the school of thought which says that all people are naturally good and can get along together in harmony, that all people naturally desire and are capable of democracy, and that the good things of our civilization are like rocks and stars, permanent features of the universe, so it doesn’t matter how badly we mess them up (for example, by opening our borders to unassimilable immigrants, socializing our economy, and imposing confiscatory tax rates), because
. Then there is the school of thought that looks at reality. Peter Robinson at
a fight between these two views, in the persons of David Brooks and the late Milton Friedman:
Milton Friedman vs. David Brooks
This past week, New York Times columnist David Brooks climbed unwittingly into the ring to go a couple of rounds with Milton Friedman—or rather, since Friedman died just over two years ago, with the ghost of Milton Friedman. The ghost decked him.
Brooks pulled on his boxing gloves by publishing a column headlined “The Commercial Republic.” Ever since the nation was founded, he argued, “the gospel of commercial success” had encouraged “people to strive, risk and make money.” Yes, the Obama administration had tamped down the American commercial ethos, but it could only do so temporarily. “After periodic pauses,” Brooks insisted, “the country inevitably returns to its elemental nature.”
Inevitably? Inevitably. Bear that word in mind. It’s Brooks’ most powerful punch.
Which brings us to Milton Friedman.
Several years ago over dinner, as I once related in this space, the Nobel Prize-winning economist grew reflective. “The challenge for my generation,” he said, “was to construct an intellectual defense for freedom.” Then Friedman looked at me gravely. “The challenge for your generation will be to keep it.”
Free markets in the United States, inevitable? Not according to the ghost of Milton Friedman. Our free markets instead lie under a persistent, irreducible threat.
As David Brooks and the ghost circled and jabbed in the brief, thrilling bout that unfolded in your correspondent’s mind, the first round produced blows over the history of the American welfare state.
“Washington,” Brooks asserted, throwing a roundhouse, “is temporarily at the center of the nation’s economic gravity. … But … this pause will not last. … The pendulum will swing hard.”
The pendulum may swing, Friedman’s ghost parried, but it never swings all the way back. Never. Whenever Washington makes the welfare state bigger, it stays bigger.
Consider Social Security, the ghost jabbed. Every informed observer has understood for decades that the program represents a giant Ponzi scheme that will prove incapable of meeting its obligations as the baby boom generation ages. But has Social Security ever been rolled back? Even a little?
George W. Bush spent the first two years of his second term trying to persuade Congress, then controlled by his own party, to revamp Social Security, in part by offering Americans private retirement accounts. Bush failed. Social Security is still with us, still a Ponzi scheme and still headed toward bankruptcy.
During his 94 years on earth, the ghost said, throwing another jab, federal spending as a share of gross domestic product had risen from about 5% to more than 25%. And now? We have a president who wants to nationalize the health care industry, which accounts for a full one-seventh of our entire economy.
The bell clanged. The judges awarded round one to the ghost.
The bell clanged again, beginning round two. David Brooks and the ghost of Milton Friedman traded blows over the history of Europe.
“Americans,” Brooks argued, swinging hard, “work longer hours than any other people.”
Ah, replied the ghost, ducking, but that didn’t used to be the case. As recently as 1970, Western Europeans and Americans worked roughly the same number of hours each year. Then the patterns diverged. Why? You may choose either of two explanations.
One explanation centers on European unions. “Unions,” the ghost said, quoting Dartmouth economist Bruce Sacerdote, “used their strength to bargain for more holidays, more vacation days, shorter regular work weeks and more unemployment insurance.”
The other explanation concerns taxes. Here the ghost quoted economist Edward Prescott of Arizona State University. “What can possibly account for [the] large differences [between the United States and Europe] in labor supply? It turns out that marginal tax rates explain virtually all of [the] difference.” In other words, Europeans now work less because their work is taxed more.
Choose either explanation you want, the ghost said, bobbing and weaving just beyond Brooks’ reach.
Did Europe become inhospitable to hard work because of its unions? Here in the United States, the ghost said, stepping in to throw a punch, the Democratic Party is now supporting “card check” legislation that would eliminate secret balloting in unions, dramatically enhancing their power. American unions would soon be able to mimic unions in Europe by demanding more rigid labor markets and an ever bigger welfare state.
Or did Europe choose to discourage work by raising marginal tax rates? Here United States, the ghost said, throwing a hook, the Obama administration now insists on permitting the Bush tax cuts to expire, a measure that would raise the top marginal income tax rate from 35% to 39.5%. The ghost followed the hook with a hard, fast jab. Combine Obama’s income tax hikes, his capital gains tax hikes, his new carbon tax and his reactivation of the estate tax, and what have you got? The biggest tax increase in American history.
Brooks, staggering, shook his head. “The United States,” he said, “will never be Europe.”
“Haven’t you been listening?” the ghost replied, throwing a quick left-right. When it comes to the expansion of the welfare state, Europe didn’t used to be Europe!
Now Brooks was on the ropes. “The [United States] inevitably returns to its elemental nature,” he gasped. “Inevitably, inevitably, inevi—”
Inevitably? the ghost replied. Did the United States win the Second World War inevitably? Did we revive our economy during the 1980s inevitably? Did we win the Cold War inevitably? When you live as long as I did, young man, you learn that freedom never triumphs inevitably. It triumphs when people fight for it.
Instead of throwing a final punch, the ghost simply gazed at Brooks, fixing him with the same look of pity, disappointment and disgust that everyone who ever studied with Milton Friedman, including, as an undergraduate at the University of Chicago, Brooks himself, had seen him turn on students he knew were capable of better work.
David Brooks’ knees buckled.
He went down for the count.
Peter Robinson, a research fellow at the Hoover Institution at Stanford University and contributor to RobinsonandLong.com, writes a weekly column for Forbes.