"Torturing People so Prices can be Free"- Milton Friedman RIP

La Revue Gauche has a fine collation of links to a number of “tributes” to Milton Friedman from the Left, most bring out his role in applying his neo- liberal principle in Chile in tandem with General Pinochet, the man responsible for the overthrow of the socialist hero Salvador Allende.

Surprisingly the man who “hated the government” had found favor from one of the most brutal governments in the second half of the 20th century.

But if Pinochet’s revolution was to spread throughout Latin America and elsewhere, it first had to take hold in the United States. And even as the dictator was “torturing people so prices could be free,” as Uruguayan writer Eduardo Galeano once mordantly observed, the insurgency that would come to unite behind Ronald Reagan was gathering steam.

Today, Pinochet is under house arrest for his brand of “shock therapy,” and Friedman is dead. But the world they helped usher in survives, in increasingly grotesque form. What was considered extreme in Chile in 1975 has now become the norm in the US today: a society where the market defines the totality of human fulfillment, and a government that tortures in the name of freedom.

an excerpt from Greg Grandin’s book on Latin America.

More on what Friedman called the “Miracle of Chile” and helped to create:

So what was the record for the entire Pinochet regime? Between 1972 and 1987, the GNP per capita fell 6.4 percent. (13) In constant 1993 dollars, Chile’s per capita GDP was over $3,600 in 1973. Even as late as 1993, however, this had recovered to only $3,170. (14) Only five Latin American countries did worse in per capita GDP during the Pinochet era (1974-1989). (15) And defenders of the Chicago plan call this an “economic miracle.”

And from Leftwrites:

A post on the Marxism List reports:

Heard in the newsroom today, when the story broke just before 1:00 PM:

“¿Quién se habría imaginado que ese hombre tenía corazón?” (Who could have suspected that man had a heart?)

A more sympathetic assesment by Brad De Long:

Friedman’s thought is, I believe, best seen as the fusion of two strong and very American currents: libertarianism and pragmatism. Friedman was a pragmatic libertarian. He believed that — as an empirical matter — giving individuals freedom and letting them coordinate their actions by buying and selling on markets would produce the best results. It was not that he thought this was a natural law. He didn’t believe that markets always worked best. It was, rather, that he believed that places where markets failed were atypical; that where markets failed there were almost always enormous profit opportunities from entrepreneurial redesign of institutions; and that the market system would create new opportunities for trade that would route around market failures. Most important, his distrust of government told him that government failure was pervasive, and that any expansion of government beyond the classical liberal state would be highly likely to cause more trouble than it could solve.

Another “left handed tribute” by Richard Adams: (link via Abi)

The great irony for Friedman’s fans is that the one piece of public policy he was responsible for that was widely and internationally adopted was one that greatly increased the ability of central governments to collect taxes – a policy he later repudiated in disgust.

Update 1: Michael Kinsley writes on the “Not so free Market” in The Guardian (via The Hindu)

Friedman was wrong and the other famous economist who died this year, John Kenneth Galbraith, was right: the free market in corporate shares doesn’t produce well-run companies.

Update 2 : William Greider writes on Friedman’s Cruel Legacy in The Nation (link via Abi)

People everywhere now understand what Friedman’s kind of “freedom” means. America has been brutally coarsened by his success at popularizing this dictum–millions of innocents injured, mutual trust gravely weakened, society demoralized by the hardening terms of life. Most people know in their gut this is wrong but see no easy way to resist it. Friedman’s utopia is also drenched in personal corruption. The proliferating scandals in business, finance and government flow directly from his teaching people to go for it and disregard moral qualms. When you tell people in power that their highest purpose in life is to maximize their own returns, there is no limit to how much “good” they will do for the rest of us.

Update 3: An analysis of the contradictory claims of Friedman’s theories by Gargi, certainly the best evaluation on the Indian blogsophere.

Errata: I had mixed up Milton Friedman with Thomas Friedman in the title (and in a comment as well). It now stands corrected. Thanks to Kuffir for pointing out.

Update 4: In Defence of Marxism on “Milton Friedman- the economic witch doctor of capitalism

Friedman is thus honoured in the church of capitalism. However, it is no accident that many of his policies have never been adopted nor will they be. The reality is that a completely free market without regulation would lead to anarchy and chaos for the capitalist system.

His emphasis on controlling the money supply has been completely ignored in recent years as finance capital has exploded. Credit has never been more out of control in the capitalist economies of 2006. Also, Friedman’s policies would mean even more inequality of income and wealth than there is already, provoking reaction from working people. All-out Friedmanism would probably have brought capitalism to its knees.

The capitalist apologists and leaders will mourn his passing, but not carry out his policies. The working class will remember the damage he has done to millions of people’s lives.

Image Acknowledgment via Alain Dubois

8 thoughts on “"Torturing People so Prices can be Free"- Milton Friedman RIP

  1. This is a very good collection of pieces on Friedman. Friedman defenetly represents one of the worst in justifying the free market systems, he’s a very good and smart economist, but nonetheless, I believe his thinking to be quite, well…wrong, he sees things through the view of the upper class capitalists. Liberation theologian Franz Hinkeleammert (who lived in Chile before the coup and now lives in Costa Rica) wrote a great book called The Ideological Weapons of Death (a translation of Las armas ideologicas de la muerta) in where he critiques Friedman’s “Happy Fetishism.” It’s a good book (but hard to find) and I’d recommend it to anyone. Great post.

  2. My wife was working at home today, watching Charlie Rose during her noon break. Old Charlie was doing a little retrospective on the defunct Milton Friedman. Charlie showed a tape of an interview in which he was asking Friedman scintillating questions, like, “What do you want your legacy to be?”

    Anyway, two little thoughts occurred to her while watching this interview. The first thought is that Milton Friedman never changed his mind. He stuck with his small-government mantra to the very end. At one point in his youth he thought that anti-trust activity by the government *might* be justified; later he changed his mind. But the overarching principles never changed. He never publicly expressed any self doubt. He was so damn SURE of himself.

    The other thought is that this self surety is exactly why he was so influential. Apparently, it feels good to follow people who are sure of themselves. Even if the espouser is completely wrong, at least he is sure!

    as for me, after reading your post earlier today, all I could think of was, how could that bastard ever sleep at night?

  3. What a great collection of comments on the late Friedman.This is a classic case where technocratic, isolated ‘wisdom’ foundered at the rocks of politics sadly leaving many impoverished and dead…!

  4. Jack: Thanks for your insightful comment.

    What scares me is that despite the fallacy of his ideas, brought to fore above all in Chile, he has become a very popular figure in India, and his book “The World is Flat” a bestseller, indicating the rise of a modern, right wing intelligentsia. Till about a decade back, intelligentsia in India was a synonym for a left- wing intelligentsia.

    Tom: Some tireless, confident people never lose a wink. They just fire their Secretary of Defense 🙂

    Raza: Thanks for your comment, glad to see you here!

  5. bhupinder,
    thomas friedman, the columnist, wrote the book ‘the world is flat’ ..not the economist.. easy to get confused, i guess, their thoughts being similar..
    i’d left a question for you on harini calamur’s blog – i’d repeat that here..what other examples can you think of apart from chile..that support the idea that friedman’s thinking results in..or is a necessary accompaniment to dictatorships?
    a very informative post, thank you.

  6. Kuffir: Yes, indeed, I got mixed up with the names:-( Thanks for pointing it out.

    Other countries: I can’t think of any other major country offhand. China, perhaps, in some ways comes closest.

    The US, too, with all its pretensions of being a democracy is a very restrictive country, whose political spectrum consists of just 2 political parties (the others don’t really have a major say)-
    one is at best a center- right party and the other is conservative, right wing.

    As William Greider points out in The Nation, the market being able to self- regulate is a flawed idea.
    Free markets are not really free, as the Indian development economist Sukhomay Chakravarty pointed out.

    What seems to have been borne out from the experience of the second half of the 20th century is that power of the state has been necessary to establish “free- markets”. This may not necessarily be a dictatorship. I think Chile is an extreme case- perhaps the logic of Friedman’s ideas reaching a logical culmination.

    The worse thing was that Friedman was happy to support a regime that implemented his ideas, overlooking the brutality of Pinochet’s regime.

  7. Hi Bhupinder
    Here via Alok’s. Thanks for this collection of pieces on Friedman. I am an economist by profession, and trained in neoclassical economics, so I have a good deal of faith in the power of markets, but even I find many of Friedman’s views guided more by a strong sense of faith rather than logic. Have you read Richard Posner’s quite balanced evaluation? It echoes my own view quite well. Available here.

    The Economist does good by him, not surprisingly.

  8. Thanks for the link, I found both the post and the comments therein very educative.

    Whatever be their theoretical contribution, people like Friedman and Karl Popper (mentioned in Posner’s post) provided ammunition to the capitalist world in the Cold War and now that it is over, there are mild criticisms without seeing the correlation between his such extreme views and the logic of capitalism.

    I don’t find it surprising (which doesn’t make it any less appalling though) that he ended up supporting one of the most brutal dictators of the 20th century.

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