We are all Friedmanites now! A review of Jennifer Burns’s Milton Friedman
Chris Cutrone
Platypus Review 165 | April 2024
Jennifer Burns, Milton Friedman: The Last Conservative (New York: Farrar, Straus and Giroux, 2023).
MILTON FRIEDMAN FAMOUSLY DECLARED, on the threshold of the neoliberal revolution he helped usher in, “We are all Keynesians now!” Also around this time, Michel Foucault said that “We are all Marxists now.” The point was to thus thrust aside, by treating as safely past, something longstanding as a banality that could be ignored — as Marx said the Young Hegelians had done to Hegel. Friedman, like Hegel, might be wrongly overlooked by subsequent generations as a “dead dog.”
Jennifer Burns, in her monumental biography, Milton Friedman: The Last Conservative (2023), wants to do the opposite: make us recognize the enduring power of Friedman’s ideas in our current post-neoliberal moment, even and precisely when we might think we are past them. Burns quotes Joe Biden from his 2020 campaign for President that, “Milton Friedman isn’t running the show anymore!” But the question then would be, “Who is?” Burns’s point is not that Friedman still is, but that perhaps he should be. But it is not the Friedman most people know. If we are haunted by Friedman, it is not his fault but ours. So the challenge is to read Friedman against the grain of his own and subsequent history, in terms of unfulfilled potential.
For it is not only the case that Friedman’s profound legacy will remain with us concretely in the ongoing practices we inevitably inherit from neoliberalism in multiple and manifold domains, but also in our thinking; and not merely as undigested, unreflected and unconscious repetition, but at the level of the truth of his vision. We might remain with Friedman because he was right. And not simply in terms of what he grasped about capitalism, but as he tasks us to change it. So it is not a matter of how he was wrong or right in this or that issue. Friedman’s thought might see beyond his time — and ours.
This is what Friedman himself meant about Keynes. Part of the problem is that we treat Friedman as an intellectual figure opposed to Keynes rather than growing out of him. We are misled to do so by considering matters merely in terms of policies and polarized differences. As his biographer writes, “his work lies at the intersection of fundamental problems that will never be solved and ongoing tensions that will never be eased” (481). Neither Keynes nor Friedman had their desired programs fulfilled. They were taken up only partially in policy, and so, in important respects, not at all. This is what makes them pertinent to us, still: to not forget what they wanted, and recall their incomplete projects. Friedman declaring himself a Keynesian meant that he wanted to fulfill Keynes better than he had been able to achieve himself. In becoming common sense, Keynes was betrayed. The same has now happened to Friedman. The attempt to discard Friedman, as Burns writes, “betrays an anxiety” that implicitly acknowledges “how fundamental Friedman’s style of economic analysis and his skepticism about government regulation have become to liberals as well as conservatives” (475).
The same had happened earlier with Keynes and his cohort of reformers of mid-20th century capitalism. Their ideas were not enacted so much as used to authorize the designs of others. In Keynes’s case, this involved ignoring his decided internationalism, indeed cosmopolitanism, in favor of nationalist economic projects. Because Friedman is associated with neoliberal globalization leading to socioeconomic disparities and hierarchies within rather than between countries, we might forget, as Burns is anxious to remind us, Friedman’s egalitarian concerns. But not directed against the rich — whose wealth he considered incidental — but rather in favor of the poor, whose condition is the true index of the wealth and health of society. This is why for Friedman the latter were to be the true beneficiaries of his policies apparently favoring the former, the infamous “rising tide that raises all boats” we are tempted to mock — at our peril. There is still a crisis of capitalism.
How this apparently “reversed” Keynes has become obscure to us today: Keynes recognized that the only meaningful variable in the economy was the money in the hands of the working class as consumers; the amount of money as capital in the hands of the rich investors was by comparison secondary and of little effect. (Keynes’s observation was confirmed in the recent Great Recession investment drought, in which the capitalists were for a significant time sitting on their money and failing to invest their capital.) This was the difference between so-called “supply-side” economics ostensibly advocated by Friedmanite neoliberalism versus the “demand-side” approach attributed to Keynes. But, looked at more closely, the supposed “social welfare” aspect of Keynesianism vs. the more limited and technical “monetarist” (money-supply) concern of Friedmanism disappears: both are varieties of monetary policy; both are based on desire for freeing up money-capital to grease the stuck wheels of the economy. Keynes and Friedman agreed on the basic nature of the problem, and they even agreed fundamentally on the solution.
But circumstances change, and so do the implications at the level of policy implementation. Just as Burns observes that Friedman’s solutions remain operant in today’s proposed post-neoliberal policies, it was true back in his day that the neoliberal revolution was a continuation in its essentials of Keynesian economics. Burns is not unsympathetic to Friedman, even while her biography of him reads as a forensic case against him as much as a tragicomedy of Friedmanism’s follies. In her account, Friedman appears most clueless precisely when he’s seemingly in the driver’s seat. Her narrative of Pinochet’s Chile — Friedman’s most notorious affair — depicts a dictator interested neither in Friedman’s goals nor his philosophy, and former students calling upon the master to endorse them in doing what they wanted to do anyway. As Burns writes, “How important was Friedman’s visit to shaping economic policy in Chile? As it turns out, the decision to shift away from gradualism had already been taken by the time he arrived. . . . To brace the government for what was to come, the Chicago Boys had flown in a ringer” (368). Their honoring him hardly affirmed his thought, but served only to make him culpable — not that Friedman was guileless.
The epigraph with which Burns begins her book is telling in this respect: that Friedman’s “ideas were lying around” when the policy-crisis came in the 1970s, but their “impossibility” becoming “inevitability” was more in serving as an opportunist rationalization rather than a genuine historical triumph. If Friedman was guilty of anything, it was not for his ideas but in allowing them to be misused.
What about MMT (Modern Monetary Theory), then — is this the “idea lying around” in the current crisis and transition to a form of capitalism after neoliberalism? Is it Keynesian? Is it Friedmanite? Paradoxically, although it is called “modern,” its foundational roots in economic thinking are actually more than a century old, predating both mid-20th century Keynesianism and subsequent Friedmanite neoliberalism. Like both of them, however, MMT is “heterodox” — a departure from reigning orthodoxy — and yet is still recognizable according to existing thinking. Like prior orthodoxies that started out as heresies, it might be taken up only in a partial and not total way.
For Friedman never did cease playing the part of a “pixie or pest” to which he had been consigned before his long-belated official recognition. To the end, in life he remained a gadfly with a twinkle in his eye rather than a revered authority. In this respect he was very much like another seeming titanic figure of the New Right, William F. Buckley, Jr., founder of National Review. Their faces might have been plastered all across the public square, their voices ringing in everyone’s ears — both, notably, through the medium of the television screen — but this cannot be equated with the real power of their ideas: was anyone actually listening to them, or hearing only what they wanted them to say? Bestowing laurels is the surest way to silence the critic, since the public can consider their case to have been won — and thus closed.
One way of understanding how and why Friedman’s desired program was implemented only in part — or by half — is to find the tension, perhaps even contradiction, between “free markets” and “upward redistribution” of income. In neoliberal capitalism, we might have gotten only the latter and not the former — and under the former’s mere banner.
So the question is, why was there a need to redistribute income upwards in the crisis of the 1970s, after the preceding period’s by comparison greater economic “egalitarianism”? Especially considering that Friedman’s own aims were to raise the wealth of society as a whole — primarily that of the working class — which he thought was hampered precisely by the mistaken established “Keynesian” policies.
Burns notes that the specter of unemployment had already reared its head in the 1960s, with the later founder of the DSA (Democratic Socialists of America), Michael Harrington’s book, The Other America, published in the early 1960s, around the time of the greatest tax breaks — enacted by JFK — before those of Ronald Reagan in the 1980s. The issue was how the desired economic growth — Keynesian “growth liberalism” — failed to materialize in the 1960s, shifting the issues to other domains. By the end of the 60s, the crisis leading to neoliberalism started to manifest.
Burns points to the scourge of “automation,” whose effects of “deindustrialization” were most glaringly seen after the 1970s, having already emerged much earlier, in the aftermath of WWII. This is where Friedman was already on the case at the time in the 1940s–50s, his investigations auguring the policy needs that would not be fully felt until the late 1960s. Burns touches on the ways the 1930s New Deal had neglected and bypassed a great deal of African-American poverty, which became salient in the climax of the Civil Rights era and Great Society expansions of the New Deal, and recognizes that this was Friedman’s concern as well — paving the way to post-Civil Rights policies in the era of neoliberalism such as “charter-school” voucher program public education reform, against the government-monopoly teachers-union “closed shop” education rackets that Friedman thought kept the teachers’ wages down as well as doing a disservice to their “consumers,” the families whose children were being educated there.
This is where Friedman’s post-Keynesian character enters the picture, in the form of a UBI (Universal Basic Income) “negative income tax,” which, again, was only partially implemented later, as the “Earned Income Tax Credit” innovation of the Reagan era. But the UBI, then as now, was directed at the problem of automation as well as redistribution, and potential stagnation due to Keynesian “under-consumption.” The problem, in Burns’s account, was regarding the lack of desired spending in the economy: was it by consumers or rather by “business” — producers? Of course it is both, as workers are producers as well as consumers, albeit as employees of strapped-for-capital firms faced with the prospect of layoffs or potential expansion: how can government policies help or hinder employers to hire more workers? It is not simply a matter of providing a freer and hence more open market — as Friedman himself well knew.
Burns retails the story of Jack Kemp’s rise in Congress during the 1970s, and then serving a pivotal role in Reagan’s tax cuts of the 1980s, as representing a constituency hard-hit by unemployment, and how his policies of refunding of homeowner property taxes as well as business-owner expenses sought to apply Friedmanite remedies to get capital flowing again. The issue is the ambiguous socioeconomic “middle class” — those who are neither rich nor poor. What are the political limitations inherent in such a conception of the core of society, in which the role of producer and consumer is mixed? The problem of maintaining asset value, whether business or private (e.g., homes) was made shockingly apparent by the rampant inflation in which Friedman’s “monetarist” ideas found a hearing in the 1970s.
This problem of depreciation via economic crisis back in the 1970s seems to foreshadow the more recent housing bubble in the 2008 financial crash leading to the Great Recession. But the return of 1970s–80s era inflation is now coming after, rather than before, the initial shock, depending on how and when one sees it. If Friedman’s prescription, otherwise dismissed by contemporaries as “voodoo economics,” appeared to have shrewdly corrected for the stubborn and beguiling “stagflation” of the late 1970s — economic stagnation combined with inflation — back then, today the opposite problem presents itself: Friedmanite economics producing inflation and menacing us chimerically with an as-yet unseen stagnation. Whereas then Friedman’s approach was dangerous as untried innovation, today it has become threatening as doxa. The deeper question is, when were the seeds planted for the manifest economic crisis? For Friedman it was in the post-WWII era, long predating the currency of his ideas in the 1970s. Similarly, today the problem appears to have been sown back in the 1980s–90s heyday of neoliberalism itself. For the depreciation of capital, both business and consumer assets, if merely in earning potential — including in children depending on inheriting their parents’ home value — is what is expressed in the monetary inflation.
Then, as now, the problem of implementing policy is marshaling enough of an electorate to support it. Of course demagogy is inevitably involved in democracy — voters don’t really understand what they are voting for. But the question is, do politicians truly know the policies they are advocating?
Burns’s story of the origins and paradoxical “triumph” of Milton Friedman’s thought provides a great deal to consider regarding capitalism and its past and current travails. What we have in Burns’s biography is the narrative of the journey of a thought from a preceding era succeeding in a later time. This is appropriate insofar as a subsequent crisis of capitalism is prepared by the character of the previous boom period. What was propitious in one time proves pernicious in another.
But we must be careful in attributing the nature of the disease that emerges only later. While Friedman detected problems with the “Keynesian” policies of his own time, really, these were made apparent by the actual shape of their success, through which could be recognized the disfiguration of the original intention.
In this respect, Friedman could build upon as well as “correct” what was essentially a Keynesian framework that had established the criteria with which to judge its own deficiencies: the task was to hold Keynesianism to its own standards. Burns finds in Friedman’s own thinking and intentions the criteria for how we must evaluate and judge its apparent failures today.
Just as Keynes’s own “monetarism” laid the groundwork for Friedman’s neoliberal reforms, so must now Freidman’s vision itself provide the lens through which new solutions can be found within today’s configuration of capitalism produced by neoliberalism. Burns warns that in our rush to re-bury Friedman after planting a wooden stake in his dreaded vampire’s heart, we risk entombing along with his troubled memory the resources that could unseal the problem we face in his wake. The blame for our current woes seems a bit too obvious in the Friedmanite legacy we seek to leave behind. But it might lie elsewhere from the place in the rearview mirror we think we have put it to rest. Our lingering fear after moving on from past mistakes is that we are destined to unknowingly make them again.
It is important to note that Friedman intended his proposed reforms to be implemented on the basis of prosperity in the 1950s–60s, not downturn and austerity, but were taken up in a period of crisis in the 1970s that he didn’t anticipate. Friedman wanted to not merely defend capitalism but realize its unfulfilled potentials.
This is why Milton Friedman’s memory haunts us, and why his character as ideological apologist for capitalism threatens to come at the expense of recognizing his true value as capitalism’s reformer. For, as Burns shows, Friedman did not place faith in capitalism to solve its own problems, but actively championed bringing about its potential that would otherwise lie dormant and unrealized. Friedman did not, as his critics tell it, call us to bow down at the altar of capitalism, but rather to take it in hand and make it work better.
As Burns reminds us, Friedman was no mere “economist” running rampant ideologically outside his own narrow province of actual expertise, but his vocation and discipline was actually “political economy,” whose concerns are much broader and deeper, and speak to the improvement of society as a whole, in which economics, culture and politics coincide and participate together. Moreover, Burns notes that Friedman’s primary concern was “freedom.” What did this mean?
Friedman’s contemporary Daniel Bell called himself a “conservative in culture, liberal in politics and socialist in economics” to describe his own brand of “neoconservatism,” in which the aim was to preserve the best qualities and potentials of society. Ludwig von Mises denounced Friedman and other fellow members of the Mont Pelerin Society as “socialists.” What this meant was their accepting the state as the indispensable agent of economic equality. This is where monetary policy is located, whether Keynesian or Friedmanite — whether old-style “progressive” liberal or later “neoliberal.” Bell’s post-Marxist “socialist economics” was more vaguely elaborated, but still concerned the contradiction Friedman had faced of automation in a society of consumption based on the wage-earnings of work, what Bell called the opposed criteria of “socialization” and “efficiency” in the economy, which he found to be at odds in the inexorable logic of technological advancement, and to which he found the (modern, bourgeois) “culture” he wanted to “conserve” fall victim, in a nihilistic, “trivialized” culture of “‘multiples’ for the culturati,” “hedonism for the middle classes” and “pornotopia for the masses.”[1] Bell found that in the post-WWII world “heterodoxy” and even “antinomianism” has become “conformist” — think Rebel Without a Cause (1955) — at the expense of any “moral” criteria of “orthodoxy” with which to even be able to judge society’s “adequacy.” A full historical period later, today, after neoliberalism, we face this specter even more starkly, in the form of social disintegration alongside perfected automated efficiency. As in Bell and Friedman’s time, the “ends” of society have been sacrificed to the “means” of capitalism.
Burns recalls that the true concern of “political economy” is not only not economic efficiency but also not the mere maintenance of society, but rather its “freedom.” The problem with “economic stagnation” is that it delivers society into a dead end from which the resources of escape are bereft: a lack of freedom.
It should be remembered that Margaret Thatcher’s infamous statement that “there is no such thing as society” was not a denial of society per se, but an attack on the dishonest political rhetoric of “socialism” or “social democracy” by her opponents in both the Conservative and Labour Parties that she thought provided cover for and justified the actual violation in practice of society, the “individuals and families” she sought to champion.
As a true egalitarian, Milton Friedman attributed the necessary freedom to change things not in government or corporate enterprise but among the working people. Friedman’s animus towards the established labor unions, for example, was not in their collective bargaining rights for workers but their betrayal of the latter in collusion with a state-corporate system that constrained — political as well as economic and broader social — choices, at all levels of society. Friedman assailed the “crony capitalism” that resulted from the post-New Deal economic and political order to which the working class had been increasingly subordinated after WWII. The problem today is that the “crony capitalism” remains, while the collective agencies of the working class have declined. But what are those agencies? And are they not still beholden to and collusive with the political-crony state-managed capitalism Friedman sought society’s freedom from? Have they done or been able to do anything at all in the last 50 years — really, in the last century — to stop or even slow the increasing vulnerability and descent of the working class and of the greater society along with it? We may not be happy with Friedman’s proposed solutions or their results, but we can at least agree on the problem: the mismanagement of society by an elite to which we are subject and to whose rule we fall casualty.
The problem is how we see capitalism: is it something over which we can exert control for our benefit; or is it something “objective” to whose reality we must inevitably submit? Burns points out that Friedman despised treating economics as some kind of “hard science” of unchangeable “mathematical” laws, which he considered an abominable intellectual and moral abdication. But the problem remains.
Though we might now see Friedman as an actor on behalf of the elite political management that managed to continue through his policies, we must recognize how his ideas were not only appropriated but hijacked and held hostage to their self-interest — at the expense of the true character of Friedman’s own concerns.
Burns’s book is subtitled “the last conservative.” But Friedman considered himself to be a true “progressive” advocating needed change against an ailing status quo. Indeed he might have been the “last rebel” — to paraphrase Newt Gingrich’s proclamation in the 1994 Congressional election “Republican Revolution” majority he led, the “true revolutionary.” Friedman sought to intervene in the impasse of the 1970s, but ended up as a neutered and banalized ornament gracing a status quo which preserved itself by prostituting his ideas and “revolutionizing” the political and social order only superficially. What Friedman sought to conserve was society and its economic, political and social resources for the prosperity of the working masses of the people, to which he found the capitalism of his time to be invidious. Friedman was the “last conservative” in Burns’s telling insofar as he represented the fading memory of that which the neoliberal reforms of capitalism conducted under the auspices of his ideas accelerated the destruction: the very society of his working-class childhood and its opportunities in the earlier 20th century that Friedman had sought to conserve and whose potential he wanted to realize. The tragedy of Milton Friedman was how he failed through “success.”
The lesson is that intellectuals’ ideas become captive and hostage to fortune in the course of historical events, serving to justify things they were originally formulated to critique and oppose. But their neglected sides might come to the fore later and redeem them in time.
The Epilogue to Burns’s book is titled “Helicopter Drop” and discusses recent economic interventions that seemed to have followed Friedman’s prescription. The phrase is Friedman’s own, advocating direct cash infusions such as was done with the COVID relief payments, but refers mordantly if never explicitly to the atrocity perpetrated by the Pinochet regime of dropping dissident political prisoners from helicopters to their deaths. The point could not be more clear: such “helicopter drops” saved the economy but also brought about the inflation that threatens to undo it. As Hegel said, the very virtue through which a community thrived historically — in this case that of neoliberal capitalism of the last era — becomes the “poison draught” that brings about its downfall, which, not able to be fully realized by its originators, in an apparent reversal is then taken up by its successors. In this instance, it is Friedman’s “conservatism” that, as Burns puts it, “paradoxically,” is providing rather an opportunity today for the “progressive” reconsideration of his legacy and the substance of his thinking and even of his advocated policies, which, again, were hardly implemented by his supposed followers in neoliberalism but might prove more fruitful and in different ways now. This speaks not only to Friedman’s social and political goals but even to his economic theory — where the danger is precisely that the latter seems discredited, but it might be to the ultimate detriment of the former for us to reflexively and unthinkingly accept this apparent verdict of history. In Burns’s view, Friedman might be key to achieving future equality where in his own time he contributed to producing deeper inequities — and even iniquities.
How capitalism has undone society since neoliberalism can be understood well from Friedman’s own theoretical point of view and out of his own concerns. For what Friedman wanted to “conserve” was our freedom to “choose” — and beyond the limited, self-serving and false alternative policies on offer in the existing political order of capitalism, as much now as back then.
Hopefully not in the mere inertia of lack of imagination, but in his neglected, buried and unfulfilled potential: Just as neoliberalism was still Keynesian, post-neoliberalism will still be Friedmanite. | P
[1] Daniel Bell, “Foreword: 1978,” in The Cultural Contradictions of Capitalism (New York: Basic Books, 1978), xxvii.
