Note: This grandiose conclusion to the chapter on education is disgusting for its rigid ideological biases. Friedman has not demonstrated that "outright redistribution of income" necessarily results in "impeding competition, destroying incentive, and dealing with symptoms." He has not and cannot make the case that, in our complex society full of many situations that generate inequality, private schools and vouchers can somehow (magically?) result in "eliminating the causes of inequality."
Friedman: Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible. This is a fundamentally subversive doctrine. P. 133
Note: Where to start? At other points Friedman does acknowledge a role for government to establish the "rules of the game." Would he accept "social responsibility" as one of the guiding criteria for governmental regulation and rule making? We know that businesses usually fight tooth and nail to avoid, reduce, or completely eliminate such rules. Healthcare reform is a very recent case in point. Even though careful scientific studies have established that the number of people dying in this country for lack of quality healthcare has risen from 17,500 in 2001 to 45,000 in 2008, health insurance companies and conservatives strongly opposed reform. Now "cap and trade" energy legislation is off the table for the current session of Congress. No matter that scientists have identified a plethora of extreme risks to our planet, including several that could end the lives of all air-breathing species, we must still allow oil companies to sell us oil and gasoline because they make money doing so. There is a rapidly growing number of companies who are finding that when they rethink their business processes, especially their use of energy, they can design new processes that save them money and add to their bottom line. The very survival of the human race depends upon allowing social responsibility to play a role at some point in our economic processes.
Friedman: Minimum wage laws are about as clear a case as one can find of a measure the effect of which are precisely the opposite of those intended by the men of good will who support it. P. 180
Note: The entire argument is "armchair reasoning" - Friedman presents no data. I have not reviewed the studies myself. I have formed the impression, however, that when companies have ongoing business relationships and customers, they generally manage to deal with minimum wage requirements. I would like to see empirical studies of numbers of persons who lose jobs when minimum wages are raised. Organizations fighting to raise minimum wages have put forth the thesis that no person working a full time job should remain below the poverty line defined by the Bureau of Labor Statistics.
Friedman: [Regarding social security] What conceivable justification is there for taxing the young to subsidize the old regardless of the economic status of the old; for imposing a higher rate of tax for this purpose on the low incomes than on the high; or, for that matter, for raising the revenues to pay the subsidy by a tax on payrolls? P. 184
Note: Friedman has identified some issues that I would like to see addressed regarding Social Security. In particular, the flat tax rate with a cap is very regressive. By making one simple change - substantially raising the cap, Social Security could maintain its solvency forever. Today the right-wing cry is to "privatize" Social Security. When George W. Bush proposed this, his own financial people did an analysis that showed the current administrative over head of Social Security to be 0.9, or less than one, percent. On the other hand, these same analysts estimated that if Social Security were "privatized" the administrative costs charged by Wall Street would amount to around five percent. In other words, government is five times more efficient than private enterprise, at least for this program.
Friedman: Nationalization of the provision of required annuities. " The only saving grace in the United States so far has been the existence of private insurance companies involved in similar activities. P. 185
Note: Here is another huge right-wing bias. Private insurance companies just have to be better than a national governmental program, right? First of all, Friedman's proposed national annuities purchase program does not exist, so far as I know. Secondly, during the recent healthcare reform debate, we have all had the opportunity to observe how fair, open and magnanimous private insurance companies can be. Third, the federal government can reasonably be regarded as "too big to fail," but individual insurance companies underwriting these securities might or might not be. Fourth, private insurance companies are "for profit." This means that inevitably a portion of the monies invested will be diverted to fund the profitability of the corporation. A government run program does not make such a diversion.
Friedman: One recourse, and in many ways the most desirable, is private charity. It is noteworthy that the heyday of Laissez-faire, the middle and late nineteenth century in Britain and the United States, saw an extraordinary proliferation of private eleemosynary organizations and institutions. P. 190
Note: Undocumented prejudice! What are the "many ways?" Friedman does not list them. He operates in a constant haze of automatic bias against government. Furthermore, if laissez-faire was doing such a great job in the "wide distribution of the benefits," why were "eleemosynary organizations and institutions" (charities) required at all?
Friedman: The arrangement that recommends itself on purely mechanical grounds is a negative income tax. " In this way, it would be possible to set a floor below which no man's net income (defined now to include the subsidy) could fall - in the simple example $300 per person. The precise floor set would depend on what the community could afford. P. 192
Note: Amazing! In 1962 I got married and lived as a poverty-stricken student on $130 per month for two people. That's $1,560 per year. At about this same time Friedman was offering $300 per year? What a guy! Plus the amount would depend, not on whether the recipient starved to death, but on how much the community could "afford." I do believe that a carefully designed negative income tax system, using reasonable rate schedules, might have the potential to greatly simplify how we extend support to needy families. Perhaps this idea should be revisited in this time of financial downturn and high unemployment.
IncorrectWhen I found data or logic that contradicted the statements in the book, I assigned them to this category.
Friedman: Government can never duplicate the variety and diversity of individual action. P. 5
Note: Wrong! Look at the Internal Revenue code.
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