Milton Friedman on Crony Capitalism in the US Oil Industry

By Robert Bradley Jr. -- July 31, 2019 2 Comments

“Few U.S. industries sing the praises of free enterprise more loudly than the oil industry. Yet few industries rely so heavily on special governmental favors.” (Milton Friedman, 1967)

In honor of his 107th birthday, MasterResource reprints a 1967 essay by Milton Friedman, “Oil and the Middle East,” which nicely summarized the political power and cronyism of the domestic oil industry at the time. [1] Far from just historical, the animus created by pro-crony policies over a half century came home to roost in the 1970s when Northeast politicians and others imposed price controls and new taxes on the industry. That animus exists today under the hubris of climate policy.

Background

From the 1920s through the early 1970s, the political power of the domestic oil industry (primarily independent oil producers versus the integrated majors) succeeded in having the major oil states (excepting California) artificially restrict (‘prorate’) production to ‘market demand.’

To block imports encouraged by the less supply/higher price domestic cartel, the U.S.

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Milton Friedman’s Energy Wisdom (would be 106 today)

By Robert Bradley Jr. -- July 31, 2018 2 Comments

“Milton Friedman’s timeless energy insights should be appreciated for all time.”

Born on this day 106 years ago, free-market economist Milton Friedman (1912–2006) was one of a kind. Even the dyspeptic Paul Krugman called his rival “the economist’s economist…a very great man indeed—a man of intellectual courage who was one of the most important economic thinkers of all time and possibly the most brilliant communicator of economic ideas to the general public that ever lived.” The Economist (November 23, 2006) called him “the most influential economist of the second half of the twentieth century… and possibly all of it.”

Milton Friedman’s major professional mark was in monetary economics. But as a public intellectual, writing popular books and a biweekly Newsweek column, he became conversant in different fields, including energy.

Friedman understood how, for much of US history, major energy regulation was sponsored by some segment of the industry.

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Milton Friedman on Mineral Resource Theory (remembering a giant of social thought)

By Robert Bradley Jr. -- July 31, 2017 2 Comments

“I think [Julian Simon] probably should have been considered for a Nobel Prize.  He took a very independent position with little backing, dug deep and provided very good evidence for his predictions and expectations.”

“I do not believe there is a natural resource economics.  I believe there is good economics and bad economics.”

  • Milton Friedman (below)

Editor note: Milton Friedman would be 105 this day. Born July 31, 1912, in New York City, he died on November 16, 2006, in San Francisco, age 94.

Reprinted below is an exchange between Robert Bradley Jr. and the Milton Friedman when the Nobel Laureate was 91 years old–a testament to the patience, scholarship, and longevity of one of the greatest social thinkers of modern time.

Friedman had not met Bradley but was in the habit of actively communicating with scholars until his final illness.

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Milton Friedman: Climate Realist, Not Alarmist (no carbon tax support here)

By Robert Murphy -- October 30, 2014 No Comments

“Of all my father’s accomplishments, I believe the one he was proudest of was his role in ending military conscription. I do not think he would be happy to be conscripted, posthumously, for someone else’s cause [of climate alarmism].”

– David Friedman, “A Case of Posthumous Conscription,” October 18, 2014.

Bob Inglis, Executive Director of the Energy and Enterprise Initiative based at George Mason University, continues a quest to get conservatives and the Republican interested in a carbon tax. Recently, he chaired a forum at the University of Chicago titled, “What Would Milton Friedman Do About Climate Change?” At the event, two Chicago economists argued that Friedman (1912–2006) would have applied the textbook analysis of “negative externalities” to the issue of climate change, and therefore would have supported a carbon tax.

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Milton Friedman Day (some energy quotations on the occasion of his 102nd birthday)

By Robert Bradley Jr. -- July 31, 2014 1 Comment Continue Reading

Milton Friedman on the Energy Crisis (and ObamaCare to come)

By Robert Bradley Jr. -- July 31, 2013 5 Comments Continue Reading

Milton Friedman's 100th: Exploring His Wisdom for the Ages (Part III: Political Capitalism)

By Robert Bradley Jr. -- August 3, 2012 7 Comments Continue Reading

Milton Friedman's 100th: Exploring His Wisdom for the Ages (Part II: Energy)

By Robert Bradley Jr. -- August 2, 2012 5 Comments Continue Reading

Milton Friedman's 100th: Exploring His Wisdom for the Ages (Part I: Worldview)

By Robert Bradley Jr. -- July 31, 2012 9 Comments Continue Reading

Milton Friedman on Mineral Resource Theory (remembering a giant of social thought)

By Robert Bradley Jr. -- July 30, 2010 26 Comments Continue Reading