Softpanorama
(slightly skeptical)
Open Source Software Educational Society
May the source be with you, but remember the KISS principle ;-)
Softpanorama Search
|
Softpanorama |
May the source be with you, but remember the KISS principle ;-)
Softpanorama Search
|
As is clear from his "Capitalism and Freedom" book Milton Friedman in his late years became a dangerous, completely blind to science ideologue.
Friedman's use of his position as the darling of irresponsible financiers to promote pseudo-scientific justification of their behavior, and Greenspan's use of his to implement Friedman's recommendations. Both need to be held up as bad examples at least in order to prevent others of their kind from gaining respect and influence.
Several of Milton Friedman interviews are available on YouTube. See for example Milton Friedman In this interview his sophistry about minimum wages is really distasteful and intellectually dishonest. I think that he understands this is just find it beneficial to promote this simplistic ramble. In reality it is not minimum wages but the army of illegal immigrants as well as offshoring of manufacturing that have negative effect of low qualified pool of laborers. Illegal immigrants are in essence a modern age slaves and wide use of their labor produces the effects he referred to. How he can ignore this and other important effects is belong me and discredit academic credential of Chicago School better then any direct critique. Also listen his simplistic assessment of Great Depression and think about the current economic situation. All-in-all in this interview he comes as an intellectual lightweight, almost Kudlow-level (which is as close to the floor, as one can get). His advocacy of Wild West capitalism and reckless deregulation did a lot harm to the country and now chickens come home to roost. And how you can preserve savings in fiat money regime is another interesting question.
In his December 23rd, 2008 post RIP Chicago School of Economics: 1976-2008 by Barry Ritholtz aptly summarized the dominant sentiment about this pseudo science:
Some time ago, I asked if “Milton Friedman was the next economist whose once lauded reputation may soon slide ?”Turns out it happened much quicker than expected. A long Bloomberg piece, Friedman Would Be Roiled as Chicago Disciples Rue Repudiation, discusses the tarnishment of the Chicago school of thought.
Its long overdue. From the efficient-market theories, to the concept of man as rational profit maximizers, much of the edifice that is was the Chicago school of economics is based on a foundation that is false, disproven or otherwise questionable.
I first encountered the Chicago theory in law school. The Chicagoists somehow read into law a market efficiency component that was never there. I recoiled against it — not because of the libertarianism, which I embraced. Rather, it seemed a backdoor way to circumvent democracy, and force into the legal system rules that were never debated, voted on, or agreed to by a representative government. I found the extremist legal theories of Judges like Richard Posner and Frank Easterbrook intellectually repulsive. They were undemocratic, anti-representative government. When I told a professor that the law and economics movement was an attempt at a political coup, he laughed and said, try to stop it.
I disliked the neoclassical price theory. It was authoritarian, a worship of a form of mob rule outside of the usual legal channels. The view that regulation and other government intervention is always inefficient compared to a free market has now been made laughable. Its always the extremists that seem to control a discipline or school of thought. If I have any dogma, its extremism in all forms is undesirable (I know, radical, huh)
If there is one silver lining in the entire collapse, its that this group of intellectual charlatans have been revealed as utterly wanting. Oh, there will be some pushback by the Chicagoans. (Watch the comments for the cute little protests from law students who never practiced a day in their lives, and the biz school kiddies who never executed a single trade).
Anyway, here’s an excerpt from today’s Bloomberg:
“When Friedman’s Platonic ideas of free-market virtues are put into practice, they have too often generated a systemic orgy of competitive greed — whose remedies, ironically, entail countermeasures of nationalization,” Marshall Sahlins, an emeritus professor of anthropology, said during the debate, speaking in a room adorned with murals of female students parading through the campus in medieval gowns. Sahlins, 77, noted a few weeks later socialist and capitalist countries alike are regulating or nationalizing financial institutions in a rebuff to Friedman.
Off campus, the global meltdown is stirring anti-Chicago economists, who were voices in the wilderness during decades of lax government oversight of markets. Joseph Stiglitz, who won one of Columbia’s economics Nobels, says the approach of Friedman and his followers helped cause today’s turmoil.
‘Bears the Blame’ “The Chicago School bears the blame for providing a seeming intellectual foundation for the idea that markets are self- adjusting and the best role for government is to do nothing,” says Stiglitz, 65, who received his Nobel in 2001.
University of Texas economist James Galbraith says Friedman’s ideology has run its course. He says hands-off policies were convenient for American capitalists after World War II as they vied with government-favored labor unions at home and Soviet expansion overseas.
“The inability of Friedman’s successors to say anything useful about what’s happening in financial markets today means their influence is finished,” he says.
Instead, Galbraith, 56, says policy-makers are rediscovering the ideas of his father, Harvard professor John Kenneth Galbraith, and economist John Maynard Keynes of the University of Cambridge. Keynes, who died in 1946, argued that governments should spend to combat the unemployment that free markets tolerate. Galbraith, who died in 2006, rejected mathematical models and technical analyses as divorced from reality.”
That’s the phrase that best sums up the Chicago School: “Divorced from Reality.”
Chicago School repudiation? Good riddance!
The most popular pseudo-academic theory that was propagated by Chicago school for the last few decades was monetarism. The most popular exposition of Market fundamentalsm was in Milton Friedman "Capitalism and Freedom".
The essence is that we have finally reached the culmination of economic theory
and all that's left is to tune the machine.
The ultimate realization of western perfection is pure free market Capitalism.
The villains of the scenario are unions, intellectuals, environmentalists
and government regulators who gum up the wheels of progress. Fueling the
market engine is relentless optimism and there are few superlatives too
vicious to be cast on those who express doubt. CEO's are hard working heroes
moving the engine while blue collar workers are parasites sucking away needed
capital. As George Lakoff would say this is
the construction of a Frame, attempting to move from concept to common knowledge.
Frames are powerful indeed and most people if given a choice
between retaining a Frame or accepting new contrary evidence will keep the
Frame and throw out the evidence. Leaving no doubt about his opinion on
the matter Thomas Frank declares, "the New Economy is a fraud". It's a Vox
Populi where billionaires are victimized by `elitist' union workers and
the crime de jour is political correctness.
Crisis of 2008-2009 was the
punch line when all those hip gen-X investors watched their brand new fortunes
go up in smoke and that bured Chicago school authority.
The heyday of the bull market are over, real wages went down, jobs
became less secure and downsizing became fashionable for CEO's who want
a quick stock pop. In the end it became painfully clear that companies, auditors and analysts
were all working against the best interest of the small investor. The market
was to be the new means for wealth redistribution as everyone had access
to the market money tree but when the chips were cashed in the wealth disparity
in America grew beyond anything seen in the last 70 years.
Pro-business, pro-globalization
propaganda as well as the endless stream of articles
in business magazines praising the new paradigm abruptly ended in 2009
when everybody understood that days of reconing are close.
Often silly, bordering on pseudoscientific, marketing theories
that were being expounded became joke they always were.
Milton Friedman?
Milton Friedman. Friedman had a solid MV = PQ doctrine from which he deviated very little all his life. By the way, he's about as smart a guy as you'll meet. He's as persuasive as you hope not to meet. And to be candid, I should tell you that I stayed on good terms with Milton for more than 60 years. But I didn't do it by telling him exactly everything I thought about him. He was a libertarian to the point of nuttiness. People thought he was joking, but he was against licensing surgeons and so forth. And when I went quarterly to the Federal Reserve meetings, and he was there, we agreed only twice in the course of the business cycle. .That's asking for a question. What were the two agreements?
When the economy was going up, we both gave the same advice, and when the economy was going down, we gave the same advice. But in between he didn't change his advice at all. He wanted a machine. He wanted a machine that spit out M0 basic currency at a rate exactly equal to the real rate of growth of the system. And he thought that would stabilize things.
Well, it was about the worst form of prediction that various people who ran scores on this -- and I remember a very lengthy Boston Federal Reserve study -- thought possible. Walter Wriston, at that time one of the most respected bankers in the country and in the world fired his whole monetarist, Friedmaniac staff overnight, because they were so off the target.
But Milton Friedman had a big influence on the profession -- much greater than, say, the influence of Friedrich Hayek or Von Mises. Friedman really changed the environment. I don't know whether you read the newspapers, but there's almost an apology from Ben Bernanke that we didn't listen more to Milton Friedman.
But anyway. The craze that really succeeded the Keynesian policy craze was not the monetarist, Friedman view, but the [Robert] Lucas and [Thomas] Sargent new-classical view. And this particular group just said, in effect, that the system will self regulate because the market is all a big rational system.
Totalicorporatism,January 21, 2008 This book was published in 2000 as an up-to-date expose on the then-ascendant corporate bubble which had not yet crashed and burned. Now the book is an informative history of the roots of a politically ruinous American epidemic - regular folks believing that the interests of the privileged classes are the same as their own. Thomas Frank is very adept at finding the nonsense and contradictions of the American political scene (especially in the much better "What's the Matter with Kansas" a few years later) and he provides a great amount of insight into the forces that turned us into worshippers of the same power players who destroy our livelihoods. Most of the book deals with the 1990s, when corporations graduated from villains in the eyes of the public to bastions of democracy. This was accomplished with relentless rhetoric in the press and politics about the unassailable greatness of markets, and the widespread ignorant use of the epithet "elitist" for anyone who disagreed with corporate dogma, regardless of whether the critics were regular citizens or the targets were influence-buying and job-destroying plutocrats. We have let it happen by falling for hogwash about how corporations think they represent the people and how the incorruptible market will lead us to utopia.doomsdayer520 (Pennsylvania) - See all my reviews
But aside from these great basic insights, overall this book is too polemical for its own good, as Frank's goal was clearly to rile up the masses. Unfortunately he falls into sarcasm and proselytizing far too often. A related issue is the book's massive repetitiveness, as Frank piles on point after point that merely regurgitate the main thesis that was advanced believably long before, while the chapters on academia and journalism are somewhat useful but stray pretty far from the main narrative of corporate hegemony. (As a graduate student who has been forced to digest cultural studies, and as a media researcher, I can also say that Frank's tirades against those subjects are pretty narrow, though I tend to agree with them in principle.) Most annoyingly, Frank often makes his points by merely deconstructing large numbers of ridiculous and obscure books that are even more outdated than this one.
It's totally easy for the thinking American to agree with Frank's polemics whole-heartedly and to demand more equality in the political and economic spheres. But this book makes its main points early on and then simply beats them to death. And one major component of Frank's argument is completely missing - why have thinking citizens let this happen? We can blame the corporations and politicians for spouting nonsense, but that nonsense will go nowhere unless people swallow it voluntarily. [~doomsdayer520~]Frank is right on the money, no doubt about it. "Free-markets" and democracies aren't the same thing. Even the freest of markets can be bought, whereas democracies can't be...or can they?
12 of 12 people found the following review helpful:
Solid thoughtful, nails our national policy failures in a big way,August 2, 2006 This is a very serious book, one that any candidate for President would do well to read, especially so the centrist candidates willing to announce that both the Democratic and Republican parties have sold the public into slavery to corporate fascism.By Robert D. Steele (Oakton, VA United States) - See all my reviews
In summary, the author documents in detail how the Reagan Revolution, and especially the firing of the air traffic controllers and the wrongful use of military air traffic controllers as "union busting" scabs, eliminated the counter-vailing force of labor unions, at the same time that government deregulated and abdicated its responsibility for a social safety net, the media converted into advertising with a "news hole," and corporations lost all moral and social standards.
He deconstructs the "New Economy" in persuasive detail and caused me to re-evaluate some of my earlier readings, especially of Kevin Kelly and others in the WIRED generation who articulate with blind faith the democratic value of the network, but fail to see, as Robert Samuelson and this author would have us understand, that outsourcing is union busting, and the actual effect of the network has been to make it possible for corporations to outsource middle class jobs while importing poverty through illegal immigration. The net loser is the Nation, because one of its most important sources of national power, an educated engaged citizenry, is being sold short.
The author is brutally on target when he points out that corporations have achieved a slight of hand in disconnecting labor from the value of created wealth, claiming much more management value (to the point that CEOs make 400 to 1000 times what their workers make, up from 25 times long ago). He also points out that the democratization of the stock market is code for what Mark Lewis called, in "Liar's Poker," "exploding the client. The smart money rides the early surge and then sells out to the middle class dreamers, who end up losing 80-90% of their value over time.
I have a note in the flyleaf that this book is "quite extraordinary, almost breathtaking in scope, with a compelling array of well-ordered facts."
Overall, while many will not like the term "corporate fascism" and the author prefers to use "extreme capitalism" while others discuss immoral and predatory capitalism, or "class war" (see my review of Faux's "The Global Class War" and, somewhat less solid but still good, Pabast's "Armed Madhouse" (dispatches from the front lines of the global class war). The sorry reality is that Americans have been lulled to sleep like sheep for a slaughter, and do not seem to appreciate the fact that there has been a MASSIVE theft of public capital through what this author calls "the Wall Street tax" on America.
The greatest strength of the book is how the author documents the calculated and comprehensive manner in which Wall Street and the evangelical right came together to turn reality on its head, and persuade everyone including blue collar workers that it was okay to break the social contract with labor, and that what is good for Wall Street is good for America and its workers. In fact, as the author points out repeatedly, when workers get laid off, Wall Street stocks go up. His entire review reminds one of Noam Chomsky and Edward Herman's classic "Manufacturing Consent." Public relations has been used in a classic manner by American corporations, to include penetration of teen-age sub-cultures and the manipulation of teen-age desires. In Europe they consider public relations to be, according to this author, advanced corporate lying.
The author draws an excellent connection between the "blind faith" that keeps the corporate illusion of free trade on the table, and the "blind faith" that led Dick Cheney to depose George Bush and invade Iraq without regard to the policy process, accountability, or reality. America is in the grip of a very destructive combination of corporate ideology, religious ideology, and political ideology.
The author is properly and comprehensively critical of the media for failing to do its job. Journalists, a few exceptions aside, have become "filler." The author excels at picking Tom Friedman apart, and at mocking the Wall Street Journal for idiocy in print.
The book ends on a sobering note, where the author points out that reality has a way of unmasking ideological pretensions in a most painful manner. He specifically suggests that George Bush Junior (he does not mention Cheney) will go the way of Herbert Hoover in the history books. Reality--that's what one White House staffer is reported to have said had no relevance, because this White House "creates its own reality." Yes it does--a reality of greed and theft and immorality at the top, poverty and disease at the bottom, and a loss of American honor around the world.
First class thinking and writing. A really strong book.4 of 4 people found the following review helpful:Enlightening romp through a decade of idiocy,From John Perry Barlow to Virginia Postrel, from _Liberation Management_ to _Who Moved My Cheese?_, from dot-com millionaires to cult stud academics, Thomas Frank summarizes, contextualizes, and debunks a decade's worth of pro-business propaganda. The major theme, he argues, was the concept of "market populism", the notion that The Market was far more democratic than actual democracies, doing whatever their copious focus groups had determined the people wanted. Frank, a serious supporter of genuine democracy, skewers their absurd myths and provides some insight into the harm they did to working people.May 7, 2006 7 of 7 people found the following review helpful:The Democracy Bubble,January 16, 2006 If there were two overall themes guiding this book, I'd say it was these:By M. Hogan (Midwest) - See all my reviews
During the late 1990s, it was pretty obvious that a rising tide was not lifting all boats. And for a very long time now, conservative and many liberal economists, business owners, investors, business writers and assorted pundits have equated democracy with the ebbs and flows of the free market.
I've never read What's The Matter With Kansas or The Baffler before. My introducation to Frank came through this book with it's marathon chapters, sometimes repetative thesis', and thoroughly damning evidence of our nation's continuing problems with a form of tulip mania and the delusion that a janitor/schoolteacher/truck driver playing the stock market with a few shares has economic parity with someone like Warren Buffett.
The title itself is an interesting look at the subject matter here: free market economics has long been a dogma among Americans. We are told time and time again that collective bargaining, state investment, and regulations over wages will lead us down the path to destruction. Also, supposedly, if we allow the foxes to guard the henhouse, someday we can all be rich.
Frank points out that this isn't a new ideology but it has become more and less popular over time. The end of the 20th century resembled the beginning more than any other time; the middle class was slowly eroding and obscene wealth consoled obscene lack of wealth with idea that even if you're living in poverty, you can just make a couple of smart investments, spend wisely, and the idea of the American Dream will be fulfilled and you'll get wealthy.
This might all seem painfully obvious, but Frank deserves credit for actually documenting it.Revelations,
October 12, 2005 In ONE MARKET UNDER GOD, Thomas Frank brilliantly unpacks the self-serving ideology of the corporatocracy. As he did in CONQUEST OF COOL and WHAT HAPPENED TO KANSAS, he examines the many self-serving narratives of the corporate state, showing how each story supports a pseudo-populist philosophy designed to whip up anti-elitist sentiments in order to better serve the interests of that elite.By Panopticonman "panopticonman"
(Brooklyn, NY USA) -
Legitimacy, since the Great Crash, had, until fairly recently been a fairly daunting problem for business. Now, as Frank points out, with the children of the Depression passing away, the corporatocracy and its junior partners in government have been emboldened to portray themselves as the heirs to Populism, Progressivism, and the New Deal, to advertise themselves as the vanguard of a revolutionary movement, a movement which through the millennial workings of the market is clearing the way for a new birth of freedom in the U.S.A., and throughout the world.
Frank notes, for instance, that throughout the 90s Americans were told that average working stiff could easily become the "millionaire next door," and further, that the average guy was much better off owning stock than relying on his pension or Social Security to see him through his golden years. So pervasive did this free market farrago become in the media, that even now, well after the New Economy bubble burst, many still hear it as gospel, believe that inevitably everything must be privatized. So cunning has the pro-business rhetoric of the corporate state become that the average American blames himself for not being "entrepreneurial" enough, when instead Frank says he should be working to reverse the corporatocracy's 30-year rollback of worker's and citizen's rights.
A profoundly funny writer with a razor-sharp satiric edge, Frank will have you laughing out loud at the transparent self-serving cant of the corporatocracy and their handmaidens in the media, academia, and government. Frank knows his history, and clearly sees through the latest lies of that great unregenerate beast, redder now in tooth and claw than ever before.
3 of 3 people found the following review helpful:October 9, 2005 By Headbang8
He documents the creepy cultural trends that have made us accept the marketplace as our ersatz democracy, why we've given up on the real version, and whom these trends really serve.
Is modern culture really a tool used by the powers that be to undo the New Deal? It makes sense.
I say this in the full knowledge that Frank devotes an entire chapter to my profession, in "The Brand and the Intellectual". When I finished reading it, I thought, "I deserved that!"
2 of 2 people found the following review helpful:October 7, 2005 Frank is verbose, but aside from this, his book is brilliant. In an age where Friedman and others are seen as "experts," Frank is extremely refreshing. It is nice to read a nuanced analysis instead of rhetoric.
By L. Vila-Henninger "Luis"
9 of 9 people found the following review helpful:Vox Populi for Billionaires,
July 20, 2005 There is a new conventional wisdom being constructed in the last few decades that we have finally reached the culmination of economic theory and all that's left is to tune the machine. The ultimate realization of western perfection is pure free market Capitalism. The villains of the scenario are unions, intellectuals, environmentalists and government regulators who gum up the wheels of progress. Fueling the market engine is relentless optimism and there are few superlatives too vicious to be cast on those who express doubt. CEO's are hard working heroes moving the engine while blue collar workers are parasites sucking away needed capital. As George Lakoff would say this is the construction of a Frame, attempting to move from concept to common knowledge. Frames are powerful indeed and most people if given a choice between retaining a Frame or accepting new contrary evidence will keep the Frame and throw out the evidence. Leaving no doubt about his opinion on the matter Thomas Frank declares, "the New Economy is a fraud". It's a Vox Populi where billionaires are victimized by `elitist' union workers and the crime de jour is political correctness.
By E. David Swan
A lot has happened since `One Market, Under God' was published including that little market correction in 2000. Thanks to bad timing Thomas Frank's book sets up the joke but misses out on the punch line when all those hip gen-X investors watched their brand new fortunes go up in smoke. However, the book is timely enough to point out that during the heyday of the bull market real wages went down, jobs became less secure and downsizing became fashionable for CEO's who want a quick stock pop. It also seems clear that a system that can be done in by mere pessimism is built on a very shaky foundation. There is a `New Afterword' chapter that gives Thomas Frank a chance to offer up some post 2000 commentary. In the end it became painfully clear that companies, auditors and analysts were all working against the best interest of the small investor. The market was to be the new means for wealth redistribution as everyone had access to the market money tree but when the chips were cashed in the wealth disparity in America grew beyond anything seen in the last 70 years.
"One Market, Under God" chronicles just about every pro-business, pro-globalization propaganda ad released in the 90's as well as the endless stream of articles in business magazines praising the new paradigm. Mr. Franks takes a critical look at the often silly, bordering on pseudoscientific, marketing theories that were being expounded. Unfortunately the book sometimes degenerates into one long sarcastic sneer aimed at all things business. There are no heroes of the book just manipulators, fools and greedy CEO's. Thomas Frank's later book, `What's the Matter with Kansas' was one of the best social commentaries I've ever read so I felt a bit disappointed with this one. Still, it's a fascinating look at how society can be manipulated and swept up into a frenzy of greed to the point where we give up our own self interests.
One Market Under God: Extreme Capitalism, Market Populism, and the End of Economic Democracy by Thomas Frank (Paperback - September 18, 2001)
The Conquest of Cool: Business Culture, Counterculture, and the Rise of Hip Consumerism by Thomas Frank (Paperback - December 1, 1998)
What's the Matter with Kansas? How Conservatives Won the Heart of America by Thomas Frank (Hardcover - June 1, 2004)
