Hayek, Move Over—Milton Friedman’s Rejection of Economism

A while ago, in the early days of this blog, I did a 4-part post on why the advocates of economism today who worship Friedrich Hayek and his The Road to Serfdom appear not actually to have read the book:
http://theeconomismscam.blogspot.com/2012/09/republican-worship-of-hayeks-road-to.html

I did read The Road to Serfdom, but admit to never having read Milton Friedman, who according to historians is right up there with Hayek as one of the original architects of neoliberalism, aka economism. Now, however, Notre Dame philosophy professor Gary Gutting has come to my aid to show that many of the things I said about Hayek apply equally to Friedman—namely, that if you go back and read his original stuff, he was rather far removed from the position that characterizes economism today:

http://opinionator.blogs.nytimes.com/2013/09/26/why-conservatives-should-reread-milton-friedman/?emc=eta1&_r=0

Here are some highlights. Prof. Gutting starts with the standard Friedman quote—that business has only one social responsibility, to maximize profits. But Friedman immediately adds qualifications—that business can maximize profit only so far as it follows the rules set down by society, which prohibit fraud and deception for example:

“This qualification acknowledges a key restriction on the maximization of profit. More important, it commits Friedman to the principle that there can be restraints on the capitalist system that are not self-imposed but rather imposed by the society that employs this system for its own purposes. This principle is also implicit in Friedman’s claim that if a business used any of its profits for social goods, it would be usurping the role of the political system.

“It follows that, on Friedman’s own account, capitalism is not an economic system that operates independently of the political system in which it is embedded. It is a creature of that system, which has goals (of morality and social responsibility, for example) that go beyond the profitable exchange of goods.”

Gutting goes on to list other things that Friedman says that would probably shock today’s conservatives who bow at his altar (including support for a negative income tax), concluding:

“Our current political impasse over economic issues has arisen because so many conservatives have moved well beyond Friedman’s position. They object to almost all regulation of business, reject the need for any governmental solutions to social problems, and often seem to insist on judging corporate success in terms of short-term profits. But whereas Friedman offers a plausible theoretical case for capitalism, there doesn’t seem to be any intellectually respectable support for current conservatives’ much more radical understanding of the system.”

In other words, as we have long insisted here, economism as a quasi-religious ideology has no coherent defense or justification.