Monday, November 17, 2008

Friedman is the Frankenstein of Economics

‘Chicago Boys’ Home

University of Chicago professors protest school’s planned ‘Milton Friedman Institute’

By Adrián Bleifuss Prados

Originally published November 17, 2008 in In These Times

In the wake of the massive Wall Street meltdown, laissez-faire economic theories seem increasingly quaint. But the University of Chicago wants to keep the flame of neoliberalism alive.

In May, the university announced plans to honor the late economist Milton Friedman by establishing the Milton Friedman Institute (MFI). Friedman — who died in 2006 — taught at the University of Chicago from 1946 to 1976, and was one of the leading lights of the right-leaning “Chicago School” of economics.

However, more than 100 faculty members have signed a petition objecting to the MFI. The group of dissenting professors calls itself the Committee for Open Research on Economy and Society (CORES). CORES will make its case against the MFI at a faculty senate, a rarely held assembly of the entire faculty to be held this fall.

Yali Amit, a professor in the Departments of Statistics and Computer Science and one of the petition’s signers, cites several broad objections to the proposed institute. The most basic complaint involves the MFI’s name. According to Amit, Friedman, the Nobel laureate and accomplished technical economist, “cannot be disentangled from Milton Friedman, the right-wing ideologue.”

As an academic, Friedman promoted monetarism, a school of thought that advocates limiting the government’s role in the economy to the central bank’s control of the money supply. He also helped shape the current understanding of the relationship between inflation and unemployment, and the phenomenon known as stagflation — inflation plus stagnant economic growth. However, it was Friedman’s career as a right-wing, anti-government pundit that made him renowned.

One of his main principles was that free-market capitalism is the handmaiden of liberal democracy. But the most famous implementation of Friedman’s ideas occurred in Chile, under the jackboots of the brutal military dictatorship that seized power in 1973. Although he expressed perfunctory opposition to the regime’s human rights abuses, Friedman met with its leader, Gen. Augusto Pinochet, and lectured in Chile during the years of oppressive military rule. Several prominent Friedmanites — known as the “Chicago Boys” — took key positions in the Pinochet government.

Friedman’s association with Pinochet is one aspect of his career that troubles members of CORES. Many professors also fear that the MFI would resemble the Hoover Institution at Stanford University, a right-wing think tank attached to a respectable university. The Hoover has been the home to such questionably distinguished scholars as former House Speaker Newt Gingrich, Reagan-era Attorney General and Iran-Contra conspirator Ed Meese, and talk radio host Laura Ingraham.

“Anything that would even vaguely resemble the Hoover would be deeply troubling,” says Bruce Lincoln, a professor of the history of religion at the Divinity School, and a vocal critic of the MFI.

The University of Chicago administration denies that the center’s work will be ideological. But according to language in the original proposal, “the intellectual focus of the institute would reflect the traditions of the Chicago School … [including Friedman’s] critical analysis of monetary policy, and his advocacy for market alternatives to ill-conceived policy initiatives.”

A related concern is that the MFI could become a fundraising tool specifically targeting persons and institutions with a material interest in promoting Friedman’s political agenda. The money for the proposed institute — a staggering $200 million — is to be raised almost exclusively by corporations and wealthy individuals. According to the MFI’s website, persons donating $1 million will become lifelong members of the Milton Friedman Society and will “provide the Institute’s scholars with connections to leaders in business and government.”

Adding insult to injury, the Friedman Institute will occupy what is currently the Chicago Theological Seminary’s historic main building. In a letter to the University of Chicago Magazine, an alumnus suggested that the institute might be re-christened the “Friedman Seminary for Divine Economics,” since the neo-Gothic landmark will be trading one theology for another.

Adrián Bleifuss Prados is a history major at Haverford College.

What are think tanks for?
"The Washington, D.C.-based nonprofit public policy organizations constituted by section 501c3 of the U.S. Tax Code ("think tanks", TTs or "tanks") monitor and adjust governance norms and networks by using research, analysis, and advocacy to structure discourse about social problems and solutions among multiple elites and in the popular imagination."
TTs exist for myth-making. Here again, our hubris leads us into catastrophe.

"America is center-right!" the Right began whining on November 5. And now we add, "The horrible noise you hear is not Friedman's mythical free market crashing all around you."

The horrors of Friedmanism trace right back to UC, and now someone wants to honor the Dr. Frankenstein of economics with a permanent myth-making lab.

No matter what evidence accrues, the social Darwinian myth remains the same: Ayn Rand is god, Friedman can do no wrong, and the way forward is to redouble our efforts along the path to disaster.

Naomi Klein nailed it on The Colbert Report
Klein: Yes. Here’s another example of disaster capitalism. After Hurricane Katrina, this is the classic example.

Colbert: I remember it. I remember it. Yeah?

Klein: I was in New Orleans. I was working on this book at the time. The city was still underwater. Richard Baker, the Republican congressman, says, "We couldn’t clean out the public housing projects, but God did." They used a horrible disaster to push through this preexisting agenda that hey had. They don’t believe in public housing. You know what they believe in? ....What they believe in is getting poor people into houses they can’t afford, so that their friends can speculate on the money, and then they can bail them out.
Feudalism, not democratic republicanism, cries out with every move of BushRoveCheneyCo; the conversion of our Common Weal into private property in the context of a holy war.
In the 1950s, there was great concern at the State Department about the fact that Latin America, then as now... was moving to the left. There was concern about what they called the “pink economists,” the rise of developmentalism, import substitution, and, of course, socialism....

So, this plan was cooked up--it was between the head of USAID’s Chile office and the head of the University of Chicago’s Economics Department--to try to change the debate in Latin America, starting in Chile, because that’s where developmentalism had gained its deepest roots....

And so, the Chicago Boys were born. And it was considered a success, and the Ford Foundation got in on the funding. And hundreds and hundreds of Latin American students, on full scholarships, came to the University of Chicago in the 1950s and '60s to study here to try to engage in what Juan Gabriel Valdes, Chile’s foreign minister after the dictatorship finally ended, described as a project of deliberate ideological transfer, taking these extreme-right ideas... and transplanting them to Latin America. That was his phrase--that is his phrase.
Clearly, this is feudalism.
"Feudalism in this sense is... based on the relation between lords and the peasants who worked their own land and that of the lord. The peasants owed labour service to the lords, who provided military protection and also had extensive police, judicial, and other rights over the peasants... Feudalism came to encompass all aspects of social organization and was characterized as a system that was both oppressive and hierarchical." [Ency Brit Std Ed Chicago: 2008]

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