friedman and a non-tomato

I’ve poked around and looked at Milton Friedman’s tributes and tomatoes. I’m mostly in the throw a tomato camp – but there were libertarian moments in Friedman’s work that I definitely love. Among them, naturally, was his opposition over forty years to drug prohibition.

What surprises me, however, about that opposition is how little it drew strength from any theory of markets – and I’ve always thought that had to do with the reluctance to ascribe any virtue to state regulation. In fact, the illegal drug markets are a wonderful instance of what happens when the state abandons its regulatory function by opting for straight banning. State regulation is often very inefficient – think of the way state’s regulate liquor and cigarette sales, and how leaky the ban on selling to minors is – and yet the standard by which it should be measured has, as its primary dimension, social concord. The first thing one wants in an economy is relative peace. Snatch and grab, which is all very well for the revolutionary moment, quickly becomes hell – as Iraq is demonstrating every day.

I talked with a friend in Mexico City this morning, and in her ritzy neighborhood, Polanco, they just had a dramatic shootout bankrobbery. Then we talked about the crime, the feelers that are out to privatize Pemex (which Fox’s government has underfunded so that it can be sold off because – it is underfunded!), etc. The misery that the neo-liberal regime imposes on a country accumulating, year after year, until something breaks, and inequality is no longer a fun topic to bat around among economists at the AEI meeting, but puts a gun in your face.

Anyway, to return to Friedman’s good side… Having an intensely silly ideal of the state as a thing that ‘keeps out’ of the political economy, Friedman deprives himself of a tool for analyzing what goes entirely wrong when the state bans a consumer commodity like, say, marijuana, and why that banning is different from the case of the state banning the manufacture of a product like DDT. Lately, I’ve been reading Knowledge and the Wealth of Nations, which goes into Romer’s theorem about endogenous technological change, and I will have some stuff to say about defining commodities in some far future post. At the moment, though, let’s just say the dumbness of the division between the public and the private sphere, as construed by economists, tripped up Friedman, who posited his objection to drug banning on the libertarian principle of freedom that is, itself, shaky business. There is a deeper lesson to be learned about markets from the catastrophes resulting from the American determination to, a., ban certain drugs internationally, and b., consume as much of those banned drugs as we can afford. Of all the ways in which the American imperium has fucked up the world, this is, practically, the greatest of all fuck ups, one that has reached into the shantytowns of Sao Paolo and the countryside of Sicily, has created black market states and financed the killing gangs of Africa, has put Latin America in a noose for the past sixty years and was the satyr play that ran within the larger play in Vietnam.

(Of course, the bigger fuck up – the mad addition of CO2 to the earth’s atmosphere, otherwise known as stealing the earth’s atmosphere – has been more gradual and less purposive.)

Other off the cuff remarks – the thumbsucker in the NYT Business section about Friedman’s real contribution was dumb even by the NYT standard of dumb obituaries about intellectuals. Friedman, it turns out, taught economists to think of the economics as … a world view! Now, I bet Adam Smith, Karl Marx, Thorsten Veblen, F.A. Hayek and Karl Polanyi wish they had thought of that.