The Failed Prophet

As Wall Street collapses, so does Milton Friedman’s legacy.

Bernie Sanders

On Dec. 2, Sen. Bernie Sanders (I-Vt.) delivered a speech entitled ‘Milton Friedman’s Legacies: On the U.S. Economic Crisis in response to the University of Chicago creating the Milton Friedman Institute for Research in Economics. In case you can’t guess where he stands on the issue, that’s an anti-MFI button on his lapel. (Photo by David Schalliol)

The late Mil­ton Fried­man was a provoca­tive teacher at my alma mater, the Uni­ver­si­ty of Chica­go. He got his stu­dents involved with their stud­ies. He was a gift­ed writer and com­mu­ni­ca­tor. And he received a Nobel Prize for his con­tri­bu­tions to economics.

If I went before a town hall meeting in Vermont and asked if people thought it would be a good idea to abolish Social Security, Medicare and Medicaid, people would think I was crazy.

But Fried­man was more than an aca­d­e­m­ic. He was an advo­cate for, and pop­u­lar­iz­er of, a rad­i­cal right-wing eco­nom­ic ideology.

In today’s polit­i­cal and social real­i­ty, the Uni­ver­si­ty of Chicago’s estab­lish­ment of a $200 mil­lion Mil­ton Fried­man Insti­tute (in the build­ing that has long housed the renowned Chica­go The­o­log­i­cal Sem­i­nary) will not be per­ceived as sim­ply a sign of appre­ci­a­tion for a promi­nent for­mer fac­ul­ty mem­ber. Instead, by found­ing such an insti­tu­tion, the uni­ver­si­ty sig­nals that it is align­ing itself with a reac­tionary polit­i­cal pro­gram sup­port­ed by the wealth­i­est, greed­i­est and most pow­er­ful peo­ple and insti­tu­tions in this coun­try. Friedman’s ide­ol­o­gy caused enor­mous dam­age to the Amer­i­can mid­dle class and to work­ing fam­i­lies here and around the world. It is not an ide­ol­o­gy that a great insti­tu­tion like the Uni­ver­si­ty of Chica­go should be seek­ing to advance.

Those who defend the Mil­ton Fried­man Insti­tute will assure us that it will encour­age a free and open exchange of ideas. That may very well be true. But if the goal of the insti­tute is sim­ply to do non-ide­o­log­i­cal research, there are a lot of names that one could come up with oth­er than that of the most polem­i­cal and ide­o­log­i­cal econ­o­mist of his time.

My sus­pi­cions only deep­en when I read on the Uni­ver­si­ty of Chica­go web­site that donors who con­tribute more than $1 mil­lion to the project will have a spe­cial rela­tion­ship with the Insti­tute as mem­bers of a Mil­ton Fried­man Soci­ety and will be expect­ed to facil­i­tate the institution’s con­nec­tions to lead­ers in busi­ness and government.”

I work in Wash­ing­ton, D.C., and I know about the pow­er that big mon­ey has over process. When the insur­ance com­pa­nies and the drug com­pa­nies and the oil com­pa­nies and the banks and the mil­i­tary-indus­tri­al com­plex make con­tri­bu­tions to polit­i­cal cam­paigns, we usu­al­ly know exact­ly what it is they want in return.

Maybe I’m being cyn­i­cal and maybe these big play­ers who are kick­ing in mil­lions for the Mil­ton Fried­man Insti­tute are mere­ly inter­est­ed in pro­mot­ing open aca­d­e­m­ic dis­cus­sion and research. Maybe that is the case.

Frankly, I doubt it.

The tim­ing of this project is a lit­tle iron­ic. Fried­man earned his bread by denounc­ing gov­ern­ment at vir­tu­al­ly every turn. He, like his acolyte, for­mer Fed­er­al Reserve Chair Alan Greenspan, believed that a large­ly unreg­u­lat­ed free mar­ket con­sti­tut­ed the most supe­ri­or form of eco­nom­ic orga­ni­za­tion imag­in­able. Well, the tune of the right-wing free mar­ke­teers has changed a bit in the last few months.

My col­leagues in the Sen­ate and I are now pick­ing up the pieces of a bank­ing sys­tem brought to the edge of col­lapse by this the­o­ry of dereg­u­la­tion and by the insa­tiable greed of a small num­ber of wealthy financiers play­ing in the mar­ket and engag­ing in incred­i­bly risky – if not ille­gal – behavior.

In the rush to bail out Wall Street, we saw Pres­i­dent Bush, Trea­sury Sec­re­tary Hen­ry Paul­son, the peo­ple in U.S. Cham­ber of Com­merce and the Busi­ness Round­table – folks who loved Friedman’s ideas and who, no doubt, would be pre­pared to finan­cial­ly sup­port a Mil­ton Fried­man Insti­tute – reverse their long­stand­ing rhetor­i­cal oppo­si­tion to gov­ern­ment intervention.

Instead, they demand­ed that we come to the res­cue of the finan­cial firms that had lined up in front of Con­gress for their emer­gency wel­fare checks.

For years, all of these peo­ple, includ­ing the pres­i­dent of the Unit­ed States, have been telling us that gov­ern­ment should not be involved in ensur­ing health­care for all Amer­i­cans as a right of cit­i­zen­ship. (‘What a ter­ri­ble idea!’)

They have been telling us that the gov­ern­ment should not be involved in mak­ing qual­i­ty edu­ca­tion afford­able to all peo­ple, that the gov­ern­ment should not be empow­ered to ensure that we reverse green­house gas emis­sions, that gov­ern­ment should not reg­u­late pol­lu­tion that con­t­a­m­i­nates our air and water and land, and that the gov­ern­ment should not pro­vide a strong safe­ty net for our chil­dren, for our seniors or for the disabled.

Well, it turns out that when the shoe is pinch­ing their foot, they have become the strongest believ­ers in gov­ern­ment inter­ven­tion – espe­cial­ly if work­ing peo­ple and the mid­dle class are bail­ing them out.

But the issue here is not just eco­nom­ic pol­i­cy. It goes deep­er than that. It touch­es on the core of who we are as a soci­ety and as a peo­ple. Are we as human beings sup­posed to turn around and not see the suf­fer­ing that so many of our broth­ers and sis­ters are expe­ri­enc­ing? Are we con­tent to be liv­ing in a nation where, thanks in part to the Fried­man­ite ide­ol­o­gy, the rich­est 1 per­cent owns more than the bot­tom 90 per­cent and the top one-tenth per­cent owns more than the bot­tom 50 percent?

Should we ignore the real­i­ty that under Bush, more and more bil­lion­aires were cre­at­ed in a peri­od when we had, by far, the high­est rate of child­hood pover­ty in the indus­tri­al­ized world? Some 18 per­cent of our kids are liv­ing in pover­ty and we are shocked that we have more peo­ple in jail than any oth­er coun­try on earth, includ­ing Chi­na. Are we sup­posed to ignore those realities?

With all due respect to the late Mil­ton Fried­man, his eco­nom­ic pro­gram is noth­ing more than a wish list for the greed­i­est, the most monied inter­ests in our soci­ety. At the same time that this ide­ol­o­gy is sup­port­ed by the rich and pow­er­ful – except when they’re lin­ing up in Wash­ing­ton for their wel­fare checks – this same ide­ol­o­gy is almost unan­i­mous­ly opposed by work­ing fam­i­lies and mid­dle-class peo­ple across this country.

If I went before the peo­ple in a town hall meet­ing in Ver­mont and asked for a show of hands of how many peo­ple thought it would be a good idea to abol­ish Social Secu­ri­ty, Medicare and Med­ic­aid, peo­ple would think I was crazy. Not one per­son in a hun­dred would sup­port that idea because it is so patent­ly absurd.

Even in the case of con­ser­v­a­tive Repub­li­cans, no GOP can­di­date would ever run on a plat­form of abol­ish­ing Social Secu­ri­ty, Medicare and Med­ic­aid. They may attempt to abol­ish these pro­grams while in office, but they will nev­er dis­cuss that agen­da on the cam­paign trail.

What would some of the items on Friedman’s wish list be? First of all, the Fried­man­ites would be sup­port­ive of the con­cept of a cul­ture of greed. They want peo­ple mak­ing bil­lions of dol­lars on the cov­ers of Time and Newsweek because these peo­ple are sup­posed to be our nation­al heroes. We are not sup­posed to rec­og­nize a teacher who makes $40,000 a year open­ing up the minds of young peo­ple. We are not sup­posed to rec­og­nize a child­care work­er who makes $18,000 a year giv­ing poor chil­dren an oppor­tu­ni­ty to grow intel­lec­tu­al­ly and emo­tion­al­ly. Those jobs are not con­sid­ered impor­tant work.

But if you’re a bil­lion­aire on Wall Street cre­at­ing exot­ic finan­cial instru­ments that end up being worth noth­ing, you are con­sid­ered a hero. The fact that this cul­ture of greed has per­me­at­ed our polit­i­cal cul­ture means that cor­po­rate CEOs can now earn more than 400 times what their work­ers earn with­out fear­ing a polit­i­cal backlash.

This wish list for the rich would include hav­ing the wealthy pay as lit­tle as pos­si­ble in tax­es. It would include the destruc­tion of the Amer­i­can labor move­ment, abol­ish­ing the min­i­mum wage and doing away with reg­u­la­tions that ensure work­place safe­ty and keep our food and prod­ucts safe.

Now we have a case study for what hap­pens when the ide­ol­o­gy of Mil­ton Fried­man becomes the oper­at­ing ide­ol­o­gy of the gov­ern­ment. Under Bush, the medi­an fam­i­ly income has declined by thou­sands of dol­lars. Mil­lions of Amer­i­cans have entered the ranks of the poor. Some 7 mil­lion have lost their health insur­ance. Some 3 mil­lion have lost their pen­sions. And the gap between the very rich and every­body else has grown much wider.

Right-wing econ­o­mists have argued that we can sim­ply trust wealthy peo­ple and large cor­po­ra­tions to do the right thing. Recent his­to­ry has demon­strat­ed what a sil­ly idea that is.

Our coun­try is due for a trans­for­ma­tion. We have endured years of right-wing ide­ol­o­gy and we are eager to move in a dif­fer­ent direc­tion. I believe that we will see a major reorder­ing of social and eco­nom­ic pri­or­i­ties, and that this last gen­er­al elec­tion rep­re­sent­ed a repu­di­a­tion of right-wing eco­nom­ic arguments.

We will see the day when health­care is a right of cit­i­zen­ship in the Unit­ed States.

We will see a U.S. with­draw­al from Iraq and an under­stand­ing that nev­er, ever again can we allow an admin­is­tra­tion to manip­u­late and deceive its way into a war.

Our role as pro­gres­sives is to remind our coun­try that alter­na­tives are pos­si­ble, that social demo­c­ra­t­ic move­ments in North­ern Europe and else­where have secured uni­ver­sal access to qual­i­ty health­care and have effec­tive­ly abol­ished the kinds of pover­ty and home­less­ness we see in our soci­ety. This will not hap­pen on its own: it will require pop­u­lar engage­ment and orga­ni­za­tion. But the chang­ing polit­i­cal land­scape has pro­vid­ed us with an oppor­tu­ni­ty to advance the cause of social and eco­nom­ic justice.

In the Bush era – a peri­od in which some of Friedman’s great­est admir­ers man­aged the U.S. econ­o­my – the top 400 fam­i­lies in this coun­try saw their wealth increase by $670 billion.

Yet we have chil­dren in this coun­try who have no health­care, chil­dren who are under­nour­ished and chil­dren who sleep out on the streets. From an eco­nom­ic per­spec­tive, from a moral per­spec­tive and from a philo­soph­i­cal per­spec­tive, the ide­ol­o­gy of Mil­ton Fried­man is dead wrong. And the Uni­ver­si­ty of Chica­go is mak­ing a seri­ous mis­take in estab­lish­ing a new plat­form for its failed ideas.

Bernie Sanders (I‑Vt.) was elect­ed to the U.S. Sen­ate in 2006 after serv­ing 16 years in the House of Rep­re­sen­ta­tives. He is the longest serv­ing inde­pen­dent mem­ber of Con­gress in Amer­i­can his­to­ry. Elect­ed May­or of Burling­ton, Vt., by 10 votes in 1981, he served four terms. Before his 1990 elec­tion as Ver­mon­t’s at-large mem­ber in Con­gress, Sanders lec­tured at the John F. Kennedy School of Gov­ern­ment at Har­vard and at Hamil­ton Col­lege in upstate New York. Read more at his web­site.
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