Passing of a Legend

Today, renowned economist Milton Friedman died.

To celebrate his contributions, I'm posting a great video from google here. Thanks goes out to "sordomudo" for his giving me the heads-up and the link.

This video is, IMHO, particularly interesting and prescient in light of how old it is. I'm not sure on the date, but it's an old one. In it, he uses the concept of minimum wage, which I just posted on a couple days back, to illustrate where good intentions are not matched by results.

One of my favorite lines comes at the beginning:
"The fact is, that the programs that are labeled as being for the poor, for the needy, almost always have effects exactly the opposite of those which their well-intentioned sponsors intend them to have."

Interestingly, he also addresses the social security tax, expounding on principles that I have talked about earlier in the context of the corporate income tax. The principle is the same: economically, the "incidence" of the tax, a.k.a. the burden, does not fall upon the corporation, but rather on the employee (or the consumer). Notably, Friedman was (in essence) arguing for the privatization of social security nearly half a century ago. The principle is simple: people know how to spend their own money better than the government does.

One weakness in his argument, IMHO, comes as he extols the virtues of the 19th century without decrying some of its more obvious shortcomings. I think he is a bit too dismissive in regards to the social and economic exigencies that led some Americans to embrace collectivism. I think he also ignores those who were religiously motivated to establish Utopian Collectivism (like the LDS), but that was a bit outside the scope of the discussion.

However, in the end, his point about fighting the natural progress toward tyranny and the "drift toward collectivism" is interesting. He points out that when a problem is identified in society, the argument for government action is simple, and easy for everyone to understand; thus resulting in a call for more collectivist policies. Meanwhile, the argument for the natural and positive results of market operations is subtle and difficult to grasp. Further, it's easy to characterize such nuanced arguments as selfish and greedy. This has always been my frustration as well. Any time you argue for the market, it's characterized as being selfish and unresponsive.

Warning: Friedman uses outdated and politically-incorrect language in a couple of instances.