The Economist and the economists
The Economist has published an article on books to read to understand how economists think. The selection starts with Milton Friedman’s Capitalism and Freedom,* which is always good. It includes Freakonomics, the old The Worldly Philosophers by Robert Heilbroner (you can do worse for a broad introduction to economic thinkers), Capitalism, Alone by Branko Milanovic and Africa: Why Economists Get It Wrong by Morten Jerven, which I haven’t read; thus I can’t comment upon.
What strikes me as funny is the broader tone. So the author writers about Milton Friedman:
Ignore the fact that Friedman was ultra-libertarian. It does not matter. Very often his arguments were plain wrong. That does not matter either. This book is perhaps the best way to learn to think about trade-offs, because that was how Friedman always thought about the world. For instance, consider minimum wages. Friedman accepts that the people who receive them take home more money. But then the trade-offs come steaming in. What, he asks, about the people who are now priced out of the labour market? Or take regulation of medicines. Unnecessary, he says. Yes, you may save some lives by insisting that pharmaceutical companies jump through hoops before taking a drug to market, as fewer dangerous drugs are sold. But those reviews will also cost lives, he says, by delaying the delivery of safe drugs to patients. (In 2006 we published this article on Friedman and his legacy.)
I wish this sounded more like: get rid of your ideological prejudices for a moment, read Friedman with a clear mind, and you’ll see he was an impressive thinker. But it does not quite sound like that. It sounds like an apology: I recommend a book by Friedman, but I must make it clear that his arguments (which ones?) were “plain wrong”. Now, mind that this is The Economist, not Jacobin.
The sad truth is that we classical liberals tend not to realize how far apart we now are from the mainstream of Western elites. You may tell me that this was always the case. Well, up to a point. Twenty years ago it was true of anti-war libertarians, a tiny group who were ostracized by right and left. But broadly speaking, a certain understanding of the market economy and the dangers of over-regulating it was shared by a good number of people who perfectly fit within the political establishment. Fear of inflation and appreciation of restrained monetary policy was mainstream. For a while, nationalizations were unpopular with the left, socialist parties presented proposals to make welfare more efficient, and it was commonplace, for Davos men and the business elite to say that globalization was a good thing. Now you need to apologize to the readers of The Economist before reminding them that, hey, there are trade-offs!!!