Friday, March 13, 2009
A Great Question
Attaturk asks one: "Why is the road to ruin always paved with stones bearing the image of Milton Friedman?"
This is apropropos of Michael Lewis's excellent article on the financial madness that gripped—and then destroyed—Iceland. Speaking of Friedman, though, Sam Smith recently reposted his nonlaudatory obit ("You'd never guess it from the sycophantic obituaries, but Milton Friedman did more damage to American democracy and culture than just about any figure in the 20th century"), and more and more I find myself thinking we should all tattoo it on our bodies like that guy from Memento so we won't make the same mistakes again:
Further, one of the best kept secrets of economics is that there are lots of systems that work provided, that is, you don't care who they work for. Feudalism, for example, was great if you were a lord, not so efficient a marketplace is you were merely a serf. And each system works differently depending on the culture in which it operates, which is why communism in the Soviet Union, China and Italy meant such different things. In the end, the real test of an economy is not its math but its social, financial and moral effect on its culture and those who live there.Word.
This is why the commentaries on Friedman were so consistently wrong. They treated economics as though it was a cold science when, in a mind as distorted as Friedman's, it was really just a sort of creationism myth applied to money.
But for the most part both public figures and the media bought Friedman's mythology, never stopping to look critically at the effect it had on America. Here are a just few things that have happened since America's elite swallowed the Friedman myth:
- Real income down
- Real manufacturing wages down
- Top one percent's share of wealth up
- Income gap between rich and poor up
- Family indebtedness up
- Bottom forty percent's share of wealth down
- CEO pay as a percent of average workers' pay up
- Workers covered by pensions down
- Workers covered by health plans down
- Age at which one can receive Social Security down
- Personal bankruptcies up
- Housing foreclosures up
- Median rent up
But the worst damage of Friedman economics is not fiscal but what it has done to the social and moral principles that made America what it was before the greedsters of neo-capitalism began taking it apart. The underlying principle of laissez faire economics is that power is intrinsically good and decency intrinsically irrelevant.
No society can long function on such a lie. It is essentially that of the Mafia with the exception being that you don't have to always ignore the law to get what you want; often, with the help of your lobbyists and purchased politicians, you can just change it to fit your needs.
We have paid a terrible price for this corruption of our culture by the new robber barons egged on by Friedman and his ilk. We so accept their foul standards that we don't even discuss or debate them. We have become prisoners of their lie.