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The Road to Selfdom

Free to Choose: A Personal Statement

by Milton Friedman, by Rose Friedman
Harcourt Brace Jovanovich, 338 pp., $9.95

Television is dramatic. It appeals to the emotions. It captures your attention. Yet, we remain of the opinion that the printed page is a more effective instrument for both education and persuasion. The authors of a book can explore issues deeply—without being limited by the ticking clock. The reader can stop and think, turn the pages back without being diverted by the emotional appeal of the scenes moving relentlessly across his television screen.

Anyone who is persuaded in one evening (or even ten one-hour evenings) is not really persuaded. He can be converted by the next person of opposite views with whom he spends an evening. The only person who can truly persuade you is yourself. You must turn the issues over in your mind at leisure, consider the many arguments, let them simmer, and after a long time turn your preferences into convictions.

With this appeal to reason, Nobel laureate Milton Friedman, perhaps the most famous conservative economist in the world, and his wife and collaborator Rose Friedman introduce the reader to their diagnosis of our present ills and their prescription for remedying them. (See box on page 4.) To judge by the rapid appearance of Free to Choose on the bestseller list, and by the attention given to the series of TV shows in which Milton Friedman repeats its message and defends himself doughtily against its critics, their statement seems assured of a vast success. It remains only to be seen if the appeal to reason works: if its hundreds of thousands of readers—perhaps the millions of readers who will eventually buy the paperback we can anticipate seeing in airports and drugstores—will become fortified in their convictions and adopt the Friedmans’ view as their own.

That depends very much, of course, on the strength of the convictions that will be engendered by the Friedmans’ arguments. Let us see, therefore, what the reader gets when he or she opens the book.

The first message is forceful and clear. It is a ringing endorsement of economic freedom and political liberty, and a warning about the dangers of continuing on our present course:

The experience of recent years—slowing growth and declining productivity—raises a doubt whether private ingenuity can continue to overcome the deadening effects of government control if we continue to grant ever more power to government, to authorize a “new class” of civil servants to spend ever larger fractions of our income supposedly on our behalf. Sooner or later—and perhaps sooner than many of us expect—an ever bigger government would destroy both the prosperity that we owe to the free market and the human freedom proclaimed so eloquently in the Declaration of Independence.

This message, frequently repeated throughout the book, accounts, I am sure, for its popular success. The Friedmans articulate what a large number of people are yearning to hear. It is hardly news that a vast frustration and irritation are to be found in democratic electorates everywhere, and that popular resentment, once focused against the excesses of big business and big labor, is today mainly brought to bear on big government. Thus the Friedmans’ book will be bought, and its calls for action eagerly read and frequently cited, because it is a book in tune with the times, whether its arguments and diagnoses are cogent or not.

There is, however, much more to Free to Choose than these affirmations and denunciations. Most of the book consists of economic arguments that are intended to document its diagnosis and to validate its claims. This is the part of the book that gives it its authority, but I suspect it is a part that will go largely unread. The Friedmans may have earnestness, virtue, perhaps even truth on their side, but their account has none of the verve and immediacy of the work of an economic journalist like Martin Mayer or the wit and impudence of that of J.K. Galbraith. Consequently, I fear that few of those who buy the book because they know it speaks to their frustrations will actually “turn the pages back” to mull over arguments. They will take them on faith, unread.

Those readers who do make their way through the Friedmans’ lucid and plain prose will find the themes of the efficacy of the free market and the baleful effects of government illustrated or explained in connection with a succession of related topics. They will begin with the Great Depression, whose cause is dismissed as “growing economic difficulties plus the puncturing of an unsustainable speculative bubble,” but whose wracking persistence is ascribed at length to the ill-considered actions of the monetary arm of the government, the Federal Reserve system.

Readers will then consider the growth of the welfare state, the outcome of the Depression. Once again they will discover that the intrinsically self-defeating properties of government have brought to naught programs whose objectives were noble. “The repeated failure of well-intentioned programs is not an accident,” the Friedmans declare. “It is not simply the result of mistakes of execution. The failure is deeply rooted in the use of bad means to achieve good objectives.” The bad means are essentially government spending programs aimed at results that contravene the market, or that mushroom into waste because they have no built-in regulators similar to those of the market. Thus HEW expenditures mount, but there is no improvement (we are told) in the actual medical care received by the public. The Social Security program is vast, but its finances are in serious disarray. Waste is rife in the welfare system, but even more distressing than the waste is the damage to our moral fabric: the family is weakened, the incentive to work and save and make innovations is impaired, our freedom is constricted.

From a consideration of these short-comings or outright perils the Friedmans move to an examination of the problem of equality, namely the rise of the new and pernicious view that “everyone should have the same level of living or income, should finish the race at the same time.” This view of equality, with its stress on outcomes rather than opportunities, produces serious social harm because it leads to unenforceable egalitarian legislation. Worse yet:

When people start to break one set of laws, the lack of respect for the law inevitably spreads to all laws, even those that everyone regards as moral and proper—laws against violence, theft, and vandalism. Hard as it may be to believe, the growth of crude criminality in Britain in recent decades may well be one consequence of the drive for equality.

The Friedmans then turn to problems of schooling, to the protection of the consumer and the working person, and finally to inflation. Here we have more variations on the same theme. Public education suffers from the malady of an excessive reach and unchallengeable monopoly of government. The well-being of consumers may on occasion be safeguarded by government agencies but is more often jeopardized by the inertia or self-interest of government bureaucracies. National problems such as energy are not alleviated but only aggravated when the flexible market is discarded in favor of government intervention. Restrictions on the entry into occupations, such as those imposed by the American Medical Association or by any other trades union, protect small constituencies at the expense of large groups of citizens. As for inflation, it too results from the imposition of government power beyond its proper limits. “Since time immemorial,” the Friedmans warn, “sovereigns—whether kings, emperors or parliaments—have been tempted to resort to increasing the quantity of money to acquire resources to wage wars, construct monuments, or for other purposes. They have often succumbed to the temptation. Whenever they have, inflation followed close behind.”

Woven into this chapter-by-chapter diagnosis of our major ills the reader will find numerous prescriptions. Predictably, the Friedmans urge that market activity be encouraged and that government activity be discouraged. Thus the monopoly of public education should be broken by their well-known voucher plan that would enable parents to choose the schools their children would attend, putting private schools on a par with public. The umbrella of consumer “protection” should be furled, and the distortions of monopoly corrected, partly by dismantling all tariff and quota barriers, partly by breaking up the licensing powers of professional groups such as the AMA. And of course the issuance of ever more money must be brought under control. Ideally capping the program would be a series of constitutional amendments for economic freedom. These would limit the taxing and spending power of the government, abolish tariffs, prohibit wage and price controls, prevent licensing of occupations and professions, simplify taxation, forbid the taxation of corporations, limit the annual growth in the money supply, and index government bonds to protect bond holders against inflation.

That is roughly the gist of the Friedmans’ book. It has the ring of self-evident truth and self-confidence, a tone of conviction that is quickly communicated to the reader. Indeed, what strikes one at first is the apparently overwhelming logic, the unanswerable evidence in favor of the Friedmans’ case. Take, as an initial instance, the contrast of Japan in 1867 and India in 1947 which they introduce early into the book. Was there not a striking similarity in the initial starting points of the two nations? “Both were countries with ancient civilizations and a sophisticated culture. Each had a highly structured population. Japan had a feudal structure…, India had a rigid caste system…. Both countries experienced a major political change that permitted a drastic alteration in political, economic, and social arrangements. In both countries a group of able, dedicated leaders took power…, determined to convert economic stagnation into rapid growth….”

Indeed, in retrospect the differences all seem to favor India. Japan in 1867 was utterly cut off from the Western world. It had no capital structure, no railroads, factories, or civil service such as India enjoyed in 1947. In resources Japan was the poorer of the two. It had no fortuitous influx of capital, such as the “enormous volume of resources” that India received as foreign aid.

Yet look what happened. Japan rose to be a formidable economic power, with a high standard of living and widespread political freedom. India remained economically stagnant and even lapsed into brief dictatorship, which it may do again (the Friedmans warn). What, then, explains the difference? “We believe the explanation is the same as for the difference between West and East Germany, Israel and Egypt, Taiwan and Red China. Japan relied primarily on voluntary cooperation and free markets…. India relied on central economic planning.”

The argument sounds convincing, until one begins to think about what has been left out: the long traumatic Indian experience with British imperialism for which the Japanese have no counterpart; the linguistic fragmentation of India, compared with the homogeneity of Japanese culture; the Japanese descent into dictatorship in the 1930s. The Friedmans leave out also the huge injection of American capital into Japan after World War II, when Japan became America’s military outpost in the Far East. Whatever the free enterprise talk in Tokyo, there is also the informal planning of government, banks, and corporations in Japan (“Japan Incorporated”) contrasted with the sprawling chaos of Indian village life, whatever the socialist rhetoric in Delhi.

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