An Ethical Critique of Milton Friedman's Doctrine on Economics and Freedom

By Vorster, Nico | Journal for the Study of Religions and Ideologies, Summer 2010 | Go to article overview

An Ethical Critique of Milton Friedman's Doctrine on Economics and Freedom


Vorster, Nico, Journal for the Study of Religions and Ideologies


Abstract: Milton Friedman was one of the most influential economists of the twentieth century. Many of the neo-liberal views that he advocated were adopted in the 1980's by Western countries such as Britain and the United States. This essay focuses on Friedman's views on politics, economics and freedom. The first section discusses his perspectives on the relation between capitalism and freedom, the nature of markets, his understanding of equality and of the social responsibility of business. The second section attempts to provide an ethical critique on Friedman's separation between economics and ethics, his concept of the market, his views on freedom and equality and the implications of his economic doctrine for human identity. The third section offers some key ethical principles that may help to reform modern capitalism.

Key Words: Economics, Freedom, Neo-Liberalism, Moral parameters, Christian ethics, Ecology, Free market, Capitalism, Consumerism, Milton Friedman

Introduction

Milton Friedman was one of the most influential political economists of the twentieth century. He received the American Economic Associ-ation's John Bates Clark Medal in 1951, the Nobel Prize for Economics in 1976 and the United States' Presidential Medal of Freedom and National Medal for Science in 1988. Friedman made a great impact on the discipline of economics as a monetary theorist, applied econometrician and narrative economic historian. He is widely credited for his contribution to modern labour economics and for changing the direction of macro-economic theory1. Friedman's influence was not restricted to the acade-mic discipline of economics, but also extended to the realm of politics. He acted as an adviser of Barry Goldwater, Augustine Pinochet, Richard Nixon and Ronald Reagan and became politically the most influential economic theorist of the last quarter of the twentieth century. The economic programmes of Ronald Reagan and Margaret Thatcher's incorporated four neo-liberal elements that Friedman strongly campaigned for: 1. lower rates of taxation; 2. lower state contributions; 3. a free market instead of state regulation of industry and 4. the stable growth of the amount of money in circulation2.

This essay is concerned with Friedman's core beliefs on politics, economics and freedom that are mainly found in his books Capitalism and Freedom (1962), Free to Choose (1980, co-authored by his wife) and Tyranny of the Status Quo (1984). An ethical re-appraisal of Friedman's views on politics, economics and freedom is particularly important at this time. Many analysts attribute the 2008 financial crisis directly to the neo-liberal deregulatory economic policies that were adopted since the 1980's by Western Countries such as Britain and the United States. It's argued that these deregulatory measures lead to irresponsible lending by banks, unethical practises in stock markets and a culture of spending among consumers that in turn caused a global credit crunch.

Aim and method

The first section of this essay will discuss Milton Friedman's views on economics, politics and freedom. The historical origin of his thinking will be discussed as well as his perspectives on the relation between capitalism and freedom, the role of self interest in the economy and the neutral nature of markets, his understanding of equality and the social responsibility of business. The second section will provide an immanent ethical critique on Friedman's thinking. Immanent criticism is a form of critique that endeavours to penetrate the premises of a thinking system and to reveal anomalies in that system. The last section of the essay will attempt to define some key principles from a deontological ethical perspective that might help to reform the free market economic system. It will be argued that economics and social responsibility cannot be separated, that moral parameters needs to be applied to the free market economy and that the ecological impact of economic actions need to be taken seriously. …

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