Fairlee, Vermont — At the top of a steep hill here stands a green hexagonal cottage. Milton Friedman, who built it in the 1960s, used to look out, as I am looking now, over the slopes that stretch in every direction, thick with pine and birch and maple. Perhaps the great free market economist mused, even in those earliest days of eco-activism, on how prosperity boosts the natural ecology.
This was once farmland, its soil poor, thin, and rocky. When the Midwest was opened to settlement, New England’s farmers trekked westward, and nature poured back into places like this. Some 90% of Vermont has been reforested, and these hills look much as they did to the first settlers. You see turkeys and white-tailed deer from the window. There are bears and coyotes in the hills nearby.
Friedman luxuriated in capitalist successes. A fundamentally optimistic man, he never lost his conviction that the free market showered its richest benefits on those who were often readiest to criticize it. He saw the removal of barriers and regulations as the best way to help poor people, minorities, and, most of all, developing countries. “The great virtue of a free market system is that it does not care what color people are,” he observed cheerfully. “It does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to help one another.”
George Shultz, Reagan’s patriotic secretary of state, once described Friedman as the most influential man of the 20th century. An odd observation, on the surface. Sure, Friedman did as much as anyone to end the Keynesian consensus and offer a popular alternative to socialist economics. But was he more influential than, say, Margaret Thatcher or Ronald Reagan or Deng Xiaoping?
It depends on what we mean by influence. Politicians shape events, but only within the parameters of what is ideologically feasible. “It’s nice to elect the right people, but that isn’t the way you solve things,” Friedman told an interviewer in 1977. “The way you solve things is by making it politically profitable for the wrong people to do the right things.” Less than three years later, Reagan, Thatcher, and Deng were devolving power in their respective countries, seeking to tilt the balance back, however slightly, from state to citizen.
Friedman offered oven-ready solutions to all three. Reagan used to quote him approvingly. Thatcher made her ministers read his books. And while Deng never did meet with the argumentative little professor, one of China’s key economic reformers, Zhao Ziyang, did. Indeed, Zhao’s association with the “extreme liberal economist” was one of the grounds on which he was removed from office by hard-liners after the Tiananmen Square abomination.
Friedman’s critics liked to complain that he advised Augusto Pinochet, the Chilean dictator, who combined successful liberal economics with political repression. Friedman used to respond that he had also advised China’s leaders and, in terms of the sheer number of people lifted out of poverty, the consequences had been far happier.
Twenty years in elected politics has convinced me that the “great man” theory of history is bunk. Politicians are the actors, not scriptwriters. They get the recognition and the renown, but, directly or indirectly, they are reading someone else’s lines.
Friedman called this cottage Capitaf — capitalism and freedom — an oddly clumsy name from a man who was such a fine phrase-maker (“The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both.”). It is run by Bob Chitester, who produced Friedman’s epic Free to Choose TV series, and is open to groups of visitors or students as a venue for small conferences.
I am here looking at whether we could revise and revive that series, making the case to a new generation. Young people these days are less likely to be Marxists than when Friedman was teaching. But they are just as likely to blame the market for what are, in fact, in almost every case, failures of the state.
The problem, now as then, is that the market is counterintuitive. The idea that an economy should be planned sounds far more reasonable than the idea that things should be left to arrange themselves higgledy-piggledy. We need to keep plugging away, patiently and politely, explaining to each generation that good intentions don’t compensate for poor outcomes, that neither side has a monopoly on compassion, that state power coerces in a way that markets never can. No one is born understanding these things. That’s why the argument is perpetual.
