Tuesday, December 13, 2005
And keeps on ticking
He may be 93, but Milton Friedman can still give observations of the world. In a recent interview with New Perspectives Quarterly, he displays several interesting thoughts:
Categories: economics
- on Iraq: Shouldn't have gone, but now that we're there we have to complete the effort "in a satisfactory way"
There is no doubt that America�s stature in the world � in large part due to the attraction and promotion of our liberal freedoms � has been eroded as a result of Iraq. However, if Iraq emerges in the end as a self-governing country that is not a threat to anybody, that will have a favorable effect on the Middle East in general. The end result then would be to increase the prestige of the U.S.
- on the trade deficit and the "global savings glut": points out that the interest income flowing in and out of the US is about the same, because the assets we hold overseas pay higher rates of return than the assets foreigners hold here. "It doesn�t worry me a bit that China and Japan hold so much U.S. debt. In a way, it seems foolish for them to do it because they get lower returns than they might elsewhere. But that is their business."
- on China: In a word, optimistic that Hong Kong will be the example. "If they don�t free up the political side, their economic growth will come to an end � while they are still at a very low level." But he feels political freedom will free up and offers Chile as the parallel.
- on socialism:
The world as a whole has more or less embraced freedom. Socialism, in the traditional sense, meant government ownership and operation of the means of production. Outside of North Korea and a couple of other spots, no one in the world today would define socialism that way. That will never come back. The fall of the Berlin Wall did more for the progress of freedom than all of the books written by myself or Hayek or others.
Socialism today has only come to mean government extraction of income from the haves and giving it to the have-nots. It is about the transfer of income, not ownership. That is still around. - on economic education:
The only reason free markets have a ghost of a chance is that they are so much more efficient than any other form of organization. When you argue for free markets, you are arguing against the trend. When something goes wrong, the natural tendency is to say, �By god, we need to pass a law and do something.�
The argument for the free market is a complicated and sophisticated one and depends on demonstration of secondary effects.
Categories: economics
