One of Milton Freidman’s greatest skills was his ability to effortlessly disarm liberals when they trot out their standard, shopworn canards.
President Obama’s $1 trillion stimulus package went mainly to the hiring of government employees, so their continued spending would stimulate the economy. Many times Milton Friedman had lectured that this is a fallacy; there is no free lunch, every dollar the government spends is taxed, borrowed or taken by devaluation from the productive sector. More money is spent, but the overall production of goods and services is still the same; so how is the economy stimulated?
For those who believe capitalism a corrupt system, run by greed, Milton Friedman had a simple explanation. Greed, better identified as self-interest, is present everywhere; nowhere does there exists such perfect angels that do not act in their own self interest. What’s more, human history shows that our greatest successes have come in those countries with free markets and private property rights; it is in those countries that deny economic freedom that you find the same grinding poverty that plagued mankind for millennia.
Why shouldn’t the government use inheritance taxes to appropriate a man’s wealth when he passes? After all, he is dead and has no need for material goods. What’s more, would men not still work hard to improve their lot in life, even knowing the consequences once they are gone? Milton Freeman’s insight was convincing. The only human motivation as powerful as self interest is the desire to improve the circumstance of one’s children and family. The impulse to give your children a better life than yours is universal in the human spirit. Absent that, Friedman asks, what remains but to consume your life’s savings before you die? No assets accumulated or long-term investments made, just wasteful consumption. The destructive effect of this policy on the long term economic health of a society is obvious, with no long term growth, just the dispersal of all gains made with each generation.
If only today’s conservative politicians could demolish the left’s stale arguments so easily and completely.
Brett Malin is a noted political blogger with ConservativesClub.com. His company, MR Data Corporation provides statistical analysis for Fortune 500 companies. (conservativesclub.com)