Shirley Williams on Milton Friedman and the Failing of Free Market Capitalism

SWilliams Book Pic

The supposed benefits of free market capitalism and deregulation are at the heart of the ‘New Right’ doctrines expressed in Thatcherism and Blairite New Labour. Thatcher took her credulous adulation of the free market from the American Chicago school of economics, most notably von Hayek and Milton Friedman. These doctrines became New Labour orthodoxy under Tony Blair following Labour’s defeat in the 1987 general election. Despite Gordon Brown, Blair’s successor, having lost the 2010 election, and the rise of Jeremy Corbyn from the Old Labour Left as leader of the party, Thatcherite ideals are still espoused and promoted by the Blairite faction in the Progress ‘party-within-a-party’ in Labour.

Yet even at the time Thatcher was implementing the free market reforms that have devastated the British economy and society, it was obvious to the majority of people on the Left that the free market simply didn’t work. Shirley Williams, the right-wing Labour MP, who left to form the SDP with David Owen, now merged with the Liberals, was one of them. In her book, Politics Is For People (Harmondsworth: Penguin 1981), she makes the following remarks and criticisms of Friedman’s grand notions of the effectiveness of the free market.

Professor Friedman, however, overstates his case – often to a ludicrous extent. There are many needs the market is incapable of meeting, because they are collective needs – for clean water, clean air, public health, a good transport system. The market is geared to individual demands and to individual purses; in meeting them, it does not count social costs or social consequences. Furthermore, there are individual demands that cannot be made effective because the individual cannot afford to satisfy them, typically, treatment for serious illness, chronic invalidism, care in old age. The market is a mechanics ill-adapted to the cycles of an individual’s life history, which move from dependence through independence back to dependence again, and also to the cycles of the economy. In his recent book, Free to Choose, Professor Friedman asserts: ‘Sooner or later, and perhaps sooner than many of us expect, ever bigger governments will destroy both the prosperity that we care for in the free market and even the human freedom proclaimed so eloquently in the Declaration of Independence.’ In an obvious sense, the Professor must be right. Total government, controlling the whole economy, would indeed be likely to destroy both prosperity and human freedom. But again his case is hopelessly overstated. In many European countries public expenditure constitutes 40 per cent or more of the gross national product. yet who is to say that Sweden or Denmark or the Federal Republic of Germany are less prosperous and less free than Spain, Argentina or Brazil, in which a much smaller proportion of the gross national product goes into public expenditure? Indeed the extremes of income and wealth characteristic of societies dominated by free market capitalism are not conducive to human freedom or to democratic political systems. Men and women without access to decent working conditions, education, housing and health do not fully share in their society. They are not accorded the human dignity that is intrinsic to the democratic process. their opportunities and their choices are crippled by the unequal distribution of resources. Even if such as country has some form of election, ostensibly based on a universal and secret franchise, the great disparities in economic power will influence the many who are weak to bow to the wishes of the few who are strong. (PP. 16-7).

And this is exactly what has happened. Britain has become much less democratic. Our leaders are rich and middle class elitists, isolated from the mass of the working poor in their own, sealed enclaves. The poor have become much poorer, and are increasingly seeing what few rights they have left stripped from them through Cameron’s reforms of the judicial system, trade union legislation and his assault on workers’ rights. Two decades ago there was a storm when someone announced that Monetarism had failed. Friedman’s free market economics are also an abject failure. They survive only because they sustain and empower a parasitical managerial class, ruling through elite privilege and toxic capitalism. It’s high time Friedman’s discredited ideas were very firmly dumped.

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3 Responses to “Shirley Williams on Milton Friedman and the Failing of Free Market Capitalism”

  1. sdbast Says:

    Reblogged this on sdbast.

  2. vondreassen Says:

    pity she had.done/ said nothing when she could; hindsight makes wonderful excuses…

    • beastrabban Says:

      The book was published in 1981, so in that sense, she did. But she and the rest of the SDP were more interested in splitting from and trying to torpedo the chances of the Labour party, unfortunately.

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