WHT-bias

The Political Theology of Milton Friedman

Milton Friedman's ideas continue to exercise a profound influence on our political and economic imagination. On the sixtieth anniversary of Capitalism and Freedom, Adam Kotsko explores the uncanny relationship between Friedman's neoliberalism and Christian theology. 

 

This year represents a particularly inauspicious milestone: the sixtieth anniversary of the publication of Milton Friedman’s Capitalism and Freedom. When it originally appeared, the postwar political settlement based on the New Deal was at the height of its power and popularity, and Friedman’s pro-market polemic could be dismissed as the work of a crank. Undaunted, Friedman presented himself as an evangelist bringing the gospel of the free market to an unsuspecting world. Indeed, even to this day, his book has often served to introduce young people (particularly young men) to libertarianism, providing a kind of “theory of everything” that explains both why society is going wrong (not enough markets) and how to solve social problems (more markets).

Yet Friedman’s ideas have served as more than just fodder for dorm room “bull sessions”—a use for his book that Friedman explicitly anticipates in his 1982 preface. His outlook has formed part of the philosophical underpinning of the neoliberal order, which has held sway over public policy and business practices for four decades, with a record of ever-increasing inequality, accelerating economic degradation, and perpetual crisis.  

Particularly since the Global Financial Crisis and the 2016 election, “neoliberalism” has become a very contentious term. On the one hand, there are those who dismiss it as a meaningless leftist slur, invented by Bernie Bros to denigrate Hillary Clinton. On the other hand, more serious analysts recognize that neoliberalism names a diverse but coherent set of policy tools, grounded in a set of clearly articulated core values. To put it briefly, neoliberalism is a political agenda that aims at reshaping all of human social life on the model of the free market, and it justifies itself in doing this with the claim that the market is the social institution where human freedom can be most fully expressed.  

Neoliberalism is “liberal” for the exact reasons that Friedman so clearly expresses in Capitalism and Freedom, where he insists on reclaiming the original 19th-century meaning of the term to designate laissez faire free market capitalism. This usage of the word is more informative and precise than the confusing American tendency to use “liberal” to mean whatever the Democratic Party happens to be doing. It is neo– because the original consensus in favor of classical 19th century liberalism had evaporated by the time Friedman was writing. Hence liberal ideas had to be reasserted under new circumstances, which necessarily required some updating.  

We can see some of these updates in Capitalism and Freedom, where Friedman repeatedly dismisses the viability of the “automatic” gold standard that was so central to 19th-century capitalist ideology. Though he clearly sees many dangers in the modern practice of central banking using fiat currencies, he recognizes that it is here to stay and seeks to shape it in a way that fits with his neoliberal convictions.

He takes a similar approach to public schooling, accepts that state responsibility for education is widely taken for granted and advocates changing the way the state carries through on that responsibility. In place of direct provision of education by the state—a “collectivist” solution that squelches individual choice—he proposes a school voucher system that will allow parents to educate their children in the way they see fit. This amounts to de-nationalizing the primary and secondary education sectors, replacing state-run schools with a state-subsidized competitive marketplace. Surely no classical liberal would have invented the school voucher system from scratch, but given the reality that people now expect the state to provide education, the liberal must apply his convictions in a new way—in other words, the classical liberal must become a neo-liberal under the conditions of the postwar consensus.  

 


“For the neoliberal, the market has to be built and cultivated and supported—from the highest levels of government down to the convictions of the individual soul.”


 

The shift from classical liberalism to neoliberalism is more than simply a strategic adaptation to a changed reality, however. It also involves a subtle but crucial shift in perspective. The original 19th-century free market system came together as the result of a largely unplanned series of events. It wasn’t simply a matter of the state “getting out of the way” and letting the market do its work—in fact, as Karl Polanyi forcefully demonstrated in his book The Great Transformation, the creation of free markets actually required a great deal of state intervention. Still, no one had a blueprint they were following. By contrast, neoliberals very much did have a blueprint, and the historical experience of the collapse of the 19th-century global free market consensus showed them that there was nothing inevitable or automatic about the market. For the neoliberal, the market has to be built and cultivated and supported—from the highest levels of government down to the convictions of the individual soul.  

In other words, neoliberalism is a conscious project in a way that classical liberalism was not and really could not be. In the Western countries, it was a project carried out with at least some degree of popular consent. In other parts of the world, however, the neoliberal project was imposed by force and violence. The most infamous case is of course Augusto Pinochet’s military junta in Chile, which carried out a campaign of state terror in order to break resistance to neoliberal reforms developed in direct consultation with Friedman and his academic acolytes at the University of Chicago. In Pinochet’s Chile, people were tortured, disappeared, and thrown out of helicopters, but at least the privatization of their social security system meant they were spared the indignity of being forced to accept a state-financed retirement annuity. That may seem like a bad trade to you, but as Friedman reminds us, “the believer in freedom has never counted noses.” 

Friedman’s propaganda work for the neoliberal system was relentless, but his role in Chile goes beyond that. There is a very real case to be made that the man has blood on his hands. No matter how much direct responsibility we attribute to him for the situation in Chile, however, his vocal support of the regime even at the height of its crimes shows that Friedman’s apparent libertarianism has sharp limits. Sometimes the people must be forced to be free.  

Neoliberals like to present themselves as pure utilitarians, following the disinterested dictates of reason to deliver the only “realistic” policies. But if they are willing to tolerate a murderous dictatorship as a means to their desired end, clearly something more than a simple cost-benefit analysis is at work. That’s why, in Neoliberalism’s Demons, I have argued that we need to understand neoliberalism as a political theology—a set of institutional arrangements (the political element) that reflect certain unquestionable, axiomatic values (the theological element). And in the case of Milton Friedman’s manifesto, the two elements are laid out right in the title: Capitalism and Freedom. The power structure that Friedman prefers is one in which the capitalist market takes the lead, and the theological “ultimate concern” motivating his choice is the value of freedom.  

Defining capitalism as the “political” side of Friedman’s ideal social order may seem strange, given that he constantly claims that one of the benefits of his market-centric society is that it excludes politics as we normally understand it. Elected officials and democratic majorities play a very minimal role in his neoliberal utopia, where they figure alternately as bumbling fools or potential Hitlers. But this very rejection of what he calls “politics” is motivated by questions of the distribution of resources and power—above all, decision-making power. This nexus of power and resources is what Friedman calls the economy, and he presents the management of the economy as virtually the sole political question. As he puts it in the first chapter:  

“[T]here are only two ways of coordinating the economic activities of millions. One is central direction involving the use of coercion—the technique of the army and of the modern totalitarian state. The other is voluntary cooperation of individuals—the technique of the marketplace.”

Maintaining the lack of coercion in the marketplace is automatic, requiring no coercion to enforce its norm of non-coercion. By contrast, what Friedman calls a “political” decision always represents some particular interest that must be asserted over against other people’s desires. Hence it always involves some element of coercion, which puts us at least a step or two down the road to the Gulag.  

If we ask what Friedman means by freedom, then, the answer is first of all freedom from coercion. This negative freedom or freedom from in turn opens up realms of positive freedom or freedom to. Under the reign of the market, we are all free—and here I am using real examples from Friedman’s text—to choose where we go on vacation, to propagandize in favor of crank ideas, to choose whether to save for retirement or squander our income in the moment, to invest in our children’s human capital as we see fit, to choose the color of our tie and the color of our employees.  

 


“There is a very real case to be made that Milton Friedman has blood on his hands.”


 

Friedman anticipates the objection that one of those things is not like the other, and his response to that objection illustrates his strategy for shoring up the legitimacy of his neoliberal utopia in the face of perverse results. After defining racism rather reductively as a kind of irrational aesthetic preference to exclude people of a certain race, his first step is to clarify exactly what is at stake in the white employer’s refusal to hire a Black worker.  In Friedman’s view, we need to distinguish between “two very different kinds of harm” —namely, the harm of coercion vs. the harm of not getting the job you want. If we define “harm” in this way, we can see that the real harm is in making someone hire a worker he doesn’t want to hire, no matter what the reason for his preference.

As regrettable as it may be that the economic potential of Black workers is not being fully taken advantage of, all we can do is “to seek to persuade [racists] that their tastes are bad and that they should change their views and their behavior, not to use coercive power to enforce my tastes and my attitudes on others.” In the meantime, we must trust that the market will eventually nudge them away from their economically irrational preferences.   

From a contemporary perspective, Friedman’s “solution” seems obviously simplistic and even willfully obtuse. The temptation when approaching such passages is always to dismiss them as outliers, a poor application of the great man’s great ideas. Such a strategy is not available here, though, because the argumentative pattern he applies to discrimination is absolutely omnipresent throughout the book. When confronted with the possibility of responding to a problem that requires means other than free choice in the market, Friedman always has three partially overlapping, partially contradictory responses.

First, he will claim it is not a real problem at all. Sometimes, as in his discussion of wealth inequality or monopoly, he denies that the problem can even be meaningfully defined or measured in the first place.  Second, he will assert that the attempt to address it through political means will only create greater harm. Often Hitler or the USSR will be invoked at this point. Finally, he will argue that the market will ultimately resolve the issue to everyone’s satisfaction. So, it’s not a problem, the real problem is trying to solve it, and anyway the market will solve the problem.  

I would gently suggest that not all three of these claims can be true at the same time. Here his rhetorical strategy brings to mind Freud’s famous example of the borrowed kettle. When the borrower returns a damaged kettle to his neighbor, he attempts to defend himself with the following three arguments: he returned the kettle undamaged, the kettle was already damaged when he borrowed it, and he never borrowed the kettle in the first place.  

Freud is trying to illustrate the paradoxical nature of dreams, where contradictory elements seamlessly coexist. It would be easy to dismiss Friedman’s similar rhetoric as an indulgence in empty dreams, but from his perspective, it is the attempt to act outside the strictures of the market that is the real fantasy and the real contradiction. Any problem that the market allows to exist must not be a “problem” in any strong sense, and hence the attempt to “solve” it through coercive (non-market) means is both dangerous and strangely self-undermining, because it contradicts his faith that the market will always win in the end. And why will the market win? Because it represents “one of the strongest and most creative forces known to man—the attempt by millions of individuals to promote their own interests, to live their lives by their own values.” 

Stated in that way, market freedom sounds quite attractive and expansive, but it is, ultimately, a strange and narrow kind of freedom. Individuals and families have the ability to choose their own destiny, but only if they resign themselves to the impossibility and undesirability of large-scale, intentional social change. This is a great situation for people with unique taste in ties or a perverse desire to publish leftist literature, and less great for people whose race or gender systematically excludes them from a wide range of opportunities. But however unfortunate the latter situation is for those suffering under it, the alternative of attempting to solve it is always worse because it undercuts the unquestionable axiom of individual freedom.  

Strangely, though, at the same time that Friedman enshrines individual choice as his ultimate concern, on the social level he repeatedly extols the benefits of avoiding any conscious human agency or decision-making. The market may be made up of all our personal strivings, but its results appear to us as completely impersonal, almost mechanical. Again and again, when proposing the ideal policy regime, Friedman will recommend a system that cuts out any human discretion so that the ideal market outcome can simply happen automatically.

For instance, when discussing the ideal system of international trade, he refers not to the expression of human preferences and values, but to indisputable mathematical truths. “Arithmetic is arithmetic and one man’s purchase is another man’s sale,” he reminds us. “Double entry books must balance. Payments must equal receipts. The only question is how.” In that context, the standard for a good trade regime is that it “will enable free market forces to provide a prompt, effective, and automatic response to changes in conditions affecting international trade.”  

 


“Because we have all decided, that means that no one has a right to decide anything different—not the state, not any particular community, and in the last analysis, not even the singular individual.”


 

This cold mathematical machinery may seem to be a far cry from the high-flown ideals of human self-determination that dominate the introduction and conclusion of the book. But in reality, they fit together perfectly. Here Friedman is giving his answer to one of the most important questions in politics—namely, who decides? On the one hand, our free participation in the market means that, in an important sense, we all decide. Every market outcome is the aggregate of all our preferences at any given moment. But because we have all decided, that means that no one has a right to decide anything different—not the state, not any particular community, and in the last analysis, not even the singular individual.

The market is what we all collectively chose, and we have no choice but to obey its dictates. Freedom from human coercion paradoxically loops back around to something that seems a whole lot like coercion—not by a human individual or group, but by something like a force of nature, or an implacable fate, or even… a God.  

 


 

This equation between the free market and God may initially seem like a logical leap. And to be fair, there are significant differences between the traditional concept of a transcendent God and the invisible hand of the market, because the traditional God is very emphatically not supposed to be the emergent outcome of the free decisions of his worshippers. Nevertheless, there is a clear historical lineage between the two concepts, which can be seen in the very term “invisible hand.” As Giorgio Agamben has shown in The Kingdom and the Glory, a massive study of the theological roots of economic thinking, the “invisible hand” is originally a theological concept. Again and again, when theologians tried to explain the way that God governs his creation, they turned to the metaphor of the hand. In the early Church Fathers, for instance, the Son and the Holy Spirit are frequently referred to as God’s two hands, which allow him to interact with the created world and manipulate earthly events. Except for rare circumstances—like the appearance of miraculous signs or the incarnation of Christ—God’s providential handiwork cannot be immediately discerned, but Christians trusted it was both real and benevolent.  

This idea of God’s influence on worldly events raises difficult questions, many of them relating to Friedman’s core theme: freedom. If God controls everything that happens, then in what sense are human beings free? And if they are not free, then in what sense are they morally accountable? This is a problem that the mainstream Christian tradition has never fully solved. In the last analysis, most mainstream Western theologians from Augustine through Luther and Calvin have embraced some form of predestination, without being fully willing to accept the implication that humans are not truly free. The most common attempt to square this circle has been the idea that God indirectly controls events through our free choices. God foreknows what we will do, and he is able to anticipate and respond to our free choices in a way that brings about a better outcome in the end.  

This doctrine has the benefit that it also responds to the other major objection against the idea of divine control of the world—namely, the fact that evil and injustice occur. On the one hand, it gives God plausible deniability, because the ultimate source of evil is not the divine will, but our creaturely rebellion. So evil is either caused directly by us or comes about as righteous punishment for our misdeeds. And if we ask why God would allow freedom to exist when he knew it would cause so much suffering, the answer is that God is ultimately able to create greater good through redeeming our evil choices than he could have in a hypothetical situation where everything went always went smoothly in the first place.  

If the goal is to vindicate God—and it always is—then this seems like a great solution. But it leaves us creatures (a category that includes humans, angels, and demons in traditional theology) in a strange position. On the one hand, we are free in the sense that we are morally accountable for our decisions. And the standard for whether our decisions are legitimate is whether they line up with God’s will—meaning that the only legitimate use of our free will is to submit to the will of another. But on the other hand, everything we do by definition fulfills God’s will. This is true of even the most extreme acts of evil. When Satan deceived Adam and Eve, it was the worst sin ever committed, leading to misery and death for literally the whole human race.

At the same time, it was all part of God’s plan, as it led to the even greater redemption brought about by Christ. The same goes for those who carried out Christ’s crucifixion, a horrific act of torture and cold-blooded murder—but one that made salvation possible for all human beings. Yet despite the fact that they were serving God’s purposes, Satan and Christ’s crucifiers are worthy of punishment, because they were not motivated by conformity to the divine plan.  

This is a very constricted and seemingly contradictory vision of freedom. We associate freedom with spontaneity and self-determination, but in this theological view, anything that we spontaneously want for our own motives is illegitimate—the only thing we are allowed to want is what God wants for us. If we nonetheless choose to follow our own selfish desires, they will ultimately backfire and God will get his way in the end anyway. That means we cannot effectively pursue our own desires, cannot ever achieve what we choose, because in the long run, God will force us into conformity with his plan. We are only truly free if we give up our freedom in unconditional obedience to God, which is to say—we have freedom, but only on the condition that we don’t attempt to use it. 

 


 

There is more than a passing resemblance between this theological doctrine and Friedman’s “broken kettle” logic on the relation between freedom and the market. This is not to say that they are identical, or equally undesirable. From a secular perspective, Friedman’s free market would actually be an improvement on the traditional God, because it doesn’t demand obedience to an outside authority. Friedman thinks that by obeying the dictates of the market, we are only obeying ourselves, taken collectively. And the market leaves room for the genuine pursuit of individual desires, which contribute to the greater good without necessarily backfiring or otherwise being undermined.

When we choose which color tie to wear, we really are free to choose. There’s no secret agenda that will lead inexorably to our damnation. It’s only when we try to do something bigger than the expression of our individual preferences that the problems begin, which is to say—we have freedom, but only on the condition that we don’t attempt to use it for anything more significant than fulfilling our own petty desires.  

This connection between the secularized market-God and the God of the Bible provides us with another lens to analyze Friedman’s bizarre notion of freedom—namely, the relationship between freedom and slavery. Biblical discussions of human freedom and obedience to God are absolutely saturated with the language of slavery, in both the Hebrew Bible and the New Testament. (Contemporary translations tend to obscure this, but basically every time you see the word “servant,” you can substitute the word “slave.”) In Jesus’s declaration that the disciples are no longer slaves but friends in John 15:15, Paul’s exhortation to his followers not to “submit again to the yoke of slavery” after enjoying the freedom of Christ in Galatians 5:1, and countless other memorable passages, the New Testament literature repeatedly equates damnation with slavery.

 


“There is more than a passing resemblance between theological doctrines of freedom and Friedman’s ‘broken kettle’ logic of the relation between freedom and the market.”


 

At the same time, though, slavery to God can figure alongside freedom as an image of salvation, as when Paul declares himself to be the slave of Jesus in Romans 1:1. This ambivalence of slavery in New Testament theology is perhaps best captured in Romans 6:16: “Do you not know that if you present yourselves to anyone as obedient slaves, you are slaves of the one whom you obey, either of sin, which leads to death, or of obedience, which leads to righteousness?” Here our salvation does depend in some sense on our free choice, but it is a choice between two different forms of slavery.  

This connection between freedom and slavery is no accident. As Orlando Patterson argues in the conclusion to his magisterial study, Slavery and Social Death, the value of freedom only makes sense against the backdrop of slavery. In a society that had never known of the degradation and subjugation of slavery, no one would think of the absence of constraint as an important value or priority. It simply would not occur to them to say they wanted freedom, any more than we would list oxygen as one of the things we want. As Patterson says, “Slaves were the first persons to find themselves in a situation where it was vital to refer to what they wanted in this way.” The slaveholders quickly turned this desire to their own advantage, using the prospect of an always partial freedom to extract more willing obedience.  

From this perspective, the fact that the biblical God is sometimes portrayed as offering freedom and is sometimes presented as the most desirable master is no contradiction. The supposedly “generous” gesture of freeing a slave was one of the most powerful tools that the masters used to legitimize their domination. Similarly, the oft-noted contradiction that the American Founders who cried out for freedom against the supposed “slavery” of British domination while nonetheless holding slaves is not necessarily a contradiction at all. Quite to the contrary, the unique strength and longevity of race-based chattel slavery for life in the United States is surely one major reason for the centrality of freedom among American values.  

That is a legacy that Friedman does not provide us with many tools to analyze productively—indeed, it is one that he would clearly rather set aside. Yet he cannot, because his very embrace of freedom constrains him to make continual reference to the possibility of slavery. Even if he seldom uses the literal word, something like slavery is what is at stake in his constant invocation of coercion and the specter of totalitarianism. Friedman’s system is fully secular in the sense that there is no transcendent God, no one to enslave us other than our fellow human beings.

But just as the biblical tradition ultimately offers us a choice between two forms of slavery, so too does Friedman offer us a choice between enslavement to particular human beings—as he puts it, by “a monarch, a dictator, an oligarchy, or a momentary majority”—or enslavement by all human beings as represented by the market. Choose this day who you will serve!  

Even if we bracket the real-world effects of Friedman’s ideas in the concrete practices of neoliberalism, the freedom he is offering doesn’t sound like a freedom worth having. The easy response to this observation is to put forward an alternate version of real freedom that surpasses Friedman’s market freedom. There is a lot of good work in this vein, such as Mike Konczal’s Freedom from the Market, an excellent book that details the many attempts by American working people to escape dependence on and domination by the market. As a matter of practical political strategy, reformulating the ideal of freedom is probably the way to go.  

From my perspective as a student of political theology, though, there are good reasons to doubt that there could be a “good” version of freedom that escapes the shadow of slavery. Patterson concludes his book by pointing out the paradox that one of our central values is the product of slavery and asks, “are we to esteem slavery for what it has wrought, or must we challenge our conception of freedom and the value we place upon it?” Clearly responding that slavery was somehow “worth it” because it gives us the value of freedom would be monstrous.

One way to avoid this trap is to ask what the enslaved wanted freedom for. Yes, they wanted some form of escape, from domination, from arbitrary violence, from all the experiences that make slavery a visceral horror. But more than that, they wanted freedom to make connections. In Patterson’s account, slavery is defined as a form of social death, a radical disconnection from social status and kinship networks. Freedom allows former slaves to form a family that is not just a de facto arrangement but a socially recognized one, to build their own reputation and defend their own honor.  

In other words, they wanted what all human beings initially have. The master’s claim to benevolently “give” them those things is a self-serving lie, a twisted form of self-justification for those who deprived the enslaved of their birthright as human beings. And once we recognize that the master’s role is solely negative, it makes no inherent sense to refer to that birthright primarily in terms of freedom. We do not choose our families, our place of birth, our initial communities. We do not choose who we are drawn to become friends with. We do not choose to fall in love. We do not choose when we conceive or give birth, nor do we choose who our children will be. We do collaborate in those relationships, and sometimes we unfortunately need to escape them, but it is surely reductive to say that they are primarily the result of free choice. Indeed, taken to an extreme, an insistence on negative freedom is more than simply an extrinsic side-effect of slavery, but becomes a perversely freely-chosen echo of the social isolation and alienation that slavery imposes upon its victims.  

Rather than the assertion of our freedom, then, our life together should be guided by the kinds of things that make life worth living—relationship, recognition, security, and creativity. If we seek first all these good things, then surely freedom in the sense of the absence of arbitrary coercion will be added to us as well. By the same token, any freedom that prevents us from seeking those good things is not a freedom worth having. In any case, freedom can’t be our end-in-itself, our ultimate concern, because freedom is a mere absence, a lack. It is nothing at all. It is not for freedom that slaves sought to be set free, but that they might have life, and have it more abundantly.

 


 

Adam Kotsko teaches in the Shimer Great Books School of North Central College. He is the author of Neoliberalism’s Demons: On the Political Theology of Late Capital.

 


 

 

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