Economist Guide: 5 Lessons Milton Friedman Teaches Us

in #introduceyourself8 years ago (edited)

 Economist Guide: 5 Lessons Milton Friedman Teaches UsBy Sean Ross | February 12, 2016When Milton Friedman won the Nobel Prize in Economic Sciences in 1976, it marked the turning of the tide in academic economic thought, away from doctrinaire Keynesianism and toward the burgeoning “Chicago school.” Friedman brought about a renewed emphasis on prices, inflation and human incentives, a direct counter to Keynes’ focus on employment, interest and public policy.To the extent that Keynes saw himself as the enemy of laissez-faire (evidence suggests this is exactly how he felt), Friedman was the new public face of free markets. Friedman won a major intellectual victory after three decades of Keynesian policies ended in stagflation in the late 1970s, something establishment Keynesians, such as Paul Samuelson, thought was impossible.From a technical perspective, Milton Friedman is best known for his monetary policy and “A Monetary History of the United States,” an epic volume devoted to his scientific work. But this is only one of the many contributions Friedman made to the political economy. The following are five lessons contemporary economists can still learn from Milton Friedman.1.  You Should Judge Policies by Their Results, Not Their IntentionsIn many ways, Milton Friedman was an idealist and libertarian activist, but his economic analysis was always grounded in practical reality. He famously told Richard Heffner, host of “The Open Mind,” in an interview: “One of the great mistakes is to judge policies and programs by their intentions rather than their results.”Many of Friedman’s most controversial positions were based on this principle. He opposed raising the minimum wage because he felt it unintentionally harmed young and low-skilled workers, particularly minorities. He opposed tariffs and subsidies because they unintentionally harmed domestic consumers. His famous 1990 “Open Letter” to then-drug czar Bill Bennett called for the decriminalization of all drugs, mostly because of the devastating unintended effects of the drug war; this letter lost Friedman a swath of conservative supporters, whom he said failed “to recognize that the very measures you favor are a major source of the evils you deplore.”This lesson is critical for economists and policy wonks of all stripes. As Henry Hazlitt once put it: a bad economist only looks at the seen; the good economist looks at the seen and unseen consequences.2.  Economics Can Be Communicated to the MassesDuring Friedman’s landmark interviews on Phil Donahue’s show in 1979 and 1980, the host said his guest was “a man who will never be accused of making economics confusing,” and told Friedman “the nice thing about you is that when you speak, I almost always understand you.” Dr. Friedman gave lectures on college campuses, including Stanford and NYU. He ran a 10-series television program entitled “Free to Choose” and wrote a book with the same name. At all times, Friedman adjusted his content for his audience.Friedman’s gift for communication was rare. Economist Walter Block, sometimes a friendly agitator of Friedman, memorialized his contemporary’s 2006 death by writing, “Milton’s valiant, witty, wise, eloquent and yes, I’ll say it, inspirational analysis must stand out as an example to us all.” More economists should learn from Friedman’s success; learning a social science is not very useful if you cannot communicate it to laypeople.3.  Inflation Is Always and Everywhere a Monetary PhenomenonThe most famous excerpt from Friedman’s writings and speeches is, “Inflation is always and everywhere a monetary phenomenon.” He defied the intellectual climate of his era and reasserted the quantity theory of money as a viable economic tenet. In a 1956 paper titled “Studies in the Quantity Theory of Money,” Friedman found that, in the long run, increased monetary growth increases prices but does not really affect output.Friedman’s work busted the classic Keynesian dichotomy on inflation, which asserted that prices rose from either “cost-push” or “demand-pull” sources. It also put monetary policy on the same level as fiscal policy. Amusingly, Friedman’s insight was so sharp in his criticism of the Federal Reserve’s mismanagement of the money supply that the Fed actually stopped releasing minutes from the board’s meetings to avoid his scrutiny.4.  Technocrats Cannot Control the EconomyIn a 1980 Newsweek column, Milton Friedman said: “If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.”Friedman was a vicious critic of government power and was convinced free markets operated better on grounds of morality and efficiency. In terms of the actual economics, Friedman rested on a few truisms and basic, incentive-based analyses. He offered that no bureaucrat would or could spend money as wisely or as carefully as the taxpayers from whom it was confiscated. He spoke often of regulatory capture, that phenomenon where powerful special interests co-opt the very agencies designed to control them.Friedman’s lesson is easy to understand: government policy is created and carried out through force, and that force creates unintended consequences that do not come from voluntary trade. Indeed, the valuable political power of government force creates an incentive for the wealthy and devious to misuse it, helping generate what Friedman dubbed “government failure.”5.  Government Failures Can Be Just as Bad, or Worse, Than Market FailuresFriedman combined his lessons about unintended consequences and the bad incentives of government policy. “Here you have a market failure,” Friedman told a Chicago student in a recorded lecture, “but in those same cases it’s also difficult to have government do anything about it…You have to put into the balance that when government seeks to achieve an answer, you’re likely to have a government failure.”Friedman loved pointing out government failures. He exposed how President Nixon’s wage and price controls led to gas shortages and higher unemployment. He railed against the Interstate Commerce Commission (ICC) and Federal Communications Commission (FCC) for creating de facto monopolies in transportation and media. Famously, he contended that the combination of public schooling, minimum wage laws, drug prohibition and welfare programs had unintentionally forced many inner city families into cycles of crime and poverty.This concept wraps up many of Friedman’s most powerful ideas: policies have unintended consequences; economists should focus on results, not intentions; and voluntary interactions between consumers and businesses often produce superior results to crafted government decrees.Source: Investopedia 

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I take back my allegations, I believe she is legitimate. And have unflagged her.

https://steemit.com/introduceyourself/@positive/jennamarbles-has-provided-verification-introduceyourself

Thanks for the comment! I never thought about it, I just love everything she does. I'm a fan for several years.

Judging by these social media pages you linked, if you are not a catfish you are in possession of a device with video, which should enable you to post a short video verification.

Secondly, you have done nothing but arouse my suspicion with this extremely bizarre verification picture.

Add me to instagram and I'll send you a personal video message)
But you make a post, with the confirmation of my identity. And apologize publicly.

No problem. I will apologise and confirm your identity. I've added you my name is gogh6297

Added you on instagram gogh6297, waiting to be accepted.

Are you happy now?:)

Yes! I am happy that you are an honest user, and will be reading your blog!

One day, the real Jenna Marbles is gonna join Steemit and want to buy her username from you.

Don't feed this catfish. I wrote a bit more about it below. That verification image is almost certainly doctored.

I already understood the mistake. During registration, the nickname which I to myself wanted was occupied. And I did not think up anything else how to use this, what not to forget it never. I try to contact administrators about it. I think all day of the mistake now.

You can just create a fresh new account.

Don´t suffer :) I wish i bought coca-cola.com before Coca-cola did :) This may be good business !

It's like art. You was registered for free. After a few years you will sell your account for millions :))

Welcome and it is so awesome to see most new people with this attitude. I am also excited to see that you are an artist....very beautiful work by the way. Just curious do you have a place that you sell your art?

Thank you, I am very happy! Soon, I'm going to introduce my gallery, I want to talk about it more here.

Welcome to the site, however I wish you would have refrained from registering the jennamarbles username as it's misleading and also in case she actually decides to join the site one day. We could use more famous youtubers like her on here.

Thanks for the comment! I never thought about it, I just love everything she does. I'm a fan for several years.

It's not impossible to transfer the account to jenna if she decides to join.

I already understood the mistake. During registration, the nickname which I to myself wanted was occupied. And I did not think up anything else how to use this, what not to forget it never. I try to contact administrators about it. I think all day of the mistake now.

Really really beautiful, nice Art too :)

I love positive energy and vibes! Its what makes the internet a worthwhile place among all the bullshit. Thank you and...

FULL STEEM AHEAD!

Welcome on board! ;-)

Welcome! You are right - it's the first tech that can reach out to the mass market. Just needs to be marketed well. Look forward to reading more from you!

Nice post tnx!

Steemit is great platform or start blogging, i believe it too!

Thank you! Yes I really hope so.

Yeah! Steem is amazing!

Hi Kate! you are very funny)

Привет Катя! Ты очень красивая девушка!

И весёлая:)

I think we will see a lot more people posting their art on the Steem blockchain!

hello

Hi! I'm glad to be here

WoW! You have a lot of talent! Welcome to the community =)

Hi Kate I am also new here. As a lover of art, and writing I love meeting fellow writers and people that do art.

very cool, like the art work, its awesome! keep it up! welcome to the community, im new too!

Interesting read thanks!

the greatest reward is to motivate something good in someone else.

It was good post till the nude man pic...

This painting is Michelangelo's "creation of Adam" is my metaphor for STEEM. He also gave me a hand that I touched the blockchain technology....

Welcome! I could not agree more. Steemit is bringing crypto mainstream and the devs have just knocked it straight out of the park. I will bet the vast majority of Steemit users will not even realize they are using a blockchain technology... and that is why it is perfect.

You are nice girl and i want to see you in other video source)

Welcome home jennamarbles. There is no better place than steemit than you can share and earn in the same time. Enjoy!

Hey. Good luck to you in Steam!

Nice all your pictures...

Welcome to the steemit community! Nice job on your well thought out introduction post.

Well said, beautiful post. Welcome to the community my Friend :-)

Lol. I Upvoted this last night. This could end up being the first post that brings a famous person to Steemit

Here is Sean (P Diddy) Combs, trying to get the Sean Combs account on Twitter.

JennaMarbles will probably end up hearing about this account, especially since it has a $1,000 post and could make even more in the future. And it could end up where she comes here to let everyone know that that's not her, or to see if she can buy the account.

I take back my allegations, I believe she is legitimate. And have unflagged her.

https://steemit.com/introduceyourself/@positive/jennamarbles-has-provided-verification-introduceyourself

Very nice! Welcome!

Downvoted.

You are committing identity fraud and using it as click bait.

You're wrong, that was my mistake. It has already been discussed above. I never thought to use it for their own purposes. If Jenna decides to come in STEEM, I will release is the name of the account. I am an honest girl.

Nice to see you here

Hi Kate, nice to see another artist here on Steemit. Love your thoughts on art and how Steemit works. Nice paintings too, will watch for more of your posts. Now I have got to stop reading everyone else's posts, edit a video I want to make and get it up here. ~ljl~

Thank you for the tips! I needed those...

Thank you very much! I am very glad that my thoughts are interesting

I love children, they are incredible. Working with them brings me pleasure!)