Passing of a giant
By Walter E. Williams
Wednesday, December 6, 2006
Nobel Laureate and Professor Milton Friedman, at age 94, succumbed to heart failure on Nov. 16. While the man is gone, those of us who hold personal liberty as society’s highest end will always remember his steadfast support of the principles of personal liberty.
I don’t usually disagree with Professor Walter. And I’m an injineer, not an ekkynominist, and certainly can’t match my accomplishments with Williams or Friedman. But one has to note certain key items with respect to the Friedman legacy:
- His involvement with instituting income tax withholding.
- His involvement with the South America dictatorship.
- His failure to hold Greenspan to his “gold bug” background.
- His support of vouchers precluded him from objecting to government involvement in education in the first place.
- His failure to keep the public’s eye on the growth of government.
From a pure economic viewpoint, he tacitly supported fiat currency, and the resultant inflation, that allowed the growth of government. Failure to limit the money supply, permitted the government to escape the reins of fiscal discipline. It allowed them to spend like drunken sailors with the taxpayer’s credit card. As Nobel Prize winning economist, he should have been able to foresee the logical conclusion of this one economic point.
With “honest money”, (i.e., money backed by gold), the government would not be able to avoid the bills for their many (failed) programs. During the years of “honest money”, government was forced to make hard choices. They’d have to go to the voters for approval and taxpayers for funding. During the honest money period, we had a period of declining prices and stability. With FDR’s gold theft and eventually Nixon’s unilateral abrogation, the dollar was disconnected from reality. The resultant inflation has eroded most, if not all, of the dollar’s value. It’s no surprise, or should be no surprise, that investors seek to convert dollars into anything that will hold its value or has value (e.g., equities, real estate, commodities, even current consumption). Holding dollars, or even delaying gratification, makes zero sense in the inflationary environment.
We are on an interesting amusement park like ride. However there is no view of when and where the ride ends. And, no guarantee that it is a safe place or that it will even end. And, certainly no one has “planned” this ride out. He put us on it. Perhaps tacitly, bit on nevertheless.
That’s why I don’t agree with “steadfast support of the principles” assessment. I’m not say I could have, would have, or did better. But, he’s not the exemplar to me that he is to Williams. Probably only Greenspan edges him out for the “bottom spot” of economists deserving scorn.