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2006 Ron Paul Chapter 100

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Congressional Record [.PDF]

Milton Friedman
6 December 2006

2006 Ron Paul 100:1
Mr. PAUL. Mr. Speaker, I am pleased to support H. Res. 1089, a resolution honoring Milton Friedman. Milton Friedman was one of America’s greatest champions of liberty. Launching a career as a public intellectual at a time when dissenters from the reigning Keynesian paradigm where viewed as the equivalent of members of the Flat Earth Society, Milton Friedman waged an oftentimes lonely intellectual battle on behalf of free markets and individual liberty in the fifties and sixties. As the economic crisis of the seventies caused by high taxes, high spending, and inflation vindicated Friedman’s critiques of interventionism, his influence grew — not because he moved to the mainstream but because the mainstream moved toward him. Friedman served as an advisor to Presidents Nixon and Ford and as a member of President Reagan’s Council of Economic Advisors. In 1976, Friedman was awarded the Nobel Prize in economics.

2006 Ron Paul 100:2
Milton Friedman’s most notable contributions to economic theory where in the area of monetary policy. His 1963 work A Monetary History of the United States 1857–1960, coauthored with Anna Schwartz, was among the first works to emphasize the role Federal Reserve policy played in causing the Great Depression. As Friedman said, “The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.”

2006 Ron Paul 100:3
Friedman’s work showed that inflation is not a result of markets but is, as he memorably put it, “always and everywhere a monetary phenomenon.” Friedman was the major originator and theoretician of monetarism. Friedman recommended restricting the Federal Reserve’s authority to increasing the quantity of money by a fixed yearly amount. While monetarism is far from the ideal free-market monetary system, Milton Friedman deserves credit for focusing the attention of economists on the Federal Reserve’s responsibility for inflation.

2006 Ron Paul 100:4
While he is mainly known for his contributions to economic theory and his advocacy of free markets, Milton Friedman considered his advocacy against the draft, cumulating in his work as a member of President Nixon’s Commission on an All-Volunteer Force, his major policy achievement. Milton Friedman’s opposition to the draft was in part based on economic principles, but was mainly motivated by his moral commitment to freedom. I ask unanimous consent to insert the attached article, “Milton Friedman: A Tribute,” by David R. Henderson, which details Milton Friedman’s efforts against the draft, into the record.

2006 Ron Paul 100:5
Unlike many free market economists who downplay their opposition to government of encroachments on personal liberty in order to appear “respectable,” Friedman never hesitated to take controversial stands in favor of liberty. Thus Friedman was one of the most outspoken critics of the federal war on drugs and an early critic of government licensing of professionals. Friedman also never allowed fear of losing access to power stop him from criticizing politicians who betrayed economic liberty. For example, his status as an advisor to President Richard Nixon did not stop him from criticizing Nixon’s imposition of wage and price controls.

2006 Ron Paul 100:6
Milton Friedman’s greatest contribution to liberty may have been his work to educate the public about free market economics. Milton Friedman’s 1962 work Capitalism and Freedom, introduced millions of people to the freedom philosophy, and it remains one of the most popular, and influential, pro-freedom books in the world.

2006 Ron Paul 100:7
In 1980, Milton Friedman collaborated with his wife Rose on a television series, Free to Choose. The series, and the accompanying best-selling book, remain among the best introductions to the benefits of economic liberty, and rivals Capitalism and Freedom in popularity. One of my favorite moments of the show is when Milton Friedman compares the robust free market economy of Hong Kong with the then stagnant economy of communist China.

2006 Ron Paul 100:8
On a personal note, I was honored to receive Milton Friedman’s endorsement of my congressional campaign in 1996. One particular quote from his endorsement exemplifies how Milton Friedman’s commitment to the free market was rooted in a recognition that a society that respects the dignity and worth of every individual is impossible without limited government, private property, and sound money: “We very badly need to have more Representatives in the House who understand in a principled way the importance of property rights and religious freedom for the preservation and extension of human freedom in general . . .”

2006 Ron Paul 100:9
Mr. Speaker, I am pleased to pay tribute to Milton Friedman’s tireless efforts on behalf of human liberty, and I urge all my colleagues to join me in supporting H. Res. 1089.

2006 Ron Paul 100:10
[From ANTIWAR.COM, Nov. 20, 2006]
“In the course of his [General Westmoreland’s] testimony, he made the statement that he did not want to command an army of mercenaries. I [Milton Friedman] stopped him and said, ‘General, would you rather command an army of slaves?’ He drew himself up and said, ‘I don’t like to hear our patriotic volunteers referred to as mercenaries.’ But I went on to say, ‘If they are mercenaries, then I, sir, am a mercenary professor, and you, sir, are a mercenary general; we are served by mercenary physicians, we use a mercenary lawyer, and we get our meat from a mercenary butcher.’ That was the last that we heard from the general about mercenaries.” — Milton and Rose Friedman, Two Lucky People, Chicago: University of Chicago Press, 1998, p. 380.

2006 Ron Paul 100:11
In May 1970, a few days after graduating from the University of Winnipeg with a major in mathematics, I flew to Chicago to look into getting a Ph.D. in economics at the University of Chicago. While there, I went to visit Milton Friedman and he invited me into his office. I had a sense that he had been through this routine before — talking to an idealistic young person showing up and wanting an autograph on his copy of Capitalism and Freedom and, beyond that, simply wanting to meet and talk to him. But he didn’t treat our meeting as routine; we had a real talk for about 10 minutes. When I told him that I’d initially been attracted to libertarianism by reading Ayn Rand, he told me that while Rand was well worth reading, there were many other people worth reading too, and I shouldn’t get stuck on her. He also stated, “Make politics an avocation, not a vocation.” Both were good pieces of advice.

2006 Ron Paul 100:12
The advice didn’t stop there. I ended up getting my Ph.D. at UCLA and going to my first academic job as an assistant professor at the University of Rochester’s Graduate School of Management. From then on, I wrote Milton a couple of times a year and he always wrote back, sometimes writing in the margins of my letter to comment on my questions and thoughts. When I contemplated my first major career change — leaving academia to work at a think tank — he advised me strongly against it (I didn’t take this advice), referring to himself as my “Dutch uncle.” I had never heard the term before and didn’t bother to look it up until writing this piece, but I understood what he meant from the context: a Dutch uncle is someone who gives you tough love, holding you to high standards because of a benevolent regard for your well-being.

2006 Ron Paul 100:13
But here’s the bigger point: with his steady and passionate work to end the military draft, Milton Friedman was the Dutch uncle of every young man in the United States. Or even better, he was like a favorite uncle that they’d never even met. He cared more for them than any president, any general, or any defense secretary has ever cared. How so? Because he wanted every young man to be free to choose whether to join the military or not.

2006 Ron Paul 100:14
Milton Friedman’s work against the draft began in December 1966, when he gave a presentation at a four-day conference at the University of Chicago. Various prominent and less-prominent academics, politicians, and activists had been invited. Papers had been commissioned, and the authors gave summaries, after which the discussion was open to all. Fortunately, the discussion was transcribed. The papers and discussions appear in a book edited by sociologist Sol Tax and titled The Draft: A Handbook of Facts and Alternatives. The invitees included two young anti-draft congressmen, Robert Kastenmeier (D–Wisc.) and Donald Rumsfeld (R–Ill.), and one pro-draft senator, Edward Kennedy (D- Mass.). Also attending were pro-draft anthropologist Margaret Mead and anti-draft economists Milton Friedman and Walter Oi. Friedman gave the general economic and philosophical case for a voluntary military in his presentation, “Why Not a Voluntary Army?” Friedman pointed out that the draft is a tax on young men. He stated:

2006 Ron Paul 100:15
“When a young man is forced to serve at $45 a week, including the cost of his keep, of his uniforms, and his dependency allowances, and there are many civilian opportunities available to him at something like $100 a week, he is paying $55 a week in an implicit tax. . . . And if you were to add to those taxes in kind, the costs imposed on universities and colleges; of seating, housing, and entertaining young men who would otherwise be doing productive work; if you were to add to that the costs imposed on industry by the fact that they can only offer young men who are in danger of being drafted stopgap jobs, and cannot effectively invest money in training them; if you were to add to that the costs imposed on individuals of a financial kind by their marrying earlier or having children at an earlier stage, and so on; if you were to add all these up, there is no doubt at all in my mind that the cost of a volunteer force, correctly calculated, would be very much smaller than the amount we are now spending in manning our Armed Forces.”

2006 Ron Paul 100:16
Reading through the whole Sol Tax volume, with all the papers and transcripts of the discussion, I had the sense that there was a coalescing of views over the four days, as people from various parts of the ideological spectrum found that they had in common a strong antipathy to the draft and found also that the economists made a surprisingly strong economic case. Both Friedman’s speech and his various comments at the conference still make compelling reading. One of his best rhetorical flourishes was his criticism of the charge that those who advocate ending the draft are advocating a “mercenary” army. You’ll recognize the same kind of argument he used against Westmoreland in the lead quote of this article. Friedman said:

2006 Ron Paul 100:17
“Now, when anybody starts talking about this [an all-volunteer force] he immediately shifts language. My army is ‘volunteer,’ your army is ‘professional,’ and the enemy’s army is ‘mercenary.’ All these three words mean exactly the same thing. I am a volunteer professor, I am a mercenary professor, and I am a professional professor. And all you people around here are mercenary professional people. And I trust you realize that. It’s always a puzzle to me why people should think that the term ‘mercenary’ somehow has a negative connotation. I remind you of that wonderful quotation of Adam Smith when he said, ‘You do not owe your daily bread to the benevolence of the baker, but to his proper regard for his own interest.’ And this is much more broadly based. In fact, I think mercenary motives are among the least unattractive that we have.” (p. 366)

2006 Ron Paul 100:18
In the margin of my 35-year-old, dog-eared copy of the Sol Tax book containing this passage, I wrote one word: “Wow!” This is rhetoric at its best, a tight argument passionately stated. When I read this at about age 18, just a year before meeting Friedman in his office, I felt cared-for. Fortunately, being Canadian, I wasn’t vulnerable to the draft. But I had the thought that if I had grown up in United States, I would be so thankful that here was this man, himself well beyond draft age and who could probably figure out how to get his son out of the draft, and yet who cared enough to be out in front on this issue.

2006 Ron Paul 100:19
Two of Friedman’s comments about this conference are worth noting. Writing some 30 years later, Friedman noted that the 74 invited participants “included essentially everyone who had written or spoken at all extensively on either side of the controversy about the draft, as well as a number of students.” (Two Lucky People, p. 377.) Friedman’s other comment is also worth citing:

2006 Ron Paul 100:20
“I have attended many conferences. I have never attended any other that had so dramatic an effect on the participants. A straw poll taken at the outset of the conference recorded two-thirds of the participants in favor of the draft; a similar poll at the end, two- thirds opposed. I believe that this conference was the key event that started the ball rolling decisively toward ending the draft.” (p. 378.)

2006 Ron Paul 100:21
Friedman didn’t stop there. He wrote a number of articles in his tri-weekly column in Newsweek making the case against the draft. Friedman was one of 15 people chosen for Nixon’s Commission on the All-Volunteer Force. By his estimate, five started off being against the draft, five in favor, and five on the fence. By the end, the Commission was able to come out with a 14–0 consensus in favor of ending the draft. Black leader Roy Wilkins, in a Feb. 6, 1970 letter to Nixon, stated he had been unable to attend many of the meetings due to a major illness and, therefore, could not support its specific recommendations; Wilkins did state, however, that he endorsed the idea of moving toward an all-volunteer armed force. (The Report of the President’s Commission on an All-Volunteer Armed Force, New York: Collier Books, 1970; letter from Roy Wilkins.)

2006 Ron Paul 100:22
It was at one of these meetings that Friedman put Westmoreland on the spot with his comeback about slaves. Knowing that Friedman was persuasive and focused and also a warm human being, I credit him with having swung at least a few of the Commission members in his direction. And although Nixon took his sweet time acting on the recommendations, finally, at the start of his second term, he let the draft expire.

2006 Ron Paul 100:23
Friedman kibitzed in his Newsweek column, never letting up. He once wrote that the draft “is almost the only issue on which I have engaged in any extensive personal lobbying with members of the House and Senate.” (Milton Friedman, An Economist’s Protest, 2nd ed., Glen Ridge, N.J.: Thomas Horton and Daughters, 1975, p. 188.)

2006 Ron Paul 100:24
And Friedman stuck around as an opponent of the draft when the going got tough. In the late 1970s, high inflation caused a serious drop in real military pay and a consequent increase in difficulty meeting recruiting quotas. Of all the threats to bring back the draft in the last 32 years, the threat in 1979 to 1980 was the most serious. Sen. Sam Nunn (D–Ga.) held hearings with the goal of building support for the draft and, at least, registration for a future draft. Hoover economist Martin Anderson organized an important conference on the draft at the Hoover Institution in November 1979 and invited the top proponents and opponents of the draft. (For the papers and transcript of the discussion, see Martin Anderson, ed., Registration and the Draft: Proceedings of the Hoover-Rochester Conference on the All-Volunteer Force, Stanford, California: Hoover Institution Press, 1982.) Friedman was one of the attendees and, at the end, debated Congressman Pete McCloskey on the draft. It was actually the weakest performance I’ve ever seen by Friedman, but Friedman’s “weak” is still pretty good.

2006 Ron Paul 100:25
In 1980, in response to the threat from Sam Nunn, I wrote and circulated the following “Economists’ Statement in Opposition to the Draft”:

2006 Ron Paul 100:26
“We, the undersigned, oppose moves toward the reimposition of the draft. The draft would be a more costly way of maintaining the military than an all-volunteer force. Those who claim that a draft costs less than a volunteer military cite as a savings the lower wages that the government can get away with paying draftees. But they leave out the burden imposed on the draftees themselves. Since a draft would force many young people to delay or forego entirely other activities valuable to them and to the rest of society, the real cost of military manpower would be substantially more than the wages draftees would be paid. Saying that a draft would reduce the cost of the military is like saying that the pyramids were cheap because they were built with slave labor.”

2006 Ron Paul 100:27
Friedman’s speed at signing made it much easier, I’m sure, to get the signatures of almost 300 other prominent and not-so-prominent economists, including Kenneth Boulding, Harold Demsetz, David Friedman, Alan Greenspan, Donald McCloskey, William Meckling, Allen H. Meltzer, James C. Miller III, William A. Niskanen, Mancur Olson, Sam Peltzman, Murray Rothbard, Jeremy J. Siegel, Vernon Smith, Beryl W. Sprinkel, Jerome Stein, and James L. Sweeney.

2006 Ron Paul 100:28
The statement, with about 150 signatures, was published as a full-page ad in Libertarian Review, Inquiry, and The Progressive.

2006 Ron Paul 100:29
Milton Friedman and I had our differences about foreign policy. I tried, in vain, to persuade him to be against the first Gulf war. Even there, though, he publicly supported, in an interview with the San Francisco Chronicle, my economic argument against the war. He stated, “Henderson’s analysis is correct. There is no justification for intervention on grounds of oil” (Jonathan Marshall, “Economists Say Iraq’s Threat to U.S. Oil Supply Is Exaggerated,” San Francisco Chronicle, Oct. 29, 1990.) Friedman did oppose the second Gulf war, as evidenced in an interview in the Wall Street Journal, in which he called it, correctly, “aggression.” (Tunku Varadarajan, “The Romance of Economics,” Wall Street Journal, July 22, 2006; page A10).

2006 Ron Paul 100:30
As far as I know, though, Friedman did not oppose the second Gulf war publicly when it mattered most — that is, before the March 2003 invasion. But on the draft, Friedman never wavered. For that, many young American men owe him a lot.

2006 Ron Paul 100:31
Two weeks ago, I attended a conference in Guatemala at which it was announced that Friedman had had a bad fall and was in the hospital. The person who announced it, Bob Chitester, producer of the Friedmans’ 1980 television series, Free to Choose, handed out buttons that read, “Have you thanked Milton Friedman today?” Thanks, Uncle Miltie.

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