99th anniversary of Milton Friedman’s birth (Part 12)

Milton Friedman: Life and ideas – Part 04

99th anniversary of Milton Friedman’s birth (Part 12)

Milton Friedman was born on July 31, 1912 and he died November 16, 2006. I started posting tributes of him on July 31 and I hope to continue them until his 100th birthday. Here is another tribute below: 

Perspective | Sheldon Richman

Sheldon Richman is the editor of The Freeman and TheFreemanOnline.org, and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America’s Families. … See All Posts by This AuthorSecurity or Friedman

Individuals Can Best Judge for Themselves How to Use Their Resources

By Sheldon Richman • April 1999
Posted April 01, 1999
Print This Post • 1 comment

True joy is waking up to a Milton Friedman op-ed. He never quits. In January the New York Times published his article “Social Security Chimeras.” What a breath of fresh air!

Milton Friedman begins by criticizing the increasingly common suggestion that individual accounts replace part of each person’s Social Security benefits. “Why replace only part and not all of Government benefits?” he asks. He goes on to refute the response that the government needs the money to pay current retirees.

Friedman’s op-ed really shines when he demolishes the case for a mandatory privatized system. As advocated by economist Martin Feldstein and others, everyone would be forced to save a minimum amount specified by the government. Feldstein says that’s necessary because, “First, some individuals are too shortsighted to provide for their own retirement [and] second, the alternative of a means-tested program for the aged might encourage some lower-income individuals to make no provision for their old age deliberately, knowing that they would receive the means-tested amount.”

Friedman’s response:

[T]he fraction of a person’s income that it is reasonable for him or her to set aside for retirement depends on that person’s circumstances and values. It makes no more sense to specify a minimum fraction for all people than to mandate a minimum fraction of income that must be spent on housing or transportation. Our general presumption is that individuals can best judge for themselves how to use their resources. Mr. Feldstein simply asserts that in this particular case the Government knows better. . . . I find it hard to justify requiring 100 percent of the people to adopt a Government-prescribed straitjacket.

Friedman ends by calling for a voluntary pension system. (In one sense, it would still be compulsory; we’d be taxed to support people now on Social Security.) “I believe that the ongoing discussion about privatizing Social Security would benefit from paying more attention to fundamentals,” Friedman said, “rather than dwelling simply on nuts and bolts of privatization.” Hear, hear!

* * *

Corporate layoffs make for good, glitzy television-news reporting. The addition of jobs is dry and statistical. No wonder people have a sense that layoffs outnumber new jobs. Charles Baird looks at the facts and finds a whole different picture.

Richard Cobden once pointed out that when government touches something—he had trade and religion in mind—it’s twisted into something else entirely, and not for the better. Bruce Benson demonstrates that science can be added to Cobden’s list.

The energy crisis, a production of your government, is long gone, but the regulations designed to whip us into efficient energy users live on. Worse, we get new ones all the time. Ben Lieberman shows the lengths to which such inanity can go.

If you lived through that crisis, you might have thought the future would be an eternal nightmare compliments of oil sheiks and—these letters were scarier than “IRS”—OPEC. Since then the price of a gallon of gas has fallen below the price of a gallon of milk. What happened to the big bad cartel? Christopher Mayer will fill you in.

What is really happening in China? Is it going capitalist even as it defends the socialist revolution? Why is it jailing dissidents? James Dorn brings lucidity to the enigma.

The term “the tragedy of the commons” has become a cliché, useful to free-market advocates as well as statist environmentalists in promulgating their policy views on property and ecology. Bruce Yandle explores how tragedies can become triumphs.

The welfare state doesn’t miss a trick. Under President Bush, the Commerce Department started a program to subsidize private companies in the development of new technology. You see, markets aren’t good at that and—well, John Sparks will give you the scoop on this creative piece of governance.

During the 1920s, the monetary authority did something to set the stage for the economic debacle of the 1930s. But what? The literature is full of conflicting answers. Richard Timberlake sorts it all out in the first of a series of articles.

Labor-relations law is premised on the Marxist notion of an irreconcilable conflict between workers and employers. Economists have debunked the notion, and so have some businessmen. Daniel Hager tell us about one: James F. Lincoln.

The withholding tax is a classic case of adding insult to injury. It’s bad enough the government appropriates a chunk of our income; but it does so before we even see it. Donald Boudreaux and Andrew Morriss point out that withholding is more than just an insult.

If you tell people you don’t want government benefits you are “entitled” to, people sure look at you funny. That’s what Mark Reboul found out when he was laid off.

FEE president Don Boudreaux’s monthly Notes from FEE column moves to the front of the magazine beginning this month. In other columns, Lawrence Reed reports on a new study about high-school economics texts, Doug Bandow dissects the minimum wage, Dwight Lee exposes the “hidden technology” myth, Mark Skousen wonders about Diamond Head and property rights, and Walter Williams takes on the government schools. Roger Meiners looks at what William Weld has to say about property rights and the environment and implores, “It Just Ain’t So!”

Our book reviewers examine tomes on conflicting outlooks about the future, the wealth and poverty of nations, America’s role in the world, the economy ahead, misery in Africa, and the memoirs of Clarence Carson.

—Sheldon Richman

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