Things Milton Friedman Got Wrong

I've been reading some Friedman lately, trying to refamiliarize myself with the intellectual granddaddy of education privatization. I'm fascinated by Libertarian thought, because I think they get some things really right, but it's canceled out by the things they get terribly wrong, and it was the wrongness that jumped out at me from some of Friedman's words. And yes, he's a major figure in economics and I'm a retired English teacher, but if economists can pretend to be education experts, well, then...

The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.

The great stumbling block of Libertarianism is dealing with racism. As demonstrated in a gazillion different ways from lunch counters to real estate, the market may not care what color people are, but racists operating in the free market care a great deal. Our history is filled with racists being compelled to stop behaving badly by force, and I've never heard a Libertarian offer a convincing explanation of how an unregulated free market would have solved issues like slavery and segregation, nor of how to create a school choice system that does not empower racists and segregationists.

Just as importantly, while the free market may not care what color people are, it cares very much how rich or poor they are. The free market is very good at picking winners and losers--not just among operators, but among customers as well. It is hard to make a lot of money providing goods and services to poor people, and with very few exceptions, the free market prefers to offer poor folks either low quality options or no options at all. The free market is not a good tool for providing poor folks with health care, mail delivery or education. 

Government has three primary functions. It should provide for military defense of the nation. It should enforce contracts between individuals. It should protect citizens from crimes against themselves or their property.

This raises more questions than it answers. What, for instance, do we do with contracts between individuals and corporations? And then there's that word "crimes." Crimes are defined by the folks in power; Jim Crow laws were actual laws. Libertarians seem to have a working definition of real crimes (Friedman, like many Libs, didn't think smoking weed was a real crime), but they're awfully fuzzy. A crime against a person covers what, exactly? Physical injury? Emotional injury? Limiting one's freedom? That one sounds good, except that if I'm poor, that limits my freedom considerably. However, being poor comes in the category that many Libs would call "your own damn fault" and therefore not a real crime. But if being poor is your own fault, then all the injuries to your freedom that come from being poor are also your own fault. Also, if you have no property, then that type of crime has nothing to do with you. The more one looks, the more it appears that government's function is on a sliding scale--the less wealthy you are, the less government is supposed to help you.

The problem with a sliding scale of government service is that it doesn't help much with education and schools; in fact, it pretty much mimics how the free market deals with schools-- good stuff for those who can pay, and subsistence junk for those who can't, with the lower end of the scale always looking for one more corner to cut in order to squeeze out a bit more ROI. 

There is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.

This is a good summary of why a critical public service like health care or education should not be handled by business. Imagine a school where the leaders' philosophy is "Job One is making money for Educorp. Never let trying to educate these kids get in the way of that." Imagine sorting students (including admitting and expelling them) based on how they affect Educorp's bottom line. 

Our minds tell us, and history confirms, that the great threat to freedom is the concentration of power. Government is necessary to preserve our freedom, it is an instrument through which we can exercise our freedom; yet by concentrating power in political hands, it is also a threat to freedom. Even though the men who wield this power initially be of good will and even though they be not corrupted by the power they exercise, the power will both attract and form men of a different stamp.

This belongs to that family of quotes where it seems like he's on the verge of getting it. Because concentration of power is a threat to freedom--but government is not the only place that such a concentration can occur. Business and corporations can also gather enough power to be a threat to freedom as well, and wealth will always attract and form men of a different stamp. And when wealth and power become great enough to capture the power of the government, we have another set of issues, and arguing that the wealthy free marketed their way to this kind of power fair and square doesn't negate their threat to freedom.

The key insight of Adam Smith's Wealth of Nations is misleadingly simple: if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it.

Yes, but-- one way to game this system is to drive one party down down down until they can "benefit" from a crumb. "Voluntary" is a fuzzy idea here. If you have engineered a person's choices to the point that they're choosing between crumbs and starvation, then you get a bargain and their "voluntary" choice is not very voluntary at all. 

Education spending will be most effective if it relies on parental choice & private initiative -- the building blocks of success throughout our society.

"Effective" is doing a lot of work here, but since Friedman believes that taxes should be cut often, for any reason, it seems his effective school would be a cheap one. But he's forgetting a third building block of success--coming from a family that has wealth. That building block is, unfortunately, already well wired into public education, but since the free market values it a great deal, it's unlikely that free market schooling would do anything about it. 

We need a system in which the government says to every parent: "Here is a piece of paper you can use for the educational purposes of your child. It will cover the full cost per student at a government school. It is worth X dollars towards the cost of educational services that you purchase from parochial schools, private for-profit schools, private nonprofit schools, or other purveyors of educational services. You may add from your own funds to the voucher if you wish to and can afford to.

Almost seventy years later, privatization fans like the Mackinac Center argue that Friedman's idea would be the antidote to things like collapsing schools in which students can hardly be expected to learn. This makes no sense. We'll still have the same public schools we have now--only they'll have even less money to maintain the facilities. Wealthy people will have a taxpayer-subsidized chance to attend the private school of their choice, and those of you who can't "add from your own fund" will settle for what you get. And, of course, these private schools hoovering up public tax dollars would be free to segregate and discriminate as they wish, giving some students even fewer choices. 

There will always be parts of Libertarianism that make sense to me; I am, for instance, a great respecter of government's ability to really screw things up. I also like freedom a lot. But the free market and freedom are not synonymous or even, in some cases, compatible, and the free market certainly doesn't provide high quality for all, nor does it provide any sort of restraint on certain brands of human misbehavior.