Ed. note: Milton Friedman was born on this day 114 years ago. MasterResource celebrates his ideas and legacy each July 31st. This post presents an example that countless others with open minds can emulate in a time of political polarization.
“Instead of blaming bad leaders, we should first reflect on what we have done—or failed to fulfill our CITIZENSHIP—that allowed these people to gain power. Starting with reviewing Dr. Friedman’s concepts of ‘free enterprise’, could be a good first step of a thousand miles to go.” (Ruby Kamm, below)
On social media several years ago, Ruby Kamm described her ascent from Marxist indoctrination to understanding free-market capitalism. Coming to see the distinction between freedom and opportunity and crony political capitalism was important. Milton Friedman stands as the most influential economist and public advocate of economic freedom in the second half of the 20th century.
Kamm begins:
I was not only a liberal but also a devoted communist. In China, Marxism education started from Kindergarten with nursery songs. After graduating lower school and mandated Chinese Communist Young Pioneer membership, I joined the Communist Youth League in middle school. I was a student representative, contributor and anchor of the propaganda radio station. Words do enforce beliefs.
My economics major in college devoted a large portion to “Marxist Economics,” which made perfect sense to a young, inexperienced, and ambitious mind. Like the idealism in John Lennon’s song “Imagine,” I believed in making the world a better place.
Friedman Misconstrued
For years, I thought Milton Friedman was pro-corporation and an anarchist, based on what was taught in my college classroom and expert cherry-picking of his words from reputable sources. It wasn’t until much later, after I devoured the entire “Free to Choose” documentary series over a weekend, that I understood his true, unaltered thoughts.
Dr. Friedman never believed the government has no place in capitalism. He emphasizes the government’s critical role in maintaining a FAIR AND TRANSPARENT environment for capitalism to be possible.
Dr. Friedman was never about “freedom for corporations”; he advocated for “freedom for enterprises.” An enterprise is not just a corporation but any natural or legal person with a sovereign identity for self-governance, organically led to act in good faith without extorting overall equality in the marketplace.
When I was in business school in the U.S., I didn’t understand the sentiment behind “Occupy Wall Street.” I thought those protestors just wanted the government to redistribute wealth. After COVID-19, I realized that the government has been redistributing wealth all along, from ordinary citizens to the 1%.
Political Capitalism vs. Free-market Capitalism
Another paradigm shift: I finally see that America is actually not true capitalism but crony capitalism, especially with the censorship of free speech. It seems people can no longer define what capitalism truly is.
Let me take a shot at it. Capitalism is simple. It is not even a system but a general description of normal business practice: market participants exchange economic utilities under three conditions:
1. Clearly defined ownership, before and after the exchange.
2. Mutually consented price free of coercion.
3. Equal access to information.
Issues such as censorship, selective law enforcement, government intervention in pricing, lobbying (legal bribery), widespread financial and taxation illiteracy, a “catch and kill” error correction attitude, and an overregulated business environment squeezing out small business owners highlight the problems in our system.
Conclusion
Instead of blaming bad leaders, we should first reflect on what we have done—or failed to fulfill our CITIZENSHIP—that allowed these people to gain power. Starting with reviewing Dr. Friedman’s concepts of “free enterprise”, could be a good first step of a thousand miles to go.