Milton Friedman and "You Didn't Build That"

A blog about business and economics.
July 31 2012 12:28 PM

Milton Friedman and "You Didn't Build That"

Milton Friedman had a lot of great ideas, but also some terrible ones of which this quotation from Ben Duronio is a great example:

If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand.
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Obviously this is a joke. But a joke repeated often enough becomes a deeply embedded ideological concept. And I think it's fair to say that this idea—the idea that "the government" is a thing, and that it's incompetent, and that when it's put in charge of things terrible results inevitably occur—is in fact influential on the contemporary American right. And yet it flies in the face of lived experience which shows clearly that the quality of public sector institutions varies widely.

In my experience, for example, the people who staff the Fort Totten Waste Transfer Station in the DC Department of Public Works are way more helpful than the people at the same agency in the same city who are in charge of distributing residential recycling bins. The people who staff the Metro stations in DC fall in the middle of that helpfulness spectrum, and are substantially less helpful than the people who staff the Stockholm Metro stations. And not only does quality of government vary a lot, but it matters a lot. Even a really small Friedman-style government enjoys a monopoly on the legal use of coercive force and is charged with stabilizing the macroeconomy. These baseline functions are much more important than running a municipal bus network, so if you think it's impossible to create well-functioning public sector institutions then you're just saying we're totally screwed. The basic conditions for thriving private businesses—enforceable property rights and functioning monetary system—can only be met insofar as it's possible to create an effective government.

That's my deep version of the "you didn't build that" argument. I don't think it has a clear policy upshot, but the right makes a huge error when in its zeal to reduce spending on this or that it decides to go all-in on the idea that government is inherently dysfunctional. It's not a coincidence that the countries with the least public corruption tend to be the richest, but it's difficult to explain how those honest public sector institutions come into being in Friedmanite terms.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.