One great brain v many small ones

The trouble with Friedman

A doughty free-marketeer sparks controversy from the grave

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nicholas nickleby

A masterpiece of reporting--I think my favorite part might be the author's casting of this as a battle between useless academics vs. one great theorist, which would seem to imply that Milton Friedman was not an academic. That's what elevates this article to masterpiece level--it not only trades on well-worn stereotypes of the uselessness of academia, but, in order to do so, it implies (falsely) that Friedman wasn't in academia. Bravo!My second favorite part might be when the author notes that the response has been in terms of "academia’s common weapons, indignation and verbosity." Words and feelings, this is not enough for the author? You want a strike, maybe? An armed resistance? No, no--for an issue which is in many ways an in-house issue (read: why do you care?), the in-house channels of protest will do fine. (And "indignation and verbosity" does do fine: if you followed up with this story, you'd see that the president of the University is convening a faculty senate to discuss the matter before, as you would have it, ploughing on ahead.)My third favorite part is how poorly researched this is, which I can understand, in part, since this is a fluff piece of minimal importance to anyone outside the university (which raises the question: why did you print it?). But this does miss the main point of the debate, which isn't "is MF right or wrong?" (in which case, as many posters have noted, the opinion of the music dept. is not important), but rather the two-fold problem of "is it right to spend so much on an ideologically-biased institute of research?" (to be clear: it's not ideologically-biased because it bears MF's name, but because the rest of the report recommending/planning the institute makes clear that the institute would be so--which would be clear, if you had read the 10-page report) and "do we want our public face to be defined in large part by this particular incarnation of the institute?"

Material Geeza

"working in unsafe conditions that wouldn't pass standards in the corp's home county or in hazardous conditions that wouldn't pass enviromental standards elsewhere, then they are being exploited"But if those conditions didn't exist then there would be no incentive for western companies to move there and therefore none of the longterm increases in the living standards that accompany foreign investments. How ever bad the working conditions are in China the quality of life does seem to be improving eh?

Material Geeza

On Chile apparently Friedman said"The Chilean economy did very well, but more important, in the end the central government, the military junta, was replaced by a democratic society. So the really important thing about the Chilean business is that free markets did work their way in bringing about a free society"its strange that left wing Yanks are trying to paint the Bush Administration as free marketeers, my first dislike of the chap was when he stuck a tarrif on european steel.


As I read the other post I see that Freidman theory has been forgotten just as his theory was highjacked.
All Friedman ever wanted to do was establish the basic value of all raw materail. If he could estiblish one or more like the value of a gallon of water or a barrel of oil then he had a working platform to help the world estiblish a floor that no commodity value could go below and stop these mad swings in economeys around the world that bring starvation and death.
By highjacking his work for their own agenda the Neocon prevented him from finding that floor. So the mad swings will continue !!!!!


I understand the distinctions your making, but as subjective as measures of poverty can be there's still underlying truths to them. Even the arbitrary standard of <$2 US a day can be extremely revealing. In the simplest sense of the word poverty is the lack of resources, but when you couple this with high inequality it becomes a different story. It is not the case that there is not ample resources, its the case that these resources are only being distributed amongst a small percentage of the population. I have spent months of my life pouring through Gini calculations, but even they don't show the complete story. As objective as the gini coefficient is, it can be fudged like any statistic. Dubai and the UAE is a great example of both my points: olympic swimming pools, lush shopping complexes, expensive cars galor, relatively average gini coefficient (.3-.4 depending on the studies.) THen theres the other side of the coin ~20% is below their official measure of poverty, and theres a huge underclass of migrant workers who aren't counted into these calculations and live in overt poverty mere kilometeres from the bustling city.

im not so naive to think that everyone everywhere should be earning the same regardless of their productivity or people working voluntarily in factories are being subjugated on the simple basis that they receive low wages. However I would assert: if workers are working in unsafe conditions that wouldn't pass standards in the corp's home county or in hazardous conditions that wouldn't pass enviromental standards elsewhere, then they are being exploited. Just because your willing to work for less doesn't mean your well being should be sacrificed as well. Even more so international corps often trounce upon people with poorly defined property rights. I really don't think its a matter or mere scarity anymore (obvious exceptions for vital resources such as water) i think its a difficult problem of assuring that people everywhere have claim to atleast the bare essentials


Just as well they did not name it after Friedman. After the crisis in the financial markets, he could have changed his views...


Inequality will always exist for the simple fact that people are not equal. Everybody cannot be a Bill Gates or a Beckham.

The causes of Inequality can be external and internal. The goal is to minimize the external causes so that individuals can maximize their internal capabilities to achieve the fullest.

Poverty, I am not so sure... are there any poor people in those really high per capita GDP countries like Switzerland or something.... ??

If there arent, then there is possibly an opportunity for all the immigrants to flock there and improve the numbers.


My 2 cents on exploited workers.

Firstly, I agree with what @ndrew posts. Whenever, i hear this debated I get the feeling that people are often confused between a corporation hiring very cheap labour and a colonial master having slave labour.

Its a totally different issue when you are free to choose what you want to do and get to weigh your costs and benefits before you make a decision. You wouldnt be very bothered about exploitation if you cannot get 2 square meals a day, or dont have a covered (with a roof) place to spend the night in.

On a sidenote, there is a lot of child labour in India, (i am Indian), the government offers free lunches in the schools to entice students to attend, instead of working.
In a lot of the instances, the students stay for the lunch and then go to work. In their simple viewpoint that way they can get both money and food.


nah-cool, I'm pretty much with Alan L on this one. Two issues in your response; poverty vs. inequality and exploited workers.I can help you make a distinction between poverty and inequality. Poverty is the subjective notion that resources are lacking. How do you define poverty, that's up to you. The 'poor' in OECD countries are doing rather well by developing countries' standards. Discussions of poverty are problematic precisely because it can't be defined in any objective way. Inequality, on the other hand, is not subjective at all. Things are equal or they are not. The degree of inequality can be measured in various ways, usually involving a mean or baseline and then measuring the deviation or variance from that. Look up Theil or GINI.I can think of ways to distribute wealth so that everyone is equally wealthy, but I can't imagine there is a way to make everyone's aptitude, effort, and outcome equal. If that is the case, then everyone is not equally productive so the 'equal' distribution appears to be quite unfair. Do you think we should pay street people $40,000/year for wandering the streets? We could if we made income distribution equal but it would require increasing the poverty of anyone making more than about $40,000About 'exploited' workers in developing countries. I don't know what your experience is in developing countries and I know every place is different but so far as I can tell exploited is a mis-characterization. With minimal education and farming, begging or prostitution as alternatives, many here in Southeast Asia feel fortunate to get some manufacturing job that allows them to afford proper sanitation and electricity and most importantly, better education for their children. Let's face it, if the MNCs didn't 'exploit' these workers their situation would be worse and those in wealthy countries couldn't afford a Western lifestyle. Imagine how the 'poor' in the West would suffer without the cheap commodities and manufactures that come from developing countries. It's a win/win situation in many respects and though it's not perfect, it will have to do until someone eliminates the fundamental facts of scarcity and human desire.Anyway, good luck with that. And Friedman, I don't see where he is so influential anyway. The Fed and other central banks around the world ignore his advice everyday. If I'm not mistaken, he advocated a monetary target with strict rules. According to Greenspan, we don't even know what money is anymore. A handful of countries use inflation targeting which may be a functional substitute but many have such a large band that there is a lot of room for XR intervention. All of this is exactly what Friedman was against.About the article, pretty weak, the human rights lady should win a Nobel and then maybe Latin Americans would care about her more. And the music guy can blow it out his horn.


alan L
to respond to your post as briefly as possile :P
1. I can't really see how the distinction between poverty and inequality can be made. true they aren't necessarily causal in a theoretical frame work, but it practice they are too sides of the same coin. It is the countries with the greatest inequalities in wealth is where there is a massive percent of the population remains in poverty. It is this concentration of wealth at the top end of society that was a trademark of the neoliberal policies implemented.
2. Neoliberal policies have revolved around the fact that there are easily exploited workers, if only they are "free" to participate in the global economy. the reality is that these policies have created a worldwide caste system of sorts where developed nations can have their picks at the natural resources and labor forces of undeveloped nations. then exploit them at the hands of powerful private corporations. As is often the case: public enterprises are made for sale through preconditional debt agreements with the IMF and private corporations are the ones that benefit. This is inherently a redistribution of wealth, just in reverse. capital generated by public funds are auctioned off at bargain price.
3. it is absolutely true that although no country has 100% embraced mr. friedman's philosophy there are certainly degress as to which countries have pursued the policies. It's with these degrees that it is possible to make distinctions. What i was trying to state was that the timing of the implimentation can be critical. China is a good example of a country pursuing liberalization on its on term and not the arbitrary goals of the IMF.
4. international corporations are commonly exempt themselves from the laws in the markets they participate in by operating out of other countries. At home corporations hold significant political sway through the use of lobbyist and of course pocket stuffing. its not always the influence they weild but also their lack of accountability that is dangerous.
5. I don't really think the world is so black and white. its not just capitalist or communist, there is a gray area of socialized capitalism where much of europe is currently.
6. maybe i was alittle overbearing in my comment to nuthead but at the same time mr. friedman has such an enormous impact of the worldwide economic condition it doesn't seem necessary to always point out his accomplishments. the point of this article was not to serve as a eulogy, rather it was to point out some the controversy that still revolves around friedman's ideas.

what im really trying to get at is that blindly pursueing any ideology is dangerous, neoliberalism is no exception. Private enterprises may be more efficient in the for-profit sense, but if you consider societal optimums then there can be a stark difference. friedman's theory was based on the idea that eventually these two would become one and the same without any intervention necessary, but this is simply not the case. alot of people have suffered for this mistaken assumption


Some commentators have claimed or opined that Chile owes its economic prosperity to free-market policies initiated by Pinochet (and by extension, Friedman). Perhaps, but as another blogger stated, Friedman's contact with Chile was very brief, and the economic growth that Pinochet may have been responsible for took a long time to kick in. If Chile had had free elections, Pinochet might have been voted out early because of a slow economy.


Why name institutes after anyone? But really, Friedman benefited from the fact that the rich elites of the world liked what he had to say because it benefited them. After all, this is a guy who argued that we should trust the brainless markets more than our own human brains. Talk about insecurity.


Always a fan of the Economist's subtle, understated humor, like the last line about how this institute will fill buildings that held a seminary.... Priceless, given Friedman's influence on absolute free-marketers.


Friedman, Hayek, Popper are about freedom of the individualThe rest is about putting your neck under the boots of those believing people who in the beginning of there life tried to improve the world. But later on during the personal journey through reality and the rest of the universe discovered that their believes are futil and wrong.But their ego was not able to recognize that they were wrong, those people like Mao, Mussolini, Hitler, Stalin, Pol Pot, Lenin and all the other collectivist failed idealists blamed others instead of realizing that their ideas was just wrong.Giving up any inch of the idea of freedom and individualism for things like "social justice" just means going the path of collectivism and dictatorship.So to name the institute after Milton Friedman is a good idea, just to remember all this idealists where there ideas might led if there would be no big (mostly rational) brains to stop them and protect mankind from greater harm.Cheers

Andre Vaillancourt

In my view Friedman is way to controversial to have his name given to
an institute. He is associated with Pinochet's dictatorship by a lot of
people around the world and the fact that he won a Nobel
price doesn't really make any difference. After all, even Kissinger
has won a Nobel price...

Alan L.

Oh, and I just checked the protest letter.
No signatures from professors of economics or business. Mostly languages, maths, history and poli sci

Alan L.

nah cool:

1. Disagree with the premise that inequality is bad. Poverty is bad, while the fact that at least a portion of humanity has managed to pull away from it and generate huge wealth is good.
2. Disagree that development under liberal capitalism does not occur at the expense of the poor, as liberal capitalism does not condone slavery. It may be true that the poor are worse off than they would be under a wealth-redistributing system. However, I don't see why they have a claim on other people's wealth in the first place.
3. No countries have implemented unrestrained neo-liberalism along Friedman's lines (as a Brazilian, I can tell you: least of all in Latin America), so while China's growth under dictatorship is indeed impressive, we haven't a proper alternative to compare it with.
4. I don't see how corporations could have control over the US economy without a state to exercise that control for them.
5. Yes, neoliberalism has been tied to non democratic regimes. Then again, it was the Cold War, and the alternative could well have been Stalinism.
6. I'm an economist. My mother, however, is not, but she reads the Economist too. I agree with nut head that the Economist, being a strongly liberal magazine, should use the opportunity to present Friedman's ideas, rather than just send a wink to free market economists.


Academics get "carriers" in esoterica because we constantly need examine every possible niche, to explore and challenge ourselves as a society to adapt to changing conditions. Experience has shown ( and the US is a classic example ) that by giving specialists free reign you get a better more adaptive society. Hence, they have every right to complain and the university has every right to ignore them. BTW Subprime is classic Friedman, taking risks for returns to placate shareholders while ignoring the possible effects of your actions "There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game," - The Social Responsibility of Business Is to Increase Profits NYT 1970Bubble away as long as it's legal.


Supposedly a PhD is a sign of intellect and scholarship. How embarrassing for the awarding university of all each of the signatories of that letter.


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