Monday, January 16, 2012

DeLong on Friedmans and Freedoms

Brad DeLong put up a post on Milton and Rose Friedman's Free to Choose so succinct, so outrageous, and so revealing, it merits breaking the "Don't respond to Brad" rule. Here it is, in its entirety:
There are, I think two important things you should note when you start reading Friedman and Director Friedman's "Free to Choose". The first is that it was a book that was written 30 years ago. The second is that the Friedmans believed that they were fighting against the tide of history. They thought--in 1980--that liberty and prosperity were in retreat worldwide, and had been in retreat for at least fifty years."

This strikes us--this strikes me at least--as profoundly odd. When you ask me what "freedom" means, I tend to go back to Franklin Delano Roosevelt's four freedoms:
  • Freedom of speech
  • Freedom of religion
  • Freedom from want
  • Freedom from fear
When I think of major impingements on freedom, I don't think of the things that the Friedmans point to in 1980 as evidence that freedom is in retreat. I see 1980 as coming at the end of the fastest and most complete 50-year expansion of freedom, democracy, and prosperity the world had ever seen.
When you ask me what "freedom" means, I tend to go back to "life, liberty and the pursuit of happiness." Yes, indeed, freedom of speech and religion, and also the freedom  peaceably to assemble, and to petition my Government for a redress of grievances. The freedom to be secure in my person, houses, papers, (hard drive) and effects, against unreasonable searches and seizures. Due process when the Government accuses me of something or wants to confiscate my property. The freedom to own property, transact it as I see fit; the right voluntary to exchange property and labor with another. The freedom to travel, live, and work anywhere in the world.

"Freedom" means not being told by force what to do. In a peaceful society with functioning police and courts, in which private disputes are subject to the rule of law, the first and most important freedom is from government interference.

(Roosevelt was, by contrast, talking about a war. My complaint is with DeLong, not in this case with Roosevelt. "Freedom from want and fear" mean something different in the Warsaw ghetto than if we're talking about the social security inflation-adjustment formula. Brad uses this quote in the context of the Friedmans and peacetime economic policy. So am I.) 

Freedom of religion and of speech are rights, of individuals against interference by their government. By putting "freedom from want"  after the first two basic rights of a democratic society, this quote elevates "freedom from want" to a similar right, against the Federal Government, and thus against your fellow citizens.

No. "Freedom from want" is the result of a prosperous, free society. The first Amendment does not grant  a right to a check from the Government. "Freedom from fear" also applies to the Schecter brothers' fear that the National Recovery Administration might shut down their business for selling chickens too cheaply.

(I can foresee the inevitable calumny: "You free-marketers are all heartless, you just don't care." No. We care more. We want a system that actually delivers freedom from want.)

Brad saved the best for last.  Read it again (my emphasis):
I see 1980 as coming at the end of the fastest and most complete 50-year expansion of freedom, democracy, and prosperity the world had ever seen.
"The end??!!"

Here are a few "freedom, democracy and prosperity" events Brad seems to have missed since 1980:
  • The Reagan and Thatcher revolutions, including deregulation, tax reform, victory over inflation and inauguration of a 20-year economic boom. 
  • A billion Chinese released from abject poverty. (Hint to China: read Capitalism and Freedom next.)
  • A billion Indians, also starting to join the modern world, having begun to overturn their Keynesian / English-socialist model. 
  • We won the cold war. East and West Germany reunited. Eastern Europe freed.
  • The number of democracies, for example as scored by Polity, doubled since 1980. Many in Latin America and Africa too.
1980 was indeed an end. It was an end to US and UK inflation -- the result of mindless "stimulus" -- and the end of widespread acceptance of simpleminded Keynesian economics. It was the end of a brief interlude of unquestioning belief in the power of the Federal Government to solve all problems. It was the end of stagnation in the US and UK.

1980 was an inflection point for the advance of freedom, not its end! Yes, some of the Friedmans' dark worries did not pan out. Why not? Because people read the book! The Friedmans were fighting against the "tide of history." And turned it back. 

"Complete??!!"  We have a long way to go, and we've been heading backwards in the last few years, on all indices of economic and political freedom. Our 30 years of liberalizations may indeed now be coming to an end. The economic and political ills of the 1970s seem to be returning.

I'll agree with Brad on one thing -- It's a great time to read the book.


  1. Professor Cochrane: It is waste of time to read anything that Delong writes. Far from being a scholar he is a partisan hack. A two-bit bully with his "why o why" rantings. So why bother with him. Professor Stephen Williamson put it appropriately: I try not to read DeLong's blog, for fear of depreciating my human capital.

  2. Great post, I'm glad you took the time to write it.

  3. Let me get this straight - you think that by taking issue with the Friedmans' characterization of the pre-1980 years Brad DeLong is denying that the liberalization of China and India and the spread of democracy since 1980 don't represent an increase in freedom?

    Are you nuts, Dr. Cochrane?

    A lot of the book and a lot of the approach of Friedman dealt with the U.S. context, which seemed to be what Brad was dealing with. I think it's extremely dishonest of you to act like he's ignored what's gone on in the world since 1980.

    Food fights are not a good way for you to enter the blogosphere. We've got enough of that here already.

    1. DK,

      I see 1980 as coming at the end of the fastest and most complete 50-year expansion of freedom, democracy, and prosperity the world had ever seen.

      Read that sentence again. It's the one DeLong wrote.

      A lot of the book and a lot of the approach of Friedman dealt with the U.S. context, which seemed to be what Brad was dealing with.

      So "the world had ever seen" is now transformed into "[dealing] with the U.S. context". As you can plainly see, dealing "with you U.S. context" is not what DeLong meant. He clearly stated "the world", not "the U.S.". So, yes, DeLong completely ignored China, India, and Southeast Asia to make a partisan point.

      It's good to know that you are Disingenuous Kuehn wherever you go.

  4. The following proclamation jumped out at me,
    "Freedom from want" is the result of a prosperous, free society
    I thought most of the developed world lived in prosperous free societies, yet I don't see "freedom from want" anywhere. It seems a big claim.

  5. @Mr.Cochrane,
    a bit out of topic:
    once I read somewhere (a book but not one on economics) that Keynesian theory wasn't able to predict 'stagflation' and that this is the reason why it was abandoned in favor of 'neoclassical' theories, is that true? Is it true that Keynesian theory wasn't able to predict that and so get "falsified"? And if true, why Keynesian theory wasn't able to predict it?
    On the other side: can the 'neoclassical' theory be falsified in someway? Which kind of event or set of events could be able to show it to be wrong? Did they ever happen?
    Well, I would be grateful to get any elucidation on these points if you like and have time!

  6. I don't understand how you could so deeply misread DeLong's last paragraph (and i don't mean to say you did it on purpose - rather the opposite, i think you did not even stop for a second to question yourself whether you were misinterpreting him).

    For me, it comes through as pretty obvious that he mentions 1980 as a reference to the time when the book was written, as if he was placing himself at that time as well, and not knowing what was to come (which is irrelevant for his post, since people in 1980 could not know that the USSR would crumble a decade later, and so on). So yes, for someone living in 1980, he/she is living in a year that is at the end of the most complete expansion of democracy, freedom, and prosperity (when compared to anything that had happened BEFORE 1980, which is the relevant thing for anyone living in that year, which in turn is the context in which DeLong is writing - anything that happened AFTER 1980 is, of course, irrelevant, in such a context).

  7. Sergio,

    Let us compare 1980 to 1930. Soviet power extends over central Europe. China has experienced the Cultural Revolution. Cuba, Viet Nam, Laos, Cambodia, Afghanistan, North Korea, the overwhelming majority of post-colonial regimes sunk into one-party dictatorships, warlordism and kleptocracy. Even colonial India was freer than socialist India. Latin America dominated by military dictatorships in Argentina, Chile and Brazil - the alternative being even worse. Then, there was Marcos in the Philippines. The expansion of the welfare state in Western Europe and North America combined with inflation and economic stagnation.

    Now I will grant you that people enjoyed a higher standard of living in much of the world in 1980 than in 1930. Freer, no. More democratic, no.

    1. Charles,

      Yes, but the examples you cherry-picked, in of themselves, tell you nothing. Was Fulgencio Batista a democrat? Was Chiang-Kai Check? Were the eastern european countries (or for that matter, the southeast asian or latin american ones you indicate) democratic? The answer is, overwhelmingly, no (in fact, to a large extent, several of those were not even independent countries in the 1930s). And, of course, you could have cherry-picked countries that had transitioned, consolidated or taken strides towards becoming more democratic - out of the top of my head, some examples include West Germany (yes, ok, hitler only got to power in 1933, if you want to be absolutely precise), Austria, Portugal, Italy, Greece, Turkey, Japan, South Korea, Botswana, Mozambique, Cape Verde (and India, of course).

      Indeed, to consider colonial India freer than independent India, where its own citizens got to choose its own rulers and design its constitution, speaks volumes as to what you consider "free" or "democratic" - it appears that democratic countries are those whose citizens choose a particular regime you happen to like, which is a very peculiar notion of freedom or of democracy. Sorry, but i don't see (and absolutely cannot agree) with the way you underestimate the importance of the end of the colonial rule.

    2. Charles,

      speaking about Military Dictatorships in Latin America: Wasn't it the Friedman Buddy's who unleashed under precisely under military rule a bunch of beastly neoliberal reforms the Friedman style because without the support of military boots they couldn't have forced them through? In support for the very bloody Junta in Chila Friedman went there several times to praise their efforts. (Maggy thatcher, the british knight of freedom, was a close friend to the old butcher Pinochet, too.) In fact Friedman emphasized as far as I know the role of shock and awe to push through the kind of "liberal" reforms he thought of - freedom for the few to enslave the many.

  8. John, you might want to take a few steps south of 59th street to see how well your "inflection point for the advance of freedom" is working out for the general population:

  9. It's awkwardly worded, but I don't think he means that 1980 was the end of the increase in freedom, democracy and prosperity. He means that looking back today and imagining oneself in 1980; it looks like from 1930 to 1980 was a fast and complete expansion in freedom.

    He finds it strange looking back that someone writing at the end of this period would think the U.S. or world was on a road to serfdom.

    Notice that if your interpretation were correct, Brad would be agreeing with the authors that the world was on the road to serfdom, yet clearly he is not.

    To disagree, one would need to argue that the last 50 years were not a sweeping tide of democracy and freedom or, perhaps more nuanced, that freedom increased from 1930 to 1980, but it peaked in the middle and was on the decline when the authors were writing.

  10. Say what you want about which rights you value most, but as a rebuttal, your post seems to intentionally misstate DeLong's case.

    His article reviewed a book written in 1980, and discussed the perspectives of the authors at that time. The fall of the Berlin Wall, reduced tax rates on the most-well-off, elections in China might have been anticipated, but could not have been known by the Friedmans, and he made a point of seeing the glass half full, rather than the half-empty that would obtain had they known of your celebrated events.

    You followed that misconstrual with an extensive rant about his use of “the end.” In my dictionary, “end” has of course the meaning of “conclusion” but also “the furthest… point of something.” In “the end of the fastest and most complete 50-year expansion of freedom, democracy, and prosperity the world had ever seen,” [My emphasis not really necessary, was it?], there couldn't possibly be any question that you snarkily set up a straw man by writing about “events Brad seems to have missed since 1980.”

    (I'm not happy claiming that a Semi-Famous Person made a point of intentionally misconstruing another's direct writing as some sneaky debate tactic that advances some Greater Cause. But I would be more disbelieving that a native English speaker could, on a couple of re-reads and even a transcription or two, misunderstand the framing of a phrase that you took pains to call out. Perhaps there's another reason besides these two (disingenuity or TIA/stroke) that you could provide to rebut a discussion of the view from 1980 but it escapes me. (No, I won't suggest that you think time can go backwards.)

    And BTW, your celebration of the Chinese release from abject poverty is best understood as coming from the fruit of pre-1980 changes: the one-child policy, which allowed per-capita income growth to keep up with total growth; the end of the heavy hand of Maoism and replacement by technocrats; and a policy decision at the end of 1978 to move from communism to a mixed economic model.

    None of these had borne economic fruit in 1980 although the significant advance in basic human rights was widely celebrated by that time (my first visit to the nation). And while subsequent economic advances were instituted before 1980, closing the re-education camps and other pre-1980 advances in rights has seen little follow-up in terms of open or fair elections, habeus corpus, due process and other basic freedoms, since.

  11. The four Roosevelt "Freedoms" do not form a good basis for a general interpretation of "Freedom". I would agree more with the fundamentals of "life, liberty and the pursuit of happiness."

    But that said, freedoms have been eroded continuously long before 1980 in direct proportion to the progression of material gains. We are mixing two contradictory ingredients - material progress and freedom. The first imposes upon the second as modern and successful societies impose more obligations and regulations upon its participants. Modern societies spread equality as a necessity to stay in power. Imposed Equality erodes freedoms.

    And this is the important philosophical difference between Liberals and Conservatives.

  12. Here's a post I wrote in response to this post:

    I agree with about 2/3 of what is here, but I think the other 1/3 warrants some serious attention as well...

  13. What a ridiculous misreading. Friedman is writing in 1980 and says freedom looks in retreat to him, from his 1980 perspective. Slope on freedom at t=1980 is negative if you like. Delong says "negative slope on freedom in 1980? What were you, nuts? It was positive, and had been steadily so since 1930 or so." 1980 was the end point of a 50 year span that Delong is pointing out to Friedman. There's nothing in Delong's statement resembling, "after 1980, freedom went into retreat."

    I need to ignore Noah and Krugman when they point me over here, waste of time.

  14. For the vast majority of Americans, trickle down has been a failure. Prof. Cochrane doesn't strengthen his arguments by ignoring this fact and writing of a "20 year boom." In fact, the deregulation craze has basically been neutral or bad, depending on which sector is examined. Disastrous in the case of financial markets.

    Nor let us ignore the costs of the Cold War, including numerous coups of democratically elected left-leaning governments. Many of these nations are still saddled with authoritarian regimes.

    Furthermore, the inequality that has been increasing in the wake of Reaganomics is just so happening to coincide with an explosion of the prison population and accelerating erosion of civil liberties and even fundamental legal protections such as the Writ of Habeas Corpus. Prof. Cochrane might rejoice in having a secure hard drive, but the FBI may well have examined his library records, recorded his phone calls, and tracked his location through his mobile telephone.

    Let's not be simpleminded or construct straw men when dealing with these important issues.

    1. For the vast majority of Americans, trickle down has been a failure.

      This is false. The people that have been affected the most by capitalism is poor people. The trickle down affects of the enormous economic gains over the last two centuries means that poor people today live better lives than the richest people did in the past.

  15. I rather doubt Brad meant to slight significant improvements of democracy after 1980; but do understand your need to exercise your freedom to be blind to crushing diminutions of economic freedom for most U.S. workers since the Billionaires took over. Of course if one counts the overthrow of oligarchic dictatorships in Latin America and the Arab spring that amounts to something great, but due to freedom of information, above all, accomplished in spite of as much as because of corporate freedoms. As to freedom from want; please get your priorities straight. If one looks hard enough, I'm certain a founder can be found to have opined that pursuit of happiness should not be limited to wishing for the next meal.

  16. Disavow my Messiah, source of everything good, and thou shall fell my wrath. So sad when seemingly smart people get blinded by ideology (or is it religion? I can't tell, maybe it's both).

  17. the first and most important freedom is from government interference...

    Are you familiar with the work of the Gallop organization, some published by Clifton in the Coming Jobs War, that the most important freedom is freedom from crime?

  18. I remember 1980. It was not a time when I was optimistic about the survival of liberal polities. The 50 years before that had seen a tremendous expansion of communist tyrannies. In 1980 the Russians were on the move in Afghanistan, Iran had sunk into the nightmare madness of the mullahs, and there were few democratic regimes in Latin America or Africa.

    Delong is a young man and he has no memories of the 60s and 70s. Nor does he understand what a dangerous, and close run thing the Cold War was.

  19. Your definition of freedom is very Hayek-ian (i.e. freedom as the absence of coercion). That might be good, might be bad.

    But I think you need to more sincerely address the Amartya Sen/Martha Nussbaum approach, as well as Zygmunt Bauman's imperious (and poetic) assessment of the freedom that modernity supplies.

    As an honest intellectual, I don't think you can leave the discussion at The Constitution of Liberty and ignore what others (not just Sen, Nussbaum, and Bauman but also Herbert Marcuse, Michel Foucault, Gilles Deleuze, and others that you may fight repugnant) have to say.

    These people I mention aren't stupid. Some of them (Michel Foucault) have been transformational.

    Their critiques of Hayek-ian freedom are not shallow. They are incredibly penetrating. And even if you disagree with them you must at least tell us why a bit more thoroughly.


Comments are welcome. Keep it short, polite, and on topic.

Thanks to a few abusers I am now moderating comments. I welcome thoughtful disagreement. I will block comments with insulting or abusive language. I'm also blocking totally inane comments. Try to make some sense. I am much more likely to allow critical comments if you have the honesty and courage to use your real name.