Does the Financial Crisis Discredit "Neoliberalism"?

Naomi Klein says it does. Or she wants it to. She thinks it discredits Milton Friedman in particular, because for Klein not a sparrow falls without Friedman’s having somehow strangled it. Hers is a tiny intellectual universe containing, on the one hand, the things she likes and, on the other, the baleful influence of Milton Friedman.

There’s a lot to say about this talk, and about Naomi Klein’s incompetence and mendacity. But let me just address this bit here:

Now, I admit to being a journalist. I admit to being an investigative journalist, a researcher, and I’m not here to argue theory. I’m here to discuss what happens in the messy real world when Milton Friedman’s ideas are put into practice, what happens to freedom, what happens to democracy, what happens to the size of government, what happens to the social structure, what happens to the relationship between politicians and big corporate players, because I think we do see patterns.

Now, the Friedmanites in this room will object to my methodology, I assure you, and I look forward to that. They will tell you, when I speak of Chile under Pinochet, Russia under Yeltsin and the Chicago Boys, China under Deng Xiaoping, or America under George W. Bush, or Iraq under Paul Bremer, that these were all distortions of Milton Friedman’s theories, that none of these actually count, when you talk about the repression and the surveillance and the expanding size of government and the intervention in the system, which is really much more like crony capitalism or corporatism than the elegant, perfectly balanced free market that came to life in those basement workshops. We’ll hear that Milton Friedman hated government interventions, that he stood up for human rights, that he was against all wars. And some of these claims, though not all of them, will be true.

But here’s the thing. Ideas have consequences. And when you leave the safety of academia and start actually issuing policy prescriptions, which was Milton Friedman’s other life—he wasn’t just an academic. He was a popular writer. He met with world leaders around the world—China, Chile, everywhere, the United States. His memoirs are a “who’s who.” So, when you leave that safety and you start issuing policy prescriptions, when you start advising heads of state, you no longer have the luxury of only being judged on how you think your ideas will affect the world. You begin having to contend with how they actually affect the world, even when that reality contradicts all of your utopian theories. So, to quote Friedman’s great intellectual nemesis, John Kenneth Galbraith, “Milton Friedman’s misfortune is that his policies have been tried.”

Wow. Here is Klein’s method. Take a famous thinker you really don’t like. See if they’ve ever had a meeting with anyone who is responsible for anything bad. Blame it on the thinker. Seriously. That seems to be about the extent of her investigative journalist rigor. You never saw Paul Bremer as a Friedman type? I guess you’re no investigative journalist.

Remember when Hugo Chavez was spotted at the UN thumbing through a copy of Noam Chomsky’s Hegemony or Survival?  We can only assume that Chavez has been busy implementing Chomsky’s ideas. Sure, it might not be what Chomsky had in mind, but when you leave the safety of academia and start issuing policy prescriptions, and heads of state read your books in public, you no longer have the luxury of only being judged on how you think your ideas will affect the world. Sure, you can say that Noam Chomsky is one of the world’s foremost defenders of a critical free press. But then why did Chomsky disciple Hugo Chavez seize control of Venezuela’s mass media? Ideas have consequences, Noam.

Do you know that Putin’s assassination of inconvenient journalists, and the invasion of Georgia, is the thought of Jeffrey Sachs in action? If you think like Naomi Klein you do!

If a world leader asked Naomi Klein for advice, do you suppose she would give it to them?

Author: Will Wilkinson

Vice President for Research at the Niskanen Center