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Milton Friedman on Non-Compliance with the State

Written by Gary North on September 17, 2016

In the summer of 1962, I read Milton Friedman’s essay, “Is a Free Society Stable?” It was published in a campus quarterly journal, New Individualist Review. A group of students at the University of Chicago published it. It remains the best campus journal I have ever read. It ceased publication after seven years: April 1961 to Winter 1968.

Friedman’s main argument has stayed with me ever since: the case for limited civil government as a way to gain widespread voluntary cooperation.

In this article is the most important sentence Friedman ever wrote. His refusal to adhere to it when discussing central banking, educational vouchers, and the gold coin standard constitutes the major criticism by his Austrian School critics, of whom I am one.

An efficient governmental organization and not an inefficient one is almost surely the greater threat to a free society.

Here, I reprint a section of his article. The complete article is online at the Liberty Fund’s site. Read it here.

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THERE IS ANOTHER DIRECTION, it seems to me, in which there is a different kind of a tendency for capitalism to undermine itself by its own success. The tendency I have in mind can probably best be brought out by the experience of Great Britain–Great Britain tends to provide the best laboratory for many of these forces. It has to do with the attitude of the public at large toward law and toward law obedience. Britain has a wide and deserved reputation for the extraordinary obedience of its people to the law. It has not always been so. At the turn of the nineteenth century, and earlier, the British had a very different reputation as a nation of people who would obey no law, or almost no law, a nation of smugglers, a nation in which corruption and inefficiency was rife, and in which one could not get very much done through governmental channels.

Indeed, one of the factors that led Bentham and the Utilitarians toward laisser-faire, and this is a view that is also expressed by Dicey, was the self-evident truth that if you wanted to get evils corrected, you could not expect to do so through the government of the time. The government was corrupt and inefficient. It was clearly oppressive. It was something that had to be gotten out of the way as a first step to reform. The fundamental philosophy of the Utilitarians, or any philosophy that puts its emphasis on some kind of a sum of utilities, however loose may be the expression, does not lead to laisser-faire in principle. It leads to whatever kind of organization of economic activity is thought to produce results which are regarded as good in the sense of adding to the sum total of utilities. I think the major reason why the Utilitarians tended to be in favor of laisser-faire was the obvious fact that government was incompetent to perform any of the tasks they wanted to see performed.

Whatever the reason for its appeal, the adoption of laisser-faire had some important consequences. Once laisser-faire was adopted, the economic incentive for corruption was largely removed. After all, if governmental officials had no favors to grant, there was no need to bribe them. And if there was nothing to be gained from government, it could hardly be a source of corruption. Moreover, the laws that were left were for the most part, and again I am oversimplifying and exaggerating, laws that were widely accepted as proper and desirable; laws against theft, robbery, murder, etc. This is in sharp contrast to a situation in which the legislative structure designates as crimes what people individually do not regard as crimes or makes it illegal for people to do what seems to them the sensible thing. The latter situation tends to reduce respect for the law. One of the unintended and indirect effects of laisser-faire was thus to establish a climate in Britain of a much greater degree of obedience and respect for the law than had existed earlier. Probably there were other forces at work in this development but I believe that the establishment of laisser-faire laid the groundwork for a reform in the civil service in the latter part of the century–the establishment of a civil service chosen on the basis of examinations and merit and of professional competence. You could get that kind of development because the incentives to seek such places for purposes of exerting “improper” influence were greatly reduced when government had few favors to confer.

(For the rest of the article, click the link.)

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