By Nick Beams:
Milton Friedman 1912-2006: “Free market” architect of social reaction
21 November 2006
In his afterword to the second edition of Capital in 1873, Karl Marx noted that the scientific character of bourgeois economics had come to an end about 1830.
At that point the class tensions generated by the development of the capitalist mode of production itself made further advances impossible.
“In place of disinterested inquirers there now stepped forward hired prize-fighters; in place of genuine scientific research, the bad conscience and evil intent of apologetics.”
The economist Milton Friedman, who died last Thursday aged 94, will be remembered in years to come as one of the classic representatives of this tendency.
Indeed his own career, culminating in his rise to the position of intellectual godfather of the “free market” over the past four decades, is a graphic example of the very processes to which Marx had pointed.
In the post-war boom, now looked back on as a kind of “golden age” for capitalism, at least in the major economies, Friedman was very much on the margins of bourgeois economics.
When this writer begun a university study of economics in the latter half of the 1960s Friedman, and the free market Chicago School in which he was a central figure, were regarded as eccentrics, if not oddities.
This was the heyday of Keynesianism, based on the notion that regulation of “effective demand” by government policies—increased spending in times of recession, cutbacks in periods of economic growth and expansion—could prevent the re-emergence of the kind of crisis that had devastated world capitalism in the 1930s. …
If Friedman’s free market dogmas had no scientific content, they were nonetheless extremely valuable in the service of definite class interests, as the experience of Chile was to graphically demonstrate.
In 1975, following the overthrow of the elected Allende government in a military coup on September 11, 1973, the head of the junta, Augusto Pinochet, called on Friedman and his “Chicago boys”—economists trained under his tutelage—to reorganise the Chilean economy.
Under the direct guidance of Friedman and his followers, Pinochet set out to implement a “free market” program based on deregulation of the economy and privatization.
He abolished the minimum wage, rescinded trade union rights, privatised the pension system, state industries and banks, and lowered taxes on incomes and profits.
The result was a social disaster for the mass of the Chilean population.
Unemployment rose from just over 9 percent in 1974 to almost 19 percent in 1975.
Output fell by 12.9 percent in the same period—a contraction comparable to that experienced by the United States in the 1930s.
Pinochet’s financial fraud: here.
Film on unemployment in Spain: here.
A very different economist compared to Friedman; from the Google cache, 1/2/06:
On 1 January 2006, United States economist and editor of Monthly Review, Harry Magdoff, died.
A Monthly Review interview with this analyst of imperialism is here.
Speaking on the state of the US economy, see this cartoon.
- When neoliberalism exploded (salon.com)