Milton Friedman: July 31, 1912 - November 16, 2006
By Ben Domenech Posted in Economy — Comments (60) / Email this page » / Leave a comment »
Milton Friedman, our economic champion and the most influential economist of the past 60 years, has died.
Born in 1912, Friedman saw the world change many times over - but the essential principles he supported remained steadfast, even when they were unpopular. As the West learned the wrong lessons from the Great Depression, country after country pursued the nationalization of industries and the regulation of the market, the welfare state exploded in size, taxes grew ever higher and government spending continued unchecked. Yet he still held to his beliefs. In the 1960s, at the height of Keynesian success, he was the spokesman for that powerful old idea, the free market. And his ideas won the day.
Yet Friedman was not just a man of ideas - he was an economist who didn't believe that truth ended at the classroom door. He applied those ideas to the real world through his support of school vouchers and his opposition to the welfare state. He brought his ideas from academic journals to the populace, making his steady argument for freedom in columns and TV programs.
I am of a generation that takes for granted the fact that capitalism is a good thing. This was not always the case. Milton Friedman, more than any other individual, made it the case.
We forget that there was ever a discussion of this fact. We forget that once, it seemed that capitalism was on the ropes. We forget that there was a battle to be won.
When John Galbraith died, I had a discussion with a friend who'd seen the news. "All these economists," she said, "They're all saying the same thing, it's just where they put the emphasis."
Don't blame her. She majored in Art & Design. But even if she hadn't, well...it's unlikely that anyone born since 1980 would be able to tell you the difference. They forget because they never knew.
Ben Stein once said: "Professor Friedman and his wife stood up for the glory of the rights and choices of the individual. From the individual, not from the state, came creativity, progress, freedom, prosperity. From the state came oppression and stagnation."
And from Milton Friedman came the marketplace of liberty we enjoy today.
R.I.P.
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Milton Friedman: July 31, 1912 - November 16, 2006 60 Comments (0 topical, 60 editorial, 0 hidden) Post a comment »
Wall Street Journal OpEd, I couldn't agree more. The great man taught us all, not enough of us learned.
2006 is done, 2008 is another day and another fight
Should make it a requirement for people in their junior and senior years in high school or their freshman years in college to read and critique Milton Friedman. I consider his work to be as much a part of American history as I do the Declaration of Independence.
If your high school or college won't change the curriculum to allow that to happen, make sure your kids aren't deprived of the privilege. And a few others, too. I'd also recommend Hayek and Kekes.
...oh wait, you mean Friedrich Hayek?
Yes, him too. Maggie Thatcher's economic muse.
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"I will guarantee you that John Kerry will be president of the United States." - Nancy Pelosi
In Pejman's video post is precisely the way the world actually works for people who wish to be industrious and to chart their own destiny. I'm running a printing and mailing consultancy with my father, and the machinery and tools and expertise we use come from everyplace on the globe. We have machines that were built by Xerox and IBM here in the US alongside certain types of machines that come from overseas and if anyone was to try and take a complete accounting of it all they would find an incredible wealth of human endeavor in everything that makes our business. If you were to look at it, even the ink that we use to print with comes from the human endeavor of people who know they have a valuable product to sell throughout the world. Dr. Friedman is holding up a pencil in that example above, but I have an entire building full of printing and mailing equipment that he could just as easily use to illustrate his example.
And we take that combined wealth and are endeavoring to make new products and new wealth both for ourselves and others. That's freedom.
Will try to tell you that it simply doesn't work while (in their irreverantly humorous way) also disparaging and belittling anyone who would want to try. Much better to rely on the State to take care of you. No wonder the New York Times sponsors them. They're sophie-stick-ate-it.
If you have a bright child who is interested in the law as well as economics, there is no better place to start teaching them than the works of Richard Epstein at the University of Chicago.
and law are the best
except for Wofford and the first USC in Columbia...of course
http://gamecock.townhall.com and www.race42008.com
"The trouble with our liberal friends is not that they're ignorant; it's just that they know so much that isn't so." - Ronald Reagan
[this space available]
[your message here]
[if you lived here you would be home by now]
I hadn't realized that KOS advised his Kossacks to get drunk and stupid this early in the day, but I'm learning to like it.
In the world of offensive stuff, this is numero uno.
_______________________________
If "pro" is the opposite of "con", what is the opposite of "progress"?
_______________________________
If "pro" is the opposite of "con", what is the opposite of "progress"?
(Career student wearing a Che t-shirt wanders onto the Interstate, drops his Dickies, and exclaims...)
Kos Kasualty: "Look at me, mommy! Look at me!"
(sfx: crickets)
Moe: "Bump, bump. Bump, bump."
(Kos Kasualty finds his true calling as a speed bump on the information highway)
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"I will guarantee you that John Kerry will be president of the United States." - Nancy Pelosi
to change the title "Mod" to "Moe" so there is always one around to poke the stooges in the eye when they show up. you can all be Moes.
As has been mentioned. :)
Moe
PS: I wish that I had thought of that last one first.
The Fuzzy Puppy of the VRWC.
It couldn't have been Moe becuase there wasn't the ever-present [ - Moe Lane] at the end of the witty comments.
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If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.
him dead is certainly beyond the pale.
The writings of Milton Friedman allways came through as clear and logical. Reminds me of Ayn Rand.
Time is but a Place.
I majored in economics in the 80s and was fortunate to have professors that introduced me to the brilliance of Milton Freidman, primarily thru his "Free to Choose." book which I still re-read every few years. Its hard to imagine a conservative movement without his teachings. His teachings should be required to be learned in grammar school.
more later
http://gamecock.townhall.com and www.race42008.com
"The trouble with our liberal friends is not that they're ignorant; it's just that they know so much that isn't so." - Ronald Reagan
That book was the only economics book read by the president of Estonia, who I think was a mere History teacher before becoming president. He said that he read it because he knew that the Soviets hated Milton Friedman.
Well...now Estonia's economy is the most free in the world and is roaring. They have a flat tax, by the way, and their government revenue surpluses are so outrageous that they're getting ready to slash the flat rate even further. The foundation of Estonia's roaring economy is Milton Friedman.
If only American politicians were so brave as to follow the free market applications recommended by Milton Friedman as faithfully, children would one day ask, "Daddy, what is poverty?"
is the fact that these Kossacks are verging on the functionally illiterate.
I guess this explains why liberals complain about a lack of education funding. They probably do feel aggrieved that they are the only sector of the population that is darn close to being less able to communicate than your average, day-1 Guatemalan immigrant. Which may also explain why they have never managed to get a grasp of supply side economics (too many big words involved, too hard to read, etc.)
"leebermanisrepublican." Time to head off to the local ESL class, methinks. Or just stick to Kos, where pidgin English is the standard.
Sorry to go all English major on everyone, but seriously... how can one expect to be taken seriously when one can't even spell the name of one of the most highly-pressed-out Senators ever?
Liz Mair is the editor of WWW.GOPPROGRESS.COM, a RedState-style blog for libertarian, mainstream and moderate Republicans
Free to Choose and Conscience of a Conservative (AUH2O) were two of the most important books in my intellectual formation. He will be missed.
in the most succinct way why government programs are inefficient and expensive.
If you buy a gift for yourself with your money you are concerned about cost and quality.
If you buy a gift for someone else with your money you are concerned about cost and not quality.
If you buy a gift for yourself with someone else’s money you are concerned about quality and not about cost.
If you buy a gift for someone else with someone else’s money you are concerned about neither cost nor quality
he's been getting others to buy stuff for themselves with all our money. (cost plus no bid contracts)
cost plus contracts are a pretty sweet deal for the government and no bid contracts don't really exist. Sole source contracts exist. ID/IQ contracts exist. There is no such animal as a "no bid" contract.
because the writers are often idiots. The Federal Acquisition Regulations cover this in detail and they, not Wikipedia, are the authority.
A contract cannot be awarded without a bid. They are treating ID/IQ contracts and sole source contracts as "no bid." That is simply false.
With an ID/IQ contract a group of companies bid on a real or notional task and a certain number of contracts are awarded. For task orders to be issued to execute work the companies submit bids.
On a sole source contract, the contract is awarded because the number of vendors is restricted. Halliburton is a classic case because Kellogg Brown and Root are probably the only company capable of providing large scale logistics to an army. They did it in Vietnam and they did it in Bosnia. To get task orders awarded to execute work they have to submit a bid and the bid is reviewed by both the government's contracting officer and the contracting officer's technical representative for pricing and techical responsiveness. The overhead, fringe, and G&A rates in the contract are validated by the Defense Contract Audit Agency.
So I'm not wrong.
can do tasks that the military had perviously been doing cheaper themselves is ludicrious. The idea that they are the only contractor that could do it is just plain crazy.
KBR is uniquely qualified because they have made that line of work their specialty and there is so little of that work that they are the only company with experience.
It is against the law to contract with an unqualified company to perform work. To be qualified you have to demonstrate you have performed the work in the past. That is KBR's advantage. No one else has experience so they are uniquely qualifed for the task.
And the military has never done these tasks for themselves because even during WW II the military did not have the manpower to do it. These contractors are part of a long and honorable tradition stretching back to the late Middle Ages when artilleryment were all private contractors. Teamsters (like Daniel Boone, for instance) have been civilians through most of our military history. The Red Cross (Clara Barton and all that) were actually contractors.
The active military can't feed troops in peacetime without civilian cooks. All the higher level maintenance of vehicles and aircraft is done in depots by civilians.
The two basic contract types are cost-plus-fee (CPFF) and firm fixed price (FFP). The contract type is determined by the type of work being performed.
FFP contracts are awarded for actions which are routine and where the risk to the contractor are knowable. Printing, for instance, moving freight, etc. The government's costs are fixed but the contractor has an incentive to cut corners because their fee is included in the price.
CPFF are awarded when the scope of work isn't well defined. This limits the risk to the government (money running out before the contract is completed) and to the contractor (costs plus a profit margin -- usually 3-6%-- are guaranteed).
There are downsides to both methods but having been on both sides of the federal contracting process I don't think anyone thinks people make a lot of money off CPFF contracts because they don't.
I would like to point out that I work exceptionally hard for my wages. I will be sure to thank God in my prayers that you are not in charge of deciding how our tax money is spent.
I would also like to point out that your frame of reference and information is sorely lacking. Please endeavor to educate yourself with sources other than Wiki and then attempt to open a meaningful dialogue (if that was your intent). Otherwise, just blurt out "Haliburton" sooner in your comments so that we know to ignore you.
Thanks.
that's not the way the process works.
The sequence works like this.
The government issues what is called a Request for Proposals. In that RFP the government specifies what it wants in terms of materials and services and as a part of the preparation the technical managers for the contract have to submit to the green eyeshades guys an estimate of what the contract should cost.
Vendors receive the proposal and prepare a technical solution to the problem and a business case to support the technical solution.
The government technical team reviews the technical proposals, they are not allowed to see the costs, and they select the best technical solution.
The contracting staff review the business proposal for reasonableness and accuracy.
If there is a significant difference between the technical staff's estimate of cost and the cost presented by the contractors the process is stopped until the differences are reconciled.
Once the technical team selects one or more finalists those vendors get a call to submit their "best and final offer", BAFO, and based on this best price and best solution the vendor is selected for negotiations.
In negotiations your pricing for labor and materials is looked at closely and the federal government has norms for both. Your profit margin is based on your negotiations with the government. 3-6% is not all that much when you consider the rate of inflation and the good old B-school concepts of net present value and opportunity costs.
So I don't agree that a single thing you've said is factually correct and without those vendors you'd be spending one helluva lot more money on federal employees.
And, FWIW, I think you're better than that.
A 3%-6% margin on a high risk contract - or any contract for that matter - is not excessive. If anything, it's low in the world of margins. We get a 3%-6% margin because it's a guarantee, if it wasn't, the bid margin would likely be 30%-60% to cover contingencies and some contracts would make companies very rich others would put them out of business.
Aldo, the invoices on those contracts are subject to oversight and audit, so it's not a "blank check".
_______________________________
If "pro" is the opposite of "con", what is the opposite of "progress"?
That's what happens when you do poorly in (business) school and have to deal with the government.
Yes, I'm kidding.
We should be glad there are companies, even just one company, that can provide services to support our troops' mission, and whose civilian employees spend more time in danger zones and are at greater risk than, say, John Kerry ever was in Vietnam.
What IS it with the left and Halliburton, anyway?
How much has Halliburton paid Dick Cheney since 2000?
2006 is done, 2008 is another day and another fight
So what?
They owed him the money for his services to the company when he was employed there. Would you have felt better about it if he had given them the money back? You don't think any of your buddies on the left would have screamed about Cheney bribing the Evil Halliburton™ do you?
Would it make you feel any better if you knew he donated the money to charity? Well, he did. Not that I think you will really care.
I meant what I said and I said what I meant. An elephant's faithful 100 percent.
Thus passes a great champion of individual liberty. We can but hope our leaders will be more attentive to his counsels in the days to come.
he's received a check every year in deferred income outsizing his VP check http://www.cbsnews.com/stories/2003/09/26/politics/main575356.shtml
I wonder if Ben Stein could be hooked back into speech writing, at least long enough for him to write one for President Bush remembering Milton Friedman.
--
If you're seeing shades of gray, it's because you're not looking close enough to see the black and white dots.
Economist, I have to say that I feel like I've lost an old, old friend. I've long harbored the fantasy that I would get to meet Dr. Friedman. Unfortunately, the great economists have all passed on (Hayek, von Mises, etc.) and what is left is sure to be retooled, watered down, and pale.
Milton Friedman was one gigantic, exhilirating, and energizing breath of fresh air. His explanation of the liberating power of free markets was (and is) wonderful.
We owe a great debt of gratitude to this wonderful gentleman.
May he rest in peace.
...he will be missed.
I think we should also remember yet another facet of the man --his belief that everyone in this country should contribute and should have an opportunity to "speak at the table".
I never missed a chance to hear him speak...most recently with Charlie Rose. I was surprised to hear he was a long-time San Francisco resident who considered a Democratic President and a Republican Congress the best recipe for economic growth. He recognized the benefits of the "push/pull" dynamic which created this country's wealth and prosperity.
Mr. Friedman recognized the difference between "the opposition" and "the enemy".
Mr. Rove and Mr. DeLay haven't a clue. A "permanent majority" by ANY one party is a surefire recipe for disaster.
http://gamecock.townhall.com and www.race42008.com
"The trouble with our liberal friends is not that they're ignorant; it's just that they know so much that isn't so." - Ronald Reagan
A voice of reason gone but not forgotten. Here are some links to Friedman material:
Several of his videos were on Google Video in their entirety. Hopefully they'll be back on. There are snippets on google video, youtube, and also on freetochoose.net.
Here are the complete transcripts of the Free to Choose Friedman Video Series:
http://www.freetochoose.net/tv_1980_transcripts.html
Here are the links to video samples of Free to Choose videos:
http://www.freetochoose.net/tv_1980.html
CommonCents
"It often shows a fine command of the English language to say nothing at all."
Join to help build a conservative grass roots movement: www.winningthefuture.com
As one of the fortunate lucky people to have studied Economics at the University of Chicago, sadly I never had an opportunity to meet Professor Friedman. Nevertheless, his ability to speak to the masses with ideas so simple and intuitive should be a goal for all those who purport to teach a subject. The country has lost one of its top intellectuals of the 20th century. He will sit with Mr. Einstein on the top of any list of great American minds of the century. And both influenced the world far more than many politicians or other leaders. Hopefully, Mr. Friedman's ideas will continue to win converts as his sincere belief in freedom and individuals needs continued renewal in a system that tilts towards governmental control.
But all of my profs were of the "chicago school". In fact the head of the dept. Dr. Willard Hohnstien was both a student of Dr. Friedman and shared research with him. He and Murray Rothbard were my primary influences.
"Nothing works like freedom, Nothing succeeds like liberty"
Kyle
People like Friedman can talk simply and elegantly. Why? They have a thorough understanding of their material. They know what they are talking about. Friedman could see the forest through the trees.
Many people who have to use big words and sound sophisticated are usually insecure and unsure of their material so they have to talk big to project over their insecurity. Words to these people have to be bigger than the shallow ideas themselves.
CommonCents
"It often shows a fine command of the English language to say nothing at all."
Join to help build a conservative grass roots movement: www.winningthefuture.com
http://gamecock.townhall.com and www.race42008.com
"The trouble with our liberal friends is not that they're ignorant; it's just that they know so much that isn't so." - Ronald Reagan
"If free markets weren't so damn efficient, they could never have survived, because they have so many enemies and so few friends." --Milton Friedman, in an interview with Russ Roberts
To say that Milton Friedman was a giant would be an understatement. We have just lost a national treasure.