Milton Friedman’s Influence Will Continue to Grow

Alan Meltzer has written a fine tribute to Milton Friedman. He documents how the country and world have changed due to Friedman’s courage and steadfastness in challenging the climate of opinion of the 1930’s and 1940’s:

Friedman’s four major successes were ending the military draft, floating the dollar and other currencies, removing interest-rate ceilings on bank deposits, and auctioning government debt. Each of these examples shows that a market solution is rarely the first choice of governments. Free-market solutions have a greater chance of success if officials gradually become familiar with the proposal and come to believe it can work.

And how it will continue to change:

In Free to Choose the Friedmans proposed to phase out Old Age and Survivors’ Insurance. They would honor existing obligations, repeal the payroll tax, and rely on voluntary decisions about savings and pensions. The United States has so far rejected every move to permit choice in the government pension program, but other countries have changed their programs in the direction the Friedmans advocated: Chile is a well-known example. Even Russia now relies heavily on private decisions after providing a public minimum. As the present generation of young workers moves toward retirement and recognizes the very low return they will receive on their public pensions, pressure for change will likely increase.
Milton devoted a large part of his later years to urging education vouchers that would permit students or their parents to choose a preferred school. Despite strong opposition–especially from teachers unions–school choice has expanded. The charter-school movement is a widely adopted example of choice. It is not the Friedmans’ proposal, but it is a move in their direction.
Welfare reform has emphasized work and choice in place of welfare. The present system is not what the Friedmans proposed. They preferred a negative income tax–a cash payment to the poor that would replace all other programs. The closest we have come is the earned income tax credit that supplements incomes for the working poor. Welfare reform and the earned income tax credit reflect the Friedmans’ influence and their emphasis on personal incentives and individual choice in place of bureaucratic regulation.

Check it out.

Print Friendly, PDF & Email

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.