Wither Friedman?

Guest Blogger

For the Balkinization Symposium on Andrew Koppelman, Burning Down the House: How Libertarian Philosophy Was Corrupted by Delusion and Greed  (St. Martin’s Press, 2022).

Jennifer Burns

Andrew Koppelman has given us a polemical, lively, and smart take on the various political traditions, ideologies, ideas, and irritable impulses captured by the general category of “libertarianism” in the contemporary United States.  The book’s greatest contribution is to break up the static category of libertarian.  It’s a little too neat to separate libertarianism into two warring camps, but the heuristic does offer a useful way into an ideological and political space that could use more curious visitors and analytic legal minds.  Koppelman also makes a useful intervention when he pulls libertarianism across the partisan divide, not only by expressing his own appreciation of the creed from a leftist position, but in his arguments for libertarian’s influence on American liberalism.  In his telling, what was most valuable in the libertarian tradition was absorbed into the political mainstream; Koppelman denounces the leftover bits.  Several commentators are skeptical of this argument, but Koppelman’s narrative is echoed by new interpretations of the late twentieth century like Gary Gerstle’s Rise and Fall of the Neoliberal Order and Elizabeth Popp Berman’s Thinking Like an Economist.   

Which brings me to a central hole in Koppelman’s account… where is the discipline of economics?  Where is Milton Friedman?  Perhaps it’s inevitable that having just finished writing an intellectual biography of Milton Friedman, I see the world through that lens.  Nonetheless, I do believe there is a case to be made that Friedman plays a central role in Koppelman’s story.  In many ways he could be swapped in for Hayek – yet Friedman was far more central than Hayek to modern economics and American political debate.  As both a dominant force in economics from the mid 1960s to the early 1970s, and one of the most visible public figures advocating free markets in the following decades, Friedman played a central role in articulating libertarian ideas and in tempering their excesses.

Contra Koppleman’s account, Friedman wrestled with the very same divide he identifies: whether or not to embrace what Friedman called “the capitalist ethic.”  This was the basic set of ideas Koppelman calls “tough luck constitutionalism” and links to Murray Rothbard and Ayn Rand.  Yet well before Rand and Rothbard emerged as important figures of libertarianism, Friedman sensed this was a basic moral dilemma of what he called “liberalism” – how to understand inequality, whether to justify it or merely tolerate it, and whether or not market and life outcomes reflected moral merit, luck, or some combination.  

Further, Friedman felt compelled to address this question in part because he clashed with the Koch network of his day, who advanced tough luck, Rothbard-style arguments: organizations like the Foundation for Economic Education, one of the first business conservative groups.  Moreover, Friedman was also motivated by disagreement with Hayek, specifically his laissez faire response to the Great Depression.  By the time they met in the late 1940s, Hayek had recanted his “liquidationist” response, and become far more open to a limited welfare state.  Even so, many of the ideas Koppelman attributes to him, like a social minimum, were advocated far more strongly by Friedman, who first sketched out a universal basic income concept in 1939.  To the extent Hayek later embraced such ideas, it was a process of persuasion in which the line ran from Friedman to Hayek.  While Koppleman needs a fairly static Hayek to serve the purposes of his polemic, readers looking for more nuance on Hayek and his evolution should take a look at the newly published Hayek: A Life, 1899-1950. 

And where did Friedman ultimately come out on the question of the “capitalist ethic”?  The answer is telegraphed in the title of his popular book Capitalism and Freedom, co-written with his wife Rose.  Freedom became the way Friedman could avoid embracing or celebrating inequality.  Instead he framed it as an unfortunate byproduct of a greater social good – the freedom to choose an occupation, with varied results in the marketplace.  Yet this did not mean inequality should not be addressed or ameliorated; hence his vigorous advocacy for a negative income tax, the legacy of which persists today in the earned income tax credit, the child tax credit, and other policy programs. 

Relatedly, Koppelman overlooks how the habits of mind he decries were inculcated not merely by popular libertarians, but by academic economics.  Take his opening vignette about the Cranick house fire.  Many of the justifications for the fire department’s inaction were couched in the language of incentives – that saving the house would surely incentivize others to skip the tax bill.  Koppelman concentrates his fire on libertarianism’s flawed account of property.  But a flawed account of incentives is also at work, and it tracks back to the assumption of utility maximizing at the heart of economic thought.  I don’t mean to imply all economists would passively accept the house fire; in fact I’m sure most would not.  Economic assumptions of rationality and response to incentives are useful in economic analysis, and they’re useful when considering aggregate behavior.  That doesn’t meant they should be expanded into a political philosophy without modification, or made so rigid they can’t accommodate emergencies and exigencies.  But a large part of libertarian’s power in public discourse comes from how it tracks the language and logic of economics, which has become a lingua franca of the educated classes and policymakers.  The most extreme arguments may come from Rand, Rothbard, and Nozick.  But they find purchase in part because they resonate with the more familiar logic of economics. 

I must add a few words about Ayn Rand before I go, given Koppelman’s strong views on her philosophy.  In some ways Rand is a difficult fit for an analysis of political philosophy.  But she did have a clear intellectual agenda: she was trying to create a new standard of morality that was specifically devoid of obligation. She believed too much emphasis had been placed upon doing things for other people as a source of moral merit, and thus wanted to create a system where the only moral act was one of self-concern, and acts traditionally considered moral really did not have a moral charge or valence, and were simply peripheral.  The motivation for this quest, Koppelman notes, was her experience of living in Soviet Russia.  There is another element: an overt and deliberate rejection of the gendered obligations of child rearing and caring for dependents, along with the Jewish religious duty to bear children.  Rand spelled little of this out, preferring to recreate the core historical experience of living under communism in a fervid dreamworld, set in the United States.  It could happen here, Rand insists, using her experience with Soviet propaganda and her Hollywood background to create overdrawn symbolic characters meant to carry an ideological message.  Thus she is best understood both in relation to political ideas and literary traditions like dystopia and science fiction.  Nonetheless I’m glad Koppelman included Rand in his analysis, despite his obvious distaste for her oeuvre, because Rand is indispensable for understanding the historic development of libertarianism.  She reminds us that radical political ideas advance by triggering the imagination as well as the rational mind. 

Jennifer Burns is Associate Professor of History at Stanford University. You can reach her by e-mail at jenniferburns@stanford.edu.