I Am John Galt

by Donald Luskin

  General William Westmoreland, the U.S. commander in Vietnam, strongly supported involuntary conscription, and told the commission that he didn’t want to command an army of mercenaries. “General,” Friedman interrupted, “would you rather command an army of slaves?”

  Replied Westmoreland indignantly, “I don’t like to hear our patriotic draftees referred to as slaves.” Friedman shot back: “I don’t like to hear our patriotic volunteers referred to as mercenaries.” Friedman moved in for the kill. “If they are mercenaries,” he told Westmoreland, “then I, sir, am a mercenary professor, and you, sir, are a mercenary general; we are served by mercenary physicians, we use a mercenary lawyer, and we get our meat from a mercenary butcher.”36

  With this kind of persuasion from Friedman—and similar efforts from his fellow Gates Commission member and Ayn Rand acolyte Alan Greenspan, whom we met in Chapter 8, “The Sellout”—the Gates Commission ended up recommending the abolition of the draft, and President Nixon ultimately signed it into law. Libertarians like Friedman and Greenspan—and Rand—were able to claim at least one spectacular victory for liberty under the otherwise dismal reign of Richard Nixon. Nowadays we falsely remember the antidraft movement coming from the political left, but conservatives/libertarians like Friedman and Greenspan—and Rand—are the ones who made abolition of the draft happen.

  At the close of the 1970s, fresh on the heels of his Nobel award, Friedman began to gain a wider audience. He wrote a regular column for Newsweek (remember, the magazine that 15 years earlier hadn’t deigned to review Capitalism and Freedom), dueling alternately with Paul Samuelson using opposing philosophical swords: Friedman’s light rapier honed by the Chicago school’s brand of free-market monetarism versus Samuelson’s blunt claymore of Keynesian government intervention. The columns were extremely popular. Friedman’s message, it seemed, resonated somewhere deep within the American psyche well outside the hallowed halls of academia and banquet rooms of Stockholm.

  It was clear that Friedman had arrived right in the middle of Main Street when he was invited to appear in 1979 on the popular daytime talk show hosted by Phil Donohue. The show’s limousine-liberal host whined to Friedman about “mal-distribution of wealth” and “the desperate plight of millions of people in underdeveloped countries.” He then asked Friedman, with arms flailing, “When you see the greed and the concentration of power, did you ever have a moment of doubt about capitalism?” Friedman’s response was calm and masterful, literally stunning the unflappable Donohue into dumbfounded silence.

  “Is there some society you know that doesn’t run on greed?” Friedman challenged. “Do you think Russia doesn’t run on greed? Do you think China doesn’t run on greed? What is greed? Of course none of us are greedy—it’s only the other fellow who is greedy. The world runs on individuals pursuing their separate interests. The greatest achievements in civilization have not come from government bureaus. Einstein didn’t construct his theory under order from a bureaucrat. Henry Ford didn’t revolutionize the automobile industry that way. In the only cases in which the masses have escaped the grinding poverty that you’re talking about—the only cases in recorded history—are where they have had capitalism and largely free trade. If you want to know where the masses are worst off, it’s in exactly the kinds of systems that depart from that. So that the record of history is absolutely crystal clear: that there is no alternative way, so far discovered, of improving the lot of ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system. Is it really true that political self-interest is nobler somehow than economic self-interest? Just tell me where in the world you find these angels who are going to organize society for us. I don’t even trust you to do that.”37

  This was not Gordon Gekko proclaiming that “greed is good.” It was classic Friedman. He made his point with supreme effectiveness, but there was not a hint of rancor in it, nor a trace of self-aggrandizement. It was all delivered with good cheer and an impish smile. Here was Rand’s Hugh Akston come to life, delivering not a deathblow in a debate, but more of a prayer—what Akston described as “a full, confident, affirming self-dedication to my love of the right, to the certainty that the right would win.”

  Helping People Learn (Because Governments Don’t)

  While Friedman’s 1962 classic Capitalism and Freedom got Friedman’s ideas to Main Street, they were soon to go further, potentially to every television set in the United States. With his wife Rose he created Free to Choose, a 10-part PBS miniseries and accompanying book. Here Milton and Rose, in homespun style and sparkly-eyed humor, led the viewer on a journey around the world, seen through the prism of their free-market philosophy. Using you-are-there real-world examples and personal interviews, the Friedmans made abstract ideas such as equality, freedom, and the power of the markets intensely accessible to the general public—even those with no formal training in economics or philosophy.

  Using popular vernacular, they translated complicated principles into understandable examples. “The strongest argument for free enterprise is that it prevents anybody from having too much power, whether that person is a government official, a trade union official, or a business executive. It forces them to put up or shut up. They either have to deliver the goods [and] produce something that people are willing to pay for [and] are willing to buy, or else they have to go into a different business,”38 he said in episode 2, “The Tyranny of Control.” It was perhaps the first time in history that a Noble laureate publicly uttered the phrase “put up or shut up.” He also provided pithy maxims that were easy to recall in response to the collectivist claptrap of the day, including: “A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.”39 “The most important single central fact about a free market is that no exchange takes place unless both parties benefit,” and “Governments never learn. Only people learn.”

  The Prophet of Profit

  In Atlas Shrugged, John Galt stopped the engine of the world by persuading its most brilliant minds to go on strike. His first recruit was the philosopher of reason, Hugh Akston. In Atlas, we read the question: “Isn’t it odd? When a politician or a movie star retires, we read front page stories about it. When a philosopher retires, people do not even notice it.” Rand’s answer, in the voice of Francisco d’Anconia: “They do, eventually.”

  That’s because ideas move the world—they can save it, or they can destroy it. The absence of ideas can enable the world to destroy itself. So it was when Hugh Akston went on strike—and so it was when Milton Friedman died, in November 2006. The timing was almost too perfect. The financial crisis that swept the globe and became the Great Recession started within months of his death, with the first wave of defaults on subprime mortgages. The Obama administration and a radical leftist Congress used the turmoil—under the doctrine of White House Chief of Staff Rahm Emanuel, who said, “You never want a serious crisis to go to waste”40—to implement a new New Deal.

  Up to his last breath, Friedman had been a stunningly effective agent in dismantling the New Deal leviathan that he had once served. He always saw the unintended consequences of government meddling in the economy and in our lives, and warned us of the dangers we were inadvertently creating for ourselves. Often we listened, and often we didn’t.

  In the case of the mortgage credit crisis that erupted shortly after his death, he had been on the case a full 16 years before. Anticipating the government’s role in the debacle through expanding Fannie Mae and Freddie Mac, he described in a 1992 pamphlet entitled Why Government Is the Problem exactly why the differences in private versus public ownership yield dramatically different results to society. “If a private enterprise is a failure, it closes down—unless it can get a government subsidy to keep it going; if a government enterprise fails, it is expanded. I challenge you to find exceptions. . . . If the initial reason for undertaking an activity disappears, they have a strong incentiv
e to find another justification for its continued existence.”41

  In the same pamphlet he went on to sum up the first decade of the twenty-first century as if he had mentally time-traveled forward almost two decades. “The problem is not that government is spending too little, but that it is spending too much. The problem in schooling is that the government is spending too much on the wrong things. The problem in health care is that the government is spending too much on the wrong things. The end result has been that government has become a self-generating monstrosity. . . . What we now have is a government of the people, by the bureaucrats, including the legislators who have become bureaucrats, for the bureaucrats.”42

  In the case of artificially imposed diversity quotas for faculty and staff at his university, he would tell the administration as early as 1974, “Balance and diversity have been and will continue to be valuable by-products of an undeviating emphasis on quality alone. They are not objectives to be sought directly.”43 Friedman would keep sounding his trumpet as the voice of reason and freedom until the day he died.

  As late as 2004, at the age of 92 when most economists have long since retired or passed on, Friedman’s voice of reason and liberty was as loud and articulate as ever, distilling difficult ideas and coating them with charm to be deliciously palatable to a mass audience. In a Fox News interview in May of that year, he explained the basic construct of government spending.

  There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch! Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government. And that’s close to 40% of our national income.44

  The only thing that Friedman failed to anticipate was the enormity of his own influence. He had guessed that Free to Choose would be received by the country about as well as Barry Goldwater in the early 1960s. Yet by the early 1980s he and Rose not only had generous sponsorship for their television show and an avid viewership, but they had a conservative Goldwater sound-alike in the White House after Ronald Reagan’s landslide victory over Jimmy Carter.

  On December 19, 1969, Friedman would appear on the cover of Time—another publication that had snubbed him and Rose earlier in the decade. The magazine grudgingly gave him credit for his emerging influence, saying, “Friedman, a 57-year-old economics professor at the University of Chicago, is still regarded by critics as a pixie or a pest, but he has reached the scholar’s pinnacle: leadership of a whole school of economic thought. It is called the ‘Chicago school.’ . . . Milton Friedman has done much to revive faith in the competitive market and to change the theories by which nations guide their commercial destinies.”45

  In 1962, Friedman had compiled a list of 14 unjustified government activities that included agricultural subsidies, trade tariffs, rent control, minimum wages, control of radio and television by the Federal Communications Commission (FCC), Social Security, public housing, the post office, and compulsory military conscription. So far, only the draft has been entirely eliminated. Yet there have been significant inroads into some areas, including fewer international trade restrictions under the North American Free Trade Agreement (NAFTA) and elimination of the price controls of the early 1970s. However, during the latter half of the 1980s spending by government had grown to 45 percent of national income. “By that test, government owns 45 percent of the means of production that produce the national income. The U.S. is now 45 percent socialist,”46 he would opine in a 1989 New York Times piece.

  By 2002—40 years after Capitalism and Freedom—Friedman had started to take a more global view and would credit a number of world developments as evidence that, ironically, capitalism was making greater gains outside of the United States, the very birthplace of modern democracy. The collapse of the Berlin Wall and the dissolution of the Soviet Union ushered in a wave of increased economic opportunity in Eastern Europe. Prosperity in China was exploding under freer economic—if not political—policies. Success stories like the East Asian “Tigers” of Taiwan, Singapore, and South Korea (all of which had followed in the footsteps of Hong Kong, which Friedman had long celebrated as an exemplary free economy) showed that largely unfettered, market-oriented systems not only worked, but thrived.

  For himself, Friedman refused to take credit for any modest advancement in liberty. He felt it was a function of individual choice and people’s gradual recognition that the creep of collectivism ran directly counter to our rational need to pursue our own interests. He wasn’t driving the change; he was only describing and presaging the inevitable. “The change in the climate of opinion was produced by experience, not by theory or philosophy,”47 he wrote in 1982. Then, echoing Hugh Akston, he advised, “The only person who can truly persuade you is yourself. You must turn the issues over in your mind at leisure, consider the many arguments, let them simmer, and after a long time turn your preferences into convictions.”48

  Before his death in 2006, Friedman would sum up his work in the humblest of terms: “My contribution to the libertarian cause has not come on the level of values or the like but rather by empirical demonstration . . . by advancing the science of economics and showing the relevance of those advances to the policy of economics.”49

  Hugh Akston might have quibbled with Friedman’s phrasing; he would have said that empirical demonstration itself is the result of one’s values—the value of reason. But we expect Akston would have been pleased when Friedman said in a 1975 interview, “One of the great mistakes is to judge policies and programs by their intentions rather than their results.”50

  Akston might also have quibbled with Friedman’s generosity with his intellectual enemies. Akston blasted philosophers of unreason as using “the prestige of philosophy to purchase the enslavement of thought.” Friedman was gentler: “When I come to the question of the dispute and difference I have made with modern liberals, the conclusion that I always reach is that the problem with the modern liberal is not that their hearts are soft, but that their heads are.”51

  Now with Friedman gone, recall what George Shultz once said of him: “Everybody loves to argue with Milton, particularly when he isn’t there.”52 Sadly, he isn’t there. And the arguments against reason and liberty seem louder than ever. But Friedman showed us all how to defend those values; now it’s up to us.

  Afterword

  Learn from Ayn Rand’s heroes—don’t be intimidated by their exceptional achievements.

  Yes, they are steel tycoons who invent new metals, architects who build the tallest buildings in New York, and rebels who save the world by stopping its engine. And today’s real-life Rand heroes are titans of technology and finance, among the wealthiest people who ever lived. But these heroes are exceptional only in their epic scale, not in their intrinsic nature. Rand’s books—like life itself—are full of characters who build exceptional lives by following Rand’s philosophy, even though they do not become world-famous industrialists.

  From The Fountainhead, think of Mike, the humble but superlatively competent construction worker who works with the brilliant architect Howard Roark. From Atlas Shrugged, think of Eddie Willers, the unassuming but—again—superlatively competent assistant to the high-powered railroad executive Dagny Taggart. Or how about Quentin Daniels, the young but—are we seeing a pattern here?—superlatively competent student who strives to reproduce John Galt’s technology breakthrough? The most unforgettable may be Jeff, merely a tramp who bums a ride on one of Dagny’s trains. It turns out he was once a
factory worker—superlatively competent, no doubt—who reveals to Dagny the true identity of John Galt. He then masterfully takes charge for Dagny when the train they’re on is abandoned by its crew.

  Rand herself summed it up perfectly. Speaking in Atlas Shrugged through the voice of Ellis Wyatt, a brilliant oilman who has abandoned his fields to join Galt’s strike: “There’s no such thing as a lousy job—only lousy men who don’t care to do it.”

  Whether or not you’ll ever be a titan of industry, there are two core lessons that can be learned from each and every one of our real-life Rand heroes.

  First, they teach us how much is possible—more than we ever would have thought without them to show us the way. Before there was a Bill Gates, we just didn’t know that anyone could get that rich anymore. Gates’s self-made wealth hasn’t been seen in this world for a century, since the days of men like Cornelius Vanderbilt. Gates proved it can still be done.

  Yes, there’s that old joke (repeated by envious cynics like Paul Krugman1) that when Bill Gates walks into a bar the average income for everyone there goes up but no one is actually richer. That is patently untrue. First, everyone in the world is richer because of the value created by Bill Gates; if they weren’t, he wouldn’t have been able to get so rich in the first place. But separately, and more importantly, everyone is made richer by the example of Bill Gates—the fact that he is living proof that great things are possible, things greater than you ever would have imagined if Gates hadn’t proved it in his own life.