"The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both."
- Milton Friedman
- Milton Friedman
Maximizing for freedom is great if you're part of a group that tends to hold power. It's not so great if you're part of a group that tends to not.
- Countries which add restrictions the the economy see slower wealth growth and more inequality
- Countries which free up their economy see acceleration in growth and more equality
- Countries with free economies outperform neighboring, similar countries which are more restrictive
- Industries which are more free are more innovative, and become cheaper, faster than heavily regulated industries
Compare health outcomes of countries with socialized medicine to those without, for example.
How many regulations exist because private companies couldn't be trusted to do the right thing on their own?
The Civil Rights act.
Sure, you can point out that soviet russia failed economically, especially compared to the US, but there is nothing about that fact that contradicts the point that "freer" economic structures have also led to serious power imbalances between employers and employees, and that many of the rights employees have today in the US are only due to regulation imposed by governments.
Socialized medicine is likely better than the current state of US healthcare, but US healthcare is by no means a free market. In fact, it's probably the most regulated and otherwise distorted by government policy. It all started with the introduction of medicare and the wage caps of the WWII era leading to employer-linked insurance. Before that, it was much more affordable.
> How many regulations exist because private companies couldn't be trusted to do the right thing on their own? The Civil Rights act.
The civil rights act was created as a response to other state distortions, like Jim Crow laws and segregation. It isn't necessary to prevent discrimination: incentives against that already exist in the marketplace.
Give me an example of a regulation, and I'll tell you why it is either unnecessary or actively harmful.
> the point that "freer" economic structures have also led to serious power imbalances between employers and employees
To the contrary, freer economies led to the reduction of child labor and improvements to worker's lives before any policy actions were implemented.
> many of the rights employees have today in the US are only due to regulation imposed by governments
If by rights, you mean privileges.
The various requirements to wear a life jacket.
Fire codes.
Removing lead from gasoline.
I wouldn't get lifetips from Friedman. Has was an important economist, and certainly pushed our knowledge forward... but I don't think there is any of his personal opinions on the theory that wasn't proven false already.
Policies that have benefitted primarily the already wealthy amassers of capital and which are in large part responsible for the massive income inequality and erosion of labour rights that is present for the first time since the Gilded Age.
His idea of human beings as rational, self-interested economic actors that is a ludicrously narrow model of the human being and has been disastrous for the working and middle classes all over the developed world.
Quotes from Friedman are worth nothing to me, personally.
Sure, but in order to understand human behavior on the scale of millions of people making billions of transactions, you need to start with a simple axiom and move on from there. I think people hear the word "self-interest" and think "greed", and assume that mainstream economics must be predicted on a very cynical view of human beings. That's not the case at all. We all want to survive. We can't possibly understand the individual needs of other people outside of a small circle of people that we love and care about. None of us are omniscient. The beautiful thing about markets is that none of us need to have perfect information in order to participate. By simply buying the things we need and selling things the things we don't, prices emerge in a totally decentralized way.
If you can think of a more accurate way to describe human economic motives, I'd like to hear it.
> has been disastrous for the working and middle classes all over the developed world.
Capitalism has lifted billions out of poverty. Sure, there's a large gap between the richest and poorest, but the poorest people of the world are also materially better off than at any other point in human history. I don't see how this is a bad thing.
I don't know what the solution is. Every government intervention has the potential to distort the market and create corrupt/perverse incentives. Rent control is a great example of something that sounds nice on paper but ends up increasing housing costs as a result. I'm generally in favor of expanding the welfare state but I think we should be extremely cautious in doing so.
And yet something less than full blown socialism seems to work fine just about everywhere.
Scandinavia says hi. And those "disastrous" times you're talking about are more the result of dictators, than any economic system used.
Idk, maybe I'm spending too much on the internet but it seems like the discussion around inequality has shifted from "let's increase the welfare state" to "let's dismantle capitalism and give socialism a try". There seem to be a lot of people these days that call themselves Marxists or capital-S Socialists, and even some who are apologists for the likes of Stalin and Mao. These people are everywhere on Reddit and HackerNews.
I'm all for the Scandinavian model (which, to be clear, is capitalism with a large welfare state and a sovereign wealth fund, not socialism), but do I want a planned economy or a dictatorship of the proletariat? No, because it doesn't work.
> And those "disastrous" times you're talking about are more the result of dictators, than any economic system used.
Socialists use this argument a lot but I can't think of a scenario in which socialism doesn't eventually devolve into fascism. Even if the means of production are owned by the workers, the workplaces are run democratically, and resources are allocated by direct consensus, you'll still need to use coercion to force people to participate in the economy. If people in village A need more grain and the farmers in village B don't want to produce more grain, do you point a gun to the farmers' heads and make them produce more grain? Disagreements will still happen in Socialist societies. People will still fundamentally be selfish. People will still want to barter with each other and enrich themselves through their labor, intellect, and unique talents. How do you seize peoples' property, prevent them from bartering and hoarding, and force them to participate in a planned economy without a massive and violent state apparatus?
The great thing about capitalism is that it recognizes the inherent self-interestedness of human beings and channels it into something that is (mostly) positive for society. Socialism starts with the premise that human beings would behave in higher-minded way if only they had more economic power, which I think is a flawed assumption and the reason why socialist economies will always fail.
Given how shitty capitalism is treating people right now, that's a pretty valid viewpoint.
"There seem to be a lot of people these days that call themselves Marxists or capital-S Socialists, and even some who are apologists for the likes of Stalin and Mao. These people are everywhere on Reddit and HackerNews."
So what?
"Socialists use this argument a lot but I can't think of a scenario in which socialism doesn't eventually devolve into fascism."
I can't really think of a scenario in which capitalism doesn't either.
"The great thing about capitalism is that it recognizes the inherent self-interestedness of human beings and channels it into something that is (mostly) positive for society."
This isn't a positive, and it does not channel it into positives for society. Captialism encourages things like dumping waste into rivers. How is that a positive for society?