Professor Milton Friedman, the counter-revolutionary economist! He denouced socialist economy as an oppressive totalitarianism. Although I disagree with some parts of his macroeconomic theory, I strongly support his political point of view as a laissez-faire capitalist theorist!!
He supports the idea that Adam Smith told that "The poorest in a rich country is certainly better-off than the richest in a poor country because the former has a much better access to the wealth and the culture than the latter. Therefore, the relative income inequality is often irrelevant. The more significant inequality is the "capability" such as avoiding envy, competence, opportunity, and the business cycle.
The deprived individuals themselves are sometimes responsible for their own situation. If it is not merely due to their own responsibility, the family they have been brought up are the fundamental problem! Who want to support someone not-known or hated without any reward? I do not want a government which enforces us to sacrifice our precious property to save those whom we are not associated with and whom we even hate so much!! If I were going to be such a deprived situation, I would rather choose to die without any pseudo moralistic hippocratic sympathy and any antipathy for my misery...! I would be rather happy to become alone to live myself than be made survived by those whom I hate to be enforced to live...!
...... The life is not the matter of live, it is the matter of how to die!!!
The way anti-Friedmanites criticise Financial Liberalism as the cause of the last Asian financial crisis in 90s is too old!
Of course, Stiglitz said these Asian economies did not leave the enough reserves. This is because they had to rely on the revenue coming from the excessive amount of financial investment in order to sustain their economic growth. At that time, this caused the bubble burst.
However, this crisis was caused not only because of the Financial Liberalisation, but also the lack of foreign direct investment (FDI) due to the fact that the world was not enough globalised then.
Nowadays, in development countries, the opposite case scenario from the 90s is happening. They always "increase" the reserve, instead of reducing the reserve!
In the current globalised world, these developing countries do not need to reduce their money reserve because they can crave the FDI from abroad. Therefore, unlike the 90s, they do not have to reduce the reserve any more, and keep their Financial Liberalisation goes by remaining the reserve ration sufficiently high.
Although what Stiglitz said was right as the contemporary time period, Friedmanite counter-revolution brought a big benefit to the global financial market! As the world is more globalised, there are more FDI opportunities for these developing countries! Therefore, they no longer need to make their financial market repressed by the state's control to stimulate their economy by creating the inflation as the cost of this stimulus!!
Financial Liberalisation encouraged raising the interest high enough to calm the inflation! Friedman is great to make us remember how costly inflation is for the lower income people!! The financially repressed economy conducted by state public sectors always causes the inflation unless they artificially repress the aggregate demand such as the USSR did!
In the past, there are only two choices, the financially repressed economy with an intense state intervention with a high inflation rate and the financial liberalisaion with a more flexible private sector based economy with the interest rate flexibly adjusted to the inflation rate with a risk of declining the reserve ratio.
Of course, the latter choice is far better than the former because it gives the freedom of choice (better than a lot of employment artificially created by the state) and the anti-inflation management (Again, the inflation is very costly to the majority of people including both the middle income and the lower income) . In addition, nowadays, they no longer need to reduce the reserve ratio (Actually increasing by financial liberalisation nowadays!) because they can seek the FDI to keep the sustainable reserve ratio! Therefore, although what Stiglitz said was correct at the contemporary time period, but Friedmanite movement was correct as well in order to expand another possibility of the global financial market evolution!!
Viva! The Cold War is over thanks to our liberal capitalists' victory!
