False-economic-recovery

STAFF NEWS & ANALYSIS
We Need a More Socialist Milton Friedman … Not
By - February 24, 2017

Milton Friedman had many ideas that I disagree with, and others that I think haven’t stood the test of time. But there’s no denying his influence over the world of economics; he was one of the field’s greatest popularizers and explainers. … For many Americans, the face of Milton Friedman is still the face of economics. -Bloomberg

No, we don’t need another Milton Friedman. We need a person who enunciates the real differences between socialism and free markets.

Friedman didn’t do that. On the big issues like central banking and taxation he was muddled at best. He was most eloquent and firm about smaller issues.

The result is a message that is not homogeneous or even well argued. His narrative is one that evades significant issues while celebrating minor ones.

More:

Economists now generally favor as much or more government intervention in the economy as the general public.

… Economics has also changed. The kind of simple supply-and-demand analysis that people learn in their Econ 101 courses — which economists call price theory — is no longer at the forefront of academic thinking. More complex theories are now the norm, and these new theories often require very different intuition and very different conclusions. Even more importantly, the whole discipline of econ has shifted away from theory and toward empirical studies.

We need a new Milton Friedman for this new age. Economics and the world have both changed, but public discussion is still too often based on the ideas of the 1970s and 1980s. Many writers are trying to remedy that situation, and educate the world about the new paradigms and the new ideas. But someone with Friedman’s academic pedigree — he won the Nobel in 1976, and was hugely influential within the discipline — would have more credibility than any writer.

This article doesn’t seem to want a Friedman after all, just someone who can promote “post-Friedman” ideas that are more socialist than not. Who are some candidates for this neo-Friedman role? The article lists Thomas Piketty and Joe Stiglitz as prominent economists who are also writers.

But Paul Krugman is closest to a modern-day Friedman  in the author’s opinion.

He is unrivaled in his ability to use economic theory, both simple and complex, to explain policy issues in a way the public can understand. Like Friedman, Krugman seamlessly integrates economic theory and political ideology ….

But still the author wants more. He believes the current crop, no matter how good, are too theoretical and not empirical enough.

He is looking for someone who will use real-life examples and illustrate concepts will real-life perspectives.

From our point of view, none of this will matter very much. Just because someone is empirical doesn’t mean they are correct. Just because economists are more socialist than ever doesn’t mean we should follow them.

The reason economics is held in low repute is not because of those who explain it but because of those who set its direction.

Even Friedman was not good enough. He advocate things like a steady state Federal Reserve. And he was the one who suggested to the federal government that prepayment of taxes would be a good idea.

Perhaps it was only supposed to last for the duration of the Second World war. Buy we are still living with it today.

We need someone like Murray Rothbard, but even more broad minded and willing to embrace a wide array of anarchical solutions and monetary possibilities, so long as they are private.

Conclusion: Socialism doesn’t work. The closer we can get to marketplace remedies for marketplace problems, the better.

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  • Yokai Yo

    Excellent.

  • autonomous

    The article says, “Economics and the world have both changed…” I don’t think so. Just because certain descriptions of the world have changed doesn’t mean the the world itself has. The sun still comes up in the east and sets in the west whether described by the ancients or by modern scientists. It still warms us as it climbs in the sky and lessens its warmth as it fades. There is still a relationship between supply and demand and pricing whether described by Adam Smith or by Milt Friedman. And there is still an inverse relationship between government intrusion and freedom.

  • MetaCynic

    2 + 2 = 4 no longer serves a very useful purpose in our new more complex world. We therefore need new, more complex mathematical concepts such as 2 + 3 /5 = 2 to keep up with the new times.

    Sarcasm aside, I would think that empirical evidence, the kind already permeating the world’s economies, will demonstrate irrefutably that government intervention in the economy always fails to deliver the desired results. Forget theory, empirical evidence should be the grave digger of Keynesianism along with every variant of socialism.

  • Bruce C.

    “The reason economics is held in low repute is not because of those who explain it but because of those who set its direction.”

    I disagree. I think economics is held in low repute because it is not only wrong in most of its predictions and explanations but because it assumes and asserts some of the worst beliefs about human nature (e.g., greediness). Modern day “economic man” is a shallow, pathetic creature.

  • Pater Tenebrarum

    Re: “The whole discipline of econ has shifted away from theory and toward empirical studies.”

    This is true and it’s precisely one of the things that is wrong with economics as it is practiced today. Economics is a social science, it is not physics or chemistry. One doesn’t need “empirical data” to “prove” the correctness of the law of marginal utility, or any other economic law for that matter. In fact, it is impossible to derive any useful economic knowledge from statistics. Economic history (which is what empirical data represent) is a matter for historians, not for economists. In order to understand and properly interpret economic history, one requires knowledge about economic theory. It is not possible to gain any useful knowledge from the vain attempt to concoct theory from the examination of history.

    Re: “Economists now generally favor as much or more government intervention in the economy as the general public”.

    This is because most modern-day economists are mediocre, but intelligent enough to understand who butters their bread. Or putting it differently: if they all had to compete in a free market, their work would definitely not attract the kind of remuneration they can obtain from the State. Many of them would have to think about doing work people actually want to pay for voluntarily. It is no wonder that many hate the free market.

    It also has to do with vanity and the desire to order other people around. Quite a few economists seem to envy successful businessmen, whom they regard as their intellectual inferiors. How can they have far more wealth and power? It’s unfair! Central economic planning means power – no economist could ever exercise power over others without it. The fact that interventionism simply cannot bring about the desired results is not a big mystery. It has been demonstrated by truly great economists a long time ago already. One must conclude that many of today’s economists are either intellectually lazy or have less-than-savory motives.

  • georgesilver

    Economics is very simple….. He who has the biggest clout wins…….. until his clout no longer works and then someone else takes his place.

  • rahrog

    More propaganda from Bloomberg.

    Some “modern” economists actually believe that 1 + 1 = CAT. If they can just say it over and over again, louder, and faster surely they will make it so.

  • Sydney

    No, we don’t need anymore Murray Rothbards. We need many, many more Carl Menger’s.

  • Yokai Yo

    Praxeology…

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