How many Marxists does it take to screw in a light bulb?
Two. One to screw in the light bulb, the other to lament Milton Friedman’s laissez-faire economic policies.
I thought a good way to celebrate Milton Friedman’s legacy was to find several of my favorite quotes by him and comment on them:
First quote:
Human wants and needs are infinite, and so there will always be new industries, there will always be new professions.
This reflects his wonderfully optimistic attitude and his inherent belief that humans, by nature, are resilient and resourceful. He appealed to our higher nature and expected that everyone would abide by the rules of the game and engage in fair competition.
Which brings me to the second quote Milton Friedman is very well known for, which is that “a corporation’s social responsibility … is to use its resources and engage in activities designed to increase its profits….[ but it is the second part of the quote that is so often forgotten and which, as an ethicist and a lawyer, speaks to me]: “so long as it stays within the rules of the game, which to say, [it] engages in open and free competition without deception or fraud.”
So many of the economic problems our country and our world face today are because of deception and fraud – Enron, Bernie Madoff, the sophisticated repackaging of toxic assets, such as subprime loans, in such way that PhDs in economics wouldn’t have recognized them for the ticking time bombs that they were, much less the average consumer. The LIBOR (London inter-bank offered rate) scandal, the fraudulent manipulation of bank interest rates.
This is certainly not “free enterprise” or “free market” principles as Milton Friedman advocated – which brings me to the third quote, in which Friedman warned, “Business corporations in general are not defenders of free enterprise. On the contrary, they are one of the
chief sources of danger.... Every businessman is in favor of freedom for everybody else, but when it comes to himself that's a different question. We have to have that tariff to protect us against competition from abroad. We have to have that special provision in the tax code. We have to have that subsidy."
So “free market’ is NOT the same as ‘pro-business.” Free Market principles do not support the notion of corporate welfare.
Honest and open competition, and the successes and failures that come with it, is an essential for truly free markets and enterprises. This is what Milton Friedman advocated and for which he long will be remembered.
Economic theories of scarcity say we have limited resources, that we only have so much pie and everyone fights over a piece of the pie. More pie for you means less pie for me -- This is a recipe for disaster. Fortunately, we are now becoming aware of the phenomenon of exponential technologies. As Peter Diamandis and Stephen Kotler write in their inspirational book Abundance: the Future is Better Than You Think, we have the technology to create a future of abundance, the technologies to expose fraud and corruption.
But, I have to ask as we celebrate today, do we have the courage and conviction to realize this future? Will we keep fighting over a piece of the pie, believing it to be limited, or will we use that energy bake more pie? -- I say what we are doing here at Singularity University is creating the recipe to bake more pie – and Milton’s Free market principles are just the right setting for Abundance.
So Happy Birthday, Milton Friedman! We’ll bake a cake (or pie) in your honor!