Schools of Thought in Classical Liberalism, Part 2: Milton Friedman and the Chicago School

How should we assess the merits of a law or government program? According to Milton Friedman and the members of the "Chicago School," we need to look at empirical evidence and see the consequences of laws. Many laws are well-intended, but do they actually have good outcomes? The Chicago School admits that markets do fail sometimes fails. But, they contend that government also fails, and that usually government failure is far greater than market failure. Dr. Ashford takes a close look at the Chicago school.

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[vonGleichenT]

Milton Friedman was a genius. I never get bored watching his videos. When he talks I listen.

[MoonsaultMadLad]

Nigel Ashford is a genius and is such a nice guy in person. He's wonderful.

[AdmiralBetas]

Good ol' Milton Friedman, big enough to admit that the free market is not God, and smart enough to give a viable fix for its imperfections, like its unfortunate tendency to leave behind the poor. Undoubtedly my favorite libertarian thinker.

[StatelessLiberty]

This guy should do audiobooks. His voice is a pleasure to listen to. Very relaxing.

[Joe_OSRS]

7:15 3 B) This could be solved with the emphasis of one's property rights, not extensive government regulation.

[devilghost]

I wish there were podcasts of these recordings

[BlackShardStudio]

And who enforces the property rights in the case of disputes?

[BDRProject]

This is often described as "neoliberalism" rather than "classical liberalism". Friedman was revising liberalism as people were losing faith in Keynesian theories. Friedman did actually have SOME similarities with Keynes, such as the view that government should run deficits to stimulate the economy in recession. That's quite different from the Jeffersonian classical liberals.

[hellwolfliberty]

military defense could be organised as property insurance against wars. you could choose not to pay, but in case of wars one who paid the insurance could claim reparation fee for damaged one's property.

i think it's a matter of imagination of setting up a functional property right framework that can solve problems case by case with consistent principal. i find using principal to guide could lead to more innovative solutions than just stick to a compromise and stay there forever.

[GudinDmitry]

The problem with some of these points is that they assume that certain things cannot be provided without the governmental intervention.

Take the military, for example. I can envision a system in which the government plays no role in funding and maintaining the military, and instead the military is funded via charity and crowdfunding campaigns on a voluntary basis. The regulation is provided by market forces, as people pay the military businesses whose regulations they support, and do not pay those whose they do not.

I do not know whether such a system would be better than what the government provides, or even if it would be viable at all. But I do not think we should immediately extend the governmental powers in order to provide us with the military, not even considering the possibility of the market-driven military. Same goes for every other role of the government the Chicago school postulates.

[Joe_OSRS]

Society organizes people without government all the time, that's not what a government is. A government is simply a group of people given the legitimacy to use the initiation of force against a group of people in a specific geographical location.

What you should realize is that it isn't the market that doesn't care about morality, it's government that uses the initiation of force that is immoral.

[Joe_OSRS]

I'm basing my solution on Anarcho-Capitalist principles, not the Coase Theorem. Property rights already extend to the air of the proximity of one's property. I can't build a walkway over someone's house right? The same rules would still apply. If a company or person is producing pollution that is effecting me physically and directly when standing in my own property they're inflicting on my property rights and personal liberties.

[gamegeek]

Coase Theorem where possible, yes, but how do you define property rights for the air?

[ZombieTex]

What's interesting here is that the supreme court has eliminated half of your point 1 for what government is supposed to do. In 2005 it ruled that the police have NO OBLIGATION to protect individuals.

[nthperson]

What is interesting about Milton Friedman is that on a number of occasions he endorsed the tax policy reforms embraced by Henry George (i.e., the public collection of the rent of land). Yet, it is unclear whether Friedman grasped the larger implications of this change in how government ought to raise revenue. Other economists who more completely studied Henry George's theory of business cycles (e.g., Harry Gunnison Brown, Mason Gaffney, William Vickrey, Fred Foldvary and Joseph Stiglitz) have agreed with Henry George that his key policy recommendations would contribute to a much less volatile economy.

[Willejt]

Our public dialogue on the role of government, indeed our democracy, would greatly benefit if our electorate payed attention to lectures on civics

[Versul]

Raising minimum wage only benefits some people for a limited time. As the market assumes what people can afford the worth of the minimum wage returns to it's original value. This short term benefit does not out weigh the job shortage created by it's boost.

[MatthewGraham]

I think I'm I agree with the Chicago school more than the others. I went from nothing to libertarian, particularly the Austrian then to this. I wouldn't call poverty a negative externality though.

[Joe_OSRS]

It's irrelevant that we currently don't know how it'll work or that I can't explain it. Simply because we don't know now how it'll be implemented doesn't change the philosophical fact that the enforcement of one's property rights are moral. In America, people didn't know what slaves would do if they were freed, that doesn't change the fact that slavery is immoral.

[potterfan]

He forgot to mention monetary policy: Friedman believed that a money supply should grow with the economy. This would justify the Federal Reserve.