Oct

10

Milton FriedmanWhen he visited the West Coast in the 70s and 80s, I was my Dad's on-call chauffeur. Besides getting the benefit of parental lectures about my dissolute, self-employed ways, I also got to listen to his discussions with authors. One of the conversations that I remember vividly was a discussion with Milton Friedman about his "school voucher" initiative. Dad agreed with Friedman that education should not be a government monopoly, but he urged the Professor not to present his case to the voters in terms of "vouchers." The word had a terrible connotation, he said. It suggested that people were getting education Food Stamps. If Friedman wanted to allow Californians to be free to choose, he should structure it in terms of changing California's Education Code so that parents had the right to send their children to any school they wanted to or to homeschool them. I remember Dad's saying, "If you make it about money, Milton, you will organize your enemies. The parents in the rich suburban districts and the people who have no economic choices about where their kids go to school will both vote against it." They did; and they still do. Vouchers remain a stone political loser, for all of their seeming intellectual merit.

Back then I was still young enough to assume that Professor Friedman would appreciate getting free political advice from someone who had become a multi-millionaire by navigating the shoals and rapids of 50 State Boards of Education, thousands of local school boards, and the recently created Federal Department of Health, Education and Welfare and had made Friedman himself a millionaire from book royalties. Wrong! The Professor lectured Dad about the absolute necessity of vouchers as part of the initiative. If there were no vouchers, then giving people the legal right to find alternate paths would be meaningless. Dad's reply was "Milton, if people have the right to pursue alternatives, they will find the money. Hell, the money will find them." That comment effectively ended the conversation. It left Professor Friedman literally sputtering with incomprehension. He simply could not conceive of the idea that capital would flow to a new and better idea for education — simply because it was a better idea. The Professor was, for all his wisdom, as completely bound by his academic horizons as any of his more liberal colleagues. He assumed that the government had to pay for schooling — one way or another.


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2 Comments so far

  1. EmmettWright Jr. on October 11, 2007 9:27 pm

    It is too bad you do not make possible the emailing of your
    splendid articles.

  2. Craig Bowles on October 12, 2007 3:08 pm

    Seems like Friedman was one of the many backers of using monetary stimulus despite being for the free market. Most of that group were Hayek believers and then switched to the Keynes view kind when it came into vogue in the 1930s. The short recession of the early 1920s was the last time the Fed didn’t do anything. Before the 1957-58 recession, the U.S. used to see declining inflation during recessions. The last time this occurred was the short 1953-54 recession. Since then, we’ve never seen prices decline even during recessions. Austrian economists warned of this back in the 1920s but economists switched their thinking from Hayek to Keynes without ever refuting Hayek and Mises. Hayek had previously ripped Keynes first attempt to promote monetary stimulus to avoid economic cycles. When Murrey Rothbard was a student of Arthur Burns in 1958, Burns advocated monetary stimulus. Rothbard asked him what would happen if inflation didn’t decline and the recession continued. Burns, who later became the Fed Chairman from 1970-1978, said they would have to resign. Well, nobody has resigned and this problem is becoming a huge issue as the Fed continues to inject what is in effect conterfeit funds into the system to keep from going into recession. Even the short 1990 recession saw the economy in a funk a couple of years before and after and that was when Asia wasn’t pushing on inflation.

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