On the Death of Milton Friedman

Milton Friedman died today. I never met him personally. The closest I got was overhearing his private conversation at the Western Economic Meetings in 1986. He was gloating that the end of communism would create a massive labor surplus that was sure to bring down wages in the West. He was particularly excited about the effect of China.

Central to Friedman’s thinking was that concepts like fairness — at least a traditional idea of fairness — had no place in economics. What the market produced was by definition fair. Corporations aiming toward profit maximization alone were sure to bring about the best possible outcome.

I just happen to be reading last Friday’s Wall Street Journal science column by Sharon Begley dealing with a sense of fairness in other primates. The article got me to thinking about the arrogance of economics, seeing its ideological mission to create a Friedman-like view of the world. Is economics engaged in some sort of reverse Darwinianism, hell-bent on making the human race into the lowest form of primate?

Anyway, here’s a short extract from the article.

Begley, Sharon. 2006. “Animals Seem to Have an Inherent Sense of Fairness and Justice.” Wall Street Journal (10 November): p. B 1.

“Even when little or no effort is required, chimps and capuchins balk at unfair situations, says anthropologist Sarah Brosnan of Emory University. In a series of experiments, the animals learned to trade a “token” (a rock or plastic pipe) with a trainer for food. If they saw a cagemate trade for a delectable grape, but were offered a cucumber in exchange for their own token, they were much more likely to refuse to hand it over for the stupid vegetable. Better to go hungry than to give in to this unfairness.”

“A sense of fairness underlies irrational choices by humans, too. Economists assume that economic decisions are rational, but in many cases people prefer to gain less in order to punish someone who is behaving unfairly. If a partner proposes a $7/$3 split of $10 offered in an experiment, many people reject it outright, gaining nothing rather than accepting the inequity. “People are willing to give up their own potential gain to block someone else from unfairly getting more than themselves,” says Ms. Brosnan, who points to resistance to globalization and free trade as current examples.”

« Advice Rumsfeld Never Heeded

Scooter Libby, A Thanksgiving Turkey »