Laying Blame for the Economic Mess: Milton Keynes or John Maynard Friedman?
September 11, 2009 by Paul McKeever
On September 2, 2009, the Financial Post published an opinion piece by Penn Bullock that asks whether or not the current economic crisis was the result of Milton Friedman’s monetarism. Casting him rightly as someone held up as a hero by libertarians, Bullock concludes:
For two libertarian champions of free markets and limited government, this legacy has the ring of a world-historic irony.
In response, I submitted the following letter to the editor of the Financial Post. From what I can tell, it was not published by that paper.
Of all of the things undermining our prospects for a growing, capitalist economy, perhaps the most damaging is the libertarian practice of passing-off Milton Friedman’s monetarism as a capitalist alternative to Keynesianism. Monetarism and Keynesianism both aim to avoid recessions and depressions. The concern of both is not the individual’s pursuit of his own happiness, but the survival of all, considered collectively. Both propose the seizure of some wealth from those who produce it: Keynes proposed that a percentage of the money supply be seized via taxation; Friedman proposed that a percentage of the money supply be seized by having private banks increase the number of dollars of private credit comprising the money supply.
The essence of capitalism is ensuring that no person obtains what another has produced without the producer’s consent. The essence of libertarianism being nothing more than opposition to government, it is not “ironic” but inevitable that libertarians would reject taxation (being an activity carried out only by governments) yet embrace private-sector expansion of the money supply. Thus, it matters little whether Federal Reserve Chair Ben Bernanke is a Keynesian or a libertarian Friedmanite: either way, he is essentially anti-capitalist, and that which is anti-capitalist – hence anti-producer – will always prove recessionary in the end.
Paul McKeever, B.Sc.(Hons), M.A., LL.B.
Leader, Freedom Party of Ontario