Over 100 Chicago professors proudly sign a letter declaring their ignorance of economics:
Many colleagues are distressed by the notoriety of the Chicago School of Economics, especially throughout much of the global south, where they have often to defend the University’s reputation in the face of its negative image. The effects of the neoliberal global order that has been put in place in recent decades, strongly buttressed by the Chicago School of Economics, have by no means been unequivocally positive. Many would argue that they have been negative for much of the world's population, leading to the weakening of a number of struggling local economies in the service of globalized capital, and many would question the substitution of monetization for democratization under the banner of “market democracy.”When the University of Chicago invests so heavily in culturally and politically conservative thought we wonder about its commitment to strong intellectual diversity in the tradition of the Kalven Report. Consider, for instance, the following passage in the Proposal to Establish the Milton Friedman Institute, which construes a certain orthodoxy as the starting point for any discussion: "Following Friedman’s lead, the design and evaluation of economic policy requires analyses that respect the incentives of individuals and the essential role of markets in allocating goods and services. As Friedman and others continually demonstrated, design of public policy without regard to market alternatives has adverse social consequences." Given the fact that our University is known for its commitment to interdisciplinarity, methodological diversity, and to discussion across political lines, some colleagues seek to secure these principles in both the structure and governance of the Institute and feel this commitment is belied by the Institute's founding documents. Some colleagues are disturbed by the specter of the University of Chicago becoming another Stanford, with the Milton Friedman Institute taking on the imposing campus presence of the Hoover Institution. Many of us are also perturbed that other units of the University that routinely engage the issues that the Friedman Institute is designed to address were not included in the planning, nor included in the ongoing core scholarly endeavors of the Institute.
This from a University that has cultivated a reputation as one of the most intellectually rigorous campuses in the country. I'm tempted to weep.
Where to start with this festival of willful misunderstanding? I was surprised to hear that Milton Friedman is reviled in "The South", since I follow the Argentinian, Venezuelan, and South African economic press closely-ish, and I've never once heard the man's name mentioned. The only country that seems aware of his existence, or that of the "Chicago Boys" is Chile, and they kind of like him.
Second, their assessment of the effects of the "neoliberal global order" is forehead slapping, head shaking, did-they-really-say that? stupid. I haven't heard such transparently wishful claptrap since my fifteen-year-old boyfriend tried to convince me that sex provided unparalleled aerobic exercise. If you put all 100 in a room with unlimited access to Lexis-Nexis and a mountain-sized peyote stash to bring their quasi-communist fantasy life into 3D technicolor, they still couldn't name a country where neoliberalism has undermined a vibrant democracy. Nor where Demon Capital has made things worse. The worst you can say for the neoliberal order is that it doesn't make things better the way we hoped it would. Any place you can name that has been deeply screwed up since global capital arrived was at least as corrupt and otherwise awful before the capital swooped in to plant garment factories in the edenic swamps of rural poverty.
The last paragraph makes these eminent professors seem, to put it charitably, not quite bright. Otherwise, how does one find a statement like this inflammatory?
Following Friedman’s lead, the design and evaluation of economic policy requires analyses that respect the incentives of individuals and the essential role of markets in allocating goods and services. As Friedman and others continually demonstrated, design of public policy without regard to market alternatives has adverse social consequences.
Do they think that we should do analyses that doesn't pay attention to individual incentives or the role of markets in allocating goods and services? Are they under the impression that there is still a debate on this? I thought the fall of the Soviet Union had rather spectacularly demonstrated that it's hard to allocate goods and services without markets. Indeed, one wonders where all these professors get their groceries.
Or perhaps they merely think that we should design our policies without regard to market alternatives. Not even the commissars managed that; you can't even reject markets without regarding them.
It's foolish to get enraged at these powerless twits. But someone has to writhe in shame at this folly, and clearly, their intellects aren't up to the task.
Whereas McArdle proudly blogs the proof of her ignorance of economics nearly every day.
I don't feel like taking the time to look, but are any of them professors in real fields, hard sciences and the like? Or just multi-colored variations of gender theory and other claptrap?
Megan,
You really have to realize that those who carry on about sweat shop factories in third world countries start from two (subconscious, I suspect) prejudices:
1) the conditions shouldn't be compared to conditions in 19th century Europe or America -- because, after all, that's ancient history and so irrelevant.
2) they shouldn't be compared to the real alternative, which is usually subsistance agriculture -- because those kinds of conditions are simply unimaginable, and so cannot exist in the real world.
As a result, the failure of places which are moving, or even trying to move, into the modern world to have having already arrived must be denounced. And, since Capital is what has allowed them to take the first step, it obviously must be at fault for that failure to already have modernized. Q.E.D
P.S. It can be amusing to ask the outraged what they know of subsistance agriculture. Or, for that matter, even of the amount of physical labor involved in agriculture in the developed world. I have yet to find even one who had any clue. And most won't believe even first-hand reports from someone who grew up on a (U.S.) farm. It just couldn't really be that bad! Ignorance is bliss.
Interesting that only four of the signees are from a hard science, and of those two are emeritus math profs.So only two came from a department where their discipline where rigor and accuracy are demonstrated in practice and in markets.
But what do you expect from a group that is immune to market forces once they get tenure?
"my fifteen-year-old boyfriend"
That's disgusting.
As a condition of obtaining tenure, professors should have to live for 24 months as subsistance farmers. If they didn't get themselves killed, they might be better prepared to avoid writing or signing on to rather stupid assertions.
There is no idiot quite like the ostensibly well educated idiot.
I think you managed to outdo yourself with this one Megan...hard to know where to start:
"If you put all 100 in a room with unlimited access to Lexis-Nexis and a mountain-sized peyote stash to bring their quasi-communist fantasy life into 3D technicolor, they still couldn't name a country where neoliberalism has undermined a vibrant democracy."
Actually, they just have to read your post to remember that those "Chicago boys" in Chile were able to implement their neoliberal policies due to the actions of a mass murdering dictator.
But this could be an aberration since the neoliberal economic order imposed on countries since the 1980s has been broadly accompanied by an expanding democracy. So, say in Latin America you are seeing the rise of center-left leaders who...are winning elections by opposing these very policies. If they are working so well, why are they now being rejected?
Furthermore, I fail to see what is wrong for expressing concern for an erosion of intellectual diversity. Are you saying that Milton Freidman got everything right? Maybe they are concerned that they'll start hiring morons like D'nesh D'Souza. His presence at Stanford doesn't exactly enhance the prestige of that institution.
Some colleagues are disturbed by the specter of the University of Chicago becoming another Stanford
As who wouldn't be?
This letter reminds me of a graduate course I just took in Modern American Literature. Essentially the main thrust of the course was about the evils of neo-liberalism and the free market. David [i]Harvey's A Brief History of Neoliberalism[/i] was a foundational book in the class.
Imagine a semester of rants such as the above letter. Oy vey.
Also, why are you dating 15-year-old boys? :P
Are these academy eggheads preparing the groundwork to erect the "Kim Il-Sung Juche Institute" or something?
"my fifteen-year-old boyfriend" That's disgusting.
I think she omitted a critcial qualifier such "...back in those halcyon high-school days when my 15-year-old boyfriend...". Past tense, in other words.
There is no idiot quite like the ostensibly well educated idiot.
So you include Uncle Milty?
Musa:
Condi Rice was at Stanford so D'Souza isn't helping or hurting.
Are these academy eggheads preparing the groundwork to erect the "Kim Il-Sung Juche Institute" or something?
Didn't Friedman advice Augusto Pinochet? A real lover of democracy Pinochet was!!
Older women are so sexy!
They "kind of like" Friedman in Chile? Does that include those people tortured by Pinochet, that erstwhile Friedman follower? Did I miss something?
"But what do you expect from a group that is immune to market forces once they get tenure?"
Please ignore the fact that the process that grants these professors tenure is the market.
"As a condition of obtaining tenure, professors should have to live for 24 months as subsistance farmers."
Moreover, for about 6-8 years they should be forced to live on 15,000 dollars a year. Oh wait.. they already did that.
I don't really want to respond to your response by actually defending this letter. Rather, I simply want to reframe what I think is there point, and is, at anyrate, my point. The question I have is this. Do we have strong reason to believe free market economics and globalization actually work? I have misgivings about some of the theoretical assumptions (we make rational, informed decisions? really?). My misgivings, though, are totally moot, the questions is, does it work. Not just as an economic policy, but as public policy? I sometimes feel as though economists lose sight of the possibility that what is good for the economy from a pure GDP growth perspective (particularly in the short term), might not be good for society.
I am no expert, so all I can really do is as the question. However, it IS important to ask the question, and if there is doubt in the answer, should we really be further canonizing a theory that is already defended with what seems to me to be dogmatic fervor?
Milton Friedman was an ideological crackpot who will be thought of as highly in 50 years as L. Ron Hubbard is today.
rick, people who do subsistance farming would cry tears of joy, every single day, if they could live in the U.S. on 15,000 dollars a year, expending the energy that a college professor does.
I'm not quite sure why you are so offended by this letter--just take a step back and try to view it from a different perspective. Each economics department emphasizes different aspects of economic theory and thought, and the Chicago school is at one extreme of this thought. This isn't necessarily bad, but you shouldn't think that these professors are necessarily anti-economics in general, even though I'm sure some of them are.
Rather, I think this is much more about how Chicago's new center will impact their own ability to do research in non-economic fields. I don't know for sure, but my guess is that opinions the rural poor in Mexico hold towards capitalism vary widely from those held in Buenos Aires. (Of course, Mexico's problems stem from non-free market clauses included in NAFTA concerning ag subsidies).
Furthermore, when you do fieldwork either abroad or in the US with immigrants, you must state (due to IRB regulations) your home institution. This can be problematic for both cooperation and validity if your research subjects make a connection or assumption about you and the beliefs of your institution, which in the case of Chicago is linked to a particular strain of economics. While I found the following book utterly useless for my work in public policy, De Genova describes in the introduction (I think) to his book, working the boundaries, the troubles he had in his research once he had to admit he was from the University of Chicago. This is not an idle problem; I'm sure that many professors can tell you problems they have had defending themselves against institutional assumptions.
In other words, this letter could be a) jealousy about money, which wouldn't surprise me b) a fear for how this might impact research for non-economists based at Chicago, c) stupidity or hatred of economics, or d) some combination thereof. But it doesn't have to include (c).
And as for groceries, we get the bulk of them from farmers markets, local co-ops, and CSAs, thank you very much. See, market alternatives that have bee helped by local public policies!
Musa - "Furthermore, I fail to see what is wrong for expressing concern for an erosion of intellectual diversity. "
Oh my god, I assume this is satire? Since when do academics care about intellectual diversity? Racial, sexual, gender, sure - but intellectual? I guess having a diverse facuty means 1/3 Maoists, 1/3 Trotskyites and 1/3 Stalinists?
And for thoe who rant about Pinochet - Waaaah! How about all the communist thugs embraced by the lefties that killed millions? Syghman Rhee, Chang Kai Shek and Pinochet might have been bastards, but Chile, South Korea and Taiwan are all democratic, free and prosperous - unlike Cuba, Cambodia, Venezuala, Argentina and all the other lefty (or formerly lefty) peoples' paradises fetishized by the left. So please, go ahead and criticize Pinochet while waering your Che Guvera T-Shirt.
Mary, I'm unclear what you mean by "market alternatives". If what you mean is "choices that have been provided to you by the free market", then you are correct. If you mean "alternatives to the market", then you are mistaken about what constitutes a market. Co-op's, farmers markets, and CSAs are all free market institutions--the local public policies to encourage them that I am aware of usually take the form of relaxing the government regulations that would otherwise forbid them to operate. Uncle Miltie would be thrilled to see you shopping at farmer's markets and co-ops; their availability is a form of expanded consumer choice.
These are people who probably failed math and science. I know so many anthro professors who, rather than designing studies that rigorously conform to the scientific method, spend much of their articles "debunking" the entire approach to learning. When people outright dismiss reason, accountability of results, and objective measurement of intended and unintended consequences, they only prove that they are unqualified to teach dogs how to fetch.
Mary, when people write things that are plainly, obviously, untrue, one can be charitable, and assert that the writers are woefully, inexcusably, ignorant, for people supposedly well educated. The alternative is to assert that the writers exceptionally dishonest. Since the latter assertion carries with it a far more harsh judgement of the writers' moral character, absent extremely strong evidence of intent to deceive, on should always prefer the first assertion.
I feel sort of compelled to say something in defense of these professors, having been at Chicago and studied under some of them. I think the letter is pretty overwrought, but I think the point they're making when quoting the shorter paragraph you reproduced is that a university shouldn't found an institution on the basis that a certain school of reasoning is definitely correct, because that limits the amount of intellectual discourse that can take place.
Anyway, when I was there it seemed that most of the other departments ignored the economics department and vice versa, so I don't see any reason why that should or would change. This seems like a fuss over very little to me.
bemused chicago graduate? Yes, you missed something.
I've found that there are certain words that allow one to conclude with nearly 100% accuracy that the person using them has long since lost touch with reality. "Neoliberal" is near the top of the list.
Yes and all those people who use words like "discourse" and "theory" are fooling themselves into thinking their intellectuals. And Footnotes and sources.
Are these academy eggheads preparing the groundwork to erect the "Kim Il-Sung Juche Institute" or something?
Well, actually, I see that Bruce Cumings is one of the signatories, so I expect the answer is "yes"
Does that include those people tortured by Pinochet, that erstwhile Friedman follower?
When did Friedman toture people?
Does that include those people tortured by Pinochet, that erstwhile Friedman follower? Did I miss something?
When did Friedman toture people? Did I miss something?
Yes and all those people who use words like "discourse" and "theory" are fooling themselves into thinking their intellectuals. And Footnotes and sources.
But can they avoid common homonym errors when yammering about intellectualism? Inquiring minds want to know...
So... it seems like basically socialist professors travel to South America to attend conferences with their socialist professor colleagues there, and get complaints about how their school's econ department is undermining socialist ideology in their colleagues' countries, which makes them uncomfortable. Therefore, presumably, the econ department should abandon its intellectual rigor and giant reputation, so that other professors can go to conferences in South America and not be pestered.
Internet post of the month.
So, does this mean there aren't allowed to be sociologists or anthropologists anymore? Or many schools of historians? Because those entire disciplines would agree that you can't look at things like an economist does. That's why they aren't economists. I'm OK with that. Why aren't you?
As others have pointed out, most of these signees are in the anthro, civ, and social science programs. But another trend I see is that most of them are relatively young: I see a lot of post-docs and associates and very few tenured heavy-weights (with the exception of the anthro, they have all the big guns on the list, which leads me to believe that this is where the letter originated from.)
Noah, your post has very little to do with Megan's post. If one wants to be a historian or anthropologist, and look at the world through those prisms, that's fine, and Megan never argued otherwise. However, that doesn't mean that one has license to write things like....
"The effects of the neoliberal global order that has been put in place in recent decades, strongly buttressed by the Chicago School of Economics, have by no means been unequivocally positive. Many would argue that they have been negative for much of the world's population, leading to the weakening of a number of struggling local economies in the service of globalized capital, and many would question the substitution of monetization for democratization under the banner of “market democracy.” "
...without being severely criticized, because, whatever one's academic discipline, that statement is supremely silly.
Many would also argue that aliens once crashed a spacecraft at Roswell, New Mexico, but that doesn't mean that anthropologists and historians should make notice of that belief, other than as part of a study in folk tales divorced from evidence.
Well, is anyone who went to the U of C REALLY shocked that Sahlins or the Comaroffs (or huge chunks of the Div School and Anthropology department) are on the list?
I'm more impressed that some of my professors who I totally expected to be on there, aren't.
But really, I think the list really DOES amount to 'the usual suspects...minus a few'
Now, if Leon Kass had signed, THAT would be newsworthy. =)
(Btw-- in terms of intellectual rigor--- one of my favorite professors was on the list. And his classes were very good, he didn't quash dissent, and he was rigorous in his field. And some of my friends (also conservative to libertarian in politics) loved their classes with some of the others on the list.
So I'd guess that this letter signing is more about personal political grandstanding in an election year than about classroom behavior.
(of course, I'm basing this assumption on decade-old impressions, so any current students may feel free to correct me!)
I thought the fall of the Soviet Union had rather spectacularly demonstrated that it's hard to allocate goods and services without markets.
Hell, didn't Mises do it rather spectacularly using mere reason around 1950 or so?
(For anyone that cares, in Human Action or its predecessor paper, in the sections on monetary calculation and its impossibility under a socialist system.)
"Following Friedman’s lead, the design and evaluation of economic policy requires analyses that respect the incentives of individuals and the essential role of markets in allocating goods and services. As Friedman and others continually demonstrated, design of public policy without regard to market alternatives has adverse social consequences."
So these professors would prefer that the institute be allowed to design public policy without regard to market alternatives or without the respecting the incentive of individuals?
It seems that all the institute requires is that you take it into considration.
And the Friedman Pinochet thing is really a joke. See this Reason article about what actually took place.
http://www.reason.com/news/show/117278.html
"For years, the University of Chicago had a program in partnership with the Catholic University of Chile providing scholarships to Chileans to study at Chicago. Pinochet’s economic advisers were thus University of Chicago-trained, and known as the “Chicago Boys.” But Friedman’s only direct connection was when he was invited by fellow Chicago professor Arnold Harberger--who was most closely involved with the Chilean program--to give a week of lectures and public talks in Chile in 1975.
While there, Friedman did have one meeting with Pinochet, for less than an hour. Pinochet asked Friedman to write him a letter about his judgments on what Chilean economic policy should be, which Friedman did . He advocated quick and severe cuts in government spending and inflation, as well as instituting more open international trade policies—and to “provide for the relief of any cases of real hardship and severe distress among the poorest classes.” He did not choose this as an opportunity to upbraid Pinochet for any of his repressive policies, and many of Friedman’s admirers, including me, would have felt better if he had.
But that was the extent of his involvement with the Chilean regime—and it fit with a recurring pattern in Friedman’s career of advising with an even hand all who would listen to him. It was not a sign of approval of military authoritarianism. Friedman, in defending himself against accusations of complicity with or approval of Pinochet, noted in a 1975 letter to the University of Chicago school newspaper that he “has never heard complaints” about giving aid and comfort to the communist governments to which he had spoken, and that “I approve of none of these authoritarian regimes—neither the Communist regimes of Russia and Yugoslavia nor the military juntas of Chile and Brazil. But I believe I can learn from observing them and that, insofar as my personal analysis of their economic situation enables them to improve their economic performance, that is likely to promote not retard a movement toward greater liberalism and freedom.” "
Nick E, Chicago already has several such schools or institutes devoted to a particular scholarly or ideological perspective. The Committee on Social Thought is probably one of the better known. The only difference between that and this Milton Friedman Institute proposal is "Committee on Social Thought" sounds more ambiguous than the "Leo Strauss Institute".
OK, maybe this should go in a request thread but when I think of countries that have really succesful development models I think of South Korea, Taiwan, and the Asian Tigers. I don't think of Latin America at all. Yet, the Asian countries seem to pretty categorically reject the Chicago school development philosophy that Megan prizes. Can someone explain to me why Korea and Taiwan shouldn't be used as models for development even if that means protectionism?
Sigivald,
Human Action is the Being and Nothingness of Austrian economics - considered a classic in the field, but ridiculous with regard to ease of comprehension. If these people aren't going to bother to read Friedman, then they certainly aren't going to read Mises. Then again, they probably haven't read Marx either.
(Disclaimer - I failed twice to get all the way through Human Action and Being and Nothingness)
When did Friedman toture people?
Better yet, what does Friedman have to do with Pinochet? He visited the country once and met with Pinochet once, for about an hour, and discussed inflation-fighting. He was not an officer of DINA.
At the time of the Russian Revolution, there was a preindustrial economy in the new Soviet Union, with under 100 commodities to manage prices for. The commissars had a relatively easy time of it. In a modern economy there are literally millions of commodity items readily available. Imaging the armies of regulators necessary to meet every day to fix the current price of quarter-twenty stainless steel bolts and left-handed metric pipe taps just boggles the mind. It also boggled the Soviet's minds, which is why the place fell apart. I guess these guys all spend time fantasizing about their roles in the new world order of benign control of we happy masses.
Dave and eccdog.
But Friedman did tell Pinochet to "ignore his image abroad" (meaning, ignore the fact that everyone hates how you torture and imprison people for political reasons) and focus on the economy at home.
I blame Naomi Klein.
Friedman did tell Pinochet to "ignore his image abroad"
Well, if that's not proximate cause, then what is?
Will Allen, you write that anyone, from any discipline, who would write "many would question the substitution of monetization for democratization under the banner of “market democracy" is equivalent to a UFO-believer. But that is a normative claim, and not an invalid one. There is a tension between control by the people and a pure market economy (you can't vote to fix prices, for example).
But more what I was referring to is the line "Following Friedman’s lead, the design and evaluation of economic policy requires analyses that respect the incentives of individuals and the essential role of markets in allocating goods and services" and Megan's utter rejection of any analysis that does not look at individual incentives. Sociology and anthropology are generally concerned with collective phenomena, not individual ones. I'm sure you've read about gift economies or whatever your favorite non-market system of allocating goods and services is (they're not all command economies!). You might not recommend a gift economy - I sure wouldn't - but you wouldn't even be able to understand it if everyone only analyzed the incentives of individuals.
So, does this mean there aren't allowed to be sociologists or anthropologists anymore? Or many schools of historians? Because those entire disciplines would agree that you can't look at things like an economist does. That's why they aren't economists. I'm OK with that. Why aren't you?
Straw man. Reread the post. Specifically, the signers dispute that "design and evaluation of economic policy requires analyses that respect the incentives of individuals and the essential role of markets in allocating goods and services... design of public policy without regard to market alternatives has adverse social consequences."
The signers dispute the fact that when constructing and evaluating economic policy, individual incentives and market behavior should be taken into account. They're not just saying people shouldn't have to think like economists, they're saying that when acting as economists, people shouldn't have to think like economists.
Besides which, I hope it's not true that whole disciplines argue that you "can't" look at things like an economist does. Instead, they'd say that there are other important ways to look at things as well. Economists wouldn't argue that you "can't" look at things like a sociologist or historian does... but maybe economists are just more open-minded.
"Megan's utter rejection of any analysis that does not look at individual incentives."
So, she's wrong to reject analyses that are incomplete? Economists shouldn't (and typically don't) assume away individual incentives because the evidence shows that they matter.
You know, I love reading this blog, and occasionally enjoy commenting when there is an interesting topic up for debate.
I'm aghast that this is even up for debate. The great prosperity engine of America/the G-8/the OECD along with all of its innovation, opportunity for escape from poverty and commitment to liberty and human rights is morally equivalent and arguably worse than the backward regimes of the southern latitudes like, say, Venezuela, Bolivia, and Zimbabwe? Really?! Wow! You really want to make that argument?! Huh!
I really think this would be a great time for Seth Meyers and Amy Poehler to have one of their "Really?!" sessions from SNL's Weekend Update. True, their politics are more sympathetic to these professors than I'd care for, but even they have shown that they can make fun of wingbattery that is this egregious.
No, Noah, I wrote that anyone who would write...
"The effects of the neoliberal global order that has been put in place in recent decades, strongly buttressed by the Chicago School of Economics, have by no means been unequivocally positive. Many would argue that they have been negative for much of the world's population, leading to the weakening of a number of struggling local economies in the service of globalized capital, and many would question the substitution of monetization for democratization under the banner of “market democracy.” "
....is the equivalent of a UFO believer, unless they are just advocationg that such a argument be studied in the context of it's obvious irrationality, like UFO believers.
You might not recommend a gift economy - I sure wouldn't - but you wouldn't even be able to understand it if everyone only analyzed the incentives of individuals.
Also a straw man. The quote (which you include in the very comment in which you set up this straw man...) nowhere says that only the incentives of individuals should be analyzed.
I wish Naomi Klein and her ilk would move to North Korea, where they could talk to their hearts content about the advantages of centrally planned governments. When all electricity goes off at 8pm, they can move on to how it all must be America's fault.
They can vacation in Cuba, where it is virtually impossible to move to a different house or neighborhood, own a car, open a business, or stay at a hotel, even if you have money, as most of those privleges are reserved for Castro's cronies. Klein and friends can complain about America's inherent inequality, and conveniently ignore that Cuba's cronyism makes it even more unequal, and that the bottom 5% of US in terms of income has more purchasing power than the average Cuban, who earns $10 a month.
They can extol Cuba's health care system, but I then dare Klein to try to get even Tylenol from a pharmacy. It likely won't be there. There are few pharmaceuticals available in Cuba, unless you are part of the elite or you obtained it in the black market. Michael Moore insists that this is because they focus on "preventative medicine.
I am pro-choice, but Cuba's systematic abortion of any fetus that may pose a burden to the state is an interesting interpretation of "preventative." I suppose if you prevent people from doing virtually anything, it's understandable that (if you believe the statistics) their life expentancy isn't that much lower than that of the US.
Enjoy life in paradise, Naomi. Good riddance.
"Indeed, one wonders where all these professors get their groceries."
I think this actually goes to the heart of the matter. When someone in Hyde Park would talk about the evils of corporate profits, you used to be able to take a short walk to the long lines and empty shelves of the Co-Op Market and just end the argument right there. Now it's a Trader Joe's or something, and everyone's already forgotten what life was like before.
WRT Pinochet, what would have been more reasonable for Friedman to do? Tell Pinochet to eff off until he stopped being mean to the commies?
He had to opportunity to influence a dictator to increase the economic freedom in the country, and that fact that Pinochet actually did that, and Chile is doing fantastically as a result, should be rejoiced.
I think the reason this really bothers lefties is that it is further proof that economic freedom begets political freedom.
The "march through the institutions" is about 80% complete in academia.
Reading the signees reminded me of one thing: anthropologists have had tremendous success in creating new departments that do practically the same thing as anthropology with people being none the wiser.
Comparative Human Development.
{Insert region} languages and civilizations
Mexican studies
Ottoman and Turkish studies
And shouldn't anthropologists understand economies?
I signed the document, not because I believe in it. Who would? It's total neofascist bullshit.
But, you have to understand something. If you put food on your family's table as a result of working in a US college or University, you have to pretend you believe in insane nonsense like this drivel.
It's like unions. If you work in a factory, you have to be in the union whether you agree with unionism or not. Otherwise, you have no friends.
Get it?
Someone hands you the latest fascist "statement of principles" and you just sign it, nodding thoughtfully. Everyone knows its just part of the game.
Why do you people take it, like, seriouslyl?
Money talks, BS walks.
People from all continents and ideological stripes are crossing oceans, deserts and going through all kinds of hardships to come here, the bastion of capitalism.
Whenever I see people from all continents and ideological stripes crossing oceans, deserts, and going through all kinds of hardships to go somewhere else, then I will study their socioeconomic setup real closely and even consider moving there.
Until then, I will refrain from BS, unless it is to say thank you God for letting me live here.
I agree with most of this, but I have to take severe exception here:
"I haven't heard such transparently wishful claptrap since my fifteen-year-old boyfriend tried to convince me that sex provided unparalleled aerobic exercise."
Hey, that line still works! Plus, it's true, esp. if she's on top.
If you do it right it is aerobic.
Citizen (world), wherever did you get the idea that Taiwan, Korea and the Asian Tigers reject Chicago economics? Korea may be an exception, but Taiwan, Hong Kong and Singapore all follow that model. Taiwan and Singapore in particular shipped a lot of students off to Chicago during the 1970s and 80s for exactly that purpose. While Taiwan had an industrial policy program, it was focused primarily on heavy industry -- which, of course, contributed very little to Taiwan's development. The other areas (export-led growth, laisses-faire approach to regulation, and low taxes) are very much what Doctor Milty would have ordered.
EM,
Maybe he meant North Korea.
Hey, I hear it's a socialist paradise. Just ask any North Korean who has no access to outside news.
isigned, did you really? I was wondering just that b/c I work in academia too.
When all that it takes to keep you from tenure is one person on your committee with an axe to grind, it's easy to bully the new people.
If your primary goal in life is not your politics and you're in academia, is it worth it to jeopardize it over what are essentially outside pursuits? I would not have signed it but I'm in the sciences and I'm guessing you're not.
In looking at the letter -90% of these damn fools work in 4 areas Classical history, political science, anthropology and one clueless idiot from the Dept of Computer and statistics. (I would love to take his classes) The sad state of academia is illustrated by who signed this. History Professors who have no real clue of history or political science. I was reading somewhere that all of the 1970's tenured baby boom protestor professors are now starting leave. Hopefully it includes this ill famed crew. The university of chicago is only known for one thing and that is the wonderful move away from use of horrible Kenysian economics by Govt. (Sorry, I fogot Obama the Messiah is for it). I never heard of or met a famous history professor from the University of Chicago. The list reflects that fact.
Megan:
When it comes to the Left's opinion about nearly anything, the facts stopped mattering a long time ago. All they can rely on at this point is bluster and ideology. They are not interested in the real world consequences of their ideas... only that they appear magnanimous and morally superior while spouting them.
An old University of Chicago joke.
Question: What does the "N" on the Northwestern University football helmet stand for?
Answer: Knowledge.
These University of Chicago faculty members now share that "N" description. They are among the last not to know that Marxism is as dead as Marx himself. They were "Free to Choose" and they chose ignorance.
"History Professors who have no real clue of history or political science."
The stupidity never ceases here, does it? Thanks Jim M. Or should I call you "the arbiter of all knowledge"??
ChrisD, sometimes discretion is the better part of valor. As a junior faculty member (in the sciences), I once had a senior colleague (and the one closest to my research field) portentously intone that the greatest President in American history was...wait for it...Jimmy Carter!
I almost spat coffee all over the table, and had a quick decision to make: was he kidding, or serious? Could I laugh, or should I maintain?
Turns out, he was serious (human rights and all that), so I just nodded gravely. No point irritating a man who holds your career in his hands.
Jeez, I suppose the upside is that all these "neoliberals" could give the "neoconservatives" a good name.
Maybe the problem is with anyone to whom the academic inelligencia affix the prefix neo?
Do they think it means "evil"? Or, as Dr. Evil might say, "a neopetting zoo"?
Now Hear This:
Canada officially apopogizes for Naomi Klein.
We also apologize for her stupid, self-hating, Al-Jazeera husband.
That is all.
RE:Posted by musa | July 15, 2008 11:30 AM
The Chilean economy is only third in North and South America behind the US and Canada. That's despite not being an oil exporter like Venezuela, Argintina and Mexico. And they can thank Pinochet for that.
The coup against the thugish Allende and his Cuban financed 3,000 man private army was supported by the Chilean congress(which allende was usurping) and the Chilean Supreme Court and the majority of the Chilean people. The people who were opposed to Pinochet and ended up dead were communists who were doing and would've contiued to do what Pinochet did to them and that's elimnate them to maintain themselves in power. So boohoo to them.
One of the most prominent opponents of Pinochet(don't remember his name) was best friends with Eric Honecker and received a human rights award from him. Eric Honecker, if you don't know who he was, was "president for life" (that's what you lefties call your dictators, right?) of East Germany.
Here's a link to a painting of Honecker and Brezhnev making out.
http://www.flickr.com/photos/dubnars/1220226244/
RE:Posted by musa | July 15, 2008 11:30 AM
The Chilean economy is only third in North and South America behind the US and Canada. That's despite not being an oil exporter like Venezuela, Argintina and Mexico. And they can thank Pinochet for that.
The coup against the thugish Allende and his Cuban financed 3,000 man private army was supported by the Chilean congress(which allende was usurping) and the Chilean Supreme Court and the majority of the Chilean people. The people who were opposed to Pinochet and ended up dead were communists who were doing and would've contiued to do what Pinochet did to them and that's elimnate them to maintain themselves in power. So boohoo to them.
One of the most prominent opponents of Pinochet(don't remember his name) was best friends with Eric Honecker and received a human rights award from him. Eric Honecker, if you don't know who he was, was "president for life" (that's what you lefties call your dictators, right?) of East Germany.
Here's a link to a painting of Honecker and Brezhnev making out.
http://www.flickr.com/photos/dubnars/1220226244/
Megan makes herself look childish when she attack's people who believe Friedman was an imperfect economist. Believing some of his ideas are wrong or flawed does not make someone a communist. That's a specious argument.
And we should remember that keynesism was once the indisputable truth and then fell out of vogue because of stagflation. Friedmanism is not above the same treatment.
And yes neo-liberalism has been spread through violence in some parts of the world. That's not communist propaganda.
Megan's post makes her sound like an ideologue.
Why do you people take it, like, seriouslyl?
They used to say that about Mein Kampf.
They do mean it.
There is a tension between control by the people and a pure market economy (you can't vote to fix prices, for example).
Yes. This tension is between the "mob rule" form of tyranny (strictly known as "democracy"), and that system based on the principle of individual rights which Adam Smith once called "the system of natural liberty", the Marxists derided as "capitalism", and which I simply call "freedom".
Being the system of individual rights, the defining attributes of this system is simply that everything that happens, from a single trade between free individuals, to large-scale projects involving long-range forecasts, all happen on the same terms: freedom of association in trade. That is the defining attribute of markets; strictly speaking, the "free" in free markets is a redundancy.
Unless you buy into the widespread notion that an individual rights are nullified in the case of any action deemed "economic" (which is the meaning of the spurious distinction between "economic" and "political" freedom), political freedom defines the "free" in "free market" -- which means that so long as all individual members of a society are free to set terms of association with others, it's a capitalist society, by definition.
"Alternatives to markets" are really "alternatives to freedom".
Btw, rickm, check back on the "Obamania" thread. You'll find your revisionist history of Ayers and his regrets laid to rest once and for all.
rickm,
That's a cute response to this post. Wait for some thoughtless blowhard who (unfortunately for her) sides with Megan, and then base your comment about "here" on him.
What the horrible neoliberal globalization made: millions and millions outside poverty
(Fortune Magazine) -- What may be the world's busiest grocery store is a Carrefour "hypermarket" in the Gubei area of Shanghai's Changning District.
Seven days a week, from 8:30 A.M. to 11 P.M., customers jam the aisles of this 126,000-square-foot market and fill their baskets with a dizzying array of produce, meats, and electronics from around the world. Last year six million people - more than twice the population of Chicago - shopped here and dropped $155 million along the way.
There are no signs of a global slowdown in these aisles. Carrefour's sales in China were up 25% in the first quarter of this year. Sales in places like Brazil and Romania jumped more than 50%. Poland is hot. So are Argentina, Turkey, and Colombia.
But the picture isn't the same in Carrefour's home country: France grew an anemic 2.6% last year. "If you're a consumer sitting in Paris and you're reading newspapers or watching TV, it looks like the world is coming to an end," says Carrefour executive David Shriver. "But consumers in places like China and Brazil simply don't see it that way."
Welcome to the new, precariously bipolar world.
While gross domestic product growth is cooling a bit in emerging markets, the results are still tremendous compared with the U.S. and much of Western Europe. The 54 developing markets surveyed by Global Insight will post a 6.7% jump in real GDP this year, down from 7.5% last year. The 31 developed countries will grow an estimated 1.6%.
(...)
http://money.cnn.com/2008/07/11/magazines/fortune/gimbel_global.fortune/index.htm?postversion=2008071412
Megan makes herself look childish when she attack's people who believe Friedman was an imperfect economist. Believing some of his ideas are wrong or flawed does not make someone a communist. That's a specious argument.
Ok, I'm violating rule #1, and letting the trolls get to me, but this is really pissing me off.
Dude, that's such an obvious straw man. She doesn't attack people who believe Friedman was an imperfect economist. That's everyone, including Friedman himself. It would be a specious argument. But what's actually specious here is your formulation of her post.
Nobody is saying that people should think Friedman was perfect. What she's attacking is... well, what she said she has a problem with. Read her post before I start throwing around words like "tool," please.
Megan makes herself look childish when she attack's people who believe Friedman was an imperfect economist. Believing some of his ideas are wrong or flawed does not make someone a communist. That's a specious argument.
Ok, I'm violating rule #1, and letting the trolls get to me, but this is really pissing me off.
Dude, that's such an obvious straw man. She doesn't attack people who believe Friedman was an imperfect economist. That's everyone, including Friedman himself. It would be a specious argument. But what's actually specious here is your formulation of her post.
Nobody is saying that people should think Friedman was perfect. What she's attacking is... well, what she said she has a problem with. Read her post before I start throwing around words like "tool," please.
are any of them professors in real fields
I looked, and ... no.
"the Asian countries seem to pretty categorically reject the Chicago school development philosophy that Megan prizes. Can someone explain to me why Korea and Taiwan shouldn't be used as models for development even if that means protectionism?"
Have you been to Hong Kong? It might be the closest any economy comes to "the Chicago school development philosophy", even after more than a decade of mainland Chinese 'guidance'.
As Epstein's Mother pointed out, the patterns in Asia strongly support Megan's point, rather than going against it. Taiwan's economic strength has been small and medium-sized enterprises, not the few large companies the government has interfered with. Even South Korea and Japan have run into problems because of their industrial policy.
It's like any central planning - on a few big decisions, the planners might sometimes manage to make the right choice (after all, even tossing a coin can work sometimes), so one example never proves or disproves the value of the system. But a centralized system brings lack of diversification - if the planners force the entire country in the wrong direction, everyone can be in trouble. Moreover, such planners are often poorly motivated, and eventually their great power can lead to abuse. Plus, without functioning markets, even skillful well-motivated planners don't have the information they need to make good decisions.
Japan and South Korea allow markets to function in many areas. Even where their governments have interfered to favor certain companies, the companies were usually expected to export and thus faced competition abroad though not at home, and this has limited the damage.
Like John Bejarano, I'm aghast that this is even up for debate. Analysis of Asian development should be sufficient to answer the question, since the Asian region has had some of the more spectacular successes and failures, and there are pretty clear patterns regarding what has and hasn't worked.
You can find well over 100 dimwitted faculty members at any major university. That's just the way academia works in this country, and it is worse in most other countries. That cheap line about Stanford is particularly trashy, and tells you something about the caliber of the people signing this thing.
Ouch, I also violated rule #2, the one about not double-posting. Sorry. At least I'm not having a straw-man party like Noah and eric.
Hmmm... I think the first order of business for the Milton Friedman Institute is to start thinking of snappy put-downs of those who don't believe in free-market capitalism. Oh wait! I know-- lets compare them to racists, and fascists, and amoral nihilists, and Holocaust deniers, like the Left always does to us.
My slogan: "Capitalism deniers are no better than Global Warming deniers!" Get yer t-shirts right here...
You really ought to get that "Remember personal info" thing fixed. It doesn't and it's annoying as all get out.
Here is an interesting look at North Korea's society and economy, for those interested in the people's paradise.
The Vice Guide to North Korea. Make sure you watch all 14 video segments.
Chile is an example of failure? Does that make Bolivia a rousing success? In certain circles, i dont doubt it.
Eric, unforunately, the document that Megan was criticizing was not merely asserting that Friedman was imperfect, and then giving a cogent example of his imperfection. The document makes factually ridiculous assertions, which is what Megan was noting.
isigned,
If you do not take this seriously and we should not take this seriously then why should we take anything that you say seriously? After all, you endorsed the sentiment of the letter.
It is clear that you are a gutless cretin because you fail to stand up to these Marxist bullies. However, from long experience with "soft" academics, it is also clear that such academics are nearly universally gutless cretins.
So you are not alone although you should still be ashamed of your hypocrisy.
In describing the exploitation of disasters like war and hurricanes to make people more receptive to Friedman-style economic policies, Naomi Klein says in her book, Shock Doctrine, they're needed because intelligent people wouldn't go for them otherwise. That's why it takes disaster of some kind to disorient people and regress them to a child-like state, a method similar to torture.
What Klein leaves unsaid but implied is this is how dicatators take over, everyone's favorite example being Hitler's acceptance by the war-shocked and Depression-shocked Germans.
This is the worldview from which Klein is likely operating.
Mary said: but you shouldn't think that these professors are necessarily anti-economics in general
Bloody well right ... they're fargin' Communists.
rickm,
Sorry, I just realized you were already here snarking under a slightly different name. But I think the substance of my previous comment still applies--you're just sniping at silly commenters and haven't engaged the post.
You do understand, Megan, that your insistence on intellectual rigor stifles it's laxity and that's no way help these professors promote diversity on as esteemed a campus as the University of Chicago.
Oh sweet, rick has a response up at his blog. Huzzah.
The funny thing is that NeoConservatives used to be the NeoLiberal movement.
The first batch were all Progressives who actually saw through the Marxist b.s. and changed their views accordingly. THAT is why they are hated so dearly. They didn't maintain the fantasy.
Apostates are always hated more than pagans. You can patronize pagans even unto death. But the apostate knows you for what you really are.
Hmmm... let me see... Freidman and others pointed out that ownership of the means of production and property in general represents power that the State doesn't (fully) control. So, when faced with a dictator, what should Milty have done? Tongue-bathed him like Chomsky cleaned up Pot or Sung, ignored him like Carter did the Shah, or advise him to implement a policy that would ultimately be his undoing, all the while improving the lives of the people he ruled? Boy, that's tough...
Also, you ever notice how some desperate ideologue will always bring up Pinochet? It's like how they always blurt out FoxNews when you mention the idiocy of the media. It's as though the existence of FoxNews equaled the coverage and distribution of the hoary cabal of Progressive Media outlets. Doesn't even come close.
Pinochet's atrocities are a rounding error compared to those regimes that flew the banner and held the name of Socialist.
I mean right outside the city of Hue, immediately following the Tet Offensive, North Vietnamese massacred about as many civilians as Pinochet supposedly did through his entire rule. But the level of atrocity is so common for Progressive regimes that it doesn't even hit the history books.
Occam,
I always thought Jimmy Carter was history's greatest monster. :)
Yeah, I agree about discretion...etc. It's lucky enough that in my department those petitions would likely not even be passed around.
LOLOL!!! Go read rickm's post while it's still up! He (a) doesn't realize that this:
"As Friedman and others continually demonstrated, design of public policy without regard to market alternatives has adverse social consequences."
is a quote from the proposal to establish the institute--he thinks it's a quote from the writers of the letter and is a criticism of Friedman!
Heh.
He goes on to misread the quote, interpreting it to say "People in south America followed Friedman's policies and used markets--they should've used market alternatives.
Then (between cussing at Megan and calling her names...) he makes fun of her for not being able to read!!!
I'm gonna go out on a limb and guess he's not embarrassed about this, but it is freaking awesome.
"...powerless twits..."
Unfortunately, they have a good bully pulpit.
I certainly the Friedman entity at U of C becames a Midwestern Hooever Institution.
That would be cool.
"...powerless twits..."
Unfortunately, they have a good bully pulpit.
I certainly hope the Friedman entity at U of C becames a Midwestern Hooever Institution.
That would be cool, both for itself, and to cause misery to these people.
The thing I never got about Klein's Shock Therapy argument about 'neoliberalism' is that lots of regime changes are the results of shocks, some of them good, some of them bad. I just don't see how a shock origin provides independent evidence that policy is bad and needs to be undone.
But it seems that people who already dislike a policy find this sort of claim convincing. For instance, conservatives in the US spent decades complaining that the New Deal was the result of economic shock that allowed FDR to override the US Constitution and the post-war Civil Rights reforms was the result of the shock growth of a Federal Leviathan State legitimated by the Depression and WWII encroaching on State Rights. As if this narrative made Social Security and the Voting Rights Act bad things.
I also find the faculty petition above unconvincing, for related reasons. If the MFI has the prospect of doing interesting/useful research (not an easy question to answer), then it should be created and funded, otherwise not. The history of Friedman narratives out there doesn't seem to bear on this question either way.
Ok, I'm violating rule #1, and letting the trolls get to me, but this is really pissing me off.Dude, that's such an obvious straw man. She doesn't attack people who believe Friedman was an imperfect economist. That's everyone, including Friedman himself. It would be a specious argument. But what's actually specious here is your formulation of her post.Nobody is saying that people should think Friedman was perfect. What she's attacking is... well, what she said she has a problem with. Read her post before I start throwing around words like "tool," please.
Wooo... name calling.
She said she had a problem with people saying that neo-liberalism/Milton Friedman economics have:
A) Made things worse in places where its been applied. Which is silly because many countries have moved towards Friedman's ideas are undergoing massive revolts against these ideas because of market crashes/loss of living standards.
There is a reason the new president of Ecuador has declared himself "no fan of Milton Friedman" in his election campaign.
B) She also basically called the professors dumb, because they said that in some places the introduction of Friedman's ideas have correlated with oppression/attacks on democracy. China and Chile are an examples of where this has happened. Do these ideas inevitable cause oppression? No, but they have been bed fellows at various points in time.
C) She also attacked the professors for mentioning market alternatives by referencing the soviet union. The health care system in Canada(single payer) is not market based but that does not make Canada the soviet union. That's specious and childish attack.
Megan can like Friedman and his ideas, but that does not mean she should attack people as communist or soviet union sympathizers and dismiss many of the facts made by those professors.
This follows in the great tradition of 88 professors at Duke pledging their ignorance of the law.
The Pinochet ordeal occurred fairly recently so the need of some commenters to use lies of omission concerning events that occurred just 35 years ago is very telling. Despite his well documented problems it is indisputable that Pinochet not only left Chile in much better straights than he found it (upon taking power) but he also abdicated power in favor of elections, interestingly and unlike leftists he abdicated without a coup. On both counts Pinochet showed himself to be both a better person and a better leader than those who have used him as a whipping post. It is also noteworthy that Allende was an utter disaster and that Chile was going down the tubes with spiraling inflation caused by indiscriminate printing of money. Allende had threatened to dissolved Chile's Senate and had the entire judiciary up in arms over his actions. Chile of 1973 showed the world how difficult it is wrest power from tyrants. Meagan commented on the settled questions of market allocation and alluded to the Soviet Union, well it seems that a certain percentage of any population longs for the ideas of Marx for their own personal reasons (laziness, personal situation, desire to seem "cool" or "intellectual", a desire for control over others that can stretch to sadism) no matter how capitalism benefits, you know, people. No matter what can be said about Pinochet, and there is a lot that can be said about the man, at the end of his dictatorship he was that rare breed, a dictator who left his country better than he found it and a dictator who abdicated. Those two inescapable facts must cause at least a small twinge of shame in leftists who have excused practically every dictator to come down the pike.
It is interesting that we are told to look down on those people who helped bring wealth and prosperity to Chile under a dictator who eschewed socialists while at the same time we should look up to both the dictators who loot their nations and the imbeciles who cozy up to them.
If Friedman had advised the Sainted Che (would that he had, and slapped some sense into the socialist pretty-boy), instead of Pinochet, do you think that Staat-shtuppers like "Joe Klein's conscience" would be more disturbed? Or less?
And if Pinochet did follow free-market economics, are the Staat-shtuppers angry because he wans't MORE of a fascist, like the capitalism-hating Mussolini?
At the most basic level, this is just a formalization of the observation that Neo-Classical theories hve not empirically panned out as promised.
And at the most basic level- they are right.
I'm afraid history is against McArdle on this one. Ultimately, the Neo-classical vision of Friedman et al. was just the Right's answer to the Left's utopian fantasies of a generation ago.
And the consequences of this ladder-day blind ideology are playing themselves out in a similar series of failures.
Eric, it's good that you have a substantive response, but you can't just insert it into your straw man post from earlier. Maybe there's an implicit apology for misrepresenting the post in there somewhere.
Re: (b) they said that in some places the introduction of Friedman's ideas have correlated with oppression/attacks on democracy. Huh? Where did they say that?
Re: (c) She also attacked the professors for mentioning market alternatives by referencing the soviet union. Bzzzt. Wrong. Reread again. She attacked them for suggesting that analysis should not consider market alternatives (i.e. alternative policies which utilize markets).
Why can't people just read the post? Shyeesh. /pops blood pressure pills
At the most basic level, this is just a formalization of the observation that Neo-Classical theories hve not empirically panned out as promised.
And at the most basic level- they are right.
I'm afraid history is against McArdle on this one. Ultimately, the Neo-classical vision of Friedman et al. was just the Right's answer to the Left's utopian fantasies of a generation ago.
And the consequences of this ladder-day blind ideology are playing themselves out in a similar series of failures.
Meh.
U of Chicago lost it's mystique for me when I heard about one of their prestigious law professors advocating the "100th monkey effect".
Someday we're going to figure out that professors have a lot less to do with elite schools being elite than the students.
"Many would argue", the eminent professors say, but the many would be wrong, now as before. Perhaps the real bone of contention is in the last sentence: "Many of us are also perturbed that other units of the University that routinely engage the issues that the Friedman Institute is designed to address were not included in the planning, nor included in the ongoing core scholarly endeavors of the Institute."
Natural disasters as tools for conservative shifts? I think not - from Evita (where I learned all my Argentinian history)?
Suddenly a earthquake hit the town of San Juan
Ka-pow, Die
They stubble and fall
Bye bye
Keep away from the wall
But one guy
Was having a ball
The tragedy a golden chance for Peron
He organized a concert with incredible flair
In aid or all the victims such a grand affair
Politicians, actors, stars of every flavor
It was January 22, 1944
A night to remember yeah that's for sure
For that's the night that Peron first met Eva
For that's the night that Peron first met Eva
I have fond memories of celebrating Ladder Day blindfolded on a 20ft 'luminum extension model in my youth.
James H. writes:
"At the most basic level, this is just a formalization of the observation that Neo-Classical theories have not empirically panned out as promised.
And at the most basic level- they are right."
But why does this suggest the MFI shouldn't be created and funded at the U of C? I could see that the MFI research program might not have enough future promise, but given the mixed results of what has gone before more research doesn't seem like the most crazy idea per se. The U of Chicago econ tradition is moving on, as it ought to, and defunding the MFI isn't going to undo the 1973 coup in Chile anymore than denying tenure to Marxist historians in the US in 2008 is going to undo the Soviet Union's founding.
What future effects academic research will have is just not predictable at this level of moral good/bad detail. Good academic social science work doesn't necessarily have good moral effects in the end. It could go either way. Bad academic social science work, on the other hand, will more likely end up with no effects.
Naomi Klein's Shock Doctrine is utter, utter twaddle. Dishonest, malicious twaddle at that.
E.g.: http://www.cato.org/pubs/bp/html/bp102/bp102index.html
Perhaps the best way for those Professors and departments to show their displeasure would be to not take any monies from the Economics department via the general fund.
I will not hold my breath, it is far easier for academics to try to censor those with whom you disagree than it is to stop stealing their money.
I don't know anything about Ladder Day ideology, but I always look forward to those great Ladder Day sales at Sears.
But can they avoid common homonym errors when yammering about intellectualism? Inquiring minds want to know...
Ah, don't you mean homophone errors? Those inquiring minds are still waiting . . .
introduction of Friedman's ideas have correlated with oppression/attacks on democracy. China and Chile are an examples of where this has happened.
China is an example of where the introduction of Friedmanite ideas correlated with attacks on democracy?
I'm going to have to re-read the Little Red Book to check up on that.
Naomi Klein rails against Capitalism in a book that she sells through Amazon and Barnes & Noble online:
Where to Buy The Shock Doctrine | Naomi Klein:
https://www.naomiklein.org/shock-doctrine/where-to-buy
Oh the irony!
Would that have anything to do with Ladder Day Saints?
The ironic thing here is that higher education is about 90% populated with liberals, and yet when one of the very rare centers that might consider libertarian or conservative thought tries to open, it gets shouted down because it would impede 'diversity'.
Milton Friedman IS diversity. He's a very well respected, very influential, Nobel prize winning economist, whose opinions are very much in the minority on university campuses. Opening a center devoted to his ideas is the very definition of diversity on campus. If students don't like it, there's no shortage of areas where they can get the statist point of you shoved down their throat.
This is the real joke about campus 'diversity'. It's almost Orwellian - 'diversity' is an orthodoxy, and it means you must follow a prescribed party line or be accused of not being 'diverse' enough. It's campus newspeak for, "Think like us." - the exact opposite of what true diversity is.
As for the outrageousness of opening a center named for and promising to carry on the ideals of a very famous, highly regarded economist... Are they joking? Universities are FULL of such centers and named buildings. This is nothing new. The outrage they feel is not at the concept of opening a center to carry on the ideas of one of the most famous alums of the university, but the fact that that alum doesn't follow the party line. That's the outrage here. And it's disgusting. We all know that if a university was opening the John Kenneth Galbraith school of progressive economics, the same people on that list would be cheering.
When universities choke off debate and research other than that which makes up the current orthodoxy, they do grave harm to the cause of knowledge and learning. These professors should be ashamed of themselves.
This is so sad. The University of Chicago was a great institution from World War II through the 1970s. Milton Friedman was the most brilliant man on a brilliant faculty. I say that not from my own knowledge, but from the testimony of a brilliant friend who was a faculty member there then.
I can say from my own experience that Mr. Friedman was a mensch. He was always willing to talk to students and explain his views. I personally saw him patiently explain himself to young liberal students who stopped him crossing the Quad in winter time.
But, like everything else, universities are subject to change and decay. The current generation of professors contains not more than a handful of true scholars or intellectuals. Most of the boomers who dominate the universities, including Chicago, these days are neither scholars nor intellectuals. They are time servers whose only contribution is political correctness.
The signers of the anti-Friedman petition have embarrassed both themselves and their university. They have proved to the world that they are know-nothings and yahoos. Worse they have demonstrated that a sizable portion of the faculty of what was once a great university should not be trusted to order pizza, let alone educate your children.
I, at least, will have the pleasure of being able to tell the U of C to pound sand the next time they come looking for money. I would much rather have the reason to write them a generous check.
Am i to understand the China was less free and more democratic before they opened their markets up? Ahem. Name a year please, and we can A/B.
Klein's idea that Hitler was a champion of limited government and free markets is beneath responding to. National Socialist German Workers' Party? That just rings of Gordon Gekko doesnt it?
...in some places the introduction of Friedman's ideas have correlated with oppression/attacks on democracy. China and Chile are examples of where this has happened.
They also have C and H as first two letters. I do not say that this inevitably causes oppression. No, but they have been bed fellows at various points in time.
I can just see the TV infomercial advertising the Milton Friedman Institute:
"Do you desperately want to become part of the ruling-elite class, but don't know where to begin?
Do you have the ability to suck-up to and lie on behalf of really rich people, but still sleep easily at night?
Do you enjoy coming up with deliberately-skewed data sets and employing groundless reasoning to manufacture scholarly-appearing yet totally B.S. think tank papers which justify moving every middle-class job out of the country and into China and India?
Do you like snickering at the average American who's barely keeping their heads above water, and pompously lecturing to them that they simply "don't understand economics"?
Do you like saying that phrase, "You simply don't understand economics", over-and-over again?
Well, then come on down to the Milton Friedman Institute of Applied Economic Propaganda! Here, you'll learn such valuable skills as...
-- How not to laugh when claiming that our runaway oil prices are due merely to "supply-and-demand".
-- How to keep a straight face while shilling on TV or print on behalf of Wal-Mart.
-- How to project the appearance of righteous indignation when defending Chinese sweatshop practices ("They never had it so good!")
-- How to speak passionately about "free markets" and how they have "lifted millions of people out of poverty!" - but avoid mentioning the inconvenient fact that India, China, etc. assess tariffs on practically every import coming within a 100 miles of their shores.
-- and much, much more!"
What an excellent opportunity to fire them all. Start fresh with like minded individuals.
Any place you can name that has been deeply screwed up since global capital arrived was at least as corrupt and otherwise awful before the capital swooped in to plant garment factories in the edenic swamps of rural poverty.
Oh, I don't know, Megan. I think that probably Chile was in a slightly better place before Augusto Pinochet took power in a C.I.A.-sponsored coup, launching an approximately 10-year reign of terror in which over 1,200 Chileans were disappeared, tortured, and/or murdered in the few months between the coup date (September 11, 1973) and the end of that year, alone.
Milton Friedman, as is well-known, served as Pinochet's economic adviser and consultant in setting up a brutally extreme free-market regime that led to huge profits for a handful of multinational corporations and just as huge income inequality gaps for the vast majority of Chileans. Friedman was the one who urged and encouraged Pinochet to slash taxes and social services. The entire public sector was decimated in the first few months of Pinochet's Friedman-cheerled regime.
Friedman fully supported the coup, obviously, and turned a blind eye to the horrendous human rights abuses under Pinochet. He also specifically denied any moral responsibility for those abuses later on, after Pinochet was gone.
I think you need to do more reading and thinking about this issue.
Am i to understand the China was less free and more democratic before they opened their markets up? Ahem. Name a year please, and we can A/B.
No, but many of the reforms were introduced under a police state and much of the dissent/protests against some the reforms have been squashed violently or with other forms of oppression.
You can argue these reforms have been good(I do) but no one can deny that they have been introduced anti-democratically, with oppression and with no say on the part of the Chinese people. Democracy and friedman's ideas have not gone hand in hand but i'm not saying they can't.
Many of these professors are angry because the whitewashing that has occurred with respect to how many of friedman's ideas have spread.
Wow Kathy, did that Chilean recap come right after the Cuban Readers Digest?
Under Allende's left wing government Chile went from the most thriving economy in South America to a basketcase with out of control inflation by the early 70s. Allende was on the verge of instituting a takeover of his own.
Was it wrong to back Pinochet? Yes, i think it was. He was a butcher. But that is a far cry from analyzing whether his economic policies were successful, and making the mad assertion that because one dictator embraced free markets free markets therefore breed dictators. The opposite has almost always been the case. Pinochet is an incredibly strange exception, and in fact his own reforms strengthened Chile enough to lead to his ouster (which is why dictators are big fans of healthy markets in the first place).
I made an Excel spreadsheet to figure out where they found the professors to sign that they disagree with "analyses that respect the incentives of individuals and the essential role of markets in allocating goods and services"
103 Professors claimed association with 22 disciplines (I grouped some similar ones)
Some professors claimed more than one association.
103 Professors claimed 123 Associations.
Please draw your own conclusions.
Where they got these people:
History 20
Anthropology 16
Asian Languages and Civilizations 13
English 12
Sociology/Social Sciences/Humanities/
Comparative Human Development 10
Art/Art History 9
Political Science 8
Religions 8
European Languages 4
Literature 4
Statistics and Computer Science 2
Classics 2
Mexican/Latin American Studies 2
Music 2
Mathematics 2
Archaeology 1
Law 1
African Studies 1
Theater 1
Linguistics 1
Gender Studies 1
Philosophy 1
Jewish Studies 1
Please note the places where these people did not come from.... Economics to start with.
"No, but many of the reforms were introduced under a police state and much of the dissent/protests against some the reforms have been squashed violently or with other forms of oppression."
Eric- so by your logic if i found a cure for cancer and the North Koreans forced it on their people via the jackboot, my cure for cancer is tainted?
I think that jealousy is the prime mover behind this as far as the anthroapologists, sociopathologists, and other social science staff. After all, Friedman and especially Becker (probably a leading choice to be the nominal head of the institute) expanded economics into what used to be their exclusive domains and often explained phenomena better by using economic theories and methodologies. As far as the other staff on the list, the liberals are trying not to lose their faculties.
chsw
Hehe.
Amusingly enough, Tillman got it wrong that it was rickm who misread this post. I made the mistake, not rick.
Guess I'm not the only fallible one.
Eric, it's good that you have a substantive response, but you can't just insert it into your straw man post from earlier. Maybe there's an implicit apology for misrepresenting the post in there somewhere.
Re: (b) they said that in some places the introduction of Friedman's ideas have correlated with oppression/attacks on democracy. Huh? Where did they say that?
Re: (c) She also attacked the professors for mentioning market alternatives by referencing the soviet union. Bzzzt. Wrong. Reread again. She attacked them for suggesting that analysis should not consider market alternatives (i.e. alternative policies which utilize markets).
Why can't people just read the post? Shyeesh. /pops blood pressure pills
Re: A) You're right that the professors didn't say it, but Megan did talk about accusations of undermining democracy in her post when she said "...they still couldn't name a country where neoliberalism has undermined a vibrant democracy...".
Re: B) The professors talked about how they didn't like how solutions that break from Friedman's market solutions are very rarely allowed to be apart of economic debates/analysis, because of the hegemony of Friedman's ideas in academia. Megan immediately took that to mean they wanted communism. That's not what the professors are saying.
She's trying to dismiss them with name calling/exaggerations.
And i'm glad you didn't dispute my first point.
She also basically called the professors dumb, because they said that in some places the introduction of Friedman's ideas have correlated with oppression/attacks on democracy. China and Chile are an examples of where this has happened. Do these ideas inevitable cause oppression? No, but they have been bed fellows at various points in time.
Neither Chile nor China were examples of unopressed democracy before adopting those ideas. Meanwhile, in other places, the introduction of Friedman's ideas have correlated with expansion of liberty and political freedoms.
Causation will have to find a different ride to hitch.
"No, but many of the reforms were introduced under a police state and much of the dissent/protests against some the reforms have been squashed violently or with other forms of oppression.
Eric- so by your logic if i found a cure for cancer and the North Koreans forced it on their people via the jackboot, my cure for cancer is tainted?
I never said that, but you shouldn't pretend that it came with freedom and democracy. Many friedmanites like to whitewash how chicago economics spread in many places around the world and pretend the populous in many countries just inevitably acknowledged the rightest of the ideas and demanded them. Many people dispute the idea that friedman economics and democracy go hand in hand. This should be acknowledged in academic circles and not immediately rejected.
I too enjoyed the debunking of Naomi Klein's book by a Cato Institute researcher:
http://www.cato.org/pressroom.php?display=news&id=150
Intellectuals in the liberal arts, humanities, "social" sciences, etc., lost their minds long ago.
It happened when they, explicitly or by default, accepted the fundamentals of Kantian ethics.
(Moral action that refers to nothing & is done for no reason--"A categorical imperative would be one which represented an action as objectively necessary in itself, without reference to any other purpose."
IOW: an action that must be done for no reason save that it must be done. How do we know it must be done? The categorical imperative tells us it is objectively necessary. How does the categorical imperative tell us? Through intuition. From where does the categorical imperative hail? From a dimension beyond reason's (but not "imagination" or intuition's) comprehension--the noumenal universe. ).
It was his ethics that in turn produced his corrupt epistemology, ("I had therefore to remove knowledge, in order to make room for belief"-- belief in the categorical imperative; belief in intuition (i.e., feelings); belief in some higher dimension that exists beyond the scope of reason.).
All of which adds up to a philosophy of pure subjectivism.
Whether taken straight or filtered through subsequent philosophers' variations thereof (e.g., Hegel (collective subjectivism), James (individual subjectivism), Sartre (interactive subjectivism), to name just 3), Kant's ideas set the foundation for much of modern and all of postmodern academe.
IOW: The majority of the professoriate of the liberal arts, not only at Chicago but just about everywhere else, is not merely ignorant of certain subjects (e.g., economics in this case).
They are _willfully antagonistic_ toward any idea that: a) recognizes that reality (Identity) is what it is; that facts are facts, no matter the wishes, pipe dreams, feelings, needs or opinions of the observer; and b) recognizes that reason (Identification) is the only means for gaining knoweledge.
Western civilization's long and laborious struggle to escape the Dark Ages and achieve the knowledge, art, freedom & prosperity we now take for granted was achieved by certain key individuals throughout history recognizing that a & b above are absolutes.
--Not dogma (like the there-are-no absolutes or "we-can't-know-the-truth gospels preached by the professoriate).
--Nor whim (like the I-don't-have-an-argument-I-just-feel-it's-right mantra encouraged by most in liberal arts academe).
--Nor "ideology" (like the Marx said-Freud-"proved"-Lecan "demonstrated" chapter & verse quotations reeled of by postmodern intellectuals).
--Plain, naked facts. Indeed, ignore-them at-your-own-peril-facts.
(Pls note--for those who now object that fascism or Nazism or some other variant of tyranny was/is *objectively* absolutist--that history is filled not only with examples of the dogmaticism of tyrannies (the Inquisition; massacre of the Huguenots; witch trials; etc., and so on), but also with that which underlies all dogmaticism--the subjectivism of tyrants ("I go the way that Providence dictates with the assurance of a sleepwalker." "I believe in one thing only, the power of human will.")
That we are now facing the possibility of sinking back into those Dark Ages is in no small part the result of the philosophy of our intellectuals in the liberal arts. To see a variation of their philosophy put into distilled, undilluted form, simply take note of the theology of the Mideast mullahs:
--(Dogma) «And fight those who have not faith in God nor in the Hereafter and (who) forbid not what God and His Prophet have forbidden, and who are not committed to the religion of truth.» (9:29).
--(Whim) http://www.miraclesofislam.com/
--(Ideology) «La ikraha fid-din. Qat-tabayanar-rushdo min al-ghayy. --There is no compulsion in religion, for the truth has been made manifest from the false» (Ayatul-kursi 2:255-257)
Then note the results in practice.
The liberal arts professoriate's ignorance of economics, as I hope I have thumbnailed here, is the least of our worries.
She also basically called the professors dumb, because they said that in some places the introduction of Friedman's ideas have correlated with oppression/attacks on democracy. China and Chile are an examples of where this has happened. Do these ideas inevitable cause oppression? No, but they have been bed fellows at various points in time.
Neither Chile nor China were examples of unopressed democracy before adopting those ideas. Meanwhile, in other places, the introduction of Friedman's ideas have correlated with expansion of liberty and political freedoms.
Causation will have to find a different ride to hitch.
Chile had democratically elected a president before pinochets coup and reign of terror. The link between the removal of democracy and the introduction of friedmans ideas are clear.
I'm not saying that friedmans can't prosper democratically, but they have been imposed violently at many points in time and we shouldn't pretend anti-democratic behavior hasn't facilitated the spread of some of these ideas. That's the point i'm trying to make and that's why I reject megans assertion that 'they still couldn't name a country where neoliberalism has undermined a vibrant democracy'. Democracy and neoliberalism have come to a head at various points.
I say this as some who believe in a mostly market based economy.
Kathy,
Friedman became one of Pinochet's economic advisors years after the 1973 coup. Prior to the "Chicago Boys" policy influence, the junta ran the typical Fascist-Peronist construct of creeping nationalization and regulatory confiscation of the economy. In fact, it was the country's economic progress after Friedman and several other UC-educated economists advised the junta to restructure Chile's economy - particularly the privatization of government-owned monopolies and Chile's social security boondoggle - which stabilized the country, raised living standards, reduced the income gap and thereby enabled Pinochet and his co-conspirators to be removed from power.
This peaceful removal of a junta from power is unique in Latin American history.
chsw
MarkG- Thanks for the catch. Unfortunately, I tend to type twice as fast as I can think. (and all too often, twice as hard...)
I grew up around U. of C. and absorbed a lot of university politics -- my impression is that the resistance to the Friedman Institute is mostly a matter of competition between disciplines. Chicago has increasingly focused on big, money-earning schools (the business school, the medical school) which in theory, but rarely in practice, subsidize the smaller departments. The humanities are in a tenuous position and have to make a stink if they want to survive.
Sure, the comments about "neoliberalism" are unserious and reflect a lack of understanding of economics. But remember that, historically, the Left has fed some excellent scholarship in the humanities. It's not an inconsistency to say that a Marxist can be dead wrong about economic policy and yet write a brilliant work of philosophy. With a different political tenor in the school, we might never have had people like Susan Sontag. Get rid of the Left and you'll lose all your historians and anthropologists.
I'm pretty sure the Institute will get built, regardless of the complaints. That's a good thing. But the petition is a necessary (if silly) formality.
"The professors talked about how they didn't like how solutions that break from Friedman's market solutions are very rarely allowed to be apart of economic debates/analysis, because of the hegemony of Friedman's ideas in academia."
Please. Non-market solutions are discussed all the time in economics. However, economists realize that markets do have several distinct benefits that layman (and non-economist academics) have not fully considered. Moreover, markets have a tendency to spring up even where they are banned or hindered (e.g., black markets). Pretending that they don't matter is foolish.
Anyway, the professors objected to this: "Following Friedman’s lead, the design and evaluation of economic policy requires analyses that respect the incentives of individuals and the essential role of markets in allocating goods and services. As Friedman and others continually demonstrated, design of public policy without regard to market alternatives has adverse social consequences."
The professors did not like the fact that the MFI would encourage its researchers to say, "What roles might markets play in this great social problem?" If they are not advocating for communism, I would really like to know what they are advocating.
The professors are the market alternatives. The adverse social consequence is their diminishing esteem in the eyes of the governing body of the university. And their feelings are hurt. Did I miss something else?
isigned,
I recently had the occasion to look up a quote from Patrick Henry. It seems appropriate here:
"Crouch down and lick the hand that feeds you. May your chains weigh lightly upon you, and may posterity forget that ye were our countrymen."
In other words, you sell out pretty cheap. And you're in the business of forming young minds?
Would you be proud of a child who emulated you?
How can you stand to look yourself in the mirror? For God's sake, if you don't honestly believe this claptrap, cowboy up and say so, and take the consequences like a man (woman.)
If these won't grant tenure on that basis, why on earth do you want to surround yourself with them, anyway?
The professors are the market alternatives. The adverse social consequence is their diminishing esteem. And their feelings are hurt. Did I miss something else?
OK. But you mentioned a problem?
Seriously, though, let's be precise. We'd lose all of our current historians and anthropologists, and it's not clear that that's a wholly bad thing.
One fact those without much exposure to our colleges tend not to know: A lot of professors are pretty stupid. Note that in addition to the ignorant content, the letter itself is written so poorly its barely readable.
You can be sure that the ones who signed that letter were not in the physical sciences, were not involved in engineering, and were not involved in the more fact-respecting humanities, such as economics. No, these idiots teaching our kids are professors in the Women's or Gender Studies Department, the Creative Writing Department, etc.
That's what happens when colleges cave to political pressure are decide to teach crap subjects and/or hire no-nothing staff.
I don't want anyone pointing out the irony of my criticizing ignorant professors in my prior comment by spelling "know nothing" like this: "no-nothing." (I meant to do that! It was satire! Really!)
Occam's Beard, you beat me to the response to Alisa. However, Alisa (and Occ), you neglect that frequently faculty departments become bastions of groupthink. I cannot imagine a free-markets advocate in most anthroapology or dystory departments. They are less likely there than in the sociopathology departments. Many humanities departments would be aghast to tenure a young hotshot who would admit to capitalist tendencies.
One conspicuous fact of the UC list is present by absence. There are almost no faculty from the hard sciences on that list - only a couple of math and computer sci profs. Perhaps it is because phenomena must be explained in the hard sciences and the explanations must be verifiable. Hence, economics is somewhat more kindred to the hard scientist than explanations of Kesey's impact on gangland grafitti and how all that is emblematic of our time, etc.
chsw
Funny thing that, but if there was one social science that rejected theories because of some sort of ideological nonconformism, it would have to be economics. And it's not 'liberals' doing the rejecting, it's people who call themselves conservatives.
And in fact, we know that the Chicago Boys were just plain Wrong, Wrong, Wrong on any of a number of different issues, yet still, they refuse to change their theories. And yes, the current mess we're in right now is a direct result of what was being pushed by these fools. Eric has it exactly right when he says,
"The professors talked about how they didn't like how solutions that break from Friedman's market solutions are very rarely allowed to be apart of economic debates/analysis, because of the hegemony of Friedman's ideas in academia. Megan immediately took that to mean they wanted communism. That's not what the professors are saying."
And we all know that's _exactly_ what the Chicago School pushes. I might also note to the gentleman trying to push the idea that Friedman was a great guy might as well give up. From what I can tell, he was something of jerk. One of those guys who was 'nice' until you disagreed with him. If you want to know what an absolute tosser this guy was, you ought to have a look at how he damaged his own son. Not that it matters as far as the ideas go, but please, can we stop this 'Mao set swimming records swimming upstream . . . in his 60's' sort of mythologizing? That's just infantile.
If Friedman had advised the Sainted Che...
Friedman did advise the Deng-era Chinese Communists, killers of 65 million people and impoverishers of a billion.
Nobody on the Left has said "boo" about that yet. Perhaps they haven't read the Black Book of Communism. Or don't care to.
I note the Chicagoans don't criticize Milton for this either.
ScentOfViolets:
"Funny thing that, but if there was one social science that rejected theories because of some sort of ideological nonconformism, it would have to be economics. And it's not 'liberals' doing the rejecting, it's people who call themselves conservatives.
And in fact, we know that the Chicago Boys were just plain Wrong, Wrong, Wrong on any of a number of different issues, yet still, they refuse to change their theories. And yes, the current mess we're in right now is a direct result of what was being pushed by these fools. Eric has it exactly right when he says."
Could you let me know which Chicago Boy (Chicago economist) you mean here? Any recent citation/link? It would help my understanding of where you're coming from to be specific.
Eric,
(a) I didn't respond to your first point because it's a historical claim I'm not qualified to evaluate. I could explain why I think it can't possibly be right, but I can't give you stats showing it's wrong without doing research, so I'll leave it to someone who knows more about that than I do.
(b) undermining democracy. She was sarcastically saying that there's no good basis for evaluation of about the effects of neoliberal policy among the places that have gotten worse since the advent of neoliberalism, because they're all places that weren't free or fit before being affected in some way by neoliberalism.
(c) The professors talked about how they didn't like how solutions that break from Friedman's market solutions are very rarely allowed to be apart of economic debates/analysis, because of the hegemony of Friedman's ideas in academia. Megan immediately took that to mean they wanted communism. That's not what the professors are saying.
Taking this sentence by sentence: (1) No, no, no. Reread what they said, please. The statement the professors complain about says only that failing to consider market-based alternatives has adverse consequences--it doesn't say anything about not considering non-market alternatives. In fact, it implies that non-market alternatives are under consideration. The professors would have to be ... well... insane to argue that Friedman's ideas have hegemony in academia. But they don't argue that. They instead argue something else slightly less dumb--that market-based alternatives to certain social policies need not be considered. (2) No, she doesn't. Please read the post. What Megan said was that even communists took markets into account in the act of rejecting them--she doesn't call these people communists, she says they're proposing something so nonsensical that even ideological communists didn't try it. (3) The professors aren't saying what you say they're saying. Megan's not saying the professors are saying what you say she's saying they're saying.
Please comment again, but please read the entire post first.
Brad,
rickm linked to the blog and I didn't realize it was a multi-man hit job. Sorry for attributing your error to him.
chsw nailed it. Also, it's funny how for good or ill y'all mention Friedman and Pinochet but nobody talks about the one od the actual architects of Chilean economic policy, who was, you know, an actual Chilean economist and the actual, you know, finance minister: Hernán Büchi. Maybe that's because he can't be accused of mass murder.
Quick survey of competing social-economic models: Chile vs. Argentina. Colombia vs. Venezuela. Puerto Rico vs. Cuba. Capitalism works.
My theory is that an academic department has outlived its usefulness when its staff spends its time signing their titles onto letter decrying the subject matter of neighboring academic departments.
Having a Doctorate of Fine Arts in the Nuclear Metaphysics of Gender does not necessarily make one an expert in economics, for instance.
Goof chewy: "-- How to speak passionately about "free markets" and how they have "lifted millions of people out of poverty!" - but avoid mentioning the inconvenient fact that India, China, etc. assess tariffs on practically every import coming within a 100 miles of their shores."
There is no such thing on the planet as a nation with a 100% free market. The fact that India and China have tariffs does not repudiate the idea that free markets have lifted millions out of poverty. I'm not sure what logical argument you were trying to make with your statement (or any of the other statements on your post).
One thing free markets HAVE done is allowed millions of US low-tech manufacturing jobs to move over seas. This has dramatically increased the standard of living of 100's of millions of people living in China, Singapore, Thailand, India, Indonesia, South Korea and a few other countries. Every low tech job lost here provides 10 times the benefit overseas as far as lifting people out of poverty (by low tech I’m not referring to textiles sweatshops, I mean non-cutting edge electronics, like low end hard drives, motherboards, stereos, simple software and the like). This whole process hasn't hurt the US nearly as much as it has helped these poor economies.
Meanwhile, the American dream changes from, "If you work hard you can make a better life for yourself" to "If you work hard and get education you can make a better life for yourself." We are no longer the country of low tech blue collar manufacturing jobs. That era is over and will never come back. Those who embrace the future will thrive.
I grew up around U. of C. and absorbed a lot of university politics -- my impression is that the resistance to the Friedman Institute is mostly a matter of competition between disciplines. Chicago has increasingly focused on big, money-earning schools (the business school, the medical school) which in theory, but rarely in practice, subsidize the smaller departments. The humanities are in a tenuous position and have to make a stink if they want to survive.
Sure, the comments about "neoliberalism" are unserious and reflect a lack of understanding of economics. But remember that, historically, the Left has fed some excellent scholarship in the humanities. It's not an inconsistency to say that a Marxist can be dead wrong about economic policy and yet write a brilliant work of philosophy. With a different political tenor in the school, we might never have had people like Susan Sontag. Get rid of the Left and you'll lose all your historians and anthropologists.
I'm pretty sure the Institute will get built, regardless of the complaints. That's a good thing. But the petition is a necessary (if silly) formality.
their quasi-communist fantasy life - Megan
Where's the part of their statement that contains this? The claim that "many would argue that Washington-consensus neoliberalism has hurt more people than it has helped" may be wrongheaded, but it doesn't actually contain any socialist content. In fact there's no positive program there at all. I don't think you can hypothesize that the signers of this letter are Communists or even anti-capitalist on the basis of what you've quoted.
You could bring their claim in line with reality in a number of ways, ways you might even agree with. For instance: China has successfully resisted many tenets of the '90s Friedmanite Washington consensus. It doesn't let the yuan trade freely, it has capital controls, it maintains a semi-Gaullist economy in which certain of the commanding heights of industry are dominated by state-owned enterprises. If you put China on the anti-Friedman side of the ledger rather than the pro-Friedman side, it shifts the balance of what economic philosophy has led to the great reductions in global poverty over the past 15 years. If you look at the big struggle in contemporary development economics as one between a Friedman camp and a Stiglitz camp, where do such success stories as China, Malaysia, and Vietnam fall?
Yes, by all means, lets look at what was actually said:
Hmmm . . . looks to me like they're saying that any solutions being considered have to be essentially market-based ones. Do you agree that this is what they are saying? If you don't agree, will you at least admit that _if_ that is what they are saying, _then_ yes, there is a certain lack of, shall we say, diversity? I'm certainly willing to say that if they only mean that market-based solutions should be considered as well as other, nonmarket-based solutions, then yes, this certainly seems innocuous enough. Indeed, 'diversity' would require it.
But that's not the way I read it; again, it seems to be saying that they require a certain type of solution. I'm guessing that this is the way the signers are reading it, and this interpretation seems to be more natural than yours.
I am sure that with a teeny weeny bit of googling, one could find a whole mess of people quite unhappy with the way the privatization of Argentina's oil industry worked out (not to mention the way all those "free market" banks illegally channeled all the dollars out of the country while imposing transaction and withdrawal rules on the general populace). While this may not relate directly to Friedman, there are plenty of people in South America who have become rightfully distrustful of the people pushing Northern "free market" economics.
And now, here at home, we see how deregulation of the mortgage industry has panned out.
An above comment is correct. The Chicago experiments of the 20th century are the equivalent of the communist experiments. Both went too far, and both failed. Communism failed in a much bigger way, but that doesn't mean the libertarian approach succeeded, especially as it seems to invariably lead to corrupted states ruined by crony capitalism much like communism seemed to lead to fascism and dictatorships.
Can you not even admit that maybe, just maybe, sometimes things work better with a wee bit of regulation and intervention? Just imagine if Fannie and Freddie had been allowed to deal with sub prime? Imagine if the gov't had not stepped in for Bear Stearns, S&L, etc.
And with so many beef recalls, tainted spinach, tainted tomatoes, tainted jalepenos, tainted carrot juice, lead toys, etc. that such an undying belief in the power of the free market to regulate itself is justified. We've seen regulations clean once filthy rivers and lesson smog in major cities.
If you cannot understand why people might dislike the Chicago brand of capitalism, then you really need to cut back on your kool aid.
ScentOfViolets, I read the statement to say: (i) you cannot assume away markets because they have a tendency to spring up anyway and (ii) markets are capable of allocating goods and services in socially acceptable ways.
Market is not a dirty word.
Er, we seem to be in a spot of trouble because of deregulation? Surely you've heard about it - the subprime mess, the ratings agencies not doing their jobs, the lack of oversight on certain financial instruments . . . on and on and on. Here's a little something from the wiki to get you started. There is also their pro-business, pro-privatization stance that has wreaked much havoc, their resistance to tax increases etc.
greg writes:
"Can you not even admit that maybe, just maybe, sometimes things work better with a wee bit of regulation and intervention? Just imagine if Fannie and Freddie had been allowed to deal with sub prime? Imagine if the gov't had not stepped in for Bear Stearns, S&L, etc."
Milton Friedman and the 'Chicago School' were big advocates of bank regulation, see for instance the 'Chicago Plan' which Friedman was sympathetic to, or Friedman's 'A Program for Monetary Stability' from 1960, which has a -- politically unrealistic -- strong regulatory structure. There is a long Chicago tradition of pointing out the deposit insurance in necessary and requires bank regulation to prevent undue risk taking by banks.
Get rid of the Left and you'll lose all your historians and anthropologists.
And their loss would be a bad thing?
Trust me, keemosabe, if you reviewed the race/class/gender Scheisse being spewed out of HIST and SOC departments as "dissertations" these days--as I do for a living--you'd quickly realize that there's something to be said for "anti-intellectualism."
No, it's not a dirty word, and if that's how the statement is meant to be taken, I would agree with it.
Would you agree that if the statement is meant to be taken as an assertion that a market-based solution is required, then yes, there is a certain lack of 'diversity'?
As an alumnus of the Economics Department who spent, with time off for bad behavior, longer on campus than does my reputation good, this touches several nerves. Could someone provide me with a link so I can see who actually signed this letter?
Thank you.
there's something to be said for "anti-intellectualism."
The answer to the problems of intellectualism is more intellectualism. I don't think you're going to get better history dissertations by encouraging stupidity.
It seems to me what the professors are saying is they don't want a conservative think tank in their midst. They're liberal and anti-free market. I'm guessing they'd be happy to see a couple of Marxists thrown in there — never mind that Marxism has been largely discredited.
For those who doubt that free market economics work well, a good book to read would be Milton Friedman's "Capitalism and Freedom." Also Thomas Sowell has an excellent primer, "Basic Economics."
I wrote:
'Could you let me know which Chicago Boy (Chicago economist) you mean here? Any recent citation/link? It would help my understanding of where you're coming from to be specific."
ScentOfViolets replied
"we seem to be in a spot of trouble because of deregulation? Surely you've heard about it - the subprime mess, the ratings agencies not doing their jobs, the lack of oversight on certain financial instruments . . ."
I'm asking for a specific example of a Chicago economist who refuses to acknowledge that "the subprime mess, the ratings agencies not doing their jobs, the lack of oversight on certain financial instruments" exist. Where do you see current Chicago economists failing to deal with these events?
As I pointed up above, there is a long Chicago tradition of calling for (a certain kind of) stronger bank regulation.
I only see Chicago guys trying to understand the subprime mess, for instance:
http://faculty.chicagogsb.edu/amit.seru/research/securitize_jan.pdf
The authors find that securitization of mortgages did play a role in creating the current problems using, you know, data.
Er, Stefan, I said that they refuse to change their theories. Not that they didn't acknowledge that things have gone sour.
Note also that they don't say anything about deregulation in your paper(at least, not that I saw on a quick skim-through.) You know, the thing you wanted to present as 'evidence' for this fact.
Sorry, found the link.
This is a hit job out of the Anthropology Department. Many years ago Chicago's Anthro Department was truly cutting edge. The work Robert Redfield did in Mexico set the standard for field work. More recently it has become a theory factory sliding perilously close to dissolving into a form of Sociology meets LInguistics. That is to say that the larger the number of methods employed the fewer the results. In addition I see that they bolster their ranks by adding Bruce Cummings, a genuine apologist for the mass murdering totalitarian maniac in North Korea.
Look for instance at some of the big name finance guys at Chiago.
1) Raghuram G. Rajan
http://faculty.chicagogsb.edu/raghuram.rajan/research
Nice stuff like
"“Landed Interests and Financial Underdevelopment in the United States”, with Rodney Ramcharan
It is usually thought that concerns about the wealthy having an incentive to limit wider access to economic institutions such as finance are important only in poor, undemocratic countries. We find that even in the United States in the early decades of the twentieth century, landed interests seem to play a significant role in the development of finance. Counties with very concentrated land holdings tended to have disproportionately fewer banks per capita and fewer national banks. Moreover, aggregating land distribution up to the state level, states that had higher land concentration passed more restrictive banking legislation. Finally, financial underdevelopment, as determined historically by land concentration, was negatively correlated with subsequent manufacturing growth, right up to the 1970s. Since these effects are observed across counties possessing similar political and legal institutions at the state level, the evidence is suggestive that the origins of underdevelopment lie in the historical pattern of constituencies or interests as much as in political or legal institutions."
2) Doug Diamond
http://faculty.chicagogsb.edu/douglas.diamond/more/
if you want to get a sense that, yes, Chicago guys are interested in understanding how financial systems function and can malfunction in the absence of the right kind of regulation.
Just trying to suggest people make contract with what today's economists at Chicago are doing.
"Neo-intellectualism" anyone? =)
There is a reason the new president of Ecuador has declared himself "no fan of Milton Friedman" in his election campaign.
Obviously, this reason is that the (mostly uneducated, extremely poor) voting public of Ecuador has somehow come to the same conclusion that the (mostly extremely educated and extremely wealthy) first world liberals have!
They must both base their views on the exact same comprehensive understanding of macroeconomics! Or something!
=darwin
(who has never understood how liberals can simultaneously think that 50% of americans are complete morons because they vote for George Bush, but random third world voters are expert geniuses because they vote for Chavez et al..)
No offense meant to any Linguists.
I'm a linguist (er, supposedly since the MA, at least) and I'm not insulted. I'm not sure whether it's a result of "publish or perish" or Chomsky's propensity to ramble theoretically inside and outside his own field, but 95 percent of what goes for linguistic research is nonsense cloaked in impenetrable, self-aggrandizing jargon.
"The Chicago experiments of the 20th century are the equivalent of the communist experiments. "
What a disgusting claim! The 'communist experiments' led to the deaths of more than 100 million people, but "one could find a whole mess of people quite unhappy with the way the privatization of Argentina's oil industry worked out", so they're equivalent? You admit that "Communism failed in a much bigger way", but still you argue that the two are comparable. How much do you know about the inevitable brutality of the communist system?
"Can you not even admit that maybe, just maybe, sometimes things work better with a wee bit of regulation and intervention?"
What a straw man. Friedman didn't argue against any and all regulation. Anarchy and capitalism aren't the same.
SoV -
in the quote where you put certain words in bold, just also bold the words "analyses that respect the", and it takes on a whole different meaning. Any thorough analysis should respect and take into consideration the ability of markets to allocate goods and services. That doesn't mean that regulation and intervention cannot even be considered or discussed - it means that individual incentives and the allocating ability of markets should also be respected and considered.
Sigh. You are aware, Stefan, that nothing you've quoted says anything that supports your position, yes?
Now, you asked me to give some examples, I did, and followed up with some quotes. Feel free to dispute the sources, but don't pretend that you've said anything that contradicts what I've already stated.
Does anyone else want to say with a straight face that the Boyz are now gung-ho for regulation as opposed to deregulation, nationalization as opposed to privatization, etc?
Anyone?
ScentOfViolets:
"Er, Stefan, I said that they refuse to change their theories. Not that they didn't acknowledge that things have gone sour.
Note also that they don't say anything about deregulation in your paper(at least, not that I saw on a quick skim-through.) You know, the thing you wanted to present as 'evidence' for this fact."
The subprime paper I linked to was evidence that Chicago guys were dealing with the subprime crisis.
The basic Chicago outlook on regulation has for a while, at least 40 years, been that there is a constant danger that the state and its regulatory agencies will be captured by corporate elites, along with the need for bank regulation to cut off excess private risk taking at the expense of the government budget -- so yes, I'm sure the last few years have not changed their minds much on these questions.
What part of this Chicago view -- the danger of corporate capture of state regulatory agencies together with the need to cut off financial speculation that going to force public bailouts -- do you want to revise?
MarkG
What makes you so special that you should be different than every other field that produces 96% junk? Back in my time James McCawley was the Libertarian anti-Chomskeite face of Chicago Linguistics. Always regretted not learning the subject.
Not that I want to put Brad DeLong up as an authority here, but it is the easiest cite I can find (Stigler is a core U Chicago economist, and Sargent is link to today's older generation of Chicago guys who move around the country):
"On matters of financial regulation, George Stigler showed great deference to Milton Friedman, and Milton was in favor of extremely tight regulation of any financial institution whose liabilities served as part of the economy's stock of liquid assets--as those of us who did the reading that Tom Sargent assigned and read Friedman's Program for Monetary Stability know: the restrictions that Friedman thinks should be imposed on what reserves banks must keep, what assets banks can hold, and what promises banks can make about the liquidity of their liabilities are absolutely draconian."
http://delong.typepad.com/sdj/2008/06/thoma-vs-mankiw.html
ScentOfViolets :
"you asked me to give some examples, I did, and followed up with some quotes. Feel free to dispute the sources, but don't pretend that you've said anything that contradicts what I've already stated.
Does anyone else want to say with a straight face that the Boyz are now gung-ho for regulation as opposed to deregulation, nationalization as opposed to privatization, etc?"
Sorry, I cannot find your specific examples. What post has them? Linking to wiki's entry on deregulation doesn't count as a specific citation, except if you want to claim that trucking and airline deregulation are big failures. You had not mentioned them previously. And even then wiki doesn't provide any specific Chicago citations and mentions Chicago only in the context of the 1970s.
And yes, the Chicago boys were always gung-ho for certain types of banking regulation, as I pointed out above multiple times. They still believe in eliminating entry restricting regulations for home decorators and distrust the American Medical Association's view of health care regulation.
Just thought I'd chime in since you mentioned liguists -- as any cunning linguist should. =D
It only seemed ligit to mention the field I was in. I wouldn't be surprised if other academy departments churned out 96% junk, tho, considering publish or perish most likely crashes against diminishing returns.
Guess I'm also kind of in the Karl Popper mindset, impressed by the time when he reduced some long-winded statement by a fellow academic into plain language revealing its inherent nonsensical, useless nature.
Stefan, Good posts, you have a good blog.
Which makes it something of a non sequitur, does it not? Particularly since I didn't say anything about them failing to acknowledge the sub prime mess and it's attendant problems? If I say that they refuse to revise their views deregulation, it doesn't help for you to say that yes, but here are some papers dealing with something else, now, does it? This shouldn't be hard for you to acknowledge.
Uh huh. On your say-so, of course. And also of course, corporations like Countrywide are banks. Uh, the story I heard was that regulation stifles innovation.
Or how about this:
My cites beat your cites :-) Oh, I'm sure you might be able to dredge up something you can claim with a straight face supports some aspect of what you say. But it seems a little absurd to be tilting at this particular windmill.
Chris Green: "There is no such thing on the planet as a nation with a 100% free market. The fact that India and China have tariffs does not repudiate the idea that free markets have lifted millions out of poverty."
Oh, OK, I see. So what you're saying is that if we simply ignore the fact that the Indian and Chinese governments heavily regulate and manipulate prices and supplies of goods -- and even go so far as to manipulate their currency (the Chinese) -- we can then safely say India and China maintain "free markets."
I'm glad we cleared that one up. The completely open-ended margin-of-error you use as your criteria ("There is no such thing on the planet as a nation with a 100% free market.") is a very persuasive argument indeed...
As is your claim that it's really just millions of "low-tech" jobs that have moved overseas (Millions? Phew! Is that all?). The countless thousands of American college and graduate degree-recipients in tech fields (taking just one of many examples) who have had to train their Indian replacements before heading out to the unemployment line will be interested to know that Chris Green tells them that if they work hard and get an education, they can make a better life for themselves.
Oh, and Stefan? You need to be more careful when you talk about 'banking regulation'. Here is what your cite actually lead back to:
(From Mankiw)
So. It seems then that you were being just a leetle disingenuous there. You seem to be trying to make the claim that if these people want some some sort of regulation on some particular, why, that must mean that they are not generally for deregulation after all.
That's extremely poor reasoning. I'll end this subthread by noting that if Mankiw, of all people, is saying that the Chicago School is anti-regulation, that's good enough for me. Obviously, I can't make you say otherwise, and it seems fairly clear at this point that this is what it would have to come down to.
ScentOfViolets,
I don't see which Chicago economists you are citing. Links would be helpful.
In response to me writing "The subprime paper I linked to was evidence that Chicago guys were dealing with the subprime crisis" ScentOfViolets wrote "Which makes it something of a non sequitur, does it not? Particularly since I didn't say anything about them failing to acknowledge the sub prime mess and it's attendant problems?"
But ScentOfViolets first response to me was "Er, we seem to be in a spot of trouble because of deregulation? Surely you've heard about it - the subprime mess, the ratings agencies not doing their jobs, the lack of oversight on certain financial instruments . .." So I'm simply responding to the first example ScentOfViolets provided.
ScentOfViolets then goes on to write that:
"For the past 40 years or so, U.S. antitrust has been dominated intellectually by an unusually conservative style of economic analysis. Its advocates, often referred to as "The Chicago School," argue that the free market (better than any unelected band of regulators) can do a better job of achieving efficiency and encouraging innovation than intrusive regulation."
But this is a cite about anti-trust. None of ScentOfViolets initial deregulation examples are anti-trust examples. Where do you think Chicago anti-trust analysis as currently practiced goes wrong? Again, actual cites to Chicago economists would be useful.
I sense a lack of interest in debating this issue or even letting me know where you're coming from on your part.
My final take: there is no such thing a good side (regulation or the free market, depending on your view), but only good regulation and bad regulation. The Chicago tradition has a take on how to think about what good and bad regulation is based on economic analysis. I'd argue that this view, properly executed (and you can mess anything up), is pretty useful. Obviously, there are alternative traditions...which ones do you prefer? Who are you looking to here for guidance on actually how to regulate, as opposed complaints about some free market ideology.
MarkG,
A Popperism sounds like a useful category.
Here is a true Chicago Economics story. One day some famous guru of Economic Geography supposedly came to campus and gave a long lecture touting Site Location Theory with drawings of triangles and nodes etc. When he finishes Bert Hoselitz looks up and says "So, people will go farther for a baby grand piano than a lousy pack of cigarettes?"
Enjoy.
"Does anyone else want to say with a straight face that the Boyz are now gung-ho for regulation as opposed to deregulation, nationalization as opposed to privatization, etc?"
Well of course they're not for nationalization. Who would be, except for political or power-grabbing purposes?
As for regulation vs. deregulation, that's too crude a measure to say. They supported specific types of regulation, with the type varing from one industry to the next, based on incentives and other factors. In banking (and yes that would include mortgage lenders like Countrywide), they supported very strong, specific types of regulation, as Stefan has explained to you repeatedly. Your generic quote that the Chicago School is in favor of free markets in general doesn't really say anything about the sub-prime situation, does it?
ScentOfViolets:
"It seems then that you were being just a leetle disingenuous there. You seem to be trying to make the claim that if these people want some some sort of regulation on some particular, why, that must mean that they are not generally for deregulation after all."
WTF? Back up a second. My claim is simply that bringing up "the subprime mess, the ratings agencies not doing their jobs, the lack of oversight on certain financial instruments" as the prime examples of where Chicago economists see no place for regulation is just wrong, even if Chicago economists have strong deregulatory tendencies in anti-trust analysis. Anti-trust deregulation does not intellectually imply that certain types of financial regulation are not called for, and the Chicago view is exactly that.
Mankiw is not a good intellectual historian here, as DeLong points out. Mankiw is a Republican economist at Harvard with a anti-intellectual history bend (sound like a Republican?), while Delong is a somewhat eclectic Harvard trained Berkeley economic historian with a macro orientation, with a strong political economy and intellectual history spin.
ScentOfViolets ends with an appeal to authority and the desire for intellectual blinders:
"I'll end this subthread by noting that if Mankiw, of all people, is saying that the Chicago School is anti-regulation, that's good enough for me."
You're basing your intellectual world view here on a sound bite from a Bush administration economist made in the context of a political campaign. Just the sort of evidence that is 'good enough' for you, as you put it so well?
ScentOfViolet,
also, if you missed it, your Mankiw quote "Remember when the University of Chicago used to be the intellectual center of the deregulation movement? No more." sort of cuts against your contention that Chicago economists have revised their views on regulation. Which is it?
ScentOfViolet,
oops...
also, if you missed it, your Mankiw quote "Remember when the University of Chicago used to be the intellectual center of the deregulation movement? No more." sort of cuts against your contention that Chicago economists have NOT revised their views on regulation. Which is it?
Shorter ScentofViolets on Chicago economists:
1) "Wrong, Wrong, Wrong on any of a number of different issues, yet still, they refuse to change their theories."
2) I ask what issues these are: "we seem to be in a spot of trouble because of deregulation? Surely you've heard about it."
3) ScentofViolets then quotes against me Mankiw's claim that ""Remember when the University of Chicago used to be the intellectual center of the deregulation movement? No more."
ScentofViolet's bottom line from this chain of claims:
"Oh, and Stefan? It seems then that you were being just a leetle disingenuous there."
The social[ist] engineering profs who know nothing about the real world hate Friedman & his school which turned back the tide of mushy Commie claptrap in Latin America, earning their undying ire.
These "social" sciences [an oxymoron if there ever was one] profs are the same numbnuts who kicked Larry Summers out of Harvard because he dared to tell the truth---Torquemada lives, and thrives on every campus where the "social" & "humanism" & "gender" & "African" studies quack profs peddle their snake oil.
By studying the economy as it really works, and daring to confront the ideologues, Friedman & his colleagues have done us all a service, and helped unmask the Krugboys & their ilk as delusional frauds. Krugboy seems to have allies on the comment thread above. Fannie Mae & Freddie Mac are these clowns' idea of well-run economic regulatory agencies.
But this is a cite about anti-trust. None of ScentOfViolets initial deregulation examples are anti-trust examples. Where do you think Chicago anti-trust analysis as currently practiced goes wrong? Again, actual cites to Chicago economists would be useful.
Er, yes, but I brought that up in response to what you immediately said. Remember:
Iow, not addressing the other issue, but one _you_ brought up. This is dangerously close to cut-and-paste mendacity; please don't do this again. If not for the sake of intellectual integrity, at least for the pragmatic consideration that this sort of thing is usually an indicator that you don't have much of an argument.
That's funny, I sense a lack of interest in good faith on your part. If you want to correct my misapprehension, you could admit that the switcheroo you tried to pull was unintentional and wrong.
Er, you see, _my_ take is that there are appropriate times to regulate, based upon economic analysis as well as other considerations. And it's pretty undisputable that the general drift of the Chicago School is that in general, less is better. Based upon sober economic analysis, of course ;-) I'd also say that trying to appropriate the rhetorical high ground in such a clumsy fashion is also evidence that you don't really have much to go on(as well as bad faith.) No, you don't get to try to slip in the assumption that they are unmotivated by any ideology and are relying upon 'science' or 'analysis' alone.
ScentOfViolets,
sorry, I cannot figure out what I did which ought to be labeled "dangerously close to cut-and-paste mendacity; please don't do this again." I'm providing you with your passage when I argue with it, so you can tell what I'm referring to.
ScentofViolts writes in what I take to be his bottom line that
"And it's pretty undisputable that the general drift of the Chicago School is that in general, less is better. Based upon sober economic analysis, of course."
I don't dispute that in general the Chicago School sees lots of regulation as bad, based on sober economic analysis. It is simply that for the one example you brought up that is at the moment causing us all these problems -- financial regulation -- this is not actually true. I don't see why you keep claiming that an 'in general' claim about anti-trust covers all financial regulation of financial institution solvency, especially when I cited you a 1960 Friedman paper that calls for strict solvency regulations financial institutions.
I am taking a sociology class right now. It’s completely ridiculous. All left wing opinion presented as social science. So this kind of letter is not a surprise.
Hate to break it to you, but those financial instruments are 'financial innovations', you know, the kind that Milton Friedman approved of. I can't paste anything since it's in pdf format, but look at the last column where it speaks glowingly of these 'financial innovations' to hedge risk for banks. But indeed as Galbraith noted, these 'innovations' time and again are just leverage packaged under another name.
So much for the argument against 'financial innovations' being warned against.
You need to read what you write before you post. I never said this or implied it.
And so they're just wrong, eh? And you're right? Uh-huh. You know, this is _your_ cite I'm using. It strikes me as somewhat odd that you're complaining about it now.
Er, no I'm not. Again, to suggest otherwise, as if I hadn't taken this position before seeing this quote is just plain dishonest. And no, it's not an appeal to authority; it's simply pointing out that _even_ these guys acknowledge it, not _because_ they acknowledge it.
Sigh. You need to be consistent. Does Mankiw know what he's talking about or doesn't he? If you want to go with the former, then, yes, the 'University of Chicago used to be the intellectual center of the deregulation movement'.
If not, then why are you using this? You're just picking up whatever is handy and throwing it into an argument with no sense of what went before, whether you're being inconsistent or not.
Note, btw, that I'm not being inconsistent; it is Mankiw's latter claim that is being debated, not the former. _That_ seems to be pretty much accepted.
Now, unless you actually have something new, I'm out of here. You need to convince me of your good faith, for starters; you might mention that you were way out of line conflating two different replies to two different claims as being replies to the same claim, if you want to be serious.
You (the author) do not seem to get the point at all. Regardless of whether or not the Chicago School (and free markets) are beneficial or not, the point of an educational institution is to promote differences in thought and open-minded discussion. Thus, whether or not it is fairly "clear" that free markets are beneficial, it is not in our best interests to have an institution which implies monetarism and the Chicago School as its basis.
Especially in the social sciences (yes, economics is still a social science) it is vital to promote different opinions. Many thinkers including J.S.Mill and Ayn Rand - bastions of neoliberal thought - have recognized the importance and role of dissent. In naming an institution after a certain divisive figure you are not really encouraging future economists and thinkers the freedom to dissent if they so do wish.
Sigh. Why don't you provide the passage that you wrote that I was responding to? You know, what I _quoted_ when I made that statement?
Really, this is getting ridiculous.
Stefan--great comments. I mean it. But please don't feed the trolls.
So we want free markets of capital, but not free markets of ideas?
So we want free markets of capital, but not free markets of ideas?
ScentOfViolets:
I never cited Mankiw as an authority, I cited DeLong, who disagrees with Mankiw. You cited Mankiw.
And yes, I do recognize that your views here are not derived from reading Mankiw. I trying to figure out what they are based on, and you provided Mankiw. If you want to tell me what they are actually based on that would help the discussion.
Since you seem unable to distinguish the your claim -- which I don't dispute -- that 'the Chicago School was the center of the anti-trust deregulation movement in the 1970s' from your claim -- which I do dispute -- 'Chicago economists oppose financial solvency regulations in all cases and are unwilling to change on this issue' I don't see any point in continuing either.
"Now, unless you actually have something new, I'm out of here. You need to convince me of your good faith, for starters; you might mention that you were way out of line conflating two different replies to two different claims as being replies to the same claim, if you want to be serious."
Where do I do that? I don't see it. If I do I am obviously wrong and I apologize, but I've checked and I don't see where I do that.
"Stefan--great comments. I mean it. But please don't feed the trolls. "
Thanks Megan, I'll take the hint. Back to real work. :-)
But first, one final remark: one big issue here is that financial innovation, while good for some things, makes solvency regulation for financial institutions much harder. So there is a trade-off between the amount and sort of financial innovation one wants to permit and how well financial solvency regulation is going to work. It's an occassionally nasty learning process and the optimal trade-offs and the optimal regulatory structure are far from obvious. Friedman is much further on the 'regulation' side than on the 'innovation' side of this conflict than most people realize, and it is not at all clear he got this right. He certainly didn't have much evidence for it, except his view that financial crises can be really really bad and avoiding them is probably worth the costs of doing so.
It's not a hint--I welcome as many comments as you care to give us. But the old timers here have been around and around with SoV many times, adn trust me, it's not going anywhere.
Reminded of William F. Buckley, Jr's comment that he would rather be governed by the first 100 people listed in the Boston telephone directory than by the entire faculty of Harvard.
Milton Friedman did list the goals of late 18th Century and early 19th Century (then known as)liberals and suggested we go back to them.
Individual freedom
Lais-sez faire at home with rduced government role in economic affairs
Gobal free trade
Support development of representative governments
Self reliance of the individual and less reliance on the government
What's wrong with that?
Friedman Rocks.
I can't help but also think that a lot of this is being driven less by ideological concerns than just money. I think this part of the letter is really the crux:
Seems to me that this is really just jealousy that this institute will pull in tons of cash. The already-successful econ groups (Econ Dept. Business, Law, the Rational Choice guys in Poli Sci, the Economic Sociology guys, etc.) will be able to attract more scholars, more funding, etc. If you're in English, History, Anthro or Art History, you might think this sucks. The rich getting richer, and the poor staying poor, etc. etc.
Friedman became one of Pinochet's economic advisors years after the 1973 coup. ... In fact, it was the country's economic progress after Friedman and several other UC-educated economists advised the junta to restructure Chile's economy - particularly the privatization of government-owned monopolies and Chile's social security boondoggle - which stabilized the country, raised living standards, reduced the income gap and thereby enabled Pinochet and his co-conspirators to be removed from power.
Your first sentence above is technically true, but very misleading. While it's true that Friedman did not personally meet with or serve as a consultant to, Pinochet until two years after the coup, Pinochet was already thoroughly familiar with the Chicago School because a group of high-ranking Chilean economists had been tapped -- by a close colleague of Friedman's -- to come to Chicago and take part in a program training them in Friedman's theories. That program went on for decades. After the coup, that same group of Chilean economists invited Friedman to travel to Santiago to advise them on Chile's economy.
The economic and social policies Pinochet put into place shortly after the coup all came from the Chicago School, and they were brutal in their consequences for ordinary Chileans. For U.S. corporate billionaires and wealthy Chileans, of course, they were a dream come true.
Here are some links:
On the specific nature of the economic "reforms" Pinochet made and the effect they had on the Chilean people:
http://www.huffingtonpost.com/joseph-a-palermo/milton-friedman-jeane-ki_b_35992.html
Here is a PBS interview with Friedman in which, at the top of the article he praises Pinochet and says the Communists wanted to overthrow him because they hated freedom (with no mention of the coup). Then, much farther down in the interview, Friedman goes into that fairy tale you mentioned of Pinochet's economic policies actually creating political freedom which ultimately enabled the Chileans to oust Pinochet.
http://www.pbs.org/wgbh/commandingheights/shared/minitextlo/int_miltonfriedman.html#10
Here are some quotes:
"INTERVIEWER: Tell us about some of the abuse you had to suffer and the degree to which you were seen as a figure out on the fringes.
MILTON FRIEDMAN: Well, I wouldn't call it abuse, really. (laughs) I enjoyed it. The only thing I would call abuse was in connection with the Chilean episode, when Allende was thrown out in Chile, and a new government came in that was headed by Pinochet. ..."
WTF?!! Allende was "thrown out" -- by whom? What is this crap about "a new government came in that was headed by Pinochet"?
Pinochet overthrew Allende in a bloody coup that HE led, that was organized and aided by the C.I.A. Pinochet MURDERED Allende; he was killed in the coup -- the first of thousands to be killed, or disappeared, or tortured, over the next decade and more.
Continuing, Friedman speaking:
"The communists were determined to overthrow Pinochet. It was very important to them, because Allende's regime, they thought, was going to bring a communist state in through regular political channels, not by revolution. And here, Pinochet overthrew that. They were determined to discredit Pinochet. As a result, they were going to discredit anybody who had anything to do with him. And in that connection, I was subject to abuse in the sense that there were large demonstrations against me at the Nobel ceremonies in Stockholm. ..."
Again, Allende was the one who was overthrown. No one was plotting to overthrow Pinochet. People had enough to worry about just trying to stay out of the hands of Pinochet's military thugs and murderers. There are no words adequate to describe the savagery of what was done to Chileans under Pinochet.
As for that "They were determined to discredit Pinochet" -- as if there were anything creditable about Pinochet that COULD be discredited? The man was, as you yourself said, a butcher. What was there to discredit? Obviously, Friedman was determined to believe, or to pretend he believed, that Pinochet's reputation as a murderous monster was not deserved, but merely the result of a smear campaign.
Now we get to the punch line:
"INTERVIEWER: So you envisaged, therefore, that the free markets ultimately would undermine Pinochet?
MILTON FRIEDMAN: Oh, absolutely. The emphasis of that talk was that free markets would undermine political centralization and political control. ..."
Okay, so let me make sure I've got this straight. The evil Communists were trying to discredit Pinochet -- which suggests, of course, that Pinochet really wasn't the terrible man everyone said he was. BUT: Milton Friedman advised Pinochet -- a good, decent man being maligned by evil Communists -- to implement a pure free-market capitalist playground for the wealthy because Friedman knew that if Pinochet implemented those economic policies, the Chilean people would gain political freedom and get rid of Pinochet?
Obviously, the two positions are completely incompatible. But more than that, I'm taken aback by the implication that Pinochet's reign of terror was ultimately a good thing because the economic policies ended the reign of terror.
You are saying that it was acceptable for Chileans to be subjected to those years and years of terror because the man who was terrorizing them would be ousted via his own economic policies?
Please tell me if there is another way to understand what you're saying, because as it is, it makes no sense at all.
Friedman became one of Pinochet's economic advisors years after the 1973 coup. ... In fact, it was the country's economic progress after Friedman and several other UC-educated economists advised the junta to restructure Chile's economy - particularly the privatization of government-owned monopolies and Chile's social security boondoggle - which stabilized the country, raised living standards, reduced the income gap and thereby enabled Pinochet and his co-conspirators to be removed from power.
Your first sentence above is technically true, but very misleading. While it's true that Friedman did not personally meet with or serve as a consultant to, Pinochet until two years after the coup, Pinochet was already thoroughly familiar with the Chicago School because a group of high-ranking Chilean economists had been tapped -- by a close colleague of Friedman's -- to come to Chicago and take part in a program training them in Friedman's theories. That program went on for decades. After the coup, that same group of Chilean economists invited Friedman to travel to Santiago to advise them on Chile's economy.
The economic and social policies Pinochet put into place shortly after the coup all came from the Chicago School, and they were brutal in their consequences for ordinary Chileans. For U.S. corporate billionaires and wealthy Chileans, of course, they were a dream come true.
Here are some links:
On the specific nature of the economic "reforms" Pinochet made and the effect they had on the Chilean people:
http://www.huffingtonpost.com/joseph-a-palermo/milton-friedman-jeane-ki_b_35992.html
Here is a PBS interview with Friedman in which, at the top of the article he praises Pinochet and says the Communists wanted to overthrow him because they hated freedom (with no mention of the coup). Then, much farther down in the interview, Friedman goes into that fairy tale you mentioned of Pinochet's economic policies actually creating political freedom which ultimately enabled the Chileans to oust Pinochet.
http://www.pbs.org/wgbh/commandingheights/shared/minitextlo/int_miltonfriedman.html#10
Here are some quotes:
"INTERVIEWER: Tell us about some of the abuse you had to suffer and the degree to which you were seen as a figure out on the fringes.
MILTON FRIEDMAN: Well, I wouldn't call it abuse, really. (laughs) I enjoyed it. The only thing I would call abuse was in connection with the Chilean episode, when Allende was thrown out in Chile, and a new government came in that was headed by Pinochet. ..."
WTF?!! Allende was "thrown out" -- by whom? What is this crap about "a new government came in that was headed by Pinochet"?
Pinochet overthrew Allende in a bloody coup that HE led, that was organized and aided by the C.I.A. Pinochet MURDERED Allende; he was killed in the coup -- the first of thousands to be killed, or disappeared, or tortured, over the next decade and more.
Continuing, Friedman speaking:
"The communists were determined to overthrow Pinochet. It was very important to them, because Allende's regime, they thought, was going to bring a communist state in through regular political channels, not by revolution. And here, Pinochet overthrew that. They were determined to discredit Pinochet. As a result, they were going to discredit anybody who had anything to do with him. And in that connection, I was subject to abuse in the sense that there were large demonstrations against me at the Nobel ceremonies in Stockholm. ..."
Again, Allende was the one who was overthrown. No one was plotting to overthrow Pinochet. People had enough to worry about just trying to stay out of the hands of Pinochet's military thugs and murderers. There are no words adequate to describe the savagery of what was done to Chileans under Pinochet.
As for that "They were determined to discredit Pinochet" -- as if there were anything creditable about Pinochet that COULD be discredited? The man was, as you yourself said, a butcher. What was there to discredit? Obviously, Friedman was determined to believe, or to pretend he believed, that Pinochet's reputation as a murderous monster was not deserved, but merely the result of a smear campaign.
Now we get to the punch line:
"INTERVIEWER: So you envisaged, therefore, that the free markets ultimately would undermine Pinochet?
MILTON FRIEDMAN: Oh, absolutely. The emphasis of that talk was that free markets would undermine political centralization and political control. ..."
Okay, so let me make sure I've got this straight. The evil Communists were trying to discredit Pinochet -- which suggests, of course, that Pinochet really wasn't the terrible man everyone said he was. BUT: Milton Friedman advised Pinochet -- a good, decent man being maligned by evil Communists -- to implement a pure free-market capitalist playground for the wealthy because Friedman knew that if Pinochet implemented those economic policies, the Chilean people would gain political freedom and get rid of Pinochet?
Obviously, the two positions are completely incompatible. But more than that, I'm taken aback by the implication that Pinochet's reign of terror was ultimately a good thing because the economic policies ended the reign of terror.
You are saying that it was acceptable for Chileans to be subjected to those years and years of terror because the man who was terrorizing them would be ousted via his own economic policies?
Please tell me if there is another way to understand what you're saying, because as it is, it makes no sense at all.
"the rural poor in Mexico hold towards capitalism vary widely from those held in Buenos Aires."
That's because there is not so much capitalism as feudalism in Latin America. A few rich people and a lot of poor people. Almost no middle class (except in Chile and maybe Mexico). No social mobility. Extreme racial prejudice and rigid class structure (I know, I said that already.) Then, of course, all the problems Hernando de Soto addresses in his book -- lack of access to capital, poorly-defined property rights, etc. (The "etc" means I can't remember the others.)
Layering a thin veneer of capitalism on top of the system does nothing to address the underlying structural issues.
Class Factorum writes:
"That's because there is not so much capitalism as feudalism in Latin America. A few rich people and a lot of poor people. Almost no middle class (except in Chile and maybe Mexico). No social mobility."
It is not actually clear that Latin America has lower social mobility that the US, indeed by standard measures it can appear higher. What is clear is that inequality is higher. See for instance
ALEJANDRO GAVIRIA, Sibling Correlations and Social Mobility in Latin America
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=192588
On the other hand, elite persistence seem higher than in the US, for instance in Chile:
http://econ.uchile.cl/public/Archivos/pub/75504e79-7bfc-4da9-9843-b4c3b8476f30.pdf
In the end, this suggests that there is both good and bad social mobility: good mobility because people born poor can make use of their abilities, but also bad mobility due to random risk and people being wiped out by circumstance. Badly functioning societies can have both more and less social mobility than well functioning societies, depending on which kind of mobility dominates.
Time for me to stop commenting...I got the signs wrong above on the Gaviria paper...so yes, even by standard measure the US as higher social mobility than all Latin American countries. So much for quick and sloppy contrarianism.
Kathy -
"Obviously, the two positions are completely incompatible."
Nonsense, the two are perfectly consistent.
First, many parts of your argument have already been discredited earlier in the thread. It wasn't as clear-cut as you claim.
But taking just the quotes you provide from Friedman, if Allende was trying to force a conversion to communism, then he obviously would have done enormous damage to the country. There's nothing ambiguous about the track record of communism.
Second, it's possible that Pinochet was genuinely trying to do the right thing for Chile. That's highly controversial, of course, given the extreme measures he took, but the extreme measures may have been needed against such a brutal enemy (the communists).
But third, even if Friedman believed that Pinochet was a 'benevolent' dictator, a capitalist democracy is better than any dictator, no matter how well-meaning. So Friedman's positions were perfectly consistent.
And Kathy, your argument would have been much more credible if you had said "and Friedman also advised the Chinese Communist Party, which had a far worse record than even Pinochet in terms of massive, brutal slaughter". You talk about the 'years and years of terror' that Chileans were subjected to, but you couldn't possibly consider them worse than the Great Leap Forward or the Cultural Revolution, could you? Why the double-standard?