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Milton Friedman: Still Singing Let It Be


Economics

MILTON FRIEDMAN: STILL SINGING LET IT BE

Ask Milton Friedman, Nobel prize winner in economics, dean of monetarists, and stalwart free-marketer, which country in the world offers its citizens the broadest private-property rights, and his answer is, well, not even a country: "Hong Kong," he says, without missing a beat. "And that won't last for long."

In Friedman's opinion, the British Crown colony, which is scheduled to revert to China's control in 1997, demonstrates how the combination of economic and civil freedoms offers the best opportunity for economic growth and prosperity. Growth can occur without many civil freedoms, says Friedman--witness the rise of Singapore, a benevolent dictatorship that lacks many of those liberties. But Hong Kong, despite a faster-growing population, did a better job, he explains, by extending both economic and civil freedoms. In 1992, per-capita income for the colony's 5.8 million people amounted to $16,672, while Singapore's 2.8 million residents enjoy per-capita income of $15,964.

As for democracy, that's another matter entirely. "Democracy is an ill-defined term," says the 80-year-old economist, who spent most of his academic life at the University of Chicago and is now at the Hoover Institution at Stanford University in Palo Alto, Calif. "It confuses civil freedoms, such as the right to free speech and the right to congregate, with political freedoms, such as the right to vote." And that distinction is critical, he argues. If Hong Kong had gained political freedom as well, it "would have gone the way of India, Ghana, or other former British colonies, where those freedoms were used to enact laws that interfered with the exercise of civil and economic freedoms."

Welcome to the world of Milton Friedman, where the only good government is the most limited government--one that doesn't set burdensome restrictions and that doesn't do for individuals what individuals can or should do for themselves. The role of government, Friedman still believes--31 years after he wrote his paean to free-market economics, Capitalism and Freedom--should be simply to make rules and play umpire, to arbitrate when markets cannot sort out differences.

TAKE NO PRISONERS. Reasonable? To be sure. Friedman's views sound a note that even many Democrats today concede: Government is just too big. But few would go along with Friedman's take-no-prisoners approach. Any time government controls prices, adopts zoning laws, sets minimum wages, forces individuals to save for retirement (and decides how to invest the money for them), redistributes income, and above all, confiscates property through high taxation, it's exceeding its authority, according to Friedman.

The passage of time, he says, has made him more adamant than ever in favor of minimalist government. "I believe the former communist nations are trying to go where we were 50 years ago," says Friedman, "while we're trying to go where they were 10 years ago." Karen Pennar in New York


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