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August 14, 2008
The Irony Of It All
Recently Chicago Magazine, the magazine of the University of Chicago, posted a short bit on a protest by a group of about 100 faculty members against the Milton Friedman Institute. The Chicago Maroon has more details. More than 100 academic faculty members have united in protest over the University's soon-to-be established Milton Friedman Institute, sending a letter to President Robert Zimmer in which they take issue with the economics research institute's name and its foundational precepts, and requesting a meeting of the complete faculty to discuss their concerns.And just what would those concerns be? ...approximately eight percent of the University's faculty members were concerned enough over what they believe to be the Institute's potential biases that they formally expressed their concerns to Zimmer and Provost Thomas Rosenbaum.Ah yes. They want a very diverse faculty. Every one should think like them. i.e. be anti-capitalist. Not bad for a University founded by John D. Rockefeller. Now for the irony part. In the same issue of the magazine, an article reprinted in the Maroon, discusses the best way to allocate scarce water resources where people have water rights. And what was the conclusion? One solution, says Coursey, is to persuade senior-rights holders to curb their water consumption and sell the surplus to junior owners for profit. Under current laws, community members can't exchange or sell water rights; Coursey's market system would change that. Think of it like a lemonade stand, he says. "I have water. You want to buy it. We make a deal." Based on market prices, owners would decide whether to keep the water to which they're entitled or else lease or sell their rights on the open market.So how did the article conclude? As with any stock exchange, participation in the Mimbres market is voluntary. "If you want to sit on your rear end and do the same thing that your great-grandfather did with the water, that's fine," says Coursey. Those who choose to buy and sell can boost their profits while also helping manage a scarce natural resource. "Greed," he says, "leads to a water system that is much more efficient than a situation where trading isn't allowed." Such avarice is good news for Mimbres residents who otherwise might not have enough water to go around.So there you have it. Greed, properly harnessed through property rights and markets (commonly called capitalism) is the best way to allocate scarce resources. Something capitalists have been saying for quite some time. Only now we have evidence not just anecdotes. Actually more evidence. Since there always was a lot. For instance, hear much about the USSR these days? I thought not. So I sent an e-mail to Chicago Magazine saying: I note in the latest Chicago Magazine (July-Aug. 2008) that 101 Professors decry naming an economics institute after Milton Friedman. In the same issue another scholar's work (Don Coursey) shows that property rights and greed are the best way to allocate scarce (water) resources.Well they got back to me saying my letter may be published in the next issue. We will see if they have the courage. Cross Posted at Power and Control Commenter JL provides a list of the signers. posted by Simon on 08.14.08 at 02:31 PM
Comments
The nice term for using a free market is risk-benefit analysis. That is what applies to most of us normal folks and works well. But even at an extreme the free market works - that is its beauty. At the extreme, greed (benefit squared) is balanced by fear (risk squared). As to the professors uncomfortable with the probable slant of a Milton Friedman Institute, there are a few primitive emotional reasons driving the discomfort. Their type of expertise is unlikely to be as valued there; resources are going to a competitor tribe (and they believe that such resouces are limited and inflexible); such dramatic projects are powerful symbolic reminders that their values are not dominant; and such institutes promise an influx of competent opponents to their unchallenged ideas. Without fully articulating such things, such fears and anxieties swim just beneath the surface of this petition. Assistant Village Idiot · August 14, 2008 04:12 PM Here is the list of those professors:
JL · August 14, 2008 04:44 PM As the immortal Bugs Bunny says, "What a bunch of Maroons!" Sam Wah · August 15, 2008 11:19 PM I just don't get you're fascination with Friedman. That he purported to be an advocate of economic freedom is all that seems to matter.
Frank · August 16, 2008 02:25 AM Frank, Where do you buy your talking points? You wuz robbed. Re: Pinochet - look up Friedman's involvement. It was minimal. And his Principles turned Chile from an economic basket case to a well functioning economy. He regretted the payroll tax. Every one makes mistakes. Friedman wrote the intro to the 50th Anniversary Edition of Hayek's "The Road to Serfdom". As to monetarism - it is now one of the bedrock principles of economics. Which is why Keynes is out of favor and Friedman is in. Look up Reagan's Federal Reserve Chairman (I forget the name) for an operational example. BTW Ronnie was trained in economics. M. Simon · August 16, 2008 05:18 AM Post a comment
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Lincoln, who helped draft the letter, said that some of the issues raised by the faculty were a perceived ideological bias for the Institute toward a conservative agenda, disciplinary narrowness, and the amount of money being spent.
I suppose if it were being spent on a "LBGT diversity center," that would be OK and encouraged.