Re: Leftists knocking Friedman ?

"sinister" <sinister@[EMAIL PROTECTED]
> wrote in message 
news:COGdnbH79b_RSCvanZ2dnUVZ_r2nnZ2d@[EMAIL PROTECTED]
>
> <problems@[EMAIL PROTECTED]
> wrote in message 
> news:1203148928.84850@[EMAIL PROTECTED]
>
> <snip>
>
>> If the cause of the present/pending credit crisis had not been
>> stimulation by Bush's reaction to 9/11: telling the people to
>> 'go out and shop', which promoted the disgusting expressions:
>> "shop till you drop", "Yea babe, I've maxed-out all my credit
>> cards", another later cause would have brought the inevitable
>> pandemic around.
>
> Huh?
>
> The cause of the current crisis is (1) a lack of regulation in the
credit 
> markets, plus (2) cheap credit because of the Chinese, Saudis, Europe, 
> etc, lending to us so we can serve as the buyer of last resort in the 
> world economy.
>
> Friedman's ideology is connected to (1), because he and his ilk view 
> regulation as anathema and the "market" as god.

Well, no.

In Capitalism and Freedom, Friedman laid out two distinct and broad areas 
where goverment regulation is necessary, those being standardization 
(allowing the markets to determine standardization is a slow and costly 
process which inhibits innovation - Friedman uses the example of the 
government setting the railroad guage to insure compatibility and 
efficiency) and "neighborhood effects", where the negative byproduct of 
capitalistic activity is so detrimental that cor****ations need to be told 
what to do (e.g., telling cor****ations to clean up after themselves 
environmentally is necessary for the good of society)

Further, it's inaccurate to refer to "god" as a proxy for Freidman's view
of 
the markets. Friedman, like all good (and he was, of course, not good, but

great) economists knows that the market will ultimately come to the best 
"solution" for a given problem if left to its own devices, but will 
inefficiently lurch to and fro in the process before such a solution is 
reached.  (Ergo, the goverment's role in standardization.)

I would personally say that the goverment has a role in mitigating the 
negative effects on certain members of society whilst such "lurching" is 
taking place, to the extent that they are reasonably able (thinking about 
the avoidance of moral hazard, here, but there are other considerations); 
but if the goverment intervenes in the process itself, they tend to
distort 
the market and ultimately accentuate the negative effects that one was 
hoping to mitigate.

These broad concepts can be extended to justify further interventions, but

it's most accurate to say that "if you gotta trust somebody" Friedman 
trusted the automaticity of supply and demand more than he trusted 
government bureaucrats and politicians. One can reasonably argue the
extent 
to which "Friedmanism" permits goverment regulation under the principles 
above, but I think his primary theorem that markets are more trustworthy 
than politicians to be quite sound and wise. I don't see how we can 
reasonably trust collections of politicians to make correct choices by 
consensus on complex matters on which they are unschooled, and would
prefer 
them in the role of mitigating effects generated automatically rather than

dictating the effects themselves.

Instead of demonizing Friedman, I am of the opinion that there is ample 
ground for debating the need and sort of goverment regulation in the
economy 
according to the principles in the first paragraph, and that there is no 
reason to forget (because of one's political inclinations) that he is one
of 
our Nobel Prize winners and thus one of our greatest thinkers.  Besides, 
history shows that when a group attempts to "burn" (figuratively speaking,

here, of course) either a man or his opus, they simply insure that the man

and his opus takes on an even more influential position among future 
scholars.

JG