Friday, July 26, 2013

Milton Friedman And Edward Snowden

Murray Dobbin writes that both men are connected, despite the years. Friedman was famous for coining the phrase "Free To Choose."  He sold right wing ideologues on the notion that the free market ensured absolute freedom. His acolytes believed, therefore, that free market capitalism was the cornerstone of democracy.

Except Friedman wasn't really sold on democracy. Dobbin writes:

At a conference on Freedom, Democracy and Economic Welfare in 1986, he challenged an audience member who had placed democracy at the pinnacle of human achievement -- not so, said Friedman. "You can't say that majority voting is a basic right.... That's a proposition I object to very strenuously." He later wrote: "One of the things that troubles me very much is that I believe a relatively free economy is a necessary condition for a democratic society. But I also believe ... that a democratic society, once established, destroys a free economy."

Naomi Klein, in The Shock Doctrine, has documented how Friedman and his colleagues at the University of Chicago prescribed radical therapy for economies they considered weak. They could only accomplish that therapy by taking advantage of -- or by creating their own -- crises in those economies. Ultimately, the rules of democracy had to be suspended for their solutions to work. And, thus, Friedman helped Chile's Augusto Pinochet tackle inflation -- at horrendous human cost.

However, their solutions always resulted in a consumption crisis. Dobbins writes:

But this 30-year history of liberating capital has had exactly the effect that many predicted: a persistent consumption crisis. Capitalists cannot sell all the goods and services they are capable of producing. The crisis has been delayed a number of times -- most notably by the globalization of production.

But the 2008 meltdown stripped away all the camouflage from a system that could not prevail. In Canada as well as in other developed Western nations, the crisis has been delayed by cheap goods from China and other low-wage countries, and by the liberal use of credit. But nothing in nature or economies stays the same for long and these two factors can no longer save extreme capitalism from its crisis.

What Friedman created was a house of cards. Democracy -- real democracy -- would bring the house down. But, remember, Friedman believed that "a democratic society once established destroys a free economy." And that's where Edward Snowden comes in. We're told that he is destroying the bulwark which has been built to protect us from terrorists. But, according to Dobbin:

The massive invasion of privacy and violation of civil liberties in the U.S. exposed by whistle-lower Edward Snowden has been justified as the necessary price Americans have to pay to keep them safe from terrorism. It is more likely the price Americans -- and perhaps Canadians -- will be forced to pay as extreme capitalism anticipates future domestic resistance to its behaviour.

You knew Big Brother was watching you. You just didn't know why.


Marie SNyder said...

Even Friedman recanted his ideas before he died - unfortunately his legacy lives on.

I summarized Shock Doctrine a while back if you're interested in an abridged version. It's a great book!

Owen Gray said...

Thanks for the link, Marie. I was not aware that Friedman had recanted. It would have been helpful if he had seen the error of his ways before he was awarded the Nobel Prize.

And, incidentally, I agree. The Shock Doctrine is a terrific book.

Kirby Evans said...

There has always been a significant conflict between so-called free market ideology and the principles of democracy, and the conflict has been one that the right-wing has been eager to keep out of public discourse. The fact is that for any economy to work long term it must seek out a relatively fair distribution of income. However, the right favours a corporate model which drives toward a radically uneven distribution of wealth. In theory a properly functioning democracy should ensure, through proper and effective regulation and taxation, that incomes don't become radically lopsided. Thus, it is a pretty simple thing to see how right wingers ( particularly do the modern, neo-liberal ilk) are profoundly threatened by democracy.

Anonymous said...

Owen, what do you know about the Sprott School of Business and the kind of people it attracts as students? Kevin O'Leary types? I do know that Ian Lee is a teacher (?) there, and he sure doesn't believe in Canadian poverty, while at the same time, he revels in hating on us, the Canadian poor.

Owen Gray said...

Absolutely true. Kirby. It makes eminently good sense to share the wealth.

But, as John Kenneth Galbraith wrote, modern conservatives have been trying for a long time to concoct a moral justification for selfishness.

Owen Gray said...

I really know nothing about the Sprott School, Linda, except that it is located at Carleton University.

The only other thing I know is that I can't abide "Dragon's Den."

Alison said...

Friedman recanted, followed within the decade by his architect Alan Greenspan and his enabler Robert McNamara, yet even today we're reading editorials that what went wrong in Detroit was that the markets weren't given a free enough hand.

So, next Wednesday Kevin O'Leary is going to debate a 14 year old on CBC ....

The Mound of Sound said...

I don't think there's any question that authoritarianism is directly linked to radical free enterprise capitalism, the corporatist state and growing inequality.

Authoritarianism suppresses the exercise of genuine democracy which, among other things, keeps increasingly invalid systems, such as growth-based economics, functioning for a while longer.

Eventually something will have to give. Whether that's going to be oligarchy or democracy remains to be seen. All I know is that the current apparatus is incapable of continuing with the unrest it is fueling.

The Great Unwashed have seen their once vibrant and robust middle class dismantled. They have seen their economic and political clout diluted. Now their privacy is being filched. As privacy is the anchor, the holdfast for so many other civil, political and human rights, it begs the question of what comes next?

Owen Gray said...

Ideologues don't listen, Alison. And evidence means nothing to them.

Even as they look at a picture of this planet taken from outer space, they insist that the earth is flat.

Owen Gray said...

Whatever comes next, Mound, I'm convinced that the powers that be won't see it coming. They didn't foresee the Great Recession; and that one was easy to predict.

When you're gazing at your navel, you don't see the freight train coming at you -- even if you're sitting on the tracks.