Trying to be sympathetic-but-fair to Friedman & to Ebenstein... What is so special about the banking industry that the government must respond to a fall in demand for its services (for that is what going to the bank to pull out your deposit in gold constitutes) by providing it with a huge, immediate subsidy (for that is what buying up banks’ Treasury bonds for cash at their normal valuation constitutes)? And, if Friedman’s detailed study of the banking sector led him to make an exception from laissez-faire for this industry, who is he to say that a similarly detailed study of other industries would lead to similar conclusions about useful deviations from laissez-faire? And we have not mentioned that the “night watchman” state is itself a very powerful enterprise, able to make and enforce its own judgments about who owns what against not just against roving bandits, but local notables and even its own functionaries. Friedman’s minimal state is not so minimal, after all.
I’ve been quite confused by the level of respect shown Friedman by economists I have come to respect (because they’ve been mostly right and when wrong admit it). As someone with only a few undergraduate Econ courses under his belt from UCSD in the late ‘70’s (taught with Samuelson’s book), my experience of Friedman was in his role as a public intellectual. In that guise his ever-present smug smirk and condescending attitude left me to conclude he was a charlatan. An honest intellectual persuades, not demeans. And my memory is that his monetarist proscription was tried by Volker with disastrous results, correct? (Disastrous for Pres. Carter at least.) He certainly informed the whole Democratic third-way brigade, but in retrospect that doesn’t seem like a useful enterprise. Maybe I’m all wrong, but I find no comfort living in a society run by malefactors of great wealth.
I’ve been quite confused by the level of respect shown Friedman by economists I have come to respect (because they’ve been mostly right and when wrong admit it). As someone with only a few undergraduate Econ courses under his belt from UCSD in the late ‘70’s (taught with Samuelson’s book), my experience of Friedman was in his role as a public intellectual. In that guise his ever-present smug smirk and condescending attitude left me to conclude he was a charlatan. An honest intellectual persuades, not demeans. And my memory is that his monetarist proscription was tried by Volker with disastrous results, correct? (Disastrous for Pres. Carter at least.) He certainly informed the whole Democratic third-way brigade, but in retrospect that doesn’t seem like a useful enterprise. Maybe I’m all wrong, but I find no comfort living in a society run by malefactors of great wealth.