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Friedman the Moderate

What I find most intriguing about Friedman is the fact that he was able to have such a substantial impact on public opinion and policy. When he began his career, free markets were widely regarded as outdated, even barbaric. In the span of a generation, this changed, due in no small part to Friedman's influence. I believe that the current generation of libertarians would do well to study his example to learn how it was that he was able to have so much influence, and whether we can do the same.

I don't pretend to have the answer to this question, but I would like to offer one hypothesis. Despite the reputation Friedman has on the left as a radical libertarian, there is an striking dearth among his policy recommendations of anything any reasonable leftist or moderate might find objectionable on normative grounds. Where radical libertarians argue for the abolition of public funding of education, Friedman dedicated much of the last decade of his life to the school choice movement. Where radical libertarians argue for the abolition of public welfare programs, Friedman inspired the Earned Income Tax Credit. Read more »


Milton Friedman\'s Theoretical Contributions

At the time of Milton Friedman's death, I knew him only as a public intellectual---one whose contributions consisted primarily of educating the public and policy makers on economic issues. I was vaguely aware that he had won the Nobel Prize, but for some reason I never thought to ask for what. So I was somewhat surprised to read on the occasion of his death references to his many theoretical contributions to the science of economics. Following is a summary of what I've learned since then about the highlights of his theoretical contributions.

What I find most striking about some of Friedman's ideas is how obvious they seem now, despite the fact that many of them ran directly contrary to accepted wisdom less than fifty years ago. As Ben Bernanke said in a 2003 speech on Friedman's legacy:

Friedman's monetary framework has been so influential that, in its broad outlines at least, it has nearly become identical with modern monetary theory and practice. I am reminded of the student first exposed to Shakespeare who complained to the professor: "I don't see what's so great about him. He was hardly original at all. All he did was string together a bunch of well-known quotations." The same issue arises when one assesses Friedman's contributions. His thinking has so permeated modern macroeconomics that the worst pitfall in reading him today is to fail to appreciate the originality and even revolutionary character of his ideas, in relation to the dominant views at the time that he formulated them.


Deceptive Marketing from the EPI

Ampersand, celebrating voters' decisions to raise the minimum wage in several states, points to the Economic Policy Institute's issue guide on the minimum wage. Read more »


Is Market Capitalization Meaningful?


Breathalyzer Interlocks Aren\'t *that* Un-Libertarian

As long as we're ripping off titles, I'm going to rip off this one to respond to Sean's criticism of TJIC's support for breathalyzer interlocks.

I don't know whether requiring breathalyzer interlocks for driving on public roads is a good idea. But I do know that it's not inherently illiberal. The use of roads clearly has to be regulated in some way---if a small minority of drivers decide to start driving on the wrong side of the road, running red lights, and otherwise behaving recklessly, this renders the roads largely unusable for the rest of us. And as long as the government is forcing us to pay for its roads, it has a duty to make sure that we can use them as efficiently as practicable. Read more »


Divide and Conquer

Over at Crooked Timber, Chris Bertram thinks he's found an inconsistency between Will Wilkinson's position on relative incomes and Tyler Cowen's position on relative GDPs: Read more »


Not Conservative Enough?

At Cato@Liberty, Chris Edwards looks at the economic voting records of the lame duck Republicans and concludes that most of them were fairly moderate on economic issues. I'm not sure, but I think that this is intended to suggest that they would not have lost had they been a bit friendlier to the cause of economic freedom. Read more »


The Real Minimum Wage

Apropos Brian's recent post, it's worth noting that the federal minimum wage, for those living below the poverty line, is not really $5.15 per hour. A family (single or married-couple) with one child and one income earner working full time at minimum wage qualifies for an Earned Income Credit of $2662 (see page 53 of this PDF. Read more »


How Not to Sell Out

Ampersand, the founder of the left-wing but otherwise excellent Alas (a blog), is taking some heat from some of his fellow travelers for selling his domain to a search-engine optimization company whose clients include some pornographic web sites. Read more »


It Was Nice While It Lasted

Grim news from Mecca:

Last month, Tsang said positive non-intervention was dead, and had been for some time. He suggested that the government could act "when there are obvious imperfections in the operation of the market mechanism."


Poverty and Welfare

I'm a bit late in getting to this, but I was busy last month, and I'm trying to catch up on things to which I've been meaning to respond. About a month ago, Ampersand wrote a fairly lengthy post at his blog Alas claiming, among other things, that income transfer programs reduce poverty (scroll down to section 4). In support of this, he posted a chart showing child poverty rates of various countries before and after taxes and transfers. Key facts shown in the chart include:

  • The US has a slightly above-average pre-transfer child poverty rate, but the highest post-transfer rate for all countries listed.
  • Denmark, Luxembourg, Belgium, Finland, Norway, and Sweden have the lowest post-transfer child poverty rates (listed in descending order).
  • Poverty is defined as 50% of the median income, presumably adjusted for family size.

The point Ampersand makes with this chart is as indisputable as it is unremarkable: If the government takes enough money from the upper and middle classes and gives it to the poor, then the number of families living on less than 50% of the median post-tax income will decline. Read more »


Why Do Canadians Outlive Americans?

Life expectancy for Canadians is a bit over two years longer than for Americans, and leftists like to point to this as evidence of the superiority Canada's single-payer health care system. I came across a paper comparing death rates of Canadians and Americans from different causes, which may shed some light on the issue. Key points:

  • Among whites, virtually all of the excess deaths came from circulatory diseases.

The Iron Law of Benefits: GM Edition

I know I'm a bit late to the party on this one, but about a month ago, Kevin Drum had this to say:

GM's management faces higher costs than its competitors in other countries because it has to pay its employees' healthcare costs and Toyota and Volkswagen don't.

To which Jane Galt responded thus:

This is a persistent meme on liberal sites, and with good reason: the logic is compelling. The only problem---and it is a slight one---is that this meme is not true. In both Japan and Germany, workers at large corporations get their health insurance via joint contributions from employeer and employee, just as they do in the United States. Big corporations in both countries also have pension schemes, just as in the United States, and higher social security contributions.

Miss Galt makes a good point, but she ignores a more fundamental error in this argument. The logic isn't compelling---it's dead wrong. Explanation below the fold. Read more »


Ghetto Grocers

Belle Waring must have started hitting the bottle early today, because she's acting like some kind of drunken minarchist and coming out in opposition to regulation of fast-food restaurants:

The most obvious response to this type of dietary do-goodery is to say that people just don’t want to buy these purported healthy alternatives, because if they did, there’d be somebody selling them to them already.

Nothing new here for regular readers of Catallarchy, but it's always a pleasant surprise to find common ground with the opposition. Unfortunately, she sobered up pretty quickly and went on to say this:

The only reason I have any sympathy at all for the impulse behind this (obviously stupid and illiberal) idea is that people in poor neighborhoods are subjected to paying more money for worse produce than people in richer ones. Crappy supermarkets with sad carrots and iceberg lettuce, or expensive bodegas with limited selection: these are not good choices, and do seem like a market failure. To this end, the attempt to move farmer’s markets into poorer neighborhoods seems good, as does the idea that opposition to big grocery stores in urban neighborhoods should be dropped.


Shocked!

Angry feminist Biting Beaver (via Kevin Drum) had some trouble getting a doctor to write her a prescription for emergency contraception, apparently because she's not married. Read more »