The announcement that Milton Friedman, probably the world’s most famous champion of the free market, has received the Nobel prize for economics, is the latest in a series of events this year confirming the new respectability of conservatism.
In the most unexpected places, people are demonstrating their discovery that Socialism is a failure. The voters in Sweden this fall defeated the Socialist government that has ruled there almost steadily for 44 years.
The British Socialist leaders, faced with the plummeting value of the pound, have finally recognized what should have been a self-evident truth, namely, that wealth cannot be redistributed unless it is first created, and that government has no creative powers.
Dr. Friedman was honored by the Nobel trustees for his “achievements in the fields of consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy.”
“Stabilization policy” is academic jargon for wage and price control. Milton Friedman didn’t merely prove that wage-price control is “complex.” He demonstrated that it is “inherently immoral,” inescapably inequitable, and, in plain language, doesn’t work. For this, he deserves not only coveted honors from the elite, but the gratitude of the general public.
One of the proudest achievements of what we affectionately call “the American way of life” is the substitution of the rule of law for the rule of men. The rule of law isn’t perfect, since laws can be tyrannical. But the rule of law rather than men is a primary factor in extending individual freedom and narrowing our subservience to the arbitrary whim of big government.
Dr. Friedman has been an eloquent and often lonely voice in academic circles explaining that wage and price controls are a giant step away from the rule of law back into the despotism of man. It takes government out of its proper function as referee and enforcer of voluntary contracts, and gives it the authority to set millions of prices ané wage rates that rest solely on arbitrary judgment and political power.
Dr. Friedman has pointed out the many unjust effects of government-managed stabilization policy. Not only is Big Brother continuously looking over our shoulders, but our neighbors are, too. The system builds a nation of informers. If one man doesn’t like the price he has to pay, he runs to a government bureau and tattles.
Another unhappy effect of government interference is the minimum wage law, which Dr. Friedman calls “the most anti-black law on the statute books — in its effect, not its intent.” He points out that many blacks and teenagers, on the average, have lower skills than whites and older workers.
Both groups are made worse off when the minimum wage law discourages employers from hiring them. The minimum wage law thus deprives both blacks and teenagers of on-the-job training, which is the main route whereby unskilled workers can become skilled.
For nearly forty years, the Keynesian economists have been in near-total control of American universities. It is devoutly to be hoped that Milton Friedman’s well-earned distinction wwill encourage other conservative professors of economics to speak out and to teach their students the fallacies of wage and price controls.
