George Walford: Friedman or Free Men?

Whether there are any free men or free women may be debatable, but there are certainly two Friedman. David the son wrote “The Machinery of Freedom” and Milton the father wrote (among other works) Capitalism and Freedom (Phoenix Books, University of Chicago Press, 1963). Milton Friedman’s theories have been said to be the inspiration for the economic policies of the present British government, so discussion of them may be of more than academic interest.

His principles are set out in the first two chapters (from which our quotations are taken) of Capitalism and Freedom, and we found them difficult to grasp. It was not that they were abstruse but that the different statements made, even in these two short chapters, did not fit together. The declared ideal, which application of these principles is to realise, is “free men in a free society,” but not everyone in this free society is to be free. Our freedom is threatened and we need government to protect it:

both from the enemies outside our gates and from our fellow-citizens.

Neither our enemies nor our fellow-citizens are to be allowed to act as they wish; both are to have their freedoms restricted. Nor is this all. Government is also needed:

to preserve law and order, to enforce private contracts, to foster competitive markets.

It is to be a free society of free people. But all who dislike law and order, all who wish to do away with private contracts, or not have them enforced, and all who do not wish competitive markets to be fostered, are to have their freedom restricted.

Government, under Friedman’s system, is to protect us from both the enemies outside our gates and from our fellow-citizens. It must, therefore, be more powerful than any possible combination of these.

But government must not be powerful, because “the great threat to freedom is the concentration of power.”

The proposed system is said to offer an extended range of choices, but the briefest reflection shows that it would eliminate a large part of the range of choice currently available; under Friedman’s system anybody wanting to work in a government-owned enterprise would be unable to do so.

One is tempted to reject the whole scheme as merely muddleheaded, but if there is one thing we should by now have learnt from systematic ideology it is that in social affairs propositions cannot safely be disregarded because they are illogical. On the contrary; a disregard of logical consistency tends to be a feature of the movements which attain significance by virtue of their size. Friedman’s theories have numerous and powerful supporters; they have to be taken seriously.

Friedman holds that if we are to have a free society we must have a free market. But any society which has a free market is thereby shown not to be, without qualification, a free society. The existence of a market depends upon restriction.

The activity of a market is the exchange of value for value; if goods are simply taken, with no value tendered in exchange, then there is no market, and we have only to look around us to see that the freedom to take goods without tendering value in exchange is cherished by a great many people. Not only police, prisons, law-courts, laws and lawyers, private guards and security firms but also the enormous apparatus that keeps commercial records is needed to insure that value is received for value, and even these massive efforts meet with incomplete success. The tendency simply to take what is wanted without offering labour or anything else in exchange is a primary inclination, and the existence of a market depends upon restraint of this mode of behaviour, that is to say upon restriction of freedom. This type and degree of restriction is what Friedman is calling for when he speaks of a government that shall preserve law and order and enforce private concerns.

We tend to take it for granted that of course the taking of goods without payment must be stopped; after all, it is a criminal activity. But this is back to front; that term “criminal” is itself a part of the repressive apparatus. It is not that what is criminal must be repressed but that what must be repressed (to enable the market to function) is defined as criminal.

The existence of a market, “free” or otherwise, depends upon repression of the freedom to indulge a primary inclination.

The uncontrolled operation of a competitive market leads to further repression of freedom. Competition produces winners and losers, and the tendency of a market system is to concentrate economic power in a few hands, dividing society into a minority who enjoy large amounts of it and a majority of which each member has only a little – and, therefore, little economic freedom. Markets operate by buying and selling, they treat things as commodities, and unless prevented from doing so they turn people also into commodities. Until control was imposed to prevent it the outcome of market operations was either chattel slavery or some virtual equivalent, peonage or serfdom or naked children towing trucks in the mines. It was the “free” market that hunted the blacks through African forests and brought them to the auction block in Charleston. Chattel slavery, and exploitation of “free” workers that was hardly better, were ended only when (and where) government imposed control upon the market to prevent these things happening. When Friedman says that government control of the market restricts the freedom of the people, this is in one sense true: it deprives them of the freedom to be slaves.

Friedman would restrict the powers of government because concentration of power in the hands of a few tends to restrict the freedom of the many. He fails to see that uncontrolled concentration of economic power in the hands of the employing minority is open to the same objection.

II

Three main types of economic freedom can be distinguished:

First, the freedom simply to take what is wanted.

Second, the freedom to possess private property, to buy and sell. This is the freedom which Milton Friedman values, and its exercise entails restriction of the first freedom.

Third, the freedom from being treated as property oneself, the freedom not to be bought and sold, or helplessly subjected to the consequences of buying and selling. Exercise of this freedom entails restriction of the second one.

The first of these freedoms was enjoyed by the hunter-gatherers over some ninety-five per cent of the time for which human society has existed, and we all enjoy it today in family and personal life, where we give and take freely without calculating the balance of return. Activities based on this freedom constitute the main substance of even the most advanced society, it is the substratum upon which social life is founded. It expresses the protostatic ideology.

The second freedom provides the means by which industrial and commercial life, including the market, is conducted. The exercise of this freedom has produced the economic pyramid with the multi-nationals at the top, the unemployed at the bottom. It has also produced the abounding wealth of our advanced societies, where even the poorest have access to goods, facilities and enjoyment unknown to Alexander, Julius Caesar or Napoleon. It expresses the epistatic ideology and appears in British party politics as conservatism.

Third comes freedom from the consequences of unrestrained exercise of the second freedom. Making an early appearance in the anti-slavery agitation which began in the late Eighteenth Century, pursuit of this third freedom was also responsible for the Factory Acts, for minimum wage rates, for control of working hours and conditions; generally, for the measures designed to protect the less successful economic competitors against the overweening powers of the winners. Exercise of this freedom makes for restraint of extreme inequalities in the distribution of wealth. It expresses the parastatic ideology and appears in British party politics as liberalism (now linked with the SDP).

At this point, with the primary freedom (to take what is wanted), the secondary freedom (to impose restrictions), and the tertiary freedom (to restrict those restrictions) all established in society, the direction of interest changes. In the further course of ideological development (through the proto-, epi- and paradynamic ideologies, finding their political expressions in the socialist, communist and anarchist movements) the effort is no longer to obtain economic freedom but to insure security, by the imposition of successively higher degrees of political control over economic activity. Through these phases the freedom valued is political rather than economic.

When Milton Friedman and his followers claim to be working for freedom the claim is justified; it is when they declare that they alone are doing so that their arguments collapse. There is more than one form of freedom, even of economic freedom.

from Ideological Commentary 20, September 1985.