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Gary M. Galles - Contributor

Mr. Galles is a professor of econmics at Pepperdine University. [go to Galles index]

Lessons on Liberty
Insights from Milton Friedman...
[Gary M. Galles] 7/30/04

America celebrates our founders, who created the first government ever devoted to liberty. But we give too little credit to those who have defended the liberty they bequeathed us. On July 31, remember the 92nd birthday of one of them--Milton Friedman. As Ed Crane put it, "when you ask which academic did the most to promote human liberty around the world during the 20th century, there is no debate. Milton Friedman wins hands down. He is the living symbol of freedom."

In Friedman's own words, "My central theme in public advocacy has been the promotion of human freedom." He has continued to fan the flame of liberty, contrasting the invisible hand of voluntary social coordination with the visible hand of government:

Fundamentally, there are only two ways of coordinating the economic activities of millions. One is central direction involving the use of coercion...The other is voluntary cooperation of individuals.

The Invisible Hand:

The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system.

The possibility of co-ordination through voluntary co-operation rests on the elementary...proposition that both parties to an economic transaction benefit from it...Exchange can therefore bring about coordination without coercion. A working model of a society organized through voluntary exchange is the free private enterprise exchange economy.

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 one another.

The Visible Hand:

Government has three primary functions. It should provide for military defense of the nation. It should enforce contracts between individuals. It should protect citizens against crimes against themselves or their property.

When government...tries to rearrange the economy, legislate morality, or help special interests, the costs come in inefficiency, lack of innovation, and loss of freedom. Government should be a referee, not an active player.

...governmental measures taken with good intentions and for good purposes often, if not typically, go astray and do harm instead of good...There are many causes for the loss of freedom, but surely a major cause has been the growth of government...

The most unresolved problem of the day is precisely the problem that concerned the founders of this nation-how to limit the scope and power of government...Tyranny, restrictions on human freedom, come primarily from governmental restrictions that we ourselves have set up.

Problems with the Visible Hand:

The government solution to a problem is usually as bad as the problem.

Wherever the state undertakes to control in detail the economic activities of its citizens...[they] have little power to control their own destiny.

Most of the energy of political work is devoted to correcting the effects of mismanagement of government.
Many people want the government to protect the consumer. A much more urgent problem is to protect the consumer from the government.

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.

Only government can take perfectly good paper, cover it with perfectly good ink, and make the combination worthless.

If you put the federal government in charge of the Sahara desert, in 5 years there would be a shortage of sand.

On the One Hand; On the Other:

The greatest advances of civilization...have never come from centralized government.

Anything that government can do, private enterprise can do for half the cost.

If you spend your own money on yourself, you are very concerned about how much is spent and how it is spent... However, if you spend someone else's money on someone else, you are not very concerned about how much is spent, or how it is spent.

The United States has continued to progress...the product of the initiative and drive of individuals co-operating through the free market. Government measures have hampered, not helped, this development. We have been able to afford and surmount these measures only because of the extraordinary fecundity of the market. The invisible hand has been more potent for progress than the visible hand for retrogression.

Milton Friedman has long argued cogently and forcefully for freedom, because "economic freedom is an end unto itself...Economic freedom is also an indispensable means toward the achievement of political freedom." He has recognized that "Underlying most arguments against the free market is a lack of belief in freedom itself," and has marshaled reams of logic and evidence to demonstrate that such unbelief is unfounded. On his 92nd birthday, give him the present of taking his lessons on liberty to heart. CRO

copyright 2004 Gary M. Galles




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