Conservatives Should Push Milton Friedman's Unfinished Business

Shell-shocked conservatives should embrace the unfinished agenda of a five-foot-tall free-market giant. Milton Friedman—1976’s Nobel economics laureate, and both an elevated theorist and fathomable popularizer of capitalist ideas—passed away November 16 at 94. He leaves behind the PBS series “Free to Choose,” some 25 books, and hundreds of articles, much of this co-produced with Rose, his wife of 68 years. Thousands of think-tank scholars—inspired by his faith in individual liberty, limited government, and private enterprise—advance his libertarian philosophy.

Despite left-wing paranoia that President Bush would reinstate the draft, incoming House Ways and Means Chairman Charles Rangel (D.-N.Y.) recently promised legislation to resurrect it. Conscription vanished largely because Friedman helped convince President Nixon to scrap it. This was among his proudest achievements. He also successfully pushed monetary discipline, tax cuts, and free trade.

This impressive public-policy track record notwithstanding, many of Friedman’s concepts remain unimplemented. America should honor this brilliant, endearing, and amazingly humble public intellectual by enacting more of his ideas:

* Friedman proposed school vouchers in 1955. Fifty-one years on, students need this reform even more urgently. As Friedman explained, the GI Bill funds higher education for veterans. They freely redeem these vouchers at government-run (UCLA), private (NYU), or religious (Brandeis) institutions.

“If present public expenditures on schooling were made available to parents regardless of where they send their children,” Friedman wrote in 1962’s “Capitalism and Freedom,” “a wide variety of schools would spring up to meet the demand.”

American school children, from the sandbox to the senior prom, should be given, in essence, GI Bills for Kids. May a thousand voucher-funded flowers bloom.

* “Money is too important to be left to central bankers,” Friedman told me in 2001. “You essentially have a group of unelected people who have enormous power to affect the economy.”

Friedman long offered an elegantly simple alternative:

“I’ve always been in favor of replacing the Fed with a computer.” A laptop could calculate the monetary base and expand it annually—through war, peace, feast, and famine—by, perhaps, a predictable 2%.

While it may be tough to criticize the Fed’s recent performance—excluding its 17 interest-rate hikes since 2004 that prompted today’s housing slump—“people tend to forget that the long history of the Fed is not one of success, but of failure,” Friedman said. Of course, a laptop might ignore things like the late-1990s’ bust or Asian financial crisis. Friedman approved. “You sacrifice this kind of appropriate fine-tuning for what fine-tuning generally is, which is a mistake.”

* The federal government should abandon its disastrous war on marijuana, as Friedman soberly advocated.

“There is no logical basis for the prohibition of marijuana,” Friedman once said. “It’s absolutely disgraceful to think of picking up a 22-year-old for smoking pot. More disgraceful is the denial of marijuana for medical purposes.”

Friedman led some 530 economists who signed a communiqué encouraging “an open and honest debate about marijuana prohibition.” Their June 2005 letter continued:  “We believe such a debate will favor a regime in which marijuana is legal but taxed and regulated like other goods.”

* While he was a young, “thoroughly Keynesian” Treasury official, Friedman promoted the withholding tax as a temporary, World War II revenue-raiser—perhaps his biggest regret.

“It never occurred to me at the time that I was helping to develop machinery that would make possible a government that I would come to criticize…as too large, too intrusive, too destructive of freedom,” Friedman wrote in “Two Lucky People,” his and Rose’s memoir. “There is an important lesson here. It is far easier to introduce a government program than to get rid of it.”

Rather than let Uncle Sam vacuum interest-free loans from workers’ paychecks, Americans should be free to send the Treasury monthly checks, along with their rent and power bills. Transparent tax collection likely would ignite a national tax revolt.

For a man awash in accolades, Friedman was incredibly modest. He could have been forgiven for having a swollen head; instead, he was disarmingly unassuming.

He also was a bouyant optimist. Asked in late 1999 for words of wisdom as this millennium approached, Milton Friedman laughed and told me: “The millennium will take care of itself.”