Free to Choose: Part 1 of 10 The Power of the Market (Featuring Milton Friedman)
Free to Choose Part 2: The Tyranny of Control (Featuring Milton Friedman
ANALYSIS/OPINION:
A few years ago, the prestigious economic publication, Journal of Economic Literature, dubbed the period from 1980 to 2005 “the age of Milton Friedman.” Harvard University economist Andrei Schleifer described this era of greater reliance on free markets and privatization, as arguably the period of greatest economic advance for mankind in world history. It would be hard to argue against that. As freedom and free markets were on the march, more than 1 billion people worldwide, mostly in China and India, moved out of poverty. Tens of trillions of dollars of new wealth were created worldwide.
But the last decade could be described as the comeback of socialism. In response to the financial crisis, nations foolheartedly turned to central governments to steer them out of crisis. Government debt, spending and regulatory activity soared all across Europe and in the United States. The Keynesian model that government welfare spending as a “stimulus” came storming back in vogue — nowhere more so than in the United States.
Many countries, including Greece, Italy, Spain, Portugal and France — as well as the United States — experimented with quasi-socialist governments. Now the bitter price is being paid.
This more than anything else explains why the world is twisting in financial turmoil in recent weeks. Not just Greece, but at least a half a dozen nations appear to be on the verge of bankruptcy because they can’t afford the social welfare states they have, and the bills are coming due. The socialists are getting hammered.
Meanwhile, China’s government is responding to a manufactured stock market bubble with more promises of Keynesian monetary and fiscal stimulus — interventions that will work there as well as they have in Japan and the United States.
Wall Street is acting as though more government intervention will calm financial markets, when it is excessive intervention of government that created the crisis in the first place. Greece is socialism on steroids — a place where the government gives a lot of things away for free, few people work, and millions receive government pensions, paychecks or welfare benefits. Fifty percent of young people don’t have a job and over half of Greeks retire before age 60. The wagon is full and no one is left to pull it. Now Greece thinks that the Germans or the, EU, the IMF or the United States is going to pay for it all. The crash is coming very soon and the standard of living in Greece will surely plummet. Thank you, socialism.
But there are so many more dominoes that could come crashing down. Almost all of Europe is a financial sink hole. The debts as a share of gross domestic product are 100 percent or more and the public spending as a share of GDP is now just shy of 50 percent.
Pundits on the left such as Paul Krugman can only lamely respond to the European meltdown by arguing that there is “too much austerity” even as debt loads keeps rising every year. The one nation in Europe that didn’t use massive Keynesian stimulus, Germany, is the one place where the economy is still functioning.
Dan Mitchell, an economist at the Cato Institute, has noted that the idea peddled by the left that nations like Greeceare being ruined by austerity is one of the great mythologies of modern times. “The nations in the most economic trouble,” he says, “tend to be the ones that have jacked up their government spending and debt the most.”
Even in the United States, socialism is failing. Connecticut is the Greece of the East Coast. It keeps raising taxes and spending, and the state is in perpetual insolvency. The same can be said of Detroit, Chicago and a dozen California cities that can’t pay their bills. Puerto Rico is a socialist welfare state and it may need to go into receivership to pay off tens of billions of unpayable debt.
We are now entering a new era of global finance when government bonds — sovereign debt — will be defaulted on because there is no one left to pay the bills and no one to bail them out. The poor will get poorer and the middle class will fall behind — the opposite of what socialism promised to deliver.
Shortly before he died, Milton Friedman lamented: The enduring lesson of the 20th century is that socialism is a failure and free markets are a success. But the politicians keep advocating just a little more socialism.” That is precisely what is ailing the world economy today.
• Stephen Moore is a Fox News contributor and co-author of “An Inquiry into the Nature and Causes of the Wealth of States,” (Wiley, 2015).
Free to Choose Part 4: From Cradle to Grave Featuring Milton Friedman
Free to Choose Part 5: Created Equal Featuring Milton Friedman
Free to Choose Part 6: What’s Wrong With Our Schools Featuring Milton Friedman
Free to Choose Part 7: Who Protects the Consumer Featuring Milton Friedman
Free to Choose Part 8: Who Protects the Worker Featuring Milton Friedman
Free to Choose Part 10: How to Stay Free Featuring Milton Friedman
Related posts:
FRIEDMAN FRIDAY Milton Friedman has the two solutions to the Black Teenage Unemployment Problem!!!
Milton Friedman on Donahue Show in 1979 Milton Friedman has the two solutions to the Black Teenage Unemployment Problem!!! The solutions would be first to lower the Minimum Wage Amount and second give students the opportunity to have vouchers so their parents can put them in the best schools when they start in the kindergarten […]
Obama loves the death tax but listen to what Milton Friedman had to say about it!!!
__ Obama loves the death tax but listen to what Milton Friedman had to say about it!!! Milton Friedman Redistribution of Wealth and the Death Tax ___________ The Obama Administration’s Assault on the Rule of Law September 6, 2016 by Dan Mitchell What’s the worst development in economic policy of the Obama years? The faux stimulus […]
Milton Friedman and Dan Mitchell: Subsidies for Higher Education Are the Problem!!!
_ Milton Friedman – Should Higher Education Be Subsidized? Published on Aug 14, 2013 Professor Friedman leads a roundtable discussion with students.http://www.LibertyPen.com Hillary Is Wrong: Subsidies for Higher Education Are the Problem, not the Solution August 24, 2016 by Dan Mitchell “So many bad ideas, so little time.” That’s my attitude about Hillary Clinton. She […]
Milton Friedman and Walter Williams have explained, minimum wage laws are especially harmful for blacks!
__ Milton Friedman – A Conversation On Minimum Wage Published on Oct 4, 2013 A debate on whether the minimum wage hurts or helps the working class.http://www.LibertyPen.com Is Anybody Shocked that Higher Minimum Wage Mandates Are Resulting in Fewer Jobs? August 25, 2016 by Dan Mitchell While economists are famous for their disagreements (and […]
Milton Friedman and Dan Mitchell on the Economics of Medical Care!!!
_ Milton Friedman on Medical Care (Full Lecture) Another Grim Reminder that Obamacare Has Made Healthcare More Expensive August 29, 2016 by Dan Mitchell Way back in 2009, some folks on the left shared a chart showing that national expenditures on healthcare compared to life expectancy. This comparison was not favorable to the United States, which […]
FRIEDMAN FRIDAY Milton Friedman on Immigration Part 2
_ Milton Friedman on Immigration Part 2 Milton Friedman – Illegal Immigration – PT 1 Milton Friedman – Illegal Immigration – PT 2 _- Immigration and the Welfare State April 4, 2010 by Dan Mitchell My previous post dealing with whether citizenship should be automatic for babies born to illegals generated a lot of commentary, so […]
FRIEDMAN FRIDAY Milton Friedman on Immigration Part 1
_ Milton Friedman – Illegal Immigration – PT 1 Milton Friedman – Illegal Immigration – PT 2 Milton Friedman stated , “you can’t have free immigration and a welfare state.” Below Dan Mitchell links back to this quote in one of his earlier posts: A Plan for Open Borders that Anti-Amnesty Folks Can Support August 18, […]
Milton Friedman on Immigration Part 2
_ Milton Friedman on Immigration Part 2 Milton Friedman – Illegal Immigration – PT 1 Milton Friedman – Illegal Immigration – PT 2 _- Immigration and the Welfare State April 4, 2010 by Dan Mitchell My previous post dealing with whether citizenship should be automatic for babies born to illegals generated a lot of commentary, […]
Milton Friedman on Immigration Part 1
_ Milton Friedman – Illegal Immigration – PT 1 Milton Friedman – Illegal Immigration – PT 2 Milton Friedman stated , “you can’t have free immigration and a welfare state.” Below Dan Mitchell links back to this quote in one of his earlier posts: A Plan for Open Borders that Anti-Amnesty Folks Can Support […]
FRIEDMAN FRIDAY Milton Friedman and Dan Mitchell on the Post Office!!!
Milton Friedman and Dan Mitchell on the Post Office!!! Ep. 10 – How to Stay Free [3/7]. Milton Friedman’s Free to Choose (1980) Pat Brennan became something of a celebrity in 1978 because she was delivering mail in competition with the United States Post Office. With her husband she set up business in a basement […]
The Daily Hatch 