I have acknowledged on multiple occasions the great abilities of Milton Friedman in debate. Clearly in the 20th century Milton Friedman was the most important public figure in the debate over the power of the market and the tyranny of political control. He had a great command of the facts whether the debate was on prohibition or on monetary policy. He also had a great ability to devastate an intellectual opponent while retaining a smile on his face and a friendly and engaging manner.
But Friedman was a bobbing and weaving counter-puncher. He stepped inside of the system of his opponent and tried to nick and cut his opponent until they bleed and accepted the TKO. But his opponents often survived the exchange, and could argue in retrospect that while Milton might have won the fight, but his arguments weren't "knock outs". His monetaristism, for example, didn't knock out Keynesianism, though it did rock the system to its knees. But analytically and methodologically Friedman was working within the Keynesian system. He didn't offer an alternative intellectual system, he offered a different perspective on that system.
I heard Paul Krugman on TV over the weekend actually utter the phrase "We are all socialists now" in discussing the government plans to take over financial markets. Paulson's "plan" is an intervention into the operation of the financial markets that is beyond belief.* McCain and Obama are tripping over one another to claim they have a PLAN. Everyone wants a plan to fix the financial markets. But the bottom line is that we do not need a government plan, we need a free market unhampered by government intervention. Instead, we are going to get government control, budget deficits and debt, and inflation in double-digits as the government attempts to pay for their inept policies that fueled the current and future crises.
We do need careful boxers, who can bobb and weave against the Krguman's of the world. But we also need those who are capable of delivering the knock out punch. Ludwig von Mises was one who packed such a punch as an economist. Easy credit, distortions to the pricing of assets, the attenuation of property rights, and the abbrogation of the profit and LOSS system do nothing but bring an economy farther away from market realities and market discipline and closer to economic catastrophe. As Mises said, the denial of the teachings of economics by political leaders doesn't impact the truth content of economic science, but it can lead to the stamping out of civilzation.
Only a forceful and effective "endogenous public choice theorist" can help stop the march toward this conclusions.
Who among the world's leading economists today will step up and play the role Mises did in 1922?
*We had an earlier blog entry claiming that George Bush is arguably the worst President in my lifetime, and these recent events only reinforce that claim and might argue that his name will go down on a rogues list of figures in US history.