Alberto Mingardi  

Milton Friedman on the intellectuals who oppose capitalism

What's in Your Bag?... Don't be early in bubble predi...

Following the valuable advice of co-blogger David Henderson, I've gotten my hands on Milton Friedman on Freedom, a new collection edited by the Hoover Institution. The book will surprise all of us who never properly appreciated the insights and wisdom of Friedman's political thinking. His own peculiar blend of classical liberalism comes out all the more as subtle and relevant.
Friedman on Freedom.jpg

Among the several chapters, I did particularly enjoy a 1974 interview with Reason magazine. Friedman was then interviewed by the editorial trio (Tibor Machan, Joe Cobb, Ralph Raico), who were challenging him from what they considered a more consistent libertarian position.

The interview is rich and interesting in many ways. Friedman defends a negative income tax and school vouchers as "devices for enabling the free market to play a larger role." He admits that the work of E.G. West made him revisit his own rationale for compulsory education (but not to abandon vouchers as a practical policy proposal), and he discusses inflation and the gold standard.

Friedman also speaks on a matter which has likewise been pondered by many of his contemporaries: why intellectuals oppose capitalism. To these questions, some have replied that the main reason is resentment (intellectuals expect more recognition from the market society than they actually get); some have pointed out that self-interest drives the phenomenon (intellectuals preach government controls and regulation because they'll be the controllers and regulators); some have taken the charitable view that intellectuals do not understand what the market really is about (as they cherish "projects" and the market is instead an unplanned order).

Friedman rejects the resentment view and proposes a version of the self-interest thesis by looking at the demand-side, so to speak. And it shows--behind the veil of his civility--very little consideration for the tastes of his fellow intellectuals for complex arguments, which seems to me quite a criticism.

Here's the passage:

REASON: Perhaps we can go back to your comment about intellectuals. What do you think of the thesis put forth by von Mises and Schoeck, that envy motivates many contemporary intellectuals' opposition to the free market?

FRIEDMAN: Well, I don't think we'll get very far by interpreting the intellectuals' motivation. Their critical attitudes might be attributed to personal resentment and envy but I would say that a more fruitful direction, or a more fundamental one, is that intellectuals are people with something to sell. So the question becomes, what is there a better market for? I think a major reason why intellectuals tend to move towards collectivism is that the collectivist answer is a simple one. If there's something wrong pass a law and do something about it. If there's something wrong it's because of some no-good bum, some devil, evil and wicked--that's a very simple story to tell. You don't have to be very smart to write it and you don't have to be very smart to accept it. On the other hand, the individualistic or libertarian argument is a sophisticated and subtle one. If there's something wrong with society, if there's a real social evil, maybe you will make better progress by letting people voluntarily try to eliminate the evil. Therefore, I think, there is in advance a tendency for intellectuals to be attracted to sell the collectivist idea.

REASON: It's paradoxical but people might then say that you are attributing to the collectivist intellectual a better feeling for the market.

FRIEDMAN: Of course. But while there's a bigger market for Fords than there is for American Motors products, there is a market for the American Motors products. In the same way, there's a bigger market for collectivist ideology than there is for individualist ideology. The thing that really baffles me is that the fraction of intellectuals who are collectivists is, I think, even larger than would be justified by the market.

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COMMENTS (8 to date)
Miguel Madeira writes:

I suspect the reason because intellectuals tend to collectivism is because a simple matter of definition - if you write about political or social issues, you are considered an "intellectual", if you write about business management or engineering, usually not. In other words, if you write articles proposing political solutions for problems, it is more probable that you will be considered an intellectual than if you write articles proposing more technical/individual/voluntary-association solutions. Of course, political solution are not necessarily coercive solutions - after all, both "raise the minimum wage" and "abolish the minimum wage" are political proposals - but I think that there is a almost natural tendency for the people interested in political issues to fall for the collectivist side almost by default (after all, their primary "instinct" is thinking in government solutions for the problems, almost by definition), and having to fight their instincts to achieve classic liberal conclusions (look that Hayek, Nozick, Friedman, Coase, etc. all began as some kind of socialists or social-democrats).

But, I am not sure if the collectivism of the intellectuals is not a bit of an exageration - yes, socialism (in its several variants) is very popular between the intellectuals; but, if we think a bit, probably classic liberalism / libertarianism is, in some way, also very popular between intellectuals (in the sense that, if very few intellectuals are classic liberals/libertarians, almost all classic liberals/libertarians are some kind of intellectuals - btw, I imagine that this will apply to almost all minority ideologies: its support base will be overwhelming intellectual). If there are ideologies that are very unpopular between intellectuals, it is not classic liberalism/libertarianism, but conservatism and specially christian-democracy (who is a major political force in many countries, specially in Europe, but has almost zero weight between the intellectuals: besides Jacques Maritain - and even him is more a case of post-death involuntary adoption as ideologue - someone knows the name of any famous christian-democratic intellectual?).

Tom Jackson writes:

The Kindle edition of this new book is only $3.40, a very fair price.

Hazel Meade writes:

Perhaps intellectuals are just tribal like most people and the tribe currently tends to lean socialist. It takes longer for tribes to change their minds than individuals, because tribalism makes members want to support the tribal consensus.

Thomas Hutcheson writes:

I do not very much like approaching economic philosophy from the standpoint of the motivations of the people holding one or another position. First it has little predictive power and it tends, I’m afraid, to dichotomizing positions. It rather implies that “intellectuals” all take the same position on “capitalism” and that “capitalism” is one thing.

Asking why “intellectuals” oppose “capitalism” is pretty useless in trying to understand why Paul Krugman opposes single payer health insurance in 2017 and even less useful is asking if single payer health insurance in 2017 would be "capitalism" compared to expanding ACA and deriving a policy position from the answer.

Kim Stephens writes:

For a broader analysis of this particular question, I direct the interested reader to Peter Foster's excellent book, "Why We Bite the Invisible Hand".

Seth writes:

I agree with Miguel, it's a self-selection issue. Why would you become an 'intellectual' unless you believed your own BS?

I also think the word 'intellectual' is misleading. Most didn't pass Feynman's first principle: "you must not fool yourself, and you are the easiest person to fool."

WalterB writes:

Aside: Krugman does not oppose single payer nowadays. He just wants to delay it a little, per his recent writings.

Roger McKinney writes:

I'm not a big fan of Friedman. Yeah he was pro-market, but his economics spoke louder and contradicted his pro-market stance by claiming that the central bank can actually control the economy.

Austrian economics was obviously too difficult for Friedman. He called Hayek's "Pure Theory of Capital" incomprehensible. I have only an average IQ and found it brilliant. His snub of Mises and Schoeck are inexcusable. Schoeck's "Envy: A Theory of Social Behavior" is one of the most important books on political economy ever written. Dismissing it as not "fruitful" just advertises his lack of depth and breadth.

Most people aren't going to like Schoeck's book because it reveals a very dark side of human nature. But honest people should not dismiss it because they don't like. They should try to prove Schoeck wrong. I have never read anyone attempt it.

BTW, Hayek contributed another view of why intellectuals like socialism. Their intelligence fools them into thinking they can control anything. Their arrogance makes them think they can control the economy.

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