Milton Friedman: A Fresh Look at the Apostle of Free Markets

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Joblessness is growing. Millions of homes are sliding into foreclosure. The financial system continues to choke on the toxic leftovers of the mortgage crisis. The downward spiral of the economy is challenging a notion that has underpinned American economic policy for a quarter-century — the idea that prosperity springs from markets left free of government interference.

The modern-day godfather of that credo was Milton Friedman, who attributed the worst economic unraveling in American history to regulators, declaring in a 1976 essay that “the Great Depression was produced by government mismanagement.”

Five years later, Ronald Reagan entered the White House, elevating Mr. Friedman’s laissez-faire ideals into a veritable set of commandments. Taxes were cut, regulations slashed and public industries sold into private hands, all in the name of clearing government from the path to riches. As the economy expanded and inflation abated, Mr. Friedman played the role of chief evangelist in the mission to let loose the animal instincts of the market.

But with market forces now seemingly gone feral, disenchantment with regulation has given way to demands for fresh oversight, placing Mr. Friedman’s intellectual legacy under fresh scrutiny.

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Norman C Lyle - 4/14/2008

On the contrary, we are still a long way off from what Mr. Friedman advocated - a truly laissez-faire capitalist system. To the extent that the federal government regulates our economy, underwrites corporate failure, and then tries to "fix" the system with ever more regulations, is the extent to which the economy has "sunk." Nevertheless, unemployment is still quite low, we have not had the necessary two quarters of negative growth to properly define a recession, despite what we are being told, and new jobs are being created. When we look at the 20+ years of economic growth stimulated by what small gains in economic freedom were achieved under Reagan, we can only wonder what amazing things might happen were the government to remove the chains entirely. My statements should not be misconstrued to imply an apology for fraud or criminal behavior. Government has a proper role in advocating against this kind of activity.