Monday, June 6, 2016

Milton Friedman in support of Bernie Sanders

Sometimes I find the political debate in the United States confusing. But at least here’s a video that explains some of it, showing Nobel laureate (alright, the Riksbanken stuff) Milton Friedman (1912-2006) coming out as a firm supporter of Bernie Sanders. Please correct me if I got some of it wrong.

According to Friedman,
"The only cases in which the masses have escaped from the kind of grinding poverty you are talking about, the only cases in recorded history, are where they have had capitalism and largely free trade."
Yay, capitalism! Sweden for instance is a capitalist country if there ever was one, and we’re one of the least poor countries by any reasonable measure. As far as I understand, Sanders is not only advocating what Friedman would call a capitalist system, but one that is EVEN MORE capitalist than the famous Svenska Modellen.

In Sanders’ opinion,
“If somebody works 40 hours a week, that person should not be living in poverty.”
Despite many decades of success of capitalism, this seems to be a controversial statement in the United States of today, simply scaring the bejeezus out of many Americans. Luckily, Milton Friedman is there to explain to the rich and the middle class that the reason for their fear is that
“It’s so hard for people to get out of the notion that life is a zero sum game. They think that if one man benefits, another must lose. But in a free market, both people can benefit.”
In the video, Friedman and Sanders seem to disagree on "minimum wages", but it's not entirely clear to me. Friedman's opinion (Capitalism and Freedom 1962, in this pdf Chapter XII is on pages 157-161, read it!) was that a certain minimum income should be provided by society to everyone and built into the income tax system (so-called negative income tax). So Friedman the capitalist and libertarian thinks that the alleviation of poverty should not be left to the free market, but is the responsibility of society (it's not as illogical as it sounds, look at this video, where Donald Trump is mentioned). It would be interesting to know what Sanders thinks about that.

So Americans, listen to what Milton Friedman is saying! Bernie Sanders and his capitalist ideas aren’t as scary as you might have thought!