More Revenge for Milton Friedman

By Dominic Pino

Monday, January 06, 2025

 

Filling in for Jim Geraghty the Friday after the presidential elections, I wrote a Morning Jolt entitled “Milton Friedman’s Revenge.” I noted how Democrats proudly boasted about ignoring Friedman’s thought, to the applause of the media, and then enacted anti-Friedman policies, only to find that voters didn’t like them as much as they had hoped they would. Democrats jacked up government spending, supersized regulations, enacted industrial policies, and overall saw government as an all-purpose remedy to the supposed failures of the free market. Then, after a bout of inflation, voters threw them out of the White House. Maybe Friedman had some good ideas after all.

 

Now, the editorial board of the National Post, Canada’s major conservative newspaper, writes, “In Canada, 2024 may eventually be remembered as the year of Milton Friedman’s revenge.” They see Friedman being proved correct in a different area: immigration.

 

“Late in his life, the American sage of free markets said on a couple of different occasions that immigration was good, and the mass immigration to the New World of the early 20th century was especially good, but that radically open borders are incompatible with large contemporary welfare states,” the editorial says. “We Canadians have all lived through a year in which the carrying capacity of a model welfare state was tested to its political limit, and beyond, by poorly controlled immigration.”

 

High levels of immigration are hardly new in Canada. What the Liberal Party did under Justin Trudeau was to put aside the normal parameters for immigration that prioritized skilled workers and allow most anyone to come to Canada.

 

The editorial notes that Canada has plenty of other anti-Friedman policies in place, such as regulations that make housing construction difficult and government-run health care. Canada also has an uncompetitive tax code that has smothered business investment, and labor productivity has flatlined alongside GDP per capita.

 

The editorial describes Canada as “a country that tries to combine plenty of economic nationalism with sky-high immigration.” That’s a pretty good description of Biden’s four years as president in the U.S., too. Biden continued the protectionism from Trump, spent gobs of money on infrastructure with strict “buy American” rules, ticked off foreign trade partners in numerous ways, and used nationalist and populist economic rhetoric, all while failing at basic border security and overseeing a massive wave of immigration.

 

“We have behaved in the 2020s exactly like a welfare state that was determined to test Friedman’s principle, and we found it to be true,” the editorial says of Canada. You can make fun of Friedman and call him outdated, but when he’s right, he’s right. Ignore him at your peril.