Today marks Milton Friedman’s birthday. Described by The Economist as “the most influential economist of the second half of the 20th century … possibly all of it,” Milton Friedman lives on in his ideas.
At the Charles Koch Institute, we’ve named our classrooms and conference rooms in honor of 28 men and women who spent their lives defending and promoting the ideas of a free and open society.
Milton Friedman is one of the figures we honor, and his conference room displays an etching of his quote: “A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.”
Below are additional “Friedmanisms” that demonstrate how his words are still relevant today.
The fact is that the Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.
In A Monetary History of United States, 1867-1960, Friedman and co-author Anna Schwartz argue that the Great Depression wasn’t a failure of capitalism, but a failure of government. The Federal Reserve’s mismanagement early on in the crisis only made problems worse. To learn more about how the failure of government led to the Great Depression and is contributing to current economic problems, you can listen to Friedman’s explanation.
You must separate out being pro free enterprise from being pro business. The two greatest enemies of the free enterprise system, in my opinion, have been, on the one hand, my fellow intellectuals and, on the other, the big businessmen.
“Pro-business” and “pro-enterprise” (also known as pro-market) are often mistaken for synonyms, but they represent vastly different ideas. While both believe that government should support businesses, someone who is pro-business would define “support” as selecting favored businesses for special benefits like subsidies and tax breaks, while someone who is pro-market would define “support” as staying out of the way by minimizing regulations and other obstacles to growth. Unfortunately, today, governments’ pro-business actions and simultaneous lack of pro-market principles are stifling economic growth and well-being in the United States.
One example of this is the sugar industry. Even though the U.S. sugar crop makes up less than 2 percent of the total crops produced in our country, money spent by the sugar industry represents a third of the total amount spent trying to influence legislators on agricultural issues.
Why such a high amount? Because the sugar crop industry gets significant benefits that make the investment well worth it: Tariffs and loan guarantee programs artificially increase the price of sugar, costing U.S. consumers twice as much while ensuring the sugar industry a sweet deal. Despite Friedman’s warnings, cronyism is still alive and well and will continue to undermine a healthy, growing economy in the United States. It is only through educating ourselves about what economic freedom really entails that we can confront such injustices.
There is no better way to appreciate Milton Friedman’s words and ideas than to engage with them directly. To that end, we’ve compiled some highlights:
- Capitalism and Freedom
- A Monetary History of the United States, 1867-1960 (with Anna Schwartz)
- Free to Choose: A Personal Statement (with Rose Friedman)
- “The Draft: From Compulsory to Voluntary” (video)
- “Why Not a Volunteer Army?” (New Individualist Review)
- “The Role of Monetary Policy” (The American Economic Review)
A version of this blog originally appeared on EconomicFreedom.org, a former project of the Charles Koch Institute. The Institute republished it here on July 31, 2015 and updated it on July 29, 2016.