My favorite economist
June 7, 2018
Is it nerdy to have a favorite economist? Hear me out, then decide. While in college, many years ago, I was interested in a girl who convinced me to see a presentation by an economist. That wasn't my idea of fun, but I went anyway. Things didn't work out with the girl, thankfully, but the message from the economist was another story.
While listening to this economist, many of the half-formed philosophies and partially validated beliefs from growing up with hard work on ranches suddenly became clear. I listened to a clear articulation of those philosophies that I could not previously state or fully explain.
This economist had such a strong effect that I seriously considered changing my major. I probably would have if I had not been so far into the existing one. Economics seemed such a dry subject, but his presentation made it interesting while remaining factual. I have since read all of his books (not nearly as entertaining) and watched numerous videos of his presentations.
Who is this mystery economist? Milton Friedman, who was at the time a professor at the University of Chicago. Many consider him to be the most influential economist of the 20th century. He served as an economic advisor to President Reagan and was the model for others such as Art Laffer, Thomas Sowell and Walter Williams.
Friedman held the view that there are four legitimate functions of government. First is the duty to defend the country against foreign enemies. This would include border security. He did not believe that the military should be privatized.
The second function is to protect the individual citizen against abuse or coercion by other citizens.
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The third is to define the "rules of the game." For example, what is private property and what are the mechanisms to be used to define and protect same.
Fourth, government should provide a mechanism to adjudicate disputes about those rules. In other words, a judicial system.
Notice that nowhere in these functions is included health care, education, the poor, pro-choice, gay marriage, gun control, or any other hot-button leftist issue.
He firmly believed that free-market capitalism, restrained only by the preceding four functions of government, is the solution to nearly every problem. This included social issues such as poverty. Today, the definition of capitalism has been perverted into crony capitalism, whereby those in favor with those in power get the benefits of the economic system. That is approaching socialism.
Capitalism, on the other hand, if free to operate under minimal government restraint, will solve nearly every economic inequality. He said, "The great virtue of a free market system is that it does not care what color people are; 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 deal with one another and help one another."
His statements are more than just opinions. Unlike Keynesian economists who provide theory generally unsupported or poorly supported by historic fact, his books provide volumes of historical data to support his beliefs. That data is far too lengthy to discuss here, but it is available from many sources.
He was defiantly against big government. His view of the failure of government is legion. For example, "One of the great mistakes is to judge policies and programs by their intentions rather than their results." One of his big criticisms in this regard was the repeated but different failures of the Federal Reserve. In his view, the Great Depression was one example, caused not by failure of business but by Fed economic policy, and greatly extended by the Fed's restrictive money supply management.
Here is an example on government's interference with supply and demand. "We economists don't know much, but we do know how to create a shortage. If you want to create a shortage of tomatoes, for example, just pass a law that retailers can't sell tomatoes for more than two cents per pound. Instantly you'll have a tomato shortage. It's the same with oil or gas."
Much of what I believe today stems from that chance occurrence in college. Get the "freebie" mentality out of our government. A true free market system will make America great again. As Friedman says "'Deserves' is an impossible thing to decide. No one deserves anything. Thank God we don't get what we deserve."
Tom Riggins' column appears every other Friday. He may be reached at email@example.com.