The Destruction of our World and the lies of Milton Friedman
- Kamran Mofid
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The continuing and deepening tragedy of our world: Socialism & Freedom to Choose for the 1% , Capitalism, Slavery, Serfdom & Capitulation for the 99%, All thanks to the Lies of Milton Friendman and his likes
If, you, too, like me, are imagining a better life, a better world, a world of peace, harmony, fairness, kindness, generosity and the common good, then, we must expose and demolish Milton Friedman's Lies
‘The evil that men do lives after them. Global economic crisis has roots back in the 1970s, it was Milton Friedman the economist, Nobel laureate and American Treasury Secretary who convinced Reagan and Thatcher to adopt his policies of small government; deregulation of financial services; free and unfettered markets; low taxation for corporations and the wealthy and privatisation of public services.’...Read more and watch the video too!
'The world runs on individuals pursuing their self interests.'
“The Social Responsibility of Business is to Increase Its Profits, whilst the businesses' sole purpose is to generate profit for shareholders”- Milton Friedman, Nobel Memorial Prize in Economic Sciences
This is ‘Milton Friedman, The Liar’- 'Infamous Economic Dogmatist'
‘Milton Friedman’s lie was that inflation was a monetary phenomenon irrespective of context. In reality, though, inflation isn’t always everywhere a monetary phenomenon. Tragically, QTM is still the basis of mainstream economics.’
‘He received the 1976 Nobel Memorial Prize in Economic Sciences. The father of the Monetarist current. Avid supporter of the so-called Free Market. His work influenced policy makers far and wide. Milton Friedman, a gentleman, a liar… His most precious contribution to the field of economics? The Quantity Theory of Money (QTM).
The famous equation reads as, MV = PQ. The money stock (M) times the velocity of money (V) is equal to the price level (P) times real output (Q). Perfectly straight forward with the equation. But what about the theory? Economists David Hendry and Neil Ericsson shall enlighten us...Continue to read
Debunking Neoliberalism and Milton Friedman’s Lies
On September 11, 1973—now referred to as the “other 9/11”—Augusto Pinochet staged a successful coup to oust Chile’s democratically elected president, Salvador Allende. Backed by the CIA, American business interests, and the blessings of Henry Kissinger, Pinochet, enlisting economists trained under Milton Friedman and the so-called “Chicago boys,” restructured the Chilean economy in the image of what has now come to be known as “neoliberalism,” that state apparatus which seeks to deregulate markets, privatise formerly public assets, minimize the power of unions, unleash all manner of austerity measures—in short, to ensure, in the name of freedom, an increasingly frictionless flow of capital across borders and into the bank accounts of those in power.’*
'Today the dominant narrative is that of market fundamentalism, widely known in Europe as neoliberalism. The story it tells is that the market can resolve almost all social, economic and political problems. The less the state regulates and taxes us, the better off we will be. Public services should be privatised, public spending should be cut and business should be freed from social control. In countries such as the UK and the US, this story has shaped our norms and values for around 35 years: since Thatcher and Reagan came to power. It’s rapidly colonising the rest of the world,’* *or as I would say: It has colonized the rest of the world...Continue to Read
Milton Friend, not only a Liar, but, also, the Father of Economic Racism
‘Milton Friedman’s Economic Racism’
The godfather of neoclassical economics ignored the market forces of discrimination and slavery.
In a most illuminating article and discussion, ‘The White Ignorance of Milton Friedman’, the writer and historian, John Jackson, eloquently highlights Friedman’s economic racism, ignorance and bias for all to see.
Jackson has reminded us that Friedman, the so-called, a giant of economics, wrote a misguided history of capitalism’s relationship with racism and slavery. Friedman’s entire essay contained only one reference and that reference did not support anything Friedman claimed about how increasing property rights led to a decrease in racism and discrimination. I argued that Friedman was an example of an “imperial scholar” because he ignored the work of pioneering African-American scholars who offered better-documented and more insightful accounts of the relationship among property rights, race, and slavery.
Let Jackson to enlighten us a bit more:
‘Imperial Scholars and White Ignorance’
White people have the luxury of not thinking about race if they don’t want to. Marginalized people, on the other hand, are forced to think about their own oppression all the time if they want to get by in the world. One way to think about this luxury is what philosopher Charles Mills calls “white ignorance.” In scholarship, one way the white ignorance is displayed is by white scholars, whom Critical Race Theorist Richard Delgado called “imperial scholars,” who ignore the scholarship of people of color. The poster child for white ignorance may well be Milton Friedman.
Milton Friedman was one of the most famous economists of the twentieth century. The leading light of the “Chicago School of Economics,” the most influential economics department in the world, Nobel prize-winner in Economics in 1976. If there were an All-Star team of economists, Friedman would be in the starting line-up. My view of him was nicely summarized by Murray Rothbard in 1964: “I am getting pretty p.o.’ed at the influence of that little bastard anyway; he is the No.1 respectable right-wing economist in Newsweek and Business Week, and Goldwater’s chief economic theoretician.” (Rothbard to James Martin, Martin Papers, University of Wyoming).
My focus is on Friedman’s chapter on “Capitalism and Discrimination” in his 1962 book, Capitalism and Freedom a book that has gone through several editions and is still in print. (How much would you pay for the first edition? Wrong! It is way more than that!). Friedman’s views on racial discrimination reflect a profound ignorance of how race operates in the world. This ignorance was inexcusable in 1962 and the fact that Friedman did not revise these views in the 1982 or 2002 editions show the pernicious power of his ideology which blinded him to the racial reality of the world.
Friedman’s description of race relations rests on two assumptions. The first is that racial animosity is simply a “taste,” not unlike my love of pizza topped with Canadian bacon and sauerkraut (it is awesome, try it!). Here he states his position:
The truth about shareholder primacy: Another of His Lies
It is time for business leaders to move away from Milton Friedman's target of short term shareholder gain towards long term sustainability, says Paul Polman, the chief executive of Unilever.
“Paul Polman, the chief executive of consumer goods giant Unilever, is in a league of his own when it comes to being the leader a multinational company challenging the corporate status quo. In a wide-ranging interview with Guardian Sustainable Business to coincide with the first annual update of the company's ambitious 10-year Sustainable Living Plan, Polman calls on business leaders, politicians and NGOs to embrace systems thinking, and to recognise they cannot deal with the world's environmental and social challenges in isolation.”
Reflecting on this interview, Gordon Pearson, the author of “The Road to Co-operation”, notes the following:
“Much of the totally unsustainable impoverishment faced today springs from that one simple untruth: the reckless depletion of finite resources, pollution of atmosphere and oceans, predatory activity of an unregulated financial sector, and the destruction of the real economy which provides real jobs as well as paying for education, health, defence and social security. All this destruction on the altar of shareholder wealth maximisation, is mirrored by the excessive bonuses and executive remuneration that are part of the daily news. No wonder, in his BBC lecture, Barclays CEO Bob Diamond lovingly claimed Milton Friedman to be his 'favourite economist'!
It is to be hoped that more will follow Polman's bold lead away from short term shareholder gain towards long term sustainability. But many firms are not strong enough to swim against the tide.
Friedman's agency lie has to be exposed and demolished. And Polman's alternative enabled to become the new orthodox wisdom.”
The World brought down to its knees: Self interest and selfishness
The Damning Impact of a Toxic Philosophy on the World
How the Myth of Self-interest & Selfishness Caused the Global Crisis
...‘The financial crisis should teach us some important lessons about the way economies work and the way we design our organizations. In essence, we have simply made the wrong assumptions about human nature. The leading model in economic theory is that of Homo Economicus, a person who makes decisions based on their rational self-interest. Led by an invisible hand, that of the market, the pursuit of self-interest automatically produces the best outcomes for everyone. Looking at the financial crisis today this idea is no longer tenable. When individual greed dominates, everyone suffers. We could have known this all along had we looked more closely at human evolution.’
However, given the disastrous and tragic consequences of Homo Economicus Model of selfinterst, which leads to severe forms of competition between individuals and firms, which will in due course, leads to severe forms of anxiety, fear, worthlessness and hopelessness for all the practitioners, ‘A team of evolutionary minded psychologists, biologists and economists led by biologist David Sloan Wilson and economist John Gowdy have come together over the past few years to come up with a more accurate model for how businesses and economies operate. It is based on Homo Sapiens rather than Homo Economics.
These scientists assert that humans have truly cooperative instincts which they developed over hundreds of thousands of years living and working in highly cohesive groups. The best survival strategy for our ancestors was to cooperate with each other and to suppress individual greed and selfishness that was good for the individual but harmful to the group. All the empirical evidence shows if the conditions are right, individuals happily work together to create highly effective organizations that look after the common good.
Homo Sapiens is the only viable model of organizational life and to deny this, is to deny human nature.
‘Unfortunately, the way many firms operated in the early 21st century was to deny these cooperative instincts. People who were recruited to the top jobs in banks and utility companies were selected for their ambition and lust for money. As if led by an invisible hand, they would do things that were good for the company or society as a whole. We have seen all too well where this ended.
For instance, inspired by neo-economic theory (neoclassical economics) and persuaded by leading consultancy firms such as McKinsey, Enron organized their famous Talent days where they would recruit the sharpest and most competitive students from prestigious MBA programs without any regard for their cooperative skills and moral standards (this is sadly not generally taught in MBA programs). No surprise that there was a culture of competition, deception, and greed at Enron and no surprise the firm went down in a spectacular way. Banks, firms, and even entire nations have gone bankrupt because they perpetuated the myth of self-interest, while denying human social instincts. It is time for a paradigm shift in economics, and business science and policy.’...Read more
The Inhumanity & Immorality of Neoclassical Economics as depicted in Neoliberalism
Was the Rise of Neoliberalism the Root Cause of Extreme Inequality?
Neoliberalism: do you know what it is? This is the Question!
Neoliberalism: ‘It has played a major role in a remarkable variety of crises: the financial meltdown of 2007‑8, the offshoring of wealth and power, of which the Panama Papers offer us merely a glimpse, the slow collapse of public health and education, resurgent child poverty, the epidemic of loneliness, the collapse of ecosystems, the rise of Donald Trump. But we respond to these crises as if they emerge in isolation, apparently unaware that they have all been either catalysed or exacerbated by the same coherent philosophy; a philosophy that has – or had – a name. What greater power can there be than to operate namelessly?
...‘Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning.
Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.
We internalise and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.
Never mind structural unemployment: if you don’t have a job it’s because you are unenterprising. Never mind the impossible costs of housing: if your credit card is maxed out, you’re feckless and improvident. Never mind that your children no longer have a school playing field: if they get fat, it’s your fault. In a world governed by competition, those who fall behind become defined and self-defined as losers.
Among the results, as Paul Verhaeghe documents in his book What About Me? are epidemics of self-harm, eating disorders, depression, loneliness, performance anxiety and social phobia. Perhaps it’s unsurprising that Britain, in which neoliberal ideology has been most rigorously applied, is the loneliness capital of Europe. We are all neoliberals now.
The term neoliberalism was coined at a meeting in Paris in 1938. Among the delegates were two men who came to define the ideology, Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin Roosevelt’s New Deal and the gradual development of Britain’s welfare state, as manifestations of a collectivism that occupied the same spectrum as nazism and communism.
In The Road to Serfdom, published in 1944, Hayek argued that government planning, by crushing individualism, would lead inexorably to totalitarian control. Like Mises’s book Bureaucracy, The Road to Serfdom was widely read. It came to the attention of some very wealthy people, who saw in the philosophy an opportunity to free themselves from regulation and tax. When, in 1947, Hayek founded the first organisation that would spread the doctrine of neoliberalism – the Mont Pelerin Society – it was supported financially by millionaires and their foundations.
With their help, he began to create what Daniel Stedman Jones describes inMasters of the Universe as “a kind of neoliberal international”: a transatlantic network of academics, businessmen, journalists and activists. The movement’s rich backers funded a series of think tanks which would refine and promote the ideology. Among them were the American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Institute of Economic Affairs, the Centre for Policy Studies and the Adam Smith Institute. They also financed academic positions and departments, particularly at the universities of Chicago and Virginia.
As it evolved, neoliberalism became more strident. Hayek’s view that governments should regulate competition to prevent monopolies from forming gave way – among American apostles such as Milton Friedman– to the belief that monopoly power could be seen as a reward for efficiency.
Something else happened during this transition: the movement lost its name. In 1951, Friedman was happy to describe himself as a neoliberal. But soon after that, the term began to disappear. Stranger still, even as the ideology became crisper and the movement more coherent, the lost name was not replaced by any common alternative.
At first, despite its lavish funding, neoliberalism remained at the margins. The postwar consensus was almost universal: John Maynard Keynes’s economic prescriptions were widely applied, full employment and the relief of poverty were common goals in the US and much of western Europe, top rates of tax were high and governments sought social outcomes without embarrassment, developing new public services and safety nets.
But in the 1970s, when Keynesian policies began to fall apart and economic crises struck on both sides of the Atlantic, neoliberal ideas began to enter the mainstream. As Friedman remarked, “when the time came that you had to change … there was an alternative ready there to be picked up”. With the help of sympathetic journalists and political advisers, elements of neoliberalism, especially its prescriptions for monetary policy, were adopted by Jimmy Carter’s administration in the US and Jim Callaghan’s government in Britain.
After Margaret Thatcher and Ronald Reagan took power, the rest of the package soon followed: massive tax cuts for the rich, the crushing of trade unions, deregulation, privatisation, outsourcing and competition in public services. Through the IMF, the World Bank, the Maastricht treaty and the World Trade Organisation, neoliberal policies were imposed – often without democratic consent – on much of the world. Most remarkable was its adoption among parties that once belonged to the left: Labour and the Democrats, for example. As Stedman Jones notes, “it is hard to think of another utopia to have been as fully realised.”
It may seem strange that a doctrine promising choice and freedom should have been promoted with the slogan “there is no alternative”. But, as Hayek remarked on a visit to Pinochet’s Chile – one of the first nations in which the programme was comprehensively applied – “my personal preference leans toward a liberal dictatorship rather than toward a democratic government devoid of liberalism”. The freedom that neoliberalism offers, which sounds so beguiling when expressed in general terms, turns out to mean freedom for the pike, not for the minnows.
Freedom from trade unions and collective bargaining means the freedom to suppress wages. Freedom from regulation means the freedom to poison rivers, endanger workers, charge iniquitous rates of interest and design exotic financial instruments. Freedom from tax means freedom from the distribution of wealth that lifts people out of poverty.
As Naomi Klein documents in The Shock Doctrine, neoliberal theorists advocated the use of crises to impose unpopular policies while people were distracted: for example, in the aftermath of Pinochet’s coup, the Iraq war and Hurricane Katrina, which Friedman described as “an opportunity to radically reform the educational system” in New Orleans.
Where neoliberal policies cannot be imposed domestically, they are imposed internationally, through trade treaties incorporating “investor-state dispute settlement”: offshore tribunals in which corporations can press for the removal of social and environmental protections. When parliaments have voted to restrict sales of cigarettes, protect water supplies from mining companies, freeze energy bills or prevent pharmaceutical firms from ripping off the state, corporations have sued, often successfully. Democracy is reduced to theatre.
Another paradox of neoliberalism is that universal competition relies upon universal quantification and comparison. The result is that workers, job-seekers and public services of every kind are subject to a pettifogging, stifling regime of assessment and monitoring, designed to identify the winners and punish the losers. The doctrine that Von Mises proposed would free us from the bureaucratic nightmare of central planning has instead created one.
Neoliberalism was not conceived as a self-serving racket, but it rapidly became one. Economic growth has been markedly slower in the neoliberal era (since 1980 in Britain and the US) than it was in the preceding decades; but not for the very rich. Inequality in the distribution of both income and wealth, after 60 years of decline, rose rapidly in this era, due to the smashing of trade unions, tax reductions, rising rents, privatisation and deregulation.
The privatisation or marketisation of public services such as energy, water, trains, health, education, roads and prisons has enabled corporations to set up tollbooths in front of essential assets and charge rent, either to citizens or to government, for their use. Rent is another term for unearned income. When you pay an inflated price for a train ticket, only part of the fare compensates the operators for the money they spend on fuel, wages, rolling stock and other outlays. The rest reflects the fact that they have you over a barrel.
Those who own and run the UK’s privatised or semi-privatised services make stupendous fortunes by investing little and charging much. In Russia and India, oligarchs acquired state assets through firesales. In Mexico, Carlos Slim was granted control of almost all landline and mobile phone services and soon became the world’s richest man.
Financialisation, as Andrew Sayer notes in Why We Can’t Afford the Rich, has had a similar impact. “Like rent,” he argues, “interest is … unearned income that accrues without any effort”. As the poor become poorer and the rich become richer, the rich acquire increasing control over another crucial asset: money. Interest payments, overwhelmingly, are a transfer of money from the poor to the rich. As property prices and the withdrawal of state funding load people with debt (think of the switch from student grants to student loans), the banks and their executives clean up.
Sayer argues that the past four decades have been characterised by a transfer of wealth not only from the poor to the rich, but within the ranks of the wealthy: from those who make their money by producing new goods or services to those who make their money by controlling existing assets and harvesting rent, interest or capital gains. Earned income has been supplanted by unearned income.
Neoliberal policies are everywhere beset by market failures. Not only are the banks too big to fail, but so are the corporations now charged with delivering public services. As Tony Judt pointed out in Ill Fares the Land, Hayek forgot that vital national services cannot be allowed to collapse, which means that competition cannot run its course. Business takes the profits, the state keeps the risk.
The greater the failure, the more extreme the ideology becomes. Governments use neoliberal crises as both excuse and opportunity to cut taxes, privatise remaining public services, rip holes in the social safety net, deregulate corporations and re-regulate citizens. The self-hating state now sinks its teeth into every organ of the public sector.
Perhaps the most dangerous impact of neoliberalism is not the economic crises it has caused, but the political crisis. As the domain of the state is reduced, our ability to change the course of our lives through voting also contracts. Instead, neoliberal theory asserts, people can exercise choice through spending. But some have more to spend than others: in the great consumer or shareholder democracy, votes are not equally distributed. The result is a disempowerment of the poor and middle. As parties of the right and former left adopt similar neoliberal policies, disempowerment turns to disenfranchisement. Large numbers of people have been shed from politics.
Chris Hedges remarks that “fascist movements build their base not from the politically active but the politically inactive, the ‘losers’ who feel, often correctly, they have no voice or role to play in the political establishment”. When political debate no longer speaks to us, people become responsive instead to slogans, symbols and sensation. To the admirers of Trump, for example, facts and arguments appear irrelevant.
Judt explained that when the thick mesh of interactions between people and the state has been reduced to nothing but authority and obedience, the only remaining force that binds us is state power. The totalitarianism Hayek feared is more likely to emerge when governments, having lost the moral authority that arises from the delivery of public services, are reduced to “cajoling, threatening and ultimately coercing people to obey them”.
Like communism, neoliberalism is the God that failed. But the zombie doctrine staggers on, and one of the reasons is its anonymity. Or rather, a cluster of anonymities.
The invisible doctrine of the invisible hand is promoted by invisible backers. Slowly, very slowly, we have begun to discover the names of a few of them. We find that the Institute of Economic Affairs, which has argued forcefully in the media against the further regulation of the tobacco industry, has been secretly funded by British American Tobacco since 1963. We discover that Charles and David Koch, two of the richest men in the world, founded the institute that set up the Tea Party movement. We find that Charles Koch, in establishing one of his think-tanks, noted that “in order to avoid undesirable criticism, how the organisation is controlled and directed should not be widely advertised”.
The words used by neoliberalism often conceal more than they elucidate. “The market” sounds like a natural system that might bear upon us equally, like gravity or atmospheric pressure. But it is fraught with power relations. What “the market wants” tends to mean what corporations and their bosses want. “Investment”, as Sayer notes, means two quite different things. One is the funding of productive and socially useful activities, the other is the purchase of existing assets to milk them for rent, interest, dividends and capital gains. Using the same word for different activities “camouflages the sources of wealth”, leading us to confuse wealth extraction with wealth creation.
A century ago, the nouveau riche were disparaged by those who had inherited their money. Entrepreneurs sought social acceptance by passing themselves off as rentiers. Today, the relationship has been reversed: the rentiers and inheritors style themselves entrepreneurs. They claim to have earned their unearned income.
These anonymities and confusions mesh with the namelessness and placelessness of modern capitalism: the franchise model which ensures that workers do not know for whom they toil; the companies registered through a network of offshore secrecy regimes so complex that even the police cannot discover the beneficial owners; the tax arrangements that bamboozle governments; the financial products no one understands.
The anonymity of neoliberalism is fiercely guarded. Those who are influenced by Hayek, Mises and Friedman tend to reject the term, maintaining – with some justice – that it is used today only pejoratively. But they offer us no substitute. Some describe themselves as classical liberals or libertarians, but these descriptions are both misleading and curiously self-effacing, as they suggest that there is nothing novel about The Road to Serfdom, Bureaucracy or Friedman’s classic work, Capitalism and Freedom.
For all that, there is something admirable about the neoliberal project, at least in its early stages. It was a distinctive, innovative philosophy promoted by a coherent network of thinkers and activists with a clear plan of action. It was patient and persistent. The Road to Serfdom became the path to power.
Neoliberalism’s triumph also reflects the failure of the left. When laissez-faire economics led to catastrophe in 1929, Keynes devised a comprehensive economic theory to replace it. When Keynesian demand management hit the buffers in the 70s, there was an alternative ready. But when neoliberalism fell apart in 2008 there was … nothing. This is why the zombie walks. The left and centre have produced no new general framework of economic thought for 80 years.
Every invocation of Lord Keynes is an admission of failure. To propose Keynesian solutions to the crises of the 21st century is to ignore three obvious problems. It is hard to mobilise people around old ideas; the flaws exposed in the 70s have not gone away; and, most importantly, they have nothing to say about our gravest predicament: the environmental crisis. Keynesianism works by stimulating consumer demand to promote economic growth. Consumer demand and economic growth are the motors of environmental destruction.
What the history of both Keynesianism and neoliberalism show is that it’s not enough to oppose a broken system. A coherent alternative has to be proposed. For Labour, the Democrats and the wider left, the central task should be to develop an economic Apollo programme, a conscious attempt to design a new system, tailored to the demands of the 21st century.’ -George Monbiot, Neoliberalism – the ideology at the root of all our problems