Some time back I came across a “Summer Reading List” on Greg Mankiw’s blog. I figured since I wasn’t originally taking classes during the summer I figured I would put my money where my mouth was and actually acquire some of these recommendations and begin reading them. After all, he’s the one with a Ph.D., so I figured his choices were likely wiser than mine. The fact that I had previously read and enjoyed one of the titles on the list also helped.
The title I started with is the subject of this post, Capitalism and Freedom by Milton Friedman. Now, to be fair, I haven’t actually finished the book yet. I’m somewhere around 2/3 of the way through it. I have discussed various sections with my coworker as I have gone through it, and for time and readability do not intend to repeat that commentary here. Instead, this is a more of a general impression and commentary on a specific section.
First, I would like to point out that this book was originally published in the 1960s. Taken in context, I feel this works in the book’s favor by offering a contrast between where we were and where we are. Some things have certainly changed, though not always in the direction our author would have preferred.
It has a perspective that most people would currently describe as libertarian, I think. There’s a tendency toward small government and a free market with minimal regulation. He often uses the word “liberal” to describe this position, not to be confused with the modern political thought of the same name.
While I do not always agree with his points, they are at least well reasoned and argued. My disagreements tend to be in the form of “Yes, but” style statements, and most of them stem from the fact that I place a higher social cost on human suffering than he does.
While somewhat out of context, there are certain statements I find extraordinarily relevant to the situation in the US. “Mistakes, excusable or not, cannot be avoided in a system which disperses responsibility yet gives a few men great power, and which thereby makes important policy actions highly dependent on accidents of personality.” (pg. 50) He was largely speaking of the Federal Reserve and central banking system, but I feel this applies equally well to both political leadership and law enforcement. I also feel that the phrase “Mistakes […] cannot be avoided” is generally true regardless of what other conditions are imposed.
I find my thoughts dwell rather long on the section regarding government subsidization of higher education. By default, he is opposed to such programs as necessarily inefficient. The taxpayer bears the burden of cost while the individual reaps the reward of increased personal income. That point, in itself, is valid. Especially in a case like mine where a federal grant is covering the costs I’m currently incurring. In fact, it’s the only thing enabling this adventure at all, and I do often feel some measure of guilt about this.
As a result, though, what I lack in financial investment I try to make up with time and effort. It seems the least I could do. The biggest problem is that it seems nearly impossible to accurately assess inherent human potential. If you were to take only my past history in education, it would paint a quite different picture of my potential than my current record does. This suggests that past performance is not always the best indicator, though how recently past may be a factor also.
Things that really rub me the wrong way are “the reluctance to think of investment in human beings as strictly comparable to investment in physical assets.” With all due respect, Dr. Friedman, we cannot accurately assess the unrealized potential of humans quite the same way we can with physical assets. Physical assets do not live, do not suffer, do not innovate. While I understand the underlying logic, any attempt to seriously compare living things with inanimate objects is… inhumane. Does this mean we should run full tilt into free college for everyone? Probably not.
In his defense, he does go on to describe a form of government revenue sharing, a trend that has only recently begun to make headway in the private lending sector. In exchange for financing the education, the educated promises a certain percentage of future income instead of a standard loan payment. It only took, y’know, 60 years. I think that would be a fair modification to the government grant as well, though many people today would be willing to allow the government that far into “their business.”
I have yet to read the sections that will be of greatest interest to me, though, so expect to hear about this book again. The next section is about discrimination which is quite a prescient topic, to say the least.
I am well beyond my standard length, though, so y’all take care.