I want to draw your attention to a talk given, I’m guessing, more than 30 years ago by Milton Friedman on “Myths That Conceal Reality”. The myths that he addresses might be thought of as the foundational myths of our current political-economical system.
The five “myths” that Dr. Friedman addresses in his talks are:
- Robber barons played a dominant role in the U. S. economy of the 19th century.
- The Great Depression of the 1930s was caused by a failure of the private sector.
- There’s a high, persistent demand for services that only the government can provide.
- Government can spend money at nobody’s expense.
- Government benefits the poor at the expense of the poor.
I found some of the sections of his talk stronger than the others. For example, I thought his treatment of the Depression of the 1930s and the demand for government services were stronger than his treatment of the robber barons and the U. S. economy of the 19th century. Let me give a few examples.
In the talk Dr. Friedman asserts that rising prices for prime farmland demonstrate that farmers were becoming better off rather than worse off. I don’t think you can make that claim based on the available data. All that rising prices for farmland demonstrates is that people wanted more farmland. Land prices could well increase even as farmers became worse off as a consequence of a large increase in the number of farmers, something we know was definitely the case in the 19th century. Prices of farmland increasing from 1870 to 1880 says less about whether farmers in the United States were better off in 1880 than in 1870 than it does about whether farmers in the United States in 1880 were better off than farmers in Germany in 1880. And that might have been due to other factors like, say, Bismarck’s military draft.
Additionally, I think he was too ready to give the “robber barons” of the 19th century credit for their own riches by comparison with today’s ultra-rich. While I don’t disagree that today’s .1% benefit enormously from government intervention of various different kinds, I think the same was true of the 19th century robber barons. John D. Rockefeller was a war profiteer and I believe the same was true of Cornelius Vanderbilt and Jay Gould. Land franchises and monopolies granted by state governments were enormously influential in the construction of the railroads and steamboat lines. The robber barons had no compunctions against wielding the levers of government, particularly against each other whether via lawsuit or outright bribery.
I also think he misinterprets the history of political power in the United States and elsewhere as a conflict among the rich, the middle class, and the poor in which the middle class has triumphed. I think that the history of political power everywhere is an internecine conflict among the top 10% of income earners. That conflict occasionally breaks out into bloody warfare as in the French and Russian Revolutions. It may have been the poor charging the barricades but on both sides of those conflicts it was those in the top 10% of income earners who were giving the orders.
Still, the talk is well worth a listen. It’s nearly a full hour in length so you might want to listen to it in pieces.