Dot.Demarche

Talking to myself about foreign policy, US politics, technology, &c.

Surplus economist removed by Invisible Hand; Market achieves balance.

Milton Friedman died today. Interesting reading the obits to see what a huge impact he and his Chicago cronies had on economic theory- and how much of that eventually influences policy. I sure wish that those dealing with foreign affairs got equal attention from presidents and congresses.

Also interesting to see how the current beliefs of someone like me, who considers himself a moderate in the field of political economy, would have been radically right-wing pre-Friedman. The man obviously wasn’t right about everything, but he was right about a lot. As Paul Samuelson was amusingly quoted “Just because Milton Friedman says it doesn’t mean that it’s necessarily untrue” – and his policies taken to their logical extreme would have lead to the most appallingly amoral economic systems imaginable.

Interestingly, he actually evolved a bit in his later years. Friedman came to realize that “the market” that economists salivate over is not an organic and naturally occurring phenomenon, but one that requires a great deal of state assistance to set up the rule of law and stability required for such a system to operate. The fact that we live in developed societies with advanced legal systems makes such requirements invisible to us, but the difficulties with privatization in the developing world demonstrated that laissez-faire is not simply the answer to all things at all times.

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