The Death of A Giant

A tribute to Milton Friedman.

Back in the 1950’s, the prevailing thought about Economics was that Keynesian Economics was the correct one. It was what was taught at the Universities and most of the Elite in this country, ( and in most others), was the Left leaning, semi-managed economics of “a little bit of inflation is a good thing.”

Keynes had this theory that if you increased the money supply, it would stimulate the economy in basically the same way that a true increase in demand for goods would.

Keynes thought that by having more money in circulation, there would be more initial demand on goods, which would then stimulate sales. His thinking was that about 2-3 percent was about right.

He also said very emphatically that there could not be a “stagnate” economy and an inflationary economy at the same time. If my memory serves me, in the 1980's we had "Stagflation" and Kenyes was in trouble.

Along about 1962 Milton Friedman wrote a book called “Capitalism and Freedom.” See excerpts here.

This book and the Universities that began to recognize its importance, has been a major factor in “freedom” loving people around the world understanding the connection between “true freedom” and economics.

Margaret Thatcher and Ronald Regan were both big supporters of his. Once their success became widely recognized with the precepts found in Friedman’s books, Russian began to see the light and started to experiment with them.

Now even China has recognized that not only was Socialism a failed Economic principal, but its little brother called “Keynesian Economics” was too.

It is all about “Competition” setting the value of goods and services instead of some nebulous governing body, that can almost never guess the value correctly. The guesses bring shortages and black markets without fail.

Russia found that until they allowed farmers to “manage” their own farms and keep some “profits” that for some reason until that time there was never enough food, but with competition and ownership comes supply and often abundance.

Not only has Russia been moving more and more towards a “competition” based society and away from socialism and communism, but China has as well.

But alas, even with all of this proof, there are those in this country that want to go in the opposite direction. From Competition towards Socialism.

We have never had true "Capitalism", nor have we ever had a true “Free Market” system, but the basic principals are there if we ever recognize that moving more toward them is the right direction and not toward more government management of our Economy.

History will and has not only honored Milton Friedman with the “Noble Prize” for Economics, but with a great eye opening of the principals of the connection of freedom with the free market principals of competition, and also with the removal of government interference within that marketplace.