Miltie’s Naturalized Markets
One of those wonderful San Francisco weekends, full of parties and events that stimulate the mind while warming the soul. Or boil the blood while making you shake your booty!… or all of the above… A couple of my regular readings touched on the recent death of Milton Friedman, the infamous ideological ogre of monetarism and free markets. As Doug Henwood put it in his 20th anniversary issue of Left Business Observer, “you’re not supposed to speak ill of the dead, [but] for him, one can make an exception.” Henwood runs through the highlights of Friedman’s much admired economics and finds them at best unproven and generally unfounded. The consequences of Margaret Thatcher’s implementation of his strict monetarism in the late 1970s was a deep recession and millions of job losses, which Henwood wryly notes, “you’d almost think that was the point of the policy.” Beyond his economics, he had a major role as political polemicist, and in that regard he was “malignant… at the forefront of reaction since he first came on the scene in the 1950s,” ultimately influencing the first 9-11 terrorist, Chile’s Augusto Pinochet (Sept. 11, 1973 coup d’etat overthrowing democratically elected Salvador Allende with deep complicity of Nixon, Kissinger and CIA), via his University of Chicago acolytes…
Paul Krugman, the liberal economist columnist from the NY Times, writes at length about Milton Friedman in the Feb. 15 NY Review of Books. If you need an overview of the 20th century debates in economics, starting with the collapse of markets and their defenders during the Great Depression of the 1930s and the ensuing rise of Keynesianism (essentially a program to save capitalism from itself through government intervention), Krugman’s piece is a good starting point. (The Marxist critique of Keynes was perhaps best made by Paul Mattick Sr., in Marx and Keynes, a long-lost volume of anti-Bolshevik left communist writing.) Krugman is no radical, but he is a humanist-leaning critic of the worst rigid ideological applications of market thinking of our era. He situates Friedman thusly:
“If Keynes was Luther, Friedman was Ignatius of Loyola, founder of the Jesuits. And like the Jesuits, Friedman’s followers have acted as a sort of disciplined army of the faithful, spearheading a broad, but incomplete rollback of Keynesian heresy. By the century’s end, classical economics had regained much though by no means all of its former dominion, and Friedman deserves much of the credit.”
Krugman is an economist himself and in spite of his reasonable criticisms he still lauds Friedman as a great man and a great economist. It’s this kind of liberal enthusiasm for markets and capitalism that just won’t die, and that Friedman and the post-60s period did so much to reinforce. I’m writing at much greater length in my new book about the restructuring of the world economy since the early 1970s, which used ideological monetarism as a justification (even if its strict application was abandoned in practice rather quickly). But I just finished reading Paul Hawken and Amory and L. Hunter Lovins’ “Natural Capitalism,” which is a nuanced and in many respects brilliant analysis of what’s wrong with industrial capitalism, but ultimately fails to follow its own arguments to their logical conclusion, which would imply a break with capitalism, corporations and even wage-labor. At the very least it necessitates a strong reorientation of state policies vis-a-vis economics: “We need, incrementally but firmly, to transform the sticks and carrots that guide and motivate business. That means, in essence, revising the tax and subsidy system–the mechanism that is most responsible for the constant rearrangement of monetary flows and that determines social, economic, and ecological outcomes by applying politically selected subsidies and penalties.” Note that this is not advocating the abolition of state regulation or taxes, nor is it advocating leaving the market to its own devices. This meta-point about the role of the state (a la Keynes) is touched on many times in their book but never fully developed into a program for governance. I think they eschew such a program precisely because of the victory of “free market” ideology of the Friedman variety in the 30 years that preceded the writing of this book.
