1976 Nobel Economics prize-winner, the father of neoliberal economics, speaks out against the Keynesian trend current today after September 11th.
In an interview given to Der Spiegel, Milton Friedman claims that after September 11th, governments around the world are investing too much, at a time when they should be saving.
The Keynesian notion of a government-aided economy is a notion which Friedman has always attacked. Friedman claims that “it is a reality that the world economy has changed totally since September 11th” and that “Keynes is back in force, the gates are open and governments are subjected to enormous pressures to spend money”.
He stated that this is a time when governments should be saving more, not spending, claiming that if the aircraft industry was so fragile, it is a good think that a natural selection process will weed out the strong from the weak, allowing the industry to come through the current crisis stronger in the long run.
For Milton Friedman, the world economic crisis should show signs of an upturn at the beginning or in the middle of 2002.
Regarding the effects of September 11th, he claimed that politicians are quoting Keynes as an excuse to spend money “in their own interests”. “It is evident that the terrorist attacks accelerated the recession even more and now serve as a pretext for a greater intervention of the state”.
Claiming that he voted for George Bush, he also pointed out that “He is also a politician and bends to the great pressures he is placed under”. Friedman claims that the Bush administration’s policy of handing back taxes is “a wrong measure to animate the economy – it is only a short-term measure”.
Milton Friedman continues to be convinced that the market economy he expounded in the 1970s is the best economic model:
“This is the beauty of the system: the need for profits inevitably leads to the transfer of capital to the hands of the most competent”.
The question is, competent at what? Downsizing, job losses, contracting economies, lay-offs, outsourcing and early retirement are all the rude words associated with neoliberalist economic theories, the scourge of the modern world as the bottom line means more than human values such as creating employment.
John ASHTEAD PRAVDA.Ru
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