Milton Friedman's death has brought forth a flood of appropriate tribute for this great and good economist who was able to use ideas to change the world. Friedman was an intellectual leader in the victorious fight for freedom against communism. No man did more to destroy the myths of Keynesian orthodoxy and to set American monetary and fiscal policy on firmer ground. But Friedman didn't always win, and many of his battles remain unfinished. The best tribute to him would be to continue waging his war for liberty.
In "Capitalism and Freedom," Friedman describes himself as a classical liberal who saw "freedom as the ultimate goal and the individual as the ultimate entity in society." Then, as now, that view was radical. Then, as now, governments routinely restricted freedom in the pursuit of some "greater good" like welfare or public health. Friedman cried out against all such restrictionseven the criminalization of marijuananot out of narrow self-interest but because freedom was both paramount and fragile. A free society needs its citizens to fight not only those restrictions that bind them personally, but also those restrictions that don't impact them at all, and even those restrictions that make their life a little more pleasant in the short run. The principle of freedom is too important to sacrifice for short-term convenience.
Friedman not only lost the battle to legalize marijuana, but he also seems to be losing the battle to smoke anything. We have come close to criminalizing tobacco by taxing it highly and making it illegal for a private citizen to allow another private citizen to smoke in a bar or restaurant. Many may enjoy smoke-free taverns, but as Friedman well understood, when we let any freedom be taken without complaint, we proclaim that freedom just isn't that important.
Sixty years ago, Friedman, together with the also-great George Stigler, published an anti-rent control broadside, "Roofs or Ceilings." Rent control is still kicking around and wreaking havoc on the New York housing market. Friedman and Stigler understood that rent control could not make Manhattan affordable and that "the ultimate solution to the housing shortage must come through new construction." Rent control is counterproductive as it erodes incentives to build. In a sentence whose sarcasm sounds more like the arch Stigler than the earnest Friedman, they write, "It is an odd way to encourage new rental construction (that is, becoming a landlord) by grudging enterprising builders an attractive return!"
Friedman and Stigler foresaw Manhattan's conversions from rental units to cooperative apartments when they wrote that "the ceiling on rents, therefore, means that an increasing fraction of all housing is being put on the market for owner-occupancy, and that rentals are becoming almost impossible to find, at least at the legal rents." As rent control turned affordable rental units into expensive coops, this restriction of economic freedom showed that it was not just inefficient but also inequitable. Poorer New Yorkers found it increasingly hard to rent affordably. Friedman even foresaw how rent control would push New York into the costly and foolish business of large-scale construction subsidies. Friedman's distaste for rent control came not just from its adverse consequences but also from its very nature as a restriction on the freedom to contract. Since freedom was Friedman's desideratum, rent control could never be good.
Friedman's fight against the government monopoly of education has had successes but not victory. His idea for school vouchers is now treated with respect, rather than with derision. Within New York's public school system, the remarkable Joel Klein has tried to follow Friedman's advice and create more competition, innovation, and incentives. But Friedman did not achieve his goal of allowing parents to choose the school that they want without paying twicewith their tax dollars and private tuition.
There is an odd concomitance in the temporal proximity of Friedman's death and the Republican electoral losses. Too many years in power have led Republicans to forget the need to protect private liberty against government spending and regulation. The victory of a Democratic Party that still has an affinity for regulation and spending will reignite debates on regulating the price of prescription drugs, minimum wages, and even personal social security accounts. On some of these issues, Friedman's stance will be popular, and on others, it will merely be right. This would be a good moment for the Republicans, and, it is to be hoped, for some Democrats as well, to start rereading "Free to Choose." Friedman's work is not finished and it never will be. Freedom will always need its defenders.
Original Source: http://www.nysun.com/opinion/friedmans-work-in-new-york/43833/