firefox
01-01-2007, 11:44 PM
He's been dead for several weeks now, but here's a little critique of Friedman and the Chicago School of Economics:
URL: http://tinyurl.com/ygetrd
oots, and these roots are the so-called "Chicago School" of economics of the 1920s and 1930s. Friedman, a professor at the University of Chicago, is now the undisputed head of the modern, or second-generation, Chicago School, which has adherents throughout the profession, with major centers at Chicago, UCLA, and the University of Virginia.
The members of the original, or first-generation, Chicago School were considered "leftish" in their day, as indeed they were by any sort of genuine free-market criterion. And while Friedman has modified some of their approaches, he remains a Chicago man of the thirties. The political program of the original Chicagoans is best revealed in the egregious work of a founder and major political mentor: Henry C. Simons’s A Positive Program for Laissez Faire.1 Simons’s political program was laissez faireist only in an unconsciously satiric sense.
It consisted of three key ideas:
1. a drastic policy of trust-busting of all business firms and unions down to small blacksmith-shop size, in order to arrive at "perfect" competition and what Simons conceived to be the "free market";
2. a vast scheme of compulsory egalitarianism, equalizing incomes through the income-tax structure; and
3. a proto-Keynesian policy of stabilizing the price-level through expansionary fiscal and monetary programs during a recession.
Extreme trust-busting, egalitarianism, and Keynesianism: the Chicago School contained within itself much of the New Deal program, and, hence, its status within the economics profession of the early 1930s as a leftish fringe. And while Friedman has modified and softened Simons’s hard-nosed stance, he is still, in essence, Simons redivivus; he only appears to be a free-marketeer because the remainder of the profession has shifted radically leftward and stateward in the meanwhile.
And, in some ways, Friedman has added unfortunate statist elements that were not even present in the older Chicago School.[/quote]
I would say that he had only one core error, which was that he thought the state could somehow be reconfigured to "optimize" the economy for free market competition. If one looks deeper, however, we see that government is never the solution, but always the problem.
URL: http://tinyurl.com/ygetrd
oots, and these roots are the so-called "Chicago School" of economics of the 1920s and 1930s. Friedman, a professor at the University of Chicago, is now the undisputed head of the modern, or second-generation, Chicago School, which has adherents throughout the profession, with major centers at Chicago, UCLA, and the University of Virginia.
The members of the original, or first-generation, Chicago School were considered "leftish" in their day, as indeed they were by any sort of genuine free-market criterion. And while Friedman has modified some of their approaches, he remains a Chicago man of the thirties. The political program of the original Chicagoans is best revealed in the egregious work of a founder and major political mentor: Henry C. Simons’s A Positive Program for Laissez Faire.1 Simons’s political program was laissez faireist only in an unconsciously satiric sense.
It consisted of three key ideas:
1. a drastic policy of trust-busting of all business firms and unions down to small blacksmith-shop size, in order to arrive at "perfect" competition and what Simons conceived to be the "free market";
2. a vast scheme of compulsory egalitarianism, equalizing incomes through the income-tax structure; and
3. a proto-Keynesian policy of stabilizing the price-level through expansionary fiscal and monetary programs during a recession.
Extreme trust-busting, egalitarianism, and Keynesianism: the Chicago School contained within itself much of the New Deal program, and, hence, its status within the economics profession of the early 1930s as a leftish fringe. And while Friedman has modified and softened Simons’s hard-nosed stance, he is still, in essence, Simons redivivus; he only appears to be a free-marketeer because the remainder of the profession has shifted radically leftward and stateward in the meanwhile.
And, in some ways, Friedman has added unfortunate statist elements that were not even present in the older Chicago School.[/quote]
I would say that he had only one core error, which was that he thought the state could somehow be reconfigured to "optimize" the economy for free market competition. If one looks deeper, however, we see that government is never the solution, but always the problem.