is felt in the American government, where ton’s idea of victory, I asked myself, I wonder how House Majority Leader Dick Armey comments, he would define defeat? “One of the great privileges of this job is that I dare In retrospect, however, it is apparent that what call Milton Friedman friend. This is like a miracle Milton meant when he said that the economic bat- in my life,” Friedman’s influence has not ended at tle had been won was pretty much what Ronald America’s borders. Reagan meant when he said, some years later, that Throughout the world, Friedman has become the the statists “had had their turn at bat in the 1960s breathing, bespectacled example of how human and had struck out.” The fundamental flaw of stat- freedom can be advanced with academic integrity ism—its “fatal conceit,” Hayek called it—was its and articulate zeal. His direct influence can be traced arrogant conviction that policymakers could in places as diverse as Thatcher’s Britain, the Czech blithely disregard traditions that embodied the wis-

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dom of generations, that they could impetuously We must not be afraid of the future. We must ignore customs whose purposes they didn’t under- not be afraid of man. It is no accident that we stand, and yet they could emerge from the inevita- are here. Each and every human person has ble disasters with their prestige intact and their been created in the “image and likeness” of ideas unchallenged…. the One who is the origin of all that is. We You know, the Keynesian economist and Nobel have within us the capacities for wisdom and Laureate Robert Solow once joked that the difference virtue. With these gifts, and with the help of between himself and Milton Friedman was that to God’s grace, we can build in the next century Milton everything always comes back to , and the next millennium a civilization wor- whereas to Solow everything always comes back to thy of the human person, a true culture of sex. I think that to all of us here this evening, every- freedom. We can and must do so! And in do- thing always comes back to freedom. The issues we ing so, we shall see that the tears of this cen- consider are sometimes quite technical—devalua- tury have prepared the ground for a new tion, regionalism, and multilateralism in interna- springtime of the human spirit. tional trade, the pros and cons of a return to the Thank you all for joining us for this special cele- , privatization schemes, etc.—but the bration of the anniversary of the Society. And a spe- underlying theme informing all of our deliberations cial thank you to Milton. We all owe a tremendous is an abiding moral concern for the mind, the soul, debt of gratitude to you and the other founders of and the rights of the individual. That’s what unites our Society for making that first pilgrimage to Mont us. That’s the common thread linking us back to our Pelerin 50 years ago. founders and forward to our successors. We are part In 1997 Heritage’s annual President’s Essay of an ongoing struggle, and we will continue to insist featured a selection from Milton Friedman’s Cap- that families, communities, and individuals, not gov- italism and Freedom (University of Chicago Press, ernment, have the freedom to make the decisions 1962). Feulner wrote this introductory essay: that shape their lives. Promoter of free markets and free minds; father Fifty years after the founding of our society, we of floating currency, stable money and the volun- can no longer think of ourselves as a Saving Rem- teer army; guiding light of the “Chicago School”; nant, huddled together for warmth and encourage- critic of the chaos that flows from central planning; ment on a dark and stormy night. But neither can sworn enemy of the free lunch: Milton Friedman is we think of ourselves as winners, despite the fact the spokesman and symbol of the remarkable that many of our ideas have gained wide accep- revival of neoclassical economics in our time. As a tance. In my opinion, we should regard ourselves, groundbreaking scholar, influential teacher, intim- first and foremost, as pilgrims, still engaged in the idating debater, television personality, widely read same quest—as individuals and as a society—that columnist and advisor to presidents and prime inspired our founders: the quest for a comprehen- ministers, he has defended the efficiency and nobil- sive philosophy of freedom, for a political, social, ity of markets and revealed the justice found in and economic order that best protects the mind, freedom. Evidence of his dazzling brilliance ranges the soul, and the rights of the individual. from discoveries in statistics made fifty years ago As it happens, the French word for pilgrim is (still known as the “Friedman Test”) to his early “pelerin.” Perhaps the decision to be known as the advocacy of school choice, deregulation and the flat Mont Pelerin Society was not quite so meaningless tax, which have reshaped policy debate in America as some of our founders supposed. and around the world. In closing let me once again quote John Paul II— In a career of constructive controversy, he has from his closing paragraph of that same speech. His deflated the pretensions of Keynesian technocrats vision is one that I personally share and one that and proven, with moral passion and economic has shaped much of my own life’s work. sophistication, that the tradition of Adam Smith is

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the wave of the world’s future. In the process, Mil- traced in places as diverse as Thatcher’s Britain, ton Friedman has become, in the words of the the Czech Republic, South Korea, Portugal, Spain, Economist and the estimation of countless others, and Chile—where the “Chicago Boys,” including “the greatest economist of the 20th century.” some of Friedman’s students, created a free-market His continuing influence is felt in the American showcase by cutting public spending, attacking government, where House Majority Leader Richard inflation, reducing tariffs, and inviting foreign Armey comments, “One of the great privileges of investment. At one point, University of Chicago this job is that I dare call Milton Friedman friend. graduates included the Chilean ministers of This is like a miracle in my life.” On the flip side, finance, planning, and the treasury; the budget Robert Rubin, Secretary of the Treasury in the Clin- director; and president and vice president of the ton Administration, has proclaimed, “We’re not a central . set of Milton Friedmans”—which is both accurate Martin Anderson, former chief domestic policy and unfortunate. advisor to President Reagan, concludes, “If you step Yet the broadest measure of Friedman’s influ- back and look at all the sweeping political and eco- ence is found in the capitalist renaissance beyond nomic changes in the United States and even in America’s borders. other countries, a lot of people have had an impor- tant effect. But if you had to say one person who • A New York Times reporter interviews the vice had the most impact, it’s Milton Friedman.” mayor of Dongguan, forty miles from Hong Kong, a former member of the Red Guard, John Maynard Keynes famously said that we whose fervor earned him a private reception are unconsciously ruled by dead . Our with Mao Zedong. “Times have changed,” the world is increasingly, consciously, and gratefully article observes. “These days, Lau says his governed by the ideas of a distinguished living favorite economist is Milton Friedman, the economist. In many ways, this can be called the age American conservative who stresses the impor- of Friedman. tance of and decries big gov- Milton Friedman has conducted his crusade for ernment. It is a bit like George Bush saying his liberty with a distinctive style that can both intimi- favorite economist is Karl Marx.” date and disarm. He is a natural debater, for whom • A correspondent for the Chicago Tribune inter- passionate, principled argument is a way of life. His views Naidansurengin Zolzhargal, the twenty- son, David, recalls that until the age of fifteen in the six-year-old director of the Mongolian Stock Friedman household, “it had not occurred to me that Exchange and director of the State Bank of there were forms of conversation that didn’t involve Mongolia. “Zolzhargal,” the reporter notes, argument and analysis.” And when he debates, “says his idol is Nobel laureate economist Mil- Friedman can be devastating. During one forum on ton Friedman.” the military draft, a general insisted on using the term “mercenaries” in his argument against a volun- • A New York Times reporter files a story from teer army. “You could see Milton getting more and Khartoum, Sudan. “With a copy of the Koran in more agitated,” recalls Martin Anderson. “Finally he one hand and the economic theories of Milton went up to the mike and said to the general, ‘If you Friedman in the other, the Sudanese Govern- will stop calling young men who volunteer to serve ment is trying to wed unbridled capitalism to their country mercenaries, then I will not start call- militant Islam.” ing people who are drafted slaves.” Some of Fried- “The tide of ideas isn’t local,” Milton Friedman man’s opponents have wisely sent up a white flag has argued. “It’s international; it’s worldwide.” And when it comes to verbal combat. John Kenneth Gal- throughout the world, Friedman has become the braith concedes, “Milton Friedman is a superb breathing, bespectacled example of how human debater.… I’ve always avoided debating him.” freedom can be advanced with academic integrity Yet this debating skill is leavened with wit, prov- and articulate zeal. His direct influence can be ing that the “dismal science” is anything but dismal

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in his hands. In reference to his height—five feet, man fell in love with economics. Graduating in two inches—he claims that he lost an inch from 1932, at the darkest moment of the Great Depres- carrying the “weight of the world” on his shoulders. sion, he was offered a scholarship to the University When Richard Nixon opined that “We are all Key- of Chicago. nesians now,” Friedman immediately wrote Gal- That university, he remembers, “exposed me to a braith a note: “You must be as chagrined as I am to cosmopolitan and vibrant intellectual atmosphere have Nixon for your disciple.” of a kind that I had never dreamed existed. I have Milton Friedman’s defining attitude is an infec- never recovered.” The University of Chicago’s eco- tious confidence, which has given conservative nomics department was populated by free-market (and classical liberal) economics its forward giants, including , , and momentum. A student skit from the University of Henry Simons. Here Friedman also encountered Chicago in the 1950s included the line: “Mr. Fried- another formative influence—a fellow graduate man, is it correct that you have discovered Tr u t h, student in economics named Rose Director, who and that you are now simply verifying it empiri- became his wife and frequent collaborator. Her cally?” Once, when hiring an administrative assis- husband, she recalls, was supremely studious, with tant who lacked an economics background, little interest in things non-academic. Once, before Friedman reassured her: “You don’t have to worry they were married, she dragged him to the sym- about not knowing anything about economics. phony in New York in a vain attempt to civilize There are many people who studied economics for him. “When I saw that he sat beside me reading a years and don’t know anything about economics. book while the music was on, I gave up.” Stick with me and you’ll learn the correct way.” After wartime work in Washington (where his Chairman of the Alan efforts led to income tax withholding from pay- Greenspan, who has called Friedman one of the checks to fund the war effort), Friedman returned most productive intellects of the century, com- to the University of Chicago, this time as a profes- ments: “As far as Milton Friedman is concerned, if sor. Lindley Clark, editor and columnist at the Wall something is true, it’s true. He talks the same way to Street Journal, was one of Friedman’s students in the an eighteen-year-old college student as he does to late 1940s. He remembers him as “exciting, even the President of the United States.” And he has reg- exhilarating” teacher who, unlike some colleagues, ularly and persuasively talked with both. “wasn’t always canceling classes because his advice Born in 1912, Milton Friedman is the product of was wanted in Washington.” America’s hard, rich immigrant experience. His The University of Chicago, after World War II, was parents emigrated from a province of the Austro- in the midst of a conservative golden age. Richard Hungarian Empire in the late nineteenth century. Weaver taught English and rhetoric. Friedrich von From the age of fourteen, his mother worked as a Hayek lectured on social philosophy. Leo Strauss seamstress in a New York sweat shop, an institution attacked relativism and revisited Athens and Jerusa- Friedman vigorously defends as a source of low- lem in political philosophy. And Milton Friedman skill, low-paying jobs. “Sweatshops serve a very began a thirty-year run of scholarly achievements that useful function. If present-day labor laws had been changed the landscape of American economics. In in effect in the 19th century, you never would have 1950, he wrote a landmark piece on flexible exchange been able to have all the immigration you did.” rates which has been called a “modern classic.” In the As a child, Friedman showed a talent for mathe- early 1960s, he authored, with Anna Schwartz, the matics, graduating from high school before his six- 860-page A Monetary History of the United States, teenth birthday and dreaming of becoming an reconstructing money supply data back to the Civil actuary for an insurance company. But at Rutgers War from old bank records. Other works dealt with College, where he was a student of Arthur Burns consumption theory, statistics and economic method- (later chairman of the Council of Economic Advis- ology. “People at MIT and Harvard didn’t know what ers and chairman of the Federal Reserve), Fried- they were going to work on until Milton made a

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speech,” says fellow University of Chicago Nobel Lau- In this period, one of Friedman’s great achieve- reate, the late . His influence trans- ments was the all-volunteer military. Beginning at a formed an academic department into a movement, University of Chicago conference in December of the “Chicago School,” of which Friedman was the 1966, Friedman debated vigorously against the spiritual leader. One professor at the time was led to draft. Eventually, he served on the presidential conclude, “At most universities, people are either con- commission that voted to terminate it. And our servatives or liberals, but at Chicago, you are either a experience since the summer of 1973, culminating libertarian or an authoritarian.” in the Gulf War, has confirmed Friedman’s faith in Along the way, Friedman participated in the the ability and commitment of soldiers who give founding of the Mont Pelerin Society on April 1, their service without compulsion. 1947—an organization which has been called a In 1966—the same year that William Buckley “kind of Comintern for the free-market.” Convened started “Firing Line”—Friedman began his regular by Hayek in Switzerland, the meeting attracted column in Newsweek, dueling with liberal econo- thirty-nine prominent European and American mist Paul Samuelson, and spreading his ideas to a scholars and connected Friedman to an interna- broader popular audience. In 1967, he was elected tional network of like-minded intellectuals. The tone president of the American Economic Association. of that first conference was somber. Its concluding In 1969 he was featured on the cover of Time, in declaration warned that “the position of the individ- which he was called a “maverick messiah.” Histo- ual and the voluntary group are progressively under- rian George Nash observes: “Here was a man of mined by extensions of arbitrary power.” Yet the increasing prestige within his profession, a man effect was encouraging. “The importance of that whom even opponents respected as one of the very meeting,” Friedman observes, “was that it showed us best American economists, who was articulating we were not alone.” It was a “rallying point,” he says, conservative viewpoints with a felicitous combina- for outnumbered troops. tion of learning and wit.” Friedman’s rising star was quickly noticed in The Nobel Prize came in 1976, the two hun- Washington. He turned down an invitation from dredth anniversary of Adam Smith’s Wealth of President Eisenhower to serve on his Council of Nations and Thomas Jefferson’s Declaration of Inde- Economic Advisers. “I really thought I could be pendence, statements of economic and social free- much more helpful and useful in the world at large dom that Friedman has given new vigor and voice. as a maverick than I could be in Washington as a In that same year, he left the University of Chicago. civil servant.” But Washington kept insisting. In “I reached the age of 65 and had graded enough 1964, Friedman served as economic adviser to can- exam papers.” But a broader exercise in teaching didate . was just beginning. On January 11, 1980—a land- But through it all, Friedman remained a maver- mark date in American conservatism—the first epi- ick, unafraid to criticize slipshod economic think- sode of Friedman’s “Free to Choose” aired on PBS, ing, whatever its source. When President Nixon making a compelling case to millions of viewers on imposed wage and price controls in 1971, Fried- the essential connection between capitalism and man wrote in : “The controls are human freedom. The ten-part series took Friedman deeply and inherently immoral. By substituting the from Hong Kong harbor, to the Glasgow classroom rule of men for the rule of law and for voluntary where Adam Smith lectured, to a Japanese elec- cooperation in the marketplace, the controls tronics factory, to the ornate boardroom of the New threaten the very foundations of a free society. By York Federal Reserve. The book based on the encouraging men to spy and report on one another, series, and written with his wife Rose, was simulta- by making it in the private interest of large num- neously on the bestseller list of every English- bers of citizens to evade controls, and by making speaking nation in the world. One reviewer com- actions illegal that are in the public interest, the mented, “The Friedmans come out swinging on controls undermine individual morality.” page one of the Preface and do not let up until the

page 6 No. 1266 WebMemo November 29, 2006 last page of Appendix B.” called it Milton Friedman carefully defines himself as a “must reading for everyone.” free market liberal, not as a conservative—a liberal In 1988, Milton Friedman was awarded the Presi- in the classical sense, concerned primarily with the dential Medal of Freedom. He now lives in San Fran- freedom of individuals. But it is impossible to deny cisco and is a senior research fellow with the Hoover that Friedman’s greatest influence has been on, and Institution. His overriding interest, he says, remains come through, the American conservative move- the same: “To try to understand as much as I can of the ment, which has this same concern at its core. world around me—and to enjoy myself in the pro- In Free to Choose, he talks of “the importance of cess. And no doubt, one has to confess, not only to the intellectual climate of opinion, which deter- understand, not only to enjoy—but to reform.” mines the unthinking preconceptions of most peo- I first met Professor Milton Friedman in 1964 ple and their leaders, their conditioned reflexes to when he was a visiting professor of Economics at one course of action or another.” Friedman’s contri- . The late Don Lipsett arranged bution to conservatism has been to influence that a meeting with Frank Meyer, William Buckley, Mil- climate like the thaw after an ice age. ton, Don, and me at the Sheraton-Atlantic Hotel in First, he has been able to thoroughly discredit the New York City. This was the organizing meeting of idea, common since the , that cap- what would become the Philadelphia Society. Inci- italism is inherently flawed and requires the “fine- dentally, this was also the first time that Friedman tuning” of government to avoid excess and disaster. and Buckley had met each other. I was very much This has been the central conceit of the Keynesian the junior man at the meeting, but plans were laid state, administered by educated elites, adjusting tax for a major American institution patterned after the and spending policies to tame the . As international Mont Pelerin Society as an interdisci- late as December 1965, Time could run a cover story plinary organization of academics, businessmen, on John Maynard Keynes, concluding, “Today, some journalists, and others involved in studying and twenty years after his death, his theories are the promoting the Free Society. prime influence on the world’s free economies, espe- After our initial 1964 meeting, I came to know cially on America’s. Keynes and his ideas still make Milton and Rose as active participants in the public some people nervous, but they have been so widely policy process, as well as participants in both Phil- accepted that they constitute both the new ortho- adelphia Society and Mont Pelerin Society meet- doxy in the universities and the assumption of eco- ings. Milton’s acuity was never sharper or more nomic management in Washington.” pithy than the time in 1968 at the Chicago meeting Friedman attacked these beliefs at their root. He of the Philadelphia Society when he challenged me ambitiously argued that the Great Depression was for my support of revenue sharing. Suffice it to say not caused by the “defects” of capitalism but by that in this case, like so many others before and government incompetence. Going back to the since that meeting, Friedman was right and I was 1930s, he demonstrated that the one-third fall in wrong, despite the seeming political attractiveness GNP was due to a one-third cut in the money sup- of the idea at the time. ply from 1929 to 1933. “The Great Depression in The active involvement of both Milton and Rose the United States, far from being a sign of the inher- in the Fiftieth Anniversary Special Gathering of the ent instability of the private enterprise system, is a Mont Pelerin Society in Mont Pelerin, Switzerland, testament to how much harm can be done by mis- was a special occasion for all 120 of us who partic- takes on the part of a few men when they wield vast ipated in it. To many of us, this was the capstone of power over the monetary system of the country.” his career as the leading intellectual light of the This astonishing revision of the conventional worldwide movement for liberty, especially since wisdom changed the entire context of economic he was the only member of the Society who policy. Keynesians argued that an unstable private attended both the founding meeting and this sector must be stabilized by the public sector. golden anniversary celebration. Friedman showed that an essentially stable private

page 7 No. 1266 WebMemo November 29, 2006 sector has been the victim of irrational shocks by ics are separate and largely unconnected; that individ- government. In the process, he made it academi- ual freedom is a political problem and material cally and intellectually respectable to believe there welfare is an economic problem.… Such a view is a was life left in Adam Smith, even after the soup delusion,” wrote Friedman in 1962. “On one hand, lines of the 1930s. freedom in economic arrangements is itself a compo- Second, Milton Friedman has shown, in case after nent of freedom broadly understood, so economic case, that government interventions in free markets freedom is an end in itself. In the second place, eco- are not only ineffective, but result in the exact oppo- nomic freedom is also an indispensable means toward site of their intended purpose. He has called this the achievement of political freedom.” “invisible foot”—the unseen force that makes things This is perhaps the most revolutionary idea of go terribly and perversely wrong with social pro- the twentieth century, with more dramatic promise grams. The minimum wage, instead of helping poor than anything claimed by Marx, and it is a pro- people, eliminates low-paying, entry-level jobs. Price foundly conservative concept. What Jefferson controls on energy actually resulted in the energy called the “disease of liberty” cannot be quaran- shortage and crisis of the 1970s. Public housing has tined; it is bound to spread rapidly, as a number of led to inhuman living conditions. “The government the world’s tyrants have discovered to their discom- solution to a problem,” Friedman concludes, “is usu- fort. Economic freedom is connected not only to ally as bad as the problem.” the liberation of men and women from poverty, but Yet, on the other side of this ledger, when free their liberation from tyranny and torture, and from markets are allowed and encouraged to work, they the oppression of conscience and information. often prove an unsuspected, constructive power to Friedman argues that the finest achievement of solve social problems—in education and the pro- capitalism is not the accumulation of wealth and tection of workers, consumers, and the environ- property but “the opportunities it offers to men and ment. Freedom leads, not just to economic women to extend and develop and improve their efficiency, but to social justice. And this has led capacities.” And Friedman’s unquestioned success Friedman beyond the realm of economic theory to in making this case is the primary reason William draw the hopeful policy implications of his ideas. Buckley refers to him, simply, as “my hero.” Above any conservative economist of his time, he This essay is one of the classic statements of the understands the inadequacy of a vision without a philosophy of freedom. Capitalism and Freedom— task. He has not only criticized current social and dubbed by some followers as “Capitalism and economic arrangements, he has proposed specific, Friedman”—is described by George Nash as “one free-market alternatives like school vouchers, the of the most significant works of conservative schol- flat tax and deregulation. His brainstorms have arship of the 1960s.” It has been in print for thirty- provided conservatives with a positive agenda. five years, sold over half a million copies and been Friedman is a realist with a passion for the possible, translated into Spanish, French, Swedish, Italian, who sees his role not only in the demolition of bad German, Japanese, Hebrew, Icelandic, Arabic, Rus- ideas, but the construction of better ones. And this sian, and Portuguese. has helped turn free market economics into a force With typical iconoclasm, Milton Friedman of hopeful reform. launches his defense of liberty with an attack on Third, and most important, Friedman has made a John Kennedy’s call to ask what “we can do for our case with passion and power that economic, social, country.” In place of this concept, Friedman ele- and political freedom are inseparable—part of the vates another objective: “We take freedom of the same yearning of the human spirit. He has defended individual, or perhaps of the family, as our ultimate “the fundamental proposition that freedom is one goal in judging social arrangements.” His reasons whole, that anything that reduces freedom on one are practical, noble, and compelling: because social part of our lives is likely to affect freedom in the other progress—in art, ideas, and the relief of misery— parts.” “It is widely believed that politics and econom- results from a social climate of variety and diversity;

page 8 No. 1266 WebMemo November 29, 2006 because free markets are a necessary condition for embracing ethic. Indeed, a major aim of the liberal political freedom (though not a sufficient one); is to leave the ethical problem for the individual to because “democratic socialism” can never be dem- wrestle with. The really important ethical problems ocratic; and, most important, because freedom and are those that face an individual in a free society— justice head in the same direction, rewarding merit what he should do with his freedom.” and allowing for coordination without coercion. In mid-1998, Milton and Rose Friedman’s joint Opposing free markets is a serious matter, because autobiography will be published by the University “underlying most arguments against the free mar- of Chicago Press. At that time, the same publisher ket is a lack of belief in freedom itself.” will release a new edition of Capitalism and Free- This essay is a bold assault on the core convic- dom. We hope that this excerpt from that seminal tions of modern liberalism by a classical liberal in work will pique the interest of the new generation the tradition of Adam Smith. And it reveals a con- to reflect on the timeless principles of liberty as viction at the heart of modern conservatism: that expounded by Milton Friedman a generation ago. justice, opportunity, and even social morality Economic and social freedom, Friedman reminds depend on personal liberty and limited govern- us, is not a state of nature, but it is also not a state of ment—on structures of freedom that honor accom- grace. It creates the space where souls can make their plishment and cherish human dignity. own choices, informed by bishops and rabbis, poets There is no more articulate voice in defense of and philosophers. “The central and supreme object freedom than Milton Friedman. But he is careful to of liberty,” said Lord Acton, “is the reign of con- note that, while freedom is the highest goal of soci- science.” And in the end they are inseparable. ety, it cannot be the highest goal of individuals. “In Edwin J. Feulner, Ph.D., is President of The Heritage a society, freedom has nothing to say about what an Foundation. individual does with his freedom; it is not an all-

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