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In the 2020 presidential campaign, Joe Biden boasted about his programme of increased public spending, adding: ‘Milton Friedman is no longer running the show.’ He has now found a soulmate. US Vice President J. D. Vance, in June 2026, exclaimed that Friedman’s ideas made much less sense today than in the 1980s. Coming from this direction, Vance’s comment is disturbing. Apparently, Friedrich von Hayek was prescient when he dedicated his 1944 critique of socialism, The Road to Serfdom, to ‘socialists of all parties’.
Economic Freedom Destroys—and Creates
Vance said that Friedman’s ideas made sense in the 1980s because they were presented in a country with a powerful Christian presence. This is puzzling. Friedman’s case for economic freedom should be just as relevant in non-Christian societies such as Japan or China as in the US. But Vance probably meant that economic freedom relies on moral foundations. We have certain obligations based on identity rather than choice, for example, obligations to our family or our nation, and the proverbial duty of the captain of a ship to rescue castaways, provided he can do so. But these obligations are reciprocal. As Burke observed, if we are to love our country, she has to be lovely. Vance probably also meant that fierce economic competition tends to erode some traditions, communities, and values. The Welsh miner’s son leaves his village for London. But competition also offers opportunities for people to form new communities: Romeo and Juliet abandoned the Montagues and Capulets, but they formed a new family (alas, in their case unsuccessfully). New York, from the outside, a concrete jungle, abounds with spontaneously formed communities. The competitive society provides not only economic self-correction but also the creation of new communities.
Economic Growth a Means to Ends
Vance also said that if we turn economic growth into an idol, we sacrifice what really matters in life. But economic growth is not about the two deadly sins of greed and avarice. It is about finding more efficient ways to produce the goods we need. Thus, it facilitates the pursuit of our chosen goals, within the limits of the law and our non-contractual moral obligations. When Friedman was my guest in Iceland in 1984, a journalist asked him whether he really believed that people were motivated solely by gain. He replied: Of course not. For example, you became a journalist because this is what you wanted to do. But we can safely predict that if the wages of journalists were halved, fewer would become journalists, while if the wages were doubled, more would try to enter. Friedman’s point was that costs are constraints on our choices, whereas the choices themselves reflect our aspirations and identities.
Wealth Created by the Division of Labour
Vance also said, rather smugly, that tariffs on imported goods were now supported by almost all Republicans. But Adam Smith demonstrated that wealth is created by the division of labour and that the division of labour requires free trade. It is true that international free trade destroys some jobs in developed countries when goods can be produced more cheaply elsewhere. But precisely because of that, resources previously used to purchase those goods are released and, in turn, used to buy new goods, thus creating new jobs. At a luncheon in Iceland in 1984, I introduced Friedman to the guests. When the governor of the Central Bank stepped forward, I said to Friedman: Here is a man who would be unemployed if your ideas were implemented here. (Friedman wanted money to be produced by rules, not by central banks.) Friedman quipped: No, he would not become unemployed; he would just have to move to a more productive job. This explains the magic of the marketplace: we have to keep adjusting to new circumstances in order to serve our fellow human beings better. If that demand disappears, the result is stagnation.