Tuesday, July 31, 2012

What did Milton Friedman have to say about human flourishing?

Who cares? I care for several reasons. Milton Friedman stands out as one of a small number of intellectuals who had a favourable influence on public policy in the 20th century. Today – July 31, 2012 - is the 100th anniversary of his birth.  This blog is about freedom and flourishing. And I am wondering how the (provisional) title of the book I am writing, ‘Free to Flourish’, might be perceived. It is a fairly obvious title given the content of the book, but I hope it might be viewed as an appropriate tribute to Milton Friedman, who with his wife, Rose, wrote a better book, entitled ‘Free to Choose’, which was first published in 1979.

I have not been able to find instances where Milton Friedman referred to human flourishing directly in his published works. His references to happiness seem to be mainly in the context of recognition that people have a right to pursue it as they see fit. He argued that the freedom of the individual should be seen as the ultimate goal in judging social arrangements and that a free society releases the energies and abilities of people to pursue their own objectives.It is reasonably clear that he thought the vast majority of people would be successful in pursuing their own objectives but he does not seem to have made specific claims to that effect. I expect he would probably have endorsed the sentiment of Friedrich Hayek that 'it may even be that liberty exercises its beneficial effects as much through the discipline it imposes on us as through the more visible opportunities it offers' (Constitution of Liberty, 1960:18). 

Friedman was certainly careful not to claim freedom as ‘an all-embracing ethic’:
Indeed, a major aim of the liberal is to leave the ethical problem for the individual to wrestle with. The “really” important ethical problems are those that face an individual in a free society – what he should do with his freedom’ (‘Capitalism and Freedom’, 1962: 12).
For the benefit of readers who have come to view the liberal label as signifying support for ever-greater government regulation, I should point out that Friedman was using the word liberalism ‘in its original sense – as the doctrines pertaining to a free man’.

Friedman was also mindful of the need to acknowledge a limited case for government action on paternalistic grounds. He wrote:
‘Freedom is a tenable objective only for responsible individuals. We do not believe in freedom for madmen or children’. He pondered the point deeply:
‘The paternalistic ground for government activity is in many ways the most troublesome to a liberal; for it involves the acceptance of a principle – that some shall decide for others – which he finds objectionable in most applications and which he rightly regards as a hallmark of his chief intellectual opponents, the proponents of collectivism in one or another of its guises, whether it be communism, socialism, or a welfare state. Yet there is no use pretending that problems are simpler than in fact they are. There is no avoiding the need for some measure of paternalism’ (‘Capitalism and Freedom’, p 33-4).

However, Friedman would have been alarmed by the modern tendency for all citizens to be treated like children - with the potential for a war on obesity (beginning perhaps with an assault on marketing of soft drinks) to be added to the war on drugs. He argued:
‘Insofar as the government has information not generally available about the merits or demerits of the items we ingest or the activities we engage in, let it give us the information. But let it leave us free to choose what chances we want to take with our own lives’ (‘Free to Choose’, p 227).

Friedman was particularly concerned about the adverse social effects of paternalistic welfare programs:
‘Their major evil is their effect on the fabric of society. They weaken the family; reduce the incentive to work, save and innovate; reduce the accumulation of capital; and limit our freedom’ (‘Free to Choose’, p 127).

It seems to me that one of the most important contributions that Friedman made was his support for efforts to measure economic freedom. In a discussion published in the preface to the 2002 ‘Economic Freedom of the World Report’, Friedman stressed the importance of measurement of economic freedom to development of a better understanding of the concept:
‘There's a phrase written on the entrance to one of the social sciences buildings at the University of Chicago: "When you cannot measure something, your knowledge is meager and unsatisfying." In the process of measuring, you find that measuring is a form of definition. It isn't just that there's economic freedom out there to be measured. In the process of measuring it, we're going to define what economic freedom is. We don't really know what we have, what economic freedom is, unless we've gotten to the point of trying to measure it and see what variables it consists of, and what each of those means. Over the course of time, we have gotten a much more sophisticated understanding of what we mean when we talk about economic freedom.’

In the same discussion he made a plea for economic freedom to be seen in the context of freedom more generally:
‘In looking to the future, I believe one has to be careful not to over-emphasize the role of economic freedom as a source of economic growth, as compared with the role of economic freedom as a part of freedom, of human freedom.
We've talked about economic and political freedom as if they were wholly separate things, which they are not. I think the next big task facing the economic freedom project will be to try to weld the two together and make a combined index of economic and political freedom, especially where they mesh with one another. Property rights are not only a source of economic freedom. They are also a source of political freedom. That's what really got us interested in economic freedom in the first place. Some of the elements in the Freedom House index seem to me to be inconsistent with some of the elements in our index, and it would seem to be useful to see how to reconcile those two and put them on the same philosophical basis.’

One of the features of Friedman’s writings is the importance he placed on political freedoms. His argument for economic freedom was based, in part, on the view that it is ‘an indispensable means toward the achievement of political freedom’. He saw political freedom – the absence of coercion of a man by his fellow men – as requiring the elimination of concentration of power to the greatest extent possible. He argued that competitive capitalism promotes political freedom because it disperses power – it separates economic power from political power and in this way enables the one to offset the other.

Friedman deserves the praise he has received for his academic accomplishments in economics, but he also deserves praise for his efforts to persuade his fellow citizens of his views about freedom. He knew that he had an important message to convey and he did his best to spread it as far as possible. In the final paragraph of ‘Capitalism and Freedom’ he wrote:
‘I believe we shall be able to preserve and extend freedom … . But we shall be able to do so only if we awake to the threat we face, only if we persuade our fellow men that free institutions offer a surer, if perhaps at times a slower, route to the ends they seek than the coercive power of the state.

Milton Friedman put his faith in the ability of his followers to persuade their fellow citizens, rather than in his own ability to influence governments directly.

The site:  www.freetochoose.tv is hosting a 24-hour "Friedman Freedom Festival" beginning 12:00 a.m. US Eastern Time July 31st and running until 12:00a.m. Aug. 1st. It will be a continuously playing list of Friedman talks, musicians from around the world and shorter clips of Friedman - most of which have rarely seen before.

Postscript 1:
Jim Belshaw has a post: 'Friedman, Freedom and Paternalism' in which he kindly refers to this post and some of the discussion below. Jim adopts a definition of paternalism as the state 'telling people what to do'. That is paternalistic, but I need to think more about the issue. My initial reaction is that wealth redistribution is also paternalistic - it is akin to a father taking toys off one child (on the grounds that she has too many) and giving them to her younger brother (who is deemed to have too few). I find it much easier to accept that it might be fair for a father (or mother) to make such a redistribution within their family (hopefully with the consent of the kids concerned) than to accept the validity of Wayne Swan's attempts to apply that ethic to the whole of society.

Jim also refers to a post by Lorenzo; 'Friedman's Century', which has links to several other sites with relevant comments.

Regarding my reference above to the obesity epidemic, Greg Dwyer has referred me to an excellent article entitled 'Sugar Sickness' by New Zealand medical doctor, MacDoctor, who points out the futility of proposals for governments to tax sugar etc. One day the paternalists (or are they nannies?) responsible for the wars against personal responsibility will realize that they are making matters worse.

Postscript 2:

Having looked at common usage of 'paternalism', I now think Jim and kvd are right. It entails limiting the liberty of some person or group in order to protect them.

Milton Friedman also seems to be right in his claim that the motivations of Bismark and the British Tories in creating the welfare state were paternalistic i.e. directed toward protecting people from harm. (Their motives were also political i.e. cutting the grounds from under their social democratic opponents). It is interesting that 'paternalistic' doesn't seem to imply that the action is against the will of the person being protected.

My supposition that Wayne Swan has paternalistic motives in arguing for wealth redistribution is probably wrong. His motives might be better described as egalitarian.


Bryce W said...

Super blog Winton, with lots of useful reminders about important nuances in these debates. I look forward to your book.
Bryce Wilkinson

Winton Bates said...

Thanks Bryce, I will keep you posted about the book.

Greg C said...

Greg C said
Thanks Winton for an insightful review of Friedman's thoughts on freedom. I wasn't aware of his emphasis on the need for further reseach on that topic. It seems there have been some encouraging developments on that front, some outside the field of economics. I recently stumbled on an account of research by US psychologist Gazzaniga and colleagues which you may already be aware of, supporting the view that a sense of freedom reinforces people's social responsibility (see for example: http://www.nytimes.com/2011/11/01/science/telling-the-story-of-the-brains-cacophony-of-competing-voices.html?_r=1&pagewanted=all)

Anonymous said...

Interesting piece Winton - thank you. If I could just quote a little bit:

Friedman was particularly concerned about the adverse social effects of paternalistic welfare programs:
‘Their major evil is their effect on the fabric of society. They weaken the family; reduce the incentive to work, save and innovate; reduce the accumulation of capital; and limit our freedom’

- and ask you how you think he defined 'paternalistic' as opposed to any other sort of welfare program? I'm assuming it relates to the amount of 'strings' or control attaching to the largesse, but I'd be interested in your own take.


Anonymous said...

Thought I'd better brush up on my Friedman:

... and following on, through 'Public Service', 'Academic Career', etc. etc...

He never actually held down a paid-for-product position, did he? A pragmatic analyst might say he survived the '30s and '40s by being the recipient of (paternalistic?) government or university largesse.

Which, I guess, grants him the ultimate qualification: knowing how to work the system.


Winton Bates said...

Greg C:
Thanks. Ronald Bailey's review of Michael Gazzaniga's book, 'Who's in Charge?', which can be found here, has links to research relating to the effects of belief in determinism on behaviour.

Philosophers often argue that the free will versus determinism issue is quite separate from the issue of liberty, but the issues seem to merge in the minds of individuals. It would probably be reasonable to predict that people who do not perceive themselves to be responsible for their own actions will be more likely to want the government to look after them.

Winton Bates said...

kvd: Regarding your paternalism question, I think Friedman would have viewed his negative income tax proposal as a non-paternalistic intervention.

In relation to your other question, I think Friedman obtained substantial royalties from book sales and commanded a substantial fee on the public speaking circuit. Someone else might be able to comment on the extent to which the academic positions he held were funded by taxpayers

Anonymous said...

Winton I expect you took my comments as some sort of attack on Mr Friedman? If so I apologise if my meaning was unclear.

I was interested in his use of 'paternalistic' in regard to welfare, and wondered about the mindset which would see government funded (in reality, taxpayer-funded) welfare as in any way remotely 'paternalistic'?

I was guessing that he places a value upon the government's action over and above that for which we actually employ (a word chosen quite deliberately) governments. As if somehow 'our' money becomes 'their' money - and in seeing to our welfare needs, the government begins to think itself 'generous'.

Perhaps not explaining myself well, but the point remains unanswered: I'd be interested to see a specific distinction between 'paternalistic' welfare programs and any other sort = not reliant upon one's view of the 'worth' of the recipients.


Jim Belshaw said...

This is my third attempt to leave a comment. The other two have been eaten by the spam trap! Winton, I will respond via post.

Winton Bates said...

kvd: I see your point about paternalism. It took me a while!

The reference to paternalism and the quoted passage are in the last paragraph of a chapter entitled 'Cradle to Grave'. Friedman comments as follows earlier in the chapter about the situation where people are spending someone else's money on someone else (Category iv spending):
'The effect is to instill in the one group a feeling of almost God-like power; in the other a feeling of childlike dependence'.

I guess Bismarck was feeling paternalistic when he got the welfare state started. Perhaps Vito Corleone (the godfather) also felt paternalistic.

Regarding your point about 'knowing how to work the system', it is the nature of 'the system' that not many people can claim not to have received any benefit from it, even when they are net losers as a result of it.

Winton Bates said...

I'm sorry the spam trap ate your comments.
It is annoying when that happens. I don't know if there is anything I can do to fix the problem.

Anonymous said...

Thank you Winton for your further amplification; that makes more sense of his 'unease' than the bit I earlier quoted, which seemed to me to be the usual old rubbish about the unfortunate in society not actually being helped by welfare (for their own good, they must starve...).

And I apologise again if you thought I was dismissing Mr Friedman's obvious contributions over his lifetime.


Winton Bates said...

kvd: I am obviously shifting ground on what is paternalism.
Perhaps there are degrees of paternalism, with those who want to control everyone's diet at one end of the spectrum and those who advocate a mild form of social insurance to protect the least fortunate (e.g. Milton and me)at the other end.

Anonymous said...

Winton, re your update, and now your follow up comment:

It is an interesting discussion as to what actually constitutes paternalism, so maybe I'll supply a definition I'm comfortable with, and then make a brief comment on your comment...

Paternalism is the interference of a state or an individual with another person, against their will, and defended or motivated by a claim that the person interfered with will be better off or protected from harm.

It is on that definition that I would suggest the provision of basic welfare services to a group of disadvantaged citizens is NOT paternalism. However, if that provision (be it enemployment benefits, whatever) comes with strings attached seeking to modify the recipient's behavior, then perhaps like Jim I would start thinking of paternalism.

You mention a 'mild form of social insurance' as one end of a paternalism spectrum. I politely don't agree that this is part of any such spectrum - it is more precisely what I would expect of any decent society.

But if the government then added a tag such that (for instance) the recipient had to comply with certain conditions before or during receipt, then I believe that is where your useage begins to have force.

Anyway, I hope Jim and yourself follow up, because between you, me and him there appears to be some basic conceptual differences.


Winton Bates said...

Having now looked at common usage of 'paternalism', I think you and Jim are right. It means interference to protect a person from harm against the will of the person being protected.

Milton Friedman also seems to be right in his claim that the motivations of Bismark and the British Tories in creating the welfare state were paternalistic (and political i.e. cutting the grounds from under their social democratic opponents). It is interesting that 'paternalistic' doesn't necessarily imply that the action is against the will of the person being protected.

My supposition that Wayne Swan has paternalistic motives in arguing for wealth redistribution is probably wrong. His motives might be better described as egalitarian.

Anonymous said...

Winton, thoughtful response. Am not surprised, but thank you.

By the way, if you're still searching for your book title, then I think you could do quite well with "Milton and Me".

Your own words, not mine unfortunately.


Anonymous said...

And you mentioned Wayne Swan a couple of times, so here's his (tonight's) address: