On "Capitalism and Freedom" by Milton Friedman ****

This work reads a lot like that of Hayek's. Friedman ties political freedom to capitalism or economic freedom. The reasons make a lot of sense in theory. The more power is concentrated in a few hands the less freedom there is. As such more and localer governments are preferred, giving one opportunity to move if displeased, as opposed to a strong central government. We should not expect government to work for us nor to work for government; rather we should ask what we can achieve through government, through voluntary association. This all sounds good. But then you get down to reality, and this is not always so great. Friedman gives the example of social security. We should have freedom to use that income as we see fit rather than the government taking it and only handing it back to us when old. Yes! Except, wait. How many will actually invest that money and have it on hand when old? And how many can afford to save like so? And what happens when people don’t? Do we just let them suffer, or do we end up paying anyway? (A better example is health care, where such freeloading ends up costing those who actually pay, because we aren’t generally cruel enough to just let the poor or the unwise die on the street.) Too much centralization is awful but a lack of centralized standards can be awful as well. There are reasons equality and well being are of importance; it’s a balancing act with freedom. That’s because free markets don’t dispense with power dynamics; they just move the from government to those with more resources.

Friedman next turns to the role government should play in the economy, which is solely as a rule maker and arbitrator. A key conflict he notes is the need to allow people via the market to make decisions and to combine at will while also keeping that combining from manipulating the market through monopoly. Friedman acknowledges that some industry is better with monopoly because of its nature— utilities such telephone and historically railroads. But what to do with such monopolies? There are three choices: let the government have the monopoly; let the government regulate the monopoly; or let the private monopoly flourish. Friedman actually proposes the latter as the least evil. He says that when the government controls the monopoly, at some point it interferes with innovation. An example is the railroad, which if it had not been regulated, would have eventually split up naturally in the face of new transport opportunities like cars and planes. Instead the government continues to regulate trains and the industry suffers. While deregulating trains might be good, given new technologies, I think letting a monopoly flourish when at its height likely would have kept those new industries from emerging. In the previous chapter Friedman had said all innovation came from private sector, but that is simply not true. Government has often seeded innovation: think of NASA. When it’s too costly and the reward to ethereal, private enterprise is not going to even try a particular innovation. Government can sponsor such.

Friedman tries to blame the Great Depression on government regulation, which seems ludicrous to me. Certainly failed fiscal policy may have helped it along, but the idea that government overreach always makes economic trouble worse seems like poppycock.

Here are some things Friedman would have the government get out of: national parks, farm and housing subsidies, bank regulation, tariffs, social security, business licensing, FCC. I’m dumbfounded. Licensing is a pain and can be abused, but it also protects consumers. FCC regulation helps distribute limited bandwidths so that we have media at all. And every time we deregulate something with the banks, we find ourselves in some economic collapse a decade or two later caused by people gaming the system. Government has a role to play, and that role does stomp on our freedom, but it’s so that others don’t do the same but without a regulator to try to make things somewhat even. I can empathize with the idea of trying to keep power out of the hands of a few, but Friedman puts way too much faith in the supposedly unbiased market. But once monopolistic behavior arises, control is still bound up with just a few people. A democratic government at least lets a wider swath of people at least attempt to keep things even.

On fiscal policy Friedman calls into question Keynesian economics. He notes that government expense to spur the economy do just the opposite, simply making things worse and bloating the government. He points to 1937 when government expenses were cut in the Great Depression and how all Econ troubles resumed. But that seems to me precisely the issue. The government wasn’t aggressive enough to truly put an end to the trouble until ww2. Nevertheless he claims that stimulus is never ending and raises inflation and takes as much from private sector as it gives. This would seem to be true but the idea is that such stimulus is to be temporary; we’re just not good at cutting. In that sense Friedman’s preference for tax cuts instead, if there is stimulus at all, has some point, because it would tend toward shrinking government instead of adding to it. But the problem is the same, since no one wants more tax just as no one wants less government service, so we still end up usually with permanent greater debt. A better means of stimulus might be in the form of grants to private sector: temporary and one time but helping to spur one hopes an economy that has sputtered. (His claim that government stimulus never works seems very dubious to me, having seen it used twice to deal with turmoil and also in reading of troubles in less regulated late 1800s. Yes stimulus leads to inflation, but it does help restore spending in low times more that nothing would. It stops the trouble from getting worse.

On the education front, Friedman espouses vouchers. He notes that ideally only parents would pay for kids, save that society does reap some benefit from an educated populace such that government payment is justified. Still a voucher system with minimum standards about what kids are taught gives parents more choice and drives innovation and excellence through competition. It would also put all people on the same level and better integrate schools. (I have middling feelings about vouchers. If someone who pays in to public school but chooses private schools on top of that now gets money back, that would take money from those who already have less. Minimum standards means government would now wield some authority over private schools. And finally who is to say that vouchers would pay for all of education. A high class institution could charge more and thus cut off poor, leaving them able only to attend poorer schools that can be paid fully by vouchers. Still, I like the idea of giving students more choice.) Friedman argues that only lower level schooling should be paid for and not anything like basket weaving or basketball, which only helps the individual and not the state. For this reason higher education, especially as related to professional programs should not be paid for or operated by the state. You want to be a doctor or plumber, you pay for that yourself because you reap the financial benefit. (Friedman doesn’t address how public education for some such programs can help society fill shortages, but I suppose the free market would do that just as well, since jobs in need would pay more and thus would be more likely to have people willing to pay for education in those fields.) This still leaves a problem for those too poor to pay for such vocational training. Friedman proposes loans based on income one makes after (say the loaner gets 10 percent of your earnings); he acknowledges this is in a way akin to slavery, however. This might be something the government could supply—then it’s more like a tax but only on the beneficiary. And in a sense that’s what has happened with students loans the government sponsors.

On civil rights, Friedman espouses a color-blind society—neither laws enforcing integration nor laws enforcing segregation. In principle I can agree; in practice, it is not realistic. On some level, it seems like we should be able to associate with whom we want, and as Friedman notes, those who choose not to serve part of a community necessarily weaken their economic status compared to others, because they're limiting their audience. Except—and Friedman shares this counterpoint—if a community forges a standard bias such that when one openly breaks that standard, one actually sees economic trouble one would usually not see. He compares race to taste, but in that there is a great problem. Taste may mean blues musicians are in higher demand than classical, but a musician can switch music genres. That’s a whole other world to race, and the like. Despite misgivings, I find it fair that government takes a swing at preventing such biases. Freedom of association is wonderful until one is one of those not free to associate. But it is a tricky proposition, with inherent contradictions, because we clearly allow such freedom in some circumstances while not doing so in others. But not forcing such a situation, one could argue, actually reduces the unity of the society and thus its ability to function.

The most interesting idea in Friedman’s discussion of monopolies is that there should be no corporate income taxes. Rather shareholders should be taxed on company profits. This would encourage larger dividends rather than companies keeping their capital. In turn money would be invested in new enterprises and where it is needed, rather than companies squirreling money away and trying to find new ways to reinvest. It actually would help small businesses more. Interesting argument. After corporations aren’t people but rather the people who make up the corporation. In this sense also corporations should not be involved in welfare and social things; their job is to make money for the investors. Making them worry over other things dilutes their purpose and takes away individual’s freedom. As a stockholder I shouldn’t be forced to give via the company to things I don’t want to give to.

Already noted is how Friedman is against licensing, which he sees as just another form of monopoly, usually perpetrated by those already in a business. He lays out three options for ensuring people belong in a business and says the first two are better options: registration, certification, and licensing. In the first, you put your name on a list, of say gun sellers. Then if we need to figure out where a gun came from we can do so. It also might involve a tax. Certificates involve noting you’ve passed certain criteria like a CPA; others can still enter the business but the certificate gives the educated a leg up and helps customers know a bit about the risk they’re taking if they hire someone else. Licenses keep people from entering a business if they don’t pass a test. Friedman shows how licenses essentially establish a monopoly in fields like medicine; he has a point. But how to keep from malpractice without a license? Let people sue more easily for bad behavior; then again, I’m not sure I’d want money in exchange for poor doctor care.

Next comes redistribution of income, which he says is ineffectively done in taxes and unfair. Luck will always play a role in wealth, along with merit. It’s unfair to penalize someone who manages to do well. He’s a proponent of the flat tax. I have not thought it a great idea insofar as I tend to think there needs to be a way to reset wealth for the sake of balancing societal power. Yet he has a point insofar as he shows how our tax system allows so many loopholes that in fact we end up not with a tax on the wealthy but on those who would otherwise become wealthy. We tax income, not wealth. We don’t tax capital gains at the same rate. And so on. He would tax all money made at the same rate with only a single standard deduction. I’ve always liked the simplicity of such an idea. Not sure of its effectiveness in practice.

Unsurprisingly Friedman comes out against housing assistance, minimum wage, and social security. I see his point about housing assistance and his preference just to hand out money is less paternalistic; I see another solution in South America, where one program hands out half finished houses, giving people a home they own and a place they are invested in. Minimum wages have their problems, I will agree, but I do think establishing a baseline is important and useful. And I am not keen on the poverty of the old that would result if social security went away; there are reasons it was instituted.

That said removing all of the above programs might be fine if his other proposal were instituted: the negative income tax (or in other words the minimum livable income). This seems a bit surprising coming from a neoliberal. But it makes a lot of sense. It is the least paternalistic and offers the greatest freedom, while hopefully keeping folks from becoming indigent. In practice it might work (as some experiments have shown), or it might just lead to inflation in the manner that minimum wages do (or so the argument goes), such that the negative on the income tax does not really provide a livable minimum. (Indeed, I remain mostly skeptical. If we were all paid enough to survive just by living, I would venture that folks would be less inclined to work jobs they didn't like or want unless those jobs paid significantly more than the minimum given out by the government. I mean, why work if you're going to get paid whether you do or not? So some typically disliked job like fastfood would have to pay, I'd think, at least $500 more per month than what your negative tax would be. That would mean that prices would rise accordingly, which would result in that same vicious circle one gets with minimum wage.)

While I don’t buy into Friedman’s anti-Keynesian narrative, I find many of his ideas interesting and possibly better than how we manage the economy now. Much to think on.

On “The Community of the Beloved Disciple” by Raymond E. Brown ***

Brown's focus on the author(s) of the Gospel of John and the epistles of John provides some great insights, but as with the other work I've read of his, on Antioch and Rome, his conservatism on some levels mixes with conjecture to the extent that I found the work a bit hard to believe in spots. The basic aim of the book is to trace the development of the Johannine community, which Brown takes as being independent of other Christian groups in its early phases.

The earliest Johannine Christians were Jews with a lot of respect for Jesus but who were to an extent outside the realm of typical Jewish believers. Then, folded into them were the Samaritans, who brought along into belief a higher Christology. These developments in turn eventually led to their dismissal from the Jewish synagogues, which is when the Fourth Gospel was written, after this dismissal. Brown does some close readings of John to show how that most likely was the case, which I enjoyed being reminded of. For Brown, the author and person the community looks to is someone known as the Beloved Disciple. How or why John ends up being affiliated with the Beloved Disciple, I'm not sure, but for the community itself it is this disciple who is most important, a disciple who in Brown's theory, is not John.

With the group dismissed from the synagogue, it begins to turn its criticism to “outsiders” (as in the first epistle). These are people who retain relationships with the synagogue, whether as Jews or as hidden Christians, but more schism is on the horizon.

With time, this Gospel is interpreted in different ways by members of the community, and there is a split in the community, with one group moving steadily toward docetism and the other eventually being subsumed by the larger Christian community/church. This is the origin of the epistles for Brown, with one man writing against the group that is moving toward docetism. Because the community was not strongly authoritarian but rather followed the lead of the Holy Spirit, the irony of the epistles is that the author has to try to balance this lead of the Spirit with a certain dallying on authority. He does that by claiming only his group is following the lead of that Spirit. Eventually, with Ignatius, the idea becomes that one follows the leaders who are spirit led.

At least one author has called into question the idea that so many Christian groups existed in the first century, and while I think he might be a bit too conservative in stating that there really was just the one church—I do think some schisms did happen—Brown seems to be positing so many groups in the first century that one wonders who a church even came to be. I don't really buy that there was a Johannine community that was distinct from Paul and from the Twelve, headed by Peter or that some unnamed individual who goes undiscussed in the other gospels was a close affiliator with Jesus and only shows up in the Fourth Gospel.

On “The World Is Flat” by Thomas Friedman ****

Admittedly, I got Thomas and Milton mixed up. Milton is now next on my list. Thomas is an economic journalist; Milton is the actual economist. Still, I would have ended up reading this book no matter on this same economics list. It was the rage twenty years ago, just shortly after I moved to Georgia. I remember lots of NPR interviews and the like. Interviews with the author made me uncomfortable, because the topic is one to make one uncomfortable—namely, globalization's effect on each and every person on the planet, which can have some rather difficult implications for any single person who is looking to maintain a job. At thirtysomething, this was scary; at fiftysomething, I should be even more scared, insofar as it would be much harder to change focus and grab some new career. The fifties were many of my parents' generation lost jobs; some ended up getting better work, but others struggled along at odd jobs for the next decade until social security kicked in and never really recovered financially. Still, what give me some condolence is that globalization didn't come for me in the intervening twenty years.

It's interesting reading Friedman's book in the context of the new Trump administration. One can look at much of what he's doing as a reaction to just the sort of things Friedman writes about, and at least according to Friedman, they are just about the worst reaction one can have. Cutting one's self off from the world—with trade barriers and anti-immigrant policies—are more likely to slow the economy than protect the jobs one has. That would be Adam Smith's view too: trade barriers are good only to protect industries that are essential to protect for the national interest, like, say, military weaponry and the raw materials that go into that. But one can see why cutting the nation off from the world would seem to be the initial reaction.

Friedman makes clear the globalization is likely to lower the relative wealth of the United States, that is, wealth relative to other nations. However, it is also likely to “grow the pie,” as conservatives have in the past argued about income inequality. That is, it doesn't matter if the rich get richer faster if everyone is getting richer. There isn't a limit on riches one shares.

The first part of Friedman's book focuses on how globalization takes place and what sort of technologies have allowed that to happen, with numerous stories about businesses that have put such technologies into practice, things like offshoring and special software and so on. One of the most interesting developments to me was the case of UPS, which I had been totally unaware of. Apparently, some manufacturers have outsourced the repairs on their products to UPS. What I mean by that is instead of some Asian electronics manufacturer having us ship the defective product all the way back to the factory, it'll arrange for UPS to do not just the delivery but the repair itself. Numerous companies have apparently done this, such that UPS has facilities that are set up to fix stuff. This cuts down on shipping time and cost, for a fee that UPS reaps from the manufacturer, and makes things more convenient for the consumer.

So how are we to cope with things like accounting and taxes and constumer service and, well, just about anything one can think to outsource, and then even things one thinks can't be outsourced, to another nation with a labor force hungry for work and a cheaper cost-of-living? Friedman notes that the easiest tasks have been those that have tended to be farmed out, the standard accounting, for example. That allows those living in the older richer economies to focus on creative and more difficult endeavours. To do that, we need to be on our game in terms of maintaining education. (Something that seems, again, awful in terms of how it is precisely in education that the current administration has seen fit to start many of its budget cuts.)

But even this seems a difficult maneuver to me, when so many of the workers in a place like India actually have great educations. Who's to say an engineer has to be American? One could have the top-notch engineer overseas just as easily do the same work cheaper. In that sense, while Friedman's education argument makes some sense, it also doesn't seem a cure-all. Friedman talks of how some people he know have developed throughout their careers, moving from one thing to another in terms of starting off as, say, illustrators, then moving to medical illustration, then some very narrow portion of the industry—each time, making the change in light of the fact that the previous task became too easy for others (often overseas others) to do using software and training and thus lowering the price of the service. One of the things that made me so anxious when I heard about this book at thirtysomething was the way in which Friedman really pushed education—or really, reeducation. But the thing is, I like learning and study, but I didn't want to be in school constantly, chasing a new certificate or degree every five years because the previous job is no longer necessary. It's tiring enough working forty hours a week; add constant night classes on top of that just to keep a job, it just seems like a drudging way to live.

One interesting proposal in that regard, however, is Friedman's idea of underemployment insurance or transitionary employment insurance. Instead of paying people money when they lose their job or reward them for training, pay people for taking a job in a new-to-them industry, even if it means lower pay. It makes sense. So you're an engineer, but the product you worked on and specialized in goes defunct after twelve years; you were in the higher levels of the company and now you are out of work. You're chasing another job with equal pay, but there aren't many left in that sector of the industry anymore. Instead, employment insurance would pay you not just to go to school for retraining but rather for taking more of an entry-level position in another industry. It would make up the difference, and then, on the job, as you gain more experience and move up and earn more money, the insurance would kick off. This seemed one of the best ideas in the book, which if ever implemented, really would help people in a globalizing and fast-changing economy, one that we really can't recede from and expect to remain relevant or well off. (Indeed, Friedman criticizes the Bush administration for doing to some degree just that in reaction to 9/11, with its focus on closing borders and old gas technologies, rather than being forward thinking, and here we seem to be doing that again—but to a much greater degree.)