Rebuttal to Malloy

Abstract

The question I would like to leave with you is, if we took the word “moral” out of Professor Malloy’s vocabulary, would he be rendered speechless? I do not think moral discourse is productive, and I do not think the fame and Nobel Prizes of Friedrich Hayek and Milton Friedman are due to their side-careers as moralists. Milton Friedman received the Nobel Prize for his work on the consumption function, in which he showed that the propensity to save does not increase as one’s income rises, which was a key tenet of Keynesianism; and also for his work on monetarism, that is, on the effect of the money supply on the price level and on output. Now in addition to being a first class economic scientist, Milton Friedman is a person of strong political convictions and a great articulator of those convictions. As an advisor to Presidents, as a spokesman for the free-market philosophy, as a popularizer and advocate of a variety of political and economic principles and policies, he has relied heavily on a moral vocabulary. Friedrich Hayek also had a dual career. His Nobel Prize is for the work that he did in the 1930s on the role of the market as a means of generating information. His somewhat counterintuitive proposition, which history has proved correct, is that a decentralized market is more efficient at generating information about the economic system than a centrally planned economy is. Now Hayek, in addition, is a polemicist, a political advocate, the author among other things of a famous historically flawed book, The Road to Serfdom, written right after World War II, where he predicted that England would become a totalitarian state as a consequence of its socialist policies. He predicted communist totalitarianism and history delivered Margaret Thatcher.