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Philosophy
Milton Friedman Was All Wet, Part 2
Milton Friedman was all wet on "intolerance" Part 2 of 2.
Posted November 5, 2012
Friedman's next intolerant attack is aimed at Mises and praxeology. He states,
So far as von Mises is concerned, I refer to his methodological doctrine of praxeology. That's a fancy word and it may seem highly irrelevant to my topic, but it isn't at all. Because his fundamental idea was that we knew things about "human action" (the title of his famous book) because we are human beings. As a result, he argued, we have absolutely certain knowledge of motivations of human action and he maintained that we can derive substantive conclusions from that basic knowledge. Facts, statistical or other evidence cannot, he argued, be used to test those conclusions, but only to illustrate a theory. They cannot be used to contradict a theory, because we are not generalizing from observed evidence, but from innate knowledge of human motives and behavior. That philosophy converts an asserted body of substantive conclusions into a religion. They do not constitute a set of scientific propositions that you can argue about in terms of empirical evidence. Suppose two people who share von Mises' praxeological view come to contradictory conclusions about anything. How can they reconcile their difference? The only way they can do so is by a purely logical argument. One has to say to the other, "You made a mistake in reasoning." And the other has to say, "No you made a mistake in reasoning." Suppose neither believes he has made a mistake in reasoning. There's only one thing left to do: fight. Karl Popper – another Austrian like Mises and Hayek – takes a different approach. If we disagree, we can say to one another, "You tell me what fact, if they were observed, you would regard as sufficient to contradict your view. And vice versa. Then we can go out and see which, if either, conclusion the evidence contradicts. The virtue of this modern scientific approach, as proposed by Popper, is that it provides way in which, at least in principle, we can resolve disagreements without a conflict.
As an Austrian economist, I am outraged by this condescending attitude toward, this complete and utter misunderstanding of, the praxeological school. On the other hand, I dare not be too critical of Friedman; criticizing him is like taking candy from a baby: he is totally unaware of the Austrian responses to this sort of calumny, whereas members of the praxeological school are completely conversant with the logical positivism on the basis of which Friedman launches his attack. So, I will now be more "tolerant" than I would otherwise be in this regard.
Let me start out on a positive note. Friedman is absolutely correct when he says that his own critical views on praxeology are entirely relevant to the issue of toleration. (Prychitko, 2002, is another author who maintains that praxeology is intolerant per se. For a rejoinder, see Block, unpublished.) It certainly would appear, at least at the outset, that Mises's views are "intolerant."
But superficial appearances can sometimes be deceiving, and that is true in this case. Let us consider an example. When A trades an a to B for one of his b's, each of them, A and B, gain in welfare in the ex ante sense. That is, A values the b he receives more than the a he must give up in this exchange. And, similarly, B, ranks the incoming a more highly than the outgoing b. Perhaps the best illustration of this is that famous front cover of the Saturday Evening Post where Norman Rockwell draws the milkman and the pie man, each sitting in front of their respective trucks, munching away on a pie and slurping at a bottle of milk. We are given to understand by Rockwell, an artist who would appear to know more about economics than Friedman, that right before the scenario he depicted, the milkman (A) traded a bottle of milk (a) with the pie man (B) for one of the latter's products (b), and that each did so because he valued what he received more than what he had to give up for it.
The difficulty with Friedman's treatment of praxeology is that he does not have a concrete example in front of him in order to facilitate his analysis. With this milk-pie case firmly embedded in our minds, it is easy to see where Friedman went astray. Suppose one economist, call him the Austrian, offers the pie-milk case as an example of voluntary trade making both parties better off, and that they rank the two goods traded in inverse order. A second economist, call him a Chicago School economist, denies this. Following Friedman's "reasoning," the Austrian says to the Chicagoan, "You made a mistake in reasoning." Whereupon the Chicagoan returns this sally, and says to the Austrian, "You made a mistake in reasoning." Do they then have no resort but to come to physical blows? Not a bit of it. The Austrian replies, "What reason could the milk man and the pie man have had, in entering their trade, other than to improve their economic welfare?" The Chicagoite, a Popperian, challenges the Austrian to specify a state of the world where he would regard his contention (voluntary trade implies mutual gain and reverse rankings of goods) "as sufficient to contradict (his) view." And, of course, the answer is, there is no possible state of the world that could contradict this praxeological claim, since these claims are necessarily true.
The Chicagoan economist would throw up his hands in dismay, thinking that the Austrian had "convert(ed) an asserted body of substantive conclusions into a religion." But if the praxeologist is guilty of this charge, then, so, too, would be all other scholars whose specialty is based on logic, not experience. For example, mathematicians, geometricians, logicians. Does Friedman think that mathematicians quarreling over whether or not 2+2=4 have no alternative but to fight? That the only way to settle the truth of the Pythagorean Theorem is to enter the boxing ring? That the truth of the syllogism, "Socrates is a man, all men are mortal, Socrates is mortal," can only be settled through force of arms? That mathematics, geometry, logic, are mere cultish religions? That specifying possible falsifications is the be all and end all of argumentation? Let the logical positivists, then, specify a real world situation where 2+2=4, the Pythagorean Theorem and the Socrates syllogism are false. These claims, all of them, those stemming from mathematics, geometry, logic, and, yes, economics too, are not tautologies, mere announcements as to how words are to be used. Rather, they are synthetic apriori statements: they are necessarily true, and, also, give a profound understanding of how the real world operates.
There is more to the examination of scholarship in general, and to economics in particular, than exists in Friedman's philosophy. Yes, empirical evidence is one way to "resolve disagreements without a conflict." But, there are other ways, too. And, empirical evidence, in some cases, is insufficient, even in principle, because not all issues are empirical.
Friedman (1991, 18-20) now moves on to another critique of "intolerance." He says:
How many times have you heard someone say that the answer to a problem is that you simply have to make it private property. But is private property such an obvious notion? Does it come out of the soul?
I have a house. It belongs to me. You fly an airplane over my house, 20,000 feet up. Are you violating my private property? You fly over at 50 feet. You might give a different answer. Your house is next door. You have a hi-fi system. You play your hi-fi at an enormously high decibel count. Are you violating my private property? Those are questions to which you can't get answers by introspection or asking whether A is A or not. They are practical questions that require answers based on experience. Before there were airplanes, nobody thought of the problem of trespass through air. So simply saying "private property" is a mantra, not an answer. Simply saying "use the market" is not an answer.
Once more, unhappily, we catch Friedman in a statement far from his best. Again, he seems to be unaware that there is a libertarian literature directed precisely to these questions. But, before we get to it, we must note that the argument from "How many times have you heard someone say" has no place in scholarly discourse. It would have been far more appropriate to quote and cite a specific Austrian economist, or libertarian philosopher. Then, defenders such as myself, could have the entire context available. (Note that in this rejoinder to Friedman I do him the honor of quoting his actual words. I do not resort to putting words in his mouth, attributing to him very naïve and inarticulate versions of what he actually said, or wrote.) The way Friedman puts matters, libertarians content themselves with squawking, parrot-like, "private property, private property," in response to all objections to philosophy, such as that now launched by Friedman. Not so, not so. Rather, there is a rather sophisticated analysis which may, indeed, be property summarized under the rubric of "private property rights."
First, consider the airplane case. What possesses Friedman to even think that any libertarian would posit that the homeowner has property rights 20,000 feet up in the air? Certainly, none has ever published such arrant nonsense. It could only be based on the ad coelum doctrine, according to which ownership of a plot of land on the surface of the earth entitles legal control over an expanding cone of air over this property, and, also, downward, toward the center of the earth. But this is directly contrary to the homesteading theory of libertarianism (Hoppe, 1993; Locke, 1948; Rothbard, 1973, 32; also see Kinsella, 2003; Block vs Epstein, 2005), according to which one becomes owner of only those parts of the earth with which he is the first to "mix his labor."
At the other end of this example, how low can you go? Would 50 feet above rooftops constitute a trespass? Of course. It would interfere with the peaceful enjoyment of their premises by the owners, who homesteaded them. Unless, possibly, they are located very close to an airport, which located there first; but here, presumably, the residents would be forbidden to build in the first place, lest they interfere with air flights.
An instance of this objection was discussed by Coase (1960), Friedman's colleague at the University of Chicago, and fellow Nobel Prize winner in economics. It was the case of Sturgis v. Bridgeman, which revolved around the issue of whether the manufacturer may run his machinery, which interferes with the quiet needed by the doctor in order to operate his stethoscope and other medical needs. Coase, of course, answered this question in terms of which decision would maximize GDP, but the libertarian analysis is clear on this matter: it depends on who was there first, to homestead either the given level or noise, or the required level of quiet. So, to answer Friedman's challenge, it all depends on who was the initial homesteader of the noise or quiet rights.
These are, to be sure, "practical questions"; but they do not at all "require answers based on experience." Rather, the key to their solution is justice, based on libertarian homesteading theory. All the "experience" in the world will not get us one iota in the direction of a just solution, a concept alien to the Friedmanite philosophy. Yes, "before there were airplanes, nobody thought of the problem of trespass through air." And of course "simply saying 'private property' is a mantra, not an answer. Simply saying 'use the market' is not an answer." But these are only summaries of the libertarian position. They do not at all exhaust its analysis, as Friedman contends.
Let us now hear from Professor Friedman (1991) on his educational voucher proposal:
"What is the answer to socialism in public schools? Freedom." Correct. But how do we get from here to there? Is that somebody else's problem? Is that a purely practical problem that we can dismiss? The ultimate goal we would like to get to is a society in which people are responsible for themselves and for their children's schooling. And in which you do not have a governmental system. But am I a statist, as I have been labelled (sic) by a number of libertarians, because some thirty years ago I suggested the use of educational vouchers as a way of easing the transition. Is that ... "simply a futile attempt to make socialism work more efficiently"? I don't believe it. I don't believe that you call simply say what the ideal is. This is what I mean by the utopian strand in libertarianism. You cannot simply describe the utopian solution, and leave it to somebody else how we get from here to there. That's not only a practical problem. It's a problem of the responsibilities that we have.
To say that socialized public schools cannot be simply ended, and private schools allowed to summarily take their place, is false. When the USSR and eastern bloc countries (very ineptly) privatized, they felt no great need for any transition period. Let alone one that retained government control to the extent of school vouchers (complete responsibility for finance). It is not true that any transition plan or period is needed, and, certainly, allowing the state to remain in charge of school finance cannot properly count as a "transition." It is not incumbent on the libertarian to offer fancy plans for "getting from here to there." The public school buildings can simply be auctioned off (The proceeds going to the long suffering tax payers, not to further enhancing already swollen public coffers) to the highest bidders, and be used for whatever these new owners believe will best maximize their profits, schooling certainly included in the mix, at their discretion.
However, if, for some reason we accept the notion, arguendo, that a transition plan must be offered, how about this one: auction off 20 percent of all public school buildings for the next five years; at the end of this time, all such amenities will be in private hands, where they belong, at least in the view of those who oppose educational socialism.
One of the least salutary effects of educational vouchers is, paradoxically, that they render public schools more efficient. Under present institutional arrangements, parents have no choice; they are compelled to send their children to dysfunctional public schools based on geographical considerations. But under the Friedman voucher plan students can flock to the better public establishments. This will pressure the poor performers to improve their standards, or, possibly, although this is unclear, exit the industry entirely and/or be given over to better administrators. As a result, the overall performance of this pernicious sector of the economy will improve, in a manner akin to how the "weeding out" process functions in the private sector. But is this not all to the good? No. The last thing libertarians desire is an improvement in public schools. This is a socialist organization through and through, specializing in inculcating tender young minds to support government. The less well it functions, the better. Do we want slavery, concentration camps, to function more efficiently? Of course not. If an institution is evil (public schools are of course less evil than these others, but wicked nonetheless) it is best if it works inefficiently. Friedman, however, in aligning himself with a program that will improve the functioning of a vital part of the government apparatus, thus reveals himself not as a libertarian, but as an efficiency expert for the state.
I have claimed that Mises was justified in his reaction to the Mont Pelerin socialists. But, even if he were not, his action would still not be incompatible with libertarianism. This political philosophy has to do with respect for the non aggression axiom, not tolerance. Were toleration the key to this philosophy, then people such as Mahatma Ghandi, Mother Theresa, Lubavitcher Rebbe Menachem Mendel Schneerson and Nelson Mandela, who were noted for this characteristic, would have been libertarians. These were all admirable people in some ways, but to characterize them as libertarians, as implied by Friedman's analysis, is nothing short of grotesque.
