FOUR MORE YEARS: We have succeeded in stalling socialism. Can the Bush administration reverse it? By Milton Friedman.
In the almost six decades since the end of World War
II, intellectual opinion in the United States
about the desirable role of government has undergone a major shift. At the
end of the war, opinion was predominantly collectivist.
Socialism—defined as government ownership and operation of the means of production—was seen as both feasible and desirable.
Those few of us who favored free markets
and limited government were a beleaguered minority.
In subsequent decades opinion moved away from
collectivism and toward a belief in free
markets and limited government. By 1980 opinion had moved enough to enable
Ronald Reagan to win the presidency on a quasi-libertarian agenda.
The collapse of the Soviet Union in 1989 delivered the
final blow to the belief in socialism. Hardly anyone today, from the far
left to the far right, regards socialism in the traditional sense of
government ownership and operation of the means of production as either
feasible or desirable. Those who profess socialism today mean by it a
welfare state.
Over the same period, the actual role of government in
the United States also changed drastically—but in precisely the
opposite direction. In the first postwar decade, 1945 to 1955, government
non-defense spending, federal, state, and
local, equaled 11.5 percent of national income, varying from a high of 16 percent in 1949 to a low of 8.5 percent in 1952. From
then on, spending rose rapidly. By 1983, government non-defense spending
reached 30 percent of national income, nearly triple the average amount in
the first postwar decade. In addition, over the same period, government
intrusion into business and private affairs exploded (a small sample:
Medicare, Medicaid, Americorps, Head Start, Job Corps, EPA, OSHA, CPSC,
LSC, EEOC). No doubt the growth of government
was one reason for the shift in public
opinion. Big government in practice proved less attractive than big
government in prospect.
Reagan’s election brought the growth in
government non-defense spending to a halt. As of 2003, government non-defense spending
equaled 30 percent of national income, the same
as it was in 1983. Government intervention through
regulation and controls did fall somewhat during Reagan’s presidency,
but has since resumed its steady rise.
To summarize: After World War II, opinion was
socialist and practice was free market; currently, opinion is free market
and practice is heavily socialist. We have largely won the battle of ideas
(though no such battle is ever won permanently); we have succeeded in
stalling the progress of socialism, but we have not succeeded in reversing
its course. We are still far from bringing practice into conformity with
opinion.
That is the overriding non-defense task for the second
Bush term—as President Bush clearly
recognizes. It will not be an easy task, particularly with Iraq threatening to consume his political capital.
This essay appeared in the Wall Street Journal on December 9, 2004. Available from the Hoover Press is The Essence of Friedman, edited by Kurt R. Leube. To order, call 800.935.2882. Milton Friedman, recipient of the 1976 Nobel Memorial Prize for economic science, was a senior research fellow at the Hoover Institution from 1977 to 2006. He passed away on Nov. 16, 2006. He was also the Paul Snowden Russell Distinguished Service Professor Emeritus of Economics at the University of Chicago, where he taught from 1946 to 1976, and a member of the research staff of the National Bureau of Economic Research from 1937 to 1981. |
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