The Failures of Milton Friedman

As an advocate of capitalism, I am well accustomed to the myriad of arguments leveled against it by every variant of statist— the purported anarchy into which the world would devolve without regulation or antitrust law, the fictionalized savior-like qualities of government in a time of recession, and the cynical and smear-ridden characterization of industrialists and investors  whom socialists of all varieties have used as their scapegoats, all the while relying upon them for their every bit of material prosperity. These are nothing new. However, the unreason of statists does not stand alone as a philosophical barrier to the achievement of liberty. Tragically, it is often the inconsistencies and contradictions of the purported advocates of liberty which most undermine it. Their intellectual errors undercut our progress toward political and economic freedom by insisting upon defending  the right ideas with the wrong arguments. Their failure to establish sound, moral cases for freedom negatively reflects upon all advocates of limited government and lends credence to our adversaries. It is thus necessary for those able and willing to exercise philosophical consistency to correct the errors of small government proponents as discriminatingly as we would those of any socialist.

There may never have been a more prime example of such inconsistency and error than in a speech by libertarian economist Milton Friedman from the August 14, 1990 International Society for Individual Liberty’s 5th World Libertarian Conference. Through the course of the speech, entitled “Libertarianism and Humility,” Dr. Friedman departs from his expertise— economics— into the realm of philosophy. In the course of the speech, Friedman extols two virtues above all others as the foundations of the case for liberty: humility and tolerance. He holds that it is the pervasive absence of these two traits which most hinders the progress of our society toward freedom and out of the grips of statism. At first glance, this critique seems innocuous, if not very profound.

He goes on to profess his admiration for two individuals whose works have, by his perceptions, exceeded all others in the furtherment of freedom in modern society: Ludwig von Mises and Ayn Rand. In distinguishing these two individuals with such high honors, Dr. Friedman appears wholly genuine and aware of the gravity of his own statements. Nonetheless, his compliments to these two are not given without considerable critique. It is that critique which reveals a seemingly endless series of dangerous convictions that, if fully explored, could inspire an entire book about the ways in which libertarians are capable of undermining their own desired goals. Short of such a venture, I will only briefly illuminate problems with some of Friedman’s beliefs in almost every major field of philosophy, from metaphysics to epistemology to ethics and, finally, to politics.

Early in Friedman’s speech, he recounts a story first told by Barbara Branden regarding a confrontation at a dinner party between Ludwig von Mises and Ayn Rand regarding the proper relation of morality to economics. The story goes that, by the end of their debate, von Mises was driven to shout in anger at Rand and that they did not speak for nearly a year before amends were made. Until now, it would seem that Friedman is making a comment about the need for general civility between intellectuals in order to facilitate effective discussion— a not unworthy suggestion, though one that might have been better suited to an editorial in an academic magazine than a keynote address to a public forum. However, it soon becomes clear that Friedman is saying something much more than this— something very deliberately intended for wider consumption: “The important thing to me is less the intolerance in personal behavior than it is that the philosophical doctrines which they— on which they claim to base their views— seem to me a fundamental source of intolerance.”

Friedman’s suggestion is not that intellectuals, in order to maintain civil and productive discourse, must refrain from flights of emotion or personal contention. Rather, he cites the fact that both Rand and von Mises are scholars whose life’s work is founded upon certain a priori fundamental beliefs. It is these beliefs, regardless of the intellectuals’ emotional discipline and composure, which are the inevitable and inextricable source of conflict. Furthermore, his critique asserts that it is not the content of the specific individuals’ philosophies and fundamental principles that he views as causing conflict, but rather that they have them at all. To Friedman, certainty is aggression. He explains,

“On the one hand, I regard the basic human value that underlies my own beliefs as tolerance based on humility. I have no right to coerce someone else because I cannot be sure that I am right and he is wrong. On the other hand, some of our heros…people who have, in fact, done the most to promote libertarian ideas, who have been enormously influential, have been highly intolerant as human beings and have justified their views, with which I largely agree, in ways that I regard as promoting intolerance.” [emphasis mine]

This can be taken as the guiding thesis of Friedman’s address: that above all values including truth, logical discourse, and the intellectual products and understandings to be derived from the exercise of reason, human beings should hold the cardinal virtues of tolerance and humility— the tolerance to accept any idea one encounters merely because someone has expressed it, the humility to forsake knowledge as unattainable. Easy though it may be to ascribe to Friedman the benefit of the doubt, that he merely means to stress the importance of paying respect to the right of others to express their views freely, his explanations make clear that he means not simply tolerance for individuals, but tolerance for their ideas, any ideas, all ideas; humility not to accept that one may be wrong, but that one cannot be right. Formally, this is the philosophy of skepticism. A more suiting term would be ‘intellectual surrender.’

Why would Friedman, a purported idealist widely revered for having spent his life in support and advocacy of free market ideas, so explicitly denounce the exercise of intellectual discrimination and the defense of values? If not for values, on what grounds does Friedman base his advocacy for libertarianism? Simple, he contends: “I have no right to coerce someone else because I cannot be sure that I am right and he is wrong.” Setting aside Friedman’s very sensitive and baseless interpretation that a logical argument between intellectuals constitutes forcible coercion, this statement reveals a profoundly dangerous contention which the economist cites as being at the very base of his philosophical beliefs: man derives his rights not from his nature as a rational being, but by virtue of his reason’s limitations; liberties are secured by the ignorance of our would-be assailants; mind is the enemy of life. Indeed, taking the corollary of Friedman’s statement would render the conclusion that if one could be certain of right and wrong, one would be infinitely entitled to force one’s will on others with full impunity. Full rationality would grant man the status of Nietzsche’s übermensch, beyond the standards of good and evil.

This point is significant to explore by virtue of the recurrence of such beliefs throughout history and the ways in which they have consistently preceded the rise of statism— a consequence Friedman would abhor, but which his philosophy would have enabled. The vehement insistence upon the impossibility of reason to discover knowledge or provide man with answers to his ethical dilemmas has, throughout history, opened doors of influence for statists into the minds of those who lack the certainty or confidence to oppose them intellectually. Primed by skepticism, they are taught to believe that no one can know anything for certain; that principles and logic are the hallmarks of Western philosophical imperialism; that, as Hitler stated, “The know-it-alls are the enemies of action.” It is only then, having confessed, ‘We can’t understand’, that they are primed for the leader who says, ‘I can. So, obey!’

This was not the epistemology that guided our Founding Fathers in their authorship of the Declaration of Independence and the Constitution. Their philosophy, with varying degrees of explicitness, was that of the Enlightenment, which, for more than a century, had enshrined reason as absolute and capable of rendering to man an understanding of the world around him beyond any system of thought ever developed. No doubt this describes an epistemology to which Friedman (if implicitly) adhered in his work as an economist. However, the Founding Fathers did not limit their application of reason to the realm of the special sciences, but viewed it as a compass toward the establishment of a proper morality and system of governance. Thus, theirs was the first conception of government ever derived from direct reference to man’s nature and his requirements— physical and spiritual. By this evaluation of the objective facts of reality, man can know, holding his life as the standard of value, what constitutes right and wrong. It is in this application that Friedman fails miserably.

Tragically, his mistakes are far from over. His next effort is a flagging attempt to refute Ayn Rand’s philosophy in general. He begins, astonishingly,

“Rand did not regard facts as relevant to [sic]… as ways of testing her propositions. She derived everything from the basic proposition that A is A, A equals A and from that follows everything. But, if it does, again, suppose two Objectivists, two disciples of Ayn Rand, disagree or a disciple disagrees with her. Both agree that A is A. There’s no disagreement about that, but they, for one reason or another, have different views. How do they reconcile that difference? There is no way.”

Regardless of whether or not one agrees with Ayn Rand’s philosophy in general (I do), the accusation leveled here is so flagrantly in disregard of the explicit tenets of Objectivism as to be, at best, philosophically illiterate and, at worst, purely dishonest. Friedman is not simply contesting Rand’s conclusions in some field of philosophy; he is speaking to her intentions and values. His contention is that Rand herself saw facts— that is, the nature of reality— as separate from her conclusions and unsuitable as a means of validating concepts.

This is not an entirely creative invention of a philosophy which Friedman has attributed to Rand. The philosophy which he describes is a formally established one known as Rationalism. Rationalism teaches that truth is to be derived from the arbitrary formulation of theorems without reference to reality and that no matter how one’s logical conclusions from said theorems may contradict observed fact, they are to be held as tantamount. One could begin to look through Rand’s writings for some excerpt or statement to the contrary in order to invalidate Friedman’s evaluation of her philosophy, but one would quickly encounter great difficulty sifting through all the volumes of options to choose from, each offering thousands of words in support of one of Rand’s central themes– that the proper philosophy is one derived exclusively and discerningly from the facts of objective reality.

If Friedman were honestly interested in Rand’s “way of testing her propositions”, he need only look to Rand’s definition of reason, which she proclaimed as man’s only means of acquiring knowledge: “Reason is the faculty that identifies and integrates the material provided by man’s senses.” What does it integrate? The material provided by man’s senses. From what do the senses derive their data? Observations of the facts of reality. Friedman may contest Rand’s conclusions on particular issues with, if not validity, some sense of legitimacy, but to suggest that she “did not regard facts as relevant” shows Friedman to be either intolerably lacking of a basic knowledge of what he is talking about or committing a deliberate distortion.

As to his citation of the Law of Identity (A is A), it is certainly relevant to the philosophy of Objectivism, but the context-dropping manner in which he describes it does it no justice. Friedman describes the broad, metaphysical axiom of identity as if it were the first premise of every argument, the cause for every effect. In the very broadest epistemological context, this is true. Identification of the concepts addressed in any subject is a prerequisite to proper analysis. However, he proceeds from there into a fallacy of reductio ad absurdum, implying that Rand would argue simply, ‘A is A, therefore capitalism is moral.’ To the contrary, Rand’s arguments, when fully explored, provide more detailed and meticulous chains of logical reasoning to support her conclusions than any philosopher in history— and certainly more than Friedman even approaches in this talk. If he didn’t wish to expend the effort to read any of her many books and essays to understand this, he should merely have foregone a public discussion of her philosophy.

Conditionally, and with great trepidation, accepting the possibility that Rand was right in making an assertion that amounts, essentially, to ‘A thing is what it is’, Friedman then proceeds to explain the dilemma which he views as necessarily arising from this Objectivist conviction. He asserts that two Objectivists, having agreed upon the law of identity, can then proceed to disagree on other issues. He describes this as an impossible quandary caused by each person’s commitment to a fundamental principle.

It is important to recognize that, if Rand practiced the philosophy of Rationalism which Friedman ascribes to her, then his description of this inescapable dilemma would be valid. How could two individuals debating arbitrary postulates without reference to the facts of reality hope to resolve a conflict between their abstract syllogisms?

This, however, is not the nature of Objectivist epistemology. Rand’s theory of knowledge, as she defines it, requires constant reevaluation of the nature of relevant entities— with no quarter given to Rationalism or the emotional dogmatism which Friedman attributes to the two hypothetical Objectivists. By Rand’s conception, having agreed upon the law of identity and other basic axioms, the two individuals establish their premises by reference to the observed evidence. If the facts available to them are the same and both assess those facts rationally, then they should arrive at the same conclusion. If their conclusions differ, one or both acknowledges the error and must alter their argument. If not, it is reality which serves as the ultimate arbiter, the judge and jury of human cognition. Put simply, two sailors can debate whether their ship is sinking, but the persistence of their disagreement will not prevent or delay their drowning.

It comes as no surprise after such an argument that Friedman himself holds a very dim view of human reason and the capacity of individuals to acquire knowledge. He explains,

“In both Rand and Mises and much libertarian literature, there’s a belief that hard questions have easy answers, that it’s possible to know something about the real world, to derive substantive conclusions from purely a priori principles.”

Again, Friedman introduces a rather philosophically substantive argument under the guise of common sense by making fallacious claims and reducing others’ arguments to absurd, oversimplified caricatures. Rand never asserted that “hard questions have easy answers” or that the construction and exercise of a comprehensive, rational philosophy was a simple task. To the contrary, she stressed and admired the profound difficulty of formulating a vast chain of logical connections and the dedication that such an adherence to reason necessarily entails. Her recognition of that difficulty was the basis of her admiration for those who upheld reason as absolute. No doubt a man of such intellectual achievement as von Mises would have shared her respect for such qualities.

And yet, Friedman uses this simplification to smuggle in a far more perilous idea. Rather than simply asserting that complex issues deserve great contemplation and that one should resist the temptation to remain satisfied with superficialities, Friedman casts doubt on man’s capacity to “know something about the real world.” This may well be the most fundamental philosophical statement that Friedman makes. With it, he expresses his adherence to a Platonic metaphysics, believing that man is incapable of directly observing the real and that he must instead satisfy himself with a second-order world of forms– mere echoes of reality that the mind can glimpse in fleeting experiences, but of which he can never be entirely certain. One can observe the direct philosophical lineage of such beliefs from Plato to Kant to the origins of skepticism with David Hume, who, to this day, is at work in much of the worst elements of libertarian thought. Whereas statists use a characterization of man as ignorant and helpless to further the Hegelian argument that, since man is incapable of knowledge or interaction with the real world, he must resort to collectivism and support an all-powerful state whose power and authority might be so great as to fulfill the will of existence (the Absolute, Spirit, World-Reason, etc). Friedman and like-minded libertarians use it to support the notion that since certainty is beyond man’s grasp, he must forgo any attempts to derive concepts of right and wrong or to act upon them, and should therefore be left free by virtue of his philosophical impotence.

Finally, as a sort of capstone to Friedman’s misunderstanding of these philosophical principles, he concludes by misunderstanding philosophy as such– that is, the nature and purpose of philosophy as a field of study. Returning to his previous attempt to critique Rand’s advocacy of the law of identity, he sardonically asks whether the law of identity can provide answers to legal disputes regarding private property and whether it can solve the challenges of particular policy issues that modern civilizations face. In so doing, he fails to understand that philosophy is a field of study devoted to man’s nature and that of the world in which he lives. Its purpose is not to provide man with answers to issues in the law, the arts, the special sciences, or business. It cannot, through divine revelation, instill in men a knowledge of how best to legislate gun control, healthcare, or national defense. It can, however, provide man with a method of thought by which to arrive at those answers himself. That Friedman demands these answers be handed to him by philosophy, ready-made, without individual effort, is equivalent to declaring all road maps to be useless because one still has to drive to the destination oneself. That, holding such views, he is still widely regarded by many libertarians as a valuable theoretician is evidence of the grievous misjudgements and errant premises of which that movement is capable.

Many will bristle at my scrutinies of Friedman and other libertarians, wondering why I, as an advocate of individualism and limited government, would expend such effort to argue against someone with whom I share some common political ground. ‘After all,’ they will contend, ‘aren’t we all working toward the same common goal? Should we not support one another against the threat of statism?’ I will refer such objectors, for a fuller explanation, to my article, “A Libertarian Error.” However, I will briefly reiterate here the importance of intellectual consistency in the struggle for freedom. Contrary to what Dr. Friedman suggests, knowledge and certainty are entirely possible to man, but they will not come without effort or without a systematic process of thought to guide men to valid conclusions. Accordingly, those who are truly interested in preserving liberties must be, first and foremost, concerned with acquiring an understanding of those tenets which make all freedoms possible. They must expand their purview from considerations of policy to become students of man. They must recognize that, throughout history, the greatest deterrent to statism has been the willingness of individual men to judge for themselves the facts of reality and to rely on that judgment without equivocation. Tyrants and oppressors have always known the value of ideas and the measure to which they could cripple their victims through the destruction of ideas. That defenders of freedom have forgotten this principle has subjected them to violations that their assailants could not have dreamed of achieving on their own. The remedy? As Leonard Peikoff puts it, “To save the world is the simplest thing in the world. All one has to do is think.”


9 thoughts on “The Failures of Milton Friedman

    1. Slade, I appreciate your efforts on behalf of those of us who ascribe to the Libertarian model. Id encourage you to keep this up. Since I have not read the full text of the Friedman address that is the subject of your blog, I dont feel that I can offer much meaningful insight regarding either his original message or your analysis of it. I do feel compelled to offer a little advice to what is obviously a fine young mind…that would be you.
      You could make your blog much more readable, and therefore more influential, by getting to your point, making it, stating your supporting arguments as succinctly as possible, and moving on. Dont fall in love with the language or your command of it. Remember that you are not writing for yourself, but for readers. Good Luck.

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