How Might Milton Friedman Respond To The COVID-19 Pandemic?

I have written extensively detailing my views on why conservatives are hell-bent on minimising introductions of stringent measures to retard the COVID-19 pandemic in their jurisdictions which would reduce preventable deaths.

It boils down to their political power base being the business class elite, and their greatest fear is that The Great Reset will lead to people in developed countries questioning their consumerist existence.

In my earliest writings, before a pandemic was declared, even before it was understood that the disease had escaped the biosecurity net around Wuhan, I was clear that I understood the global economic impacts would be severe (though admittedly I was a little cryptic initially – not wanting to be declared alarmist – in inferring that a depression may be the consequence).

When the rapid progression of events forced these conservative politicians to confront their cognitive dissonance, e.g. Morrison having to accept he would not be able to attend the opening week of the NRL, this fear of a depression was what gripped these conservative (mostly) men.

Such deep scarring to the psyche of people would lead to significant changes in society which leads to uncertainty for the business elites as to whether their powerful advantage would endure. At worst, for them, people might even turn away from materialistic consumerism, which had been the bedrock of their wealth and power, and people might instead place a higher importance on other aspects of their life which are not valuable or tradeable in market economies.

Moreover, if that paradigm shift were to occur it would spell the end of a political ideology espoused for decades by conservatives, and let’s face it, also espoused by many who declare themselves on the other side of the political divide, of ceaseless aspiration, which would leave a powerful and extensive global political aparatus rudderless and in search of a new narrative.

Thus this political apparatus continually pushes against introductions of stringent measures to minimise and slow their usage in an attempt to minimise that paradigm shift by people as they lose their previous habits and develop new ones, in many ways having had time and space, and in some cases sad shocks which caused them, to reflect on what it really is that enriches their lives.

For many years, and especially since the global financial crisis, this apparatus has focused on one factor perhaps above all others – confidence.

Confidence to spend. Confidence to invest. And most of all in recent decades, confidence to borrow.

As I said in “If After 30 years Of Unbroken Economic Growth Australia Can’t Afford To Protect The Most Vulnerable, Then Who Really Benefitted From That Economic Growth?“, fear of losing your own life trumps all other fears, logically. 

Thus it is impossible for people to be confident until they do not fear losing their lives. Note that this is also the finding of a report by McKinsey & Company, the premier consultancy to corporations, where they concluded that “only when the novel coronavirus is under control will economic growth resume”.

Now I realise that this political apparatus has spent a good amount of energy in misinforming and confusing people in order to pull the wool over their eyes since this pandemic began (I actually wrote that line before the WHO swung into damage control as they felt Dr. Nabarro’s comments about lockdowns were taken out of context which I will discuss in another post which I am now drafting).

However, the human reality of the pandemic continually asserts itself in a way that can not be ignored by the people no matter how much they might like to believe that they will be safe or that the risks to them are overstated by such reputable people as Dr. Fauci.

The shock that people are experiencing is real, and just as the shock from The Great Depression led to a deep scarring causing risk aversion that had repercussions even beyond that generation, these shocks are also likely to be long-lasting.

Strategists behind this political apparatus are very intelligent and sophisticated, and know that they are in a conundrum that cannot be solved.

Their political ideology and base of power will remain under threat until an effective vaccine is administered en masse, and to minimise the damage to them they will continually fight for minimal interventions (think of Tony Abbott’s views). When the sheer level of human pain forces increased measures, they will then immediately move to ruminate for rapid easing.

Everybody who genuinely believes in the primacy of protecting human life should be fighting against this apparatus, and should be prepared to continue arguing because it will not stop working to protect the privilege and power of the conservatives and elites.

In the second part of this essay I will pose the question on how might Dr. Milton Friedman, a hero to these conservative and elites, have responded to the COVID-19 pandemic.

In this age of tribalism, where everybody must be apportioned to a particular tribe with a specific agenda, I am well aware that I will already have been painted as a socialist and\or anti-capitalist. In fact in my earlier blogging for less manipulated and fairer Australian housing markets a decade ago I frequently received angry emails and posts describing me as such.

The truth is that I have a very high regard for many who might be considered business “elites”.

Very early in life I intuitively understood that a system built on little or even no reward for your own individual combination of hard and smart work is not sustainable, and I feel no amount of jealousy towards those who have earned a comfortable living. But note the definitive word is most definitely “earned”. Moreover, I make this statement with a heavy heart in knowing that we live in a massively inequitable world and there are very many who deserve so much more opportunity for a better life than they have and they would have it if the world were a perfect and genuinely equitable meritocracy.

Embedded in my use of the term “earned” is an expectation that a right to the benefits from society have been earned by paying through our taxation systems a fair and proportionate contribution to administering our society.

The elites that I respect, as I explained in “Your Life: Something The Elites Have Always Been Prepared To Sacrifice For Their Ends“:

are those who authentically understand the privilege that they have enjoyed, usually from birth by virtue of the luck of being born in a developed country or into middle class even if they consider themselves ‘self-made’, as well as respect and appreciate relationships with other human beings … 

I do not identify with those who list very wealthy individuals saying that it is obscene that they have accumulated such wealth. If they hurt people, either knowingly or by choosing to remain ignorant to it, in accumulating that wealth, then I would certainly consider them as deplorable. 

Of course I prefer that everybody on this Earth does what they can to assist other people, so obviously I would hope that people of greater means undertake genuinely significant philanthropic activities aimed at making a difference for others (rather than just promoting themselves in social circles, or only engaging in egotistical and vain projects with lesser returns to humanity, or to gain goodwill which will be cashed in later for personal advantage.) I must admit, however, that in my day to day life in the suburbs I regularly encounter people who say that they can not afford to donate to charities or give of their time or in some other capacity.

I believe that giving is relative to what you have, and I have learned many times over through my life and on my travels, especially in developing countries, that one has something to give as soon as one has something, and even before that we have ourselves to give.

While perhaps it is a greater pity that somebody with means to make a more significant difference, whether that is due to their wealth or their public profile or position, declines to do so, I do not care for any mean-spirited person irrespective of their means.

Foremost among the many undeniable elites who I admire would be Warren Buffett and Charlie Munger, Bill Gates, and George Soros. I also know, for certain, that there would be many, many more who I would like and respect if I were to know them personally or observe them often and closely enough to be able to develop an informed opinion.

As I look at that list it strikes me that they are all white American men. There are some Australian men I might include such as John Hewson (I mentioned my admiration before on these pages) and probably Mike Cannon Brookes (but I do not really know that much about him).

Interestingly much of the elite political leadership that I admire presently are women including Jacinda Ardern, Christine Lagarde, Ursula von der Leyen and Kristalina Georgieva – so mostly white European women.

I also have to say that I have been impressed by some more of these individuals, who belong to a very fortunate and privileged group within society, in how they have responded to the outpouring of emotion and drive for societal change through the Black Lives Matter protests following the murder of George Floyd. Here I would make special mention of the African-American businesswoman Ursula Burns, the former CEO of Xerox, who I knew little of before but who I found extremely impressive. But there were also other white men whose response was impressive and suggested that real, durable change is finally possible.

The truth is that I like people, and I want to believe the best in all people, so it fills me with pride when I see good people stand up to be counted and try to be the best version of themselves to the benefit of humanity. And I tend to be fiercely loyal to someone once they have shown themselves to be authentic.

My view is unequivocal that capitalism is the best system that mankind has developed to allocate resources for the betterment of humanity and I do find it difficult to believe that a better system is attainable.

I am in little doubt, however, that the form of capitalism that we practice in this early period of the 21st century has gone too far as I first began to articulate in my post “The Magic Sauce Of American Economic Dynamism Is Not Based On Personal Greed“. I see greed as a deleterious byproduct of wealth which leads to corruption of the capitalist system, and I do not see it as a basic core nature of human beings even though proponents of this extreme form of capitalism have co-opted biological theories, notably the Selfish Gene Theory, to justify its centrality to their preferred form of capitalism. The current form of extreme capitalism based on the centrality of personal greed is exemplified by the theory of Trickle Down Economics which is in reality no different from any other form of sequestering of wealth by the elites practiced down through the ages.

Taking superficially attractive ideas and extrapolating them to extremes is common in financial systems, in fact it is the basis for nearly all speculative bubbles. And I would suggest that the same can be said for the formative ideas of Dr. Milton Friedman who is a hero to the proponents of our current extreme form of capitalism. Reflecting on that recently, after reading his Doctrine  “The Social Responsibility Of Business Is To Increase Its Profits” for the first time, I was left with a ruminating question – How might Dr. Friedman respond to the COVID-19 pandemic?

Dr. Milton Friedman is proclaimed as a key architect of the current American economic paradigm which has been variously described as based on supply-side economics, Reaganomics and trickle-down economics, amongst other descriptors. Dr. Friedman wrote extensively of his views on dealing with economic problems that prevailed in the 1950’s through the 1970’s in western countries, and was awarded the Nobel Prize for economics in 1976. Dr. Friedman was a key economic advisor to President Reagan and to Prime Minister Thatcher in the United Kingdom, and their joint success at reforming their economies out from prolonged periods of low economic growth with high inflation earned Dr. Friedman widespread acclaim.

In reading Dr. Friedman’s words in his famous “Doctrine” I was struck with the perception that I share some views which are central to his doctrine as he expressed it in 1970. I even wondered whether these are so central to his doctrine that it is possible that my own views are more consistent to his, at that time, than are the views of many contemporary elites. As I read I realised just how much the basic premise of the essay had been co-opted by contemporary elites to justify their political motivations to garner more power and influence. I would go as far as to suggest that the man who sat down to write that essay likely would not be supportive of the way capitalism is practiced today even though he is venerated by it’s proponents – those who have prospered so greatly from it – for establishing the roadmap towards it, what President George W Bush described as the “moral vision”, and for being intimately involved in the early stages of reform.

(Obviously this situation is not uncommon, where many can agree on what are important problems and it is the solutions chosen, often with a political agenda in mind, where the problems arise. As one example I would admit that when I have listened to Steve Bannon speak I have been impressed by the way he has set out the issues and grievances of many in contemporary Western society. I even find common ground with some of the causes he identifies. But it is his solutions and especially his politics where we sharply disagree. That is precisely why these are the situations which can prove to be dangerous inflection points for society because the details and nuances are critical.)

The best way to discuss Dr. Friedman’s doctrine is to “reverse engineer” the document, commencing with his conclusion:

the doctrine of “social responsibility” taken seriously would extend the scope of the political mechanism to every human activity. It does not differ in philosophy from the most explicitly collectivist doctrine. It differs only by professing to believe that collectivist ends can be attained without collectivist means. That is why, in my book “Capitalism and Freedom,” I have called it a “fundamentally subversive doctrine” in a free society, and have said that in such a society, “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception fraud.”

Many contemporary readers will immediately seize on the key words here unlike they might have done 50 years ago. Of course these are the final twenty-three words of the document, “so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception fraud.”

Everything that is written in this doctrine is from the point of view – no, the assumption – that Government oversight of corporations will always remain robust, powerful, active and diligent.

civil servants… must be selected through a political process. If they are to impose taxes and make expenditures to foster “social” objectives, then political machinery must be set up to guide the assessment of taxes and to determine through a political process the objectives to be served.

It does not allow for the regulatory capture that is now so prevalent and pervasive in most of the western world.

Dr. Friedman wrote with a frame of reference of having been immersed in the heavily regulated and unionised 60’s and 70’s. He expressed a disdain for “pure and unadulterated socialism”. His views of the environment in which he had formulated his ideas are summed up in these key quotes:

In the present climate of opinion, with its widespread aversion to “capitalism,” “profits,” the “soulless corporation” and so on

The businessmen believe that they are defending free enterprise when they declaim that business is not concerned “merely” with profit but also with promoting desirable “social” ends… In fact they are – or would be if they or anyone else took them seriously – preaching pure and unadulterated socialism. Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades

speeches by business men on social responsibility… may gain them kudos in the short run. But it helps to strengthen the already too prevalent view that the pursuit of profits is wicked and immoral and must be curbed and controlled by external forces. Once this view is adopted, the external forces that curb the market will not be the social consciences, however highly developed, of the pontificating executives; it will be the iron fist of Government bureaucrats. Here, as with price and wage controls, business men seem to me to reveal a suicidal impulse.

Clearly Dr. Friedman considered that he was in an intellectual struggle against a foe, which perhaps he feared was in an entrenched ascendant epoch, but which, in no small part due to his own efforts, was on the cusp of terminal decline.

One has to wonder what that man would think if the minute he finished the final version of that doctrine he entered a wormhole and emerged from it any time over the twenty-tens, with the major developed economies having undergone continual deregulation – with only minor and temporary tracebacks – for half a century, and with the cold war having been won over two decades earlier, and with China having been welcomed to become so deeply enmeshed in the Global economy (even if that is currently undergoing adjustment – which I have previously stated was both necessary and overdue – but perhaps soon to be managed by more intelligent and adept hands.)

While the “iron fist of Government bureaucrats” and powerful labour unions have largely been relegated to historical accounts of nearly all western society, there are other ways in which economies have been managed which are antithetical to libertarian ideals.

Certainly fresh from exiting a worm hole a 1970 Dr. Friedman would question where are “free markets”, with Government institutions globally – the central banks – being the main purchasers of the main funding instruments of Governments (bonds), and increasingly of private business debt, and even stocks of publicly traded companies already in some countries and foreshadowed in others. Most developed countries have engaged in this in one form or another. In my own country, the distortions away from free markets are perhaps best exemplified by the continual “management” (i.e. manipulation) of our residential property markets given the extreme level of household debt based on this one asset class.

The reality is that markets have been increasingly manipulated in the first two decades of this millenium, and those manipulations have had the effect of benefitting the elites.

Dr. Friedman’s views on taxation are linked to the assumption of enduring robust Government oversight based on public values. But his views on taxation extend to improper or sub-optimal usage of funds for and by those who are not in a position to make such decisions.

In each of these cases, the corporate executive would be spending someone else’s money for a general social interest. Insofar as his actions in accord with his “social responsibility” reduce returns to stock holders, he is spending their money. Insofar as his actions raise the price to customers, he is spending the customers’ money. Insofar as his actions lower the wages of some employes, he is spending their money….

But if he does this, he is in effect imposing taxes, on the one hand, and deciding how the tax proceeds shall be spent, on the other.

This process raises political questions on two levels: principle and consequences. On the level of political principle, the imposition of taxes and the expenditure of tax proceeds are governmental functions. We have established elaborate constitutional, parliamentary and judicial provisions to control these functions, to assure that taxes are imposed so far as possible in accordance with the preferences and desires of the public— after all, “taxation without representation” was one of the battle cries of the American Revolution. We have a system of checks and balances to separate the legislative function of imposing taxes and enacting expenditures from the executive function of collecting taxes and administering expenditure programs and from the judicial function of mediating disputes and interpreting the law.

The difficulty of exercising “social responsibility” illustrates, of course, the great virtue of private competitive enterprise — it forces people to be responsible for their own actions and makes it difficult for them to “exploit” other people for either selfish or unselfish purposes. They can do good—but only at their own expense.

On the first point of taxation by Government I shall leave it to a Republican who was “present at the creation” of the current American economic paradigm, working for both President Reagan and President George HW Bush, Bruce Bartlett writing in 2007 in The New York Times:

Today, supply-side economics has become associated with an obsession for cutting taxes under any and all circumstances… [it’s advocates in Congress] support even the most gimmicky, economically dubious tax cuts with the same intensity.

…today it is common to hear tax cutters claim, implausibly, that all tax cuts raise revenue

Critically, Mr. Bartlett goes on to explain the context into which the present economic paradigm was spawned, and he was strident in his disapproval of these reforms being continued almost without boundaries. Essentially his point was that the ideas had become so embedded as to almost be redundant, and that continuing reforms on those same lines – in that case, relating to taxation – had become deleterious. (Sound familiar?)

The second point flows from the first. To borrow Dr. Friedman’s words, when the businessperson uses their political power to reduce taxes on businesses and the wealthy, they are in fact taxing the remainder of society, and then the businessperson is deciding where those proceeds will be spent.

Even when the businessperson uses some of those funds charitably, Dr. Friedman has already spelt out that it is not their right to make those decisions as they are society-wide decisions, and often such endeavours performed by individuals are done with additional objectives in mind including vanity or creating good will which elicits potential for extraction of favour at a later point in time.

Thus the “good” that they do is not genuinely at their own expense.

(And yes, in an Australian context, you can bet I have in mind the watering down of the resources rent tax and at the same time deposing of a sitting Prime Minister as a particularly poignant example.)

Thus there should be little doubt that a 1970 Dr. Friedman, too, would not look favourably upon businesspeople seeking to, disproportionately to the remainder of society, reduce their Government taxation obligations either directly or indirectly.

One of our greatest shared views is our belief in the power of human specialisation which is central to his 1970 doctrine. My favourite quote is this:

WHETHER blameworthy or not, the use of the cloak of social responsibility, and the nonsense spoken in its name by influential and prestigious businessmen, does clearly harm the foundations of a free society. I have been impressed time and again by the schizophrenic character of many businessmen. They are capable of being extremely far‐sighted and clear‐headed in matters that are internal to their businesses. They are incredibly short sighted and muddle‐headed in matters that are outside their businesses but affect the possible survival of business in general.

Dr. Friedman’s main argument against anybody else other than Government and eleemosynary organisations involvement in decisions around social responsibility are that they are not equipped to do so.

That has patent relevancy to the COVID-19 pandemic where the collective voice of business people works to undermine measures to protect life. While business people have a clear view of what are the impacts of stringent social isolation measures on their businesses, they are not capable of understanding the broad complexity of issues of relevance to society and thus how that mix of issues will ultimately affect their businesses. That has already been proven in this pandemic where businesspeople have allowed their visceral fears – which we human beings have all felt at times this year – to advocate, with their disproportionately loud voices, for policies which have been more deleterious to their businesses than swift and stringent measures to protect human life.

None of that would surprise 1970 Dr. Friedman, clearly, and if he were consistent he would be exalting all to ignore the short-sighted muddle-headed rantings of the business elite on what Governments should be doing to respond to the COVID-19 pandemic.

Importantly, Dr. Friedman also clearly endorses that in some human endeavours the profit imperative must be usurped by other objectives.

A group of persons might establish a corporation for an eleemosynary purpose—for example, a hospital or school. The manager of such a corporation will not have money profit as his objective but the rendering of certain services.

Health is an area where the profit imperative has penetrated especially in the last half century, in this pandemic leaving Americans at the point of being intubated in the battle to save their life concerningly asking who will pay for their treatment.

Clearly for many Americans there is indeed a fate worse than death – living to pay for the medical costs incurred.

From the Wikipedia page on Dr. Friedman I followed a link to an interview with Friedman on the Phil Donahue show in 1979 where he was pressed on whether the military could ever be privatised given the vast sums spent annually. He said “Very likely, if you could turn that over to private enterprise [an aircraft carrier] would cost half [what it currently costs], but we have to have a strong military” (his emphasis).

Clearly his view then was that some things were just too important to turn over to the private sector, with it’s profit imperative before all else.

Thus there is a line to be drawn in the sand, but where one draws that line will necessarily be subjective and thus will ultimately be politicised.

I do not think that it is at all controversial to suggest the severe impacts that COVID-19 has had on Americans and their society have shown that, where this line was drawn on health, it did not provide sufficient protection to the American people. Many will argue that this has been apparent for a long time and I certainly expressed early in the COVID-19 pandemic, on March 4, that I feared “all of these deficiencies of the US health system… [would] be revealed in a truly terrible manner”.

What Dr. Friedman failed to realise as he wrote in 1970 – so focused on arguing for his ideas in the face of his socialist foes, “monopolistic unions” and “iron fisted Government bureaucrats” – was how the balance of political power would shift as his reforms took effect. A cycle between reducing political power and increasing inequality caused a hollowed-out and precarious middle class with less political influence. The increasing political influence garnered by the increasingly wealthy elites, unsurprisingly, has not been driven by altruism seeking a reversal of these multi-decade trends – collectively, ironically, the political influence that this weight of wealth has bought has sought to entrench their advantage for subsequent generations as has been the pattern of human society through the ages.

I truly wonder whether the man who argued passionately in that doctrine, but before he became quite so acclaimed for his work as to receive a Nobel Prize and be taken in by the political elite to usher in a prolonged period of economic reform and societal change, writing the words quoted above, would wish to stake claim to the view that the system that so comprehensively failed so many people was based on his doctrine and views which together formed his “moral vision… which has changed America and it is changing the world”.

Perhaps it is a consequence of our social structures and how ideas spread, but my observation from my half century on Earth is that societal ideas and values, and thus policies and political trends, seem to act like a pendulum with the bottom of the swing the point at which there is most momentum to continue to move in that direction away from what in reality is the equilibrium (stable\sustainable) state until all of that (kinetic) energy is transferred and builds up inexorably into potential energy to swing back in the opposite direction with ultimately equal force.

Because I have an overall optimism in humanity I do believe that in the third dimension – imagine turning your view of the swinging pendulum 90 degrees – you will observe more easily that the pivot point is on a gradually rising trajectory, but experiencing the amplitudes of the swinging pendulum is why it can really feel like sometimes we are going backwards.

The secret for humanity is really to learn how to dampen those oscillations so that our progress can be more smooth and feel less disengaging for large swathes of society when the pendulum is at its least favourable so that positioning is not extreme.

This pretty much spells out the situation for contemporary extreme capitalism and the political ideology based on its value of greed and never-ending aspiration for materialism.

Here I should note that I do not consider aspiration in itself a negative as I am certain that those who wish to apportion me or paint me as belonging to an anti-capitalist tribe have assumed. It all depends on what the aspiration is towards. I think it is fair to say that each and every parent aspires to keep their family safe and to work towards maximising their moments of happiness in an uncertain world. But I think it is a reasonable argument to make that never-ending aspiration for more material wealth, power and influence is instead a toxic form of aspiration, and I would argue that it is encouraged within this contemporary extreme capitalism.

That we have reached this moment in time, and no doubt a major factor has been the pandemic providing a rare moment in time when many people will reflect on their existence as it has been in recent years and how they would like it to be in the future, is understood intuitively by very many. Some of us have intuitively understood that this moment would come at some point.

Trickle down economics never was a sustainable model on which to run society and the potential energy created within society to swing back in the other direction now has a certain degree of inevitability to it (writing by others indicates that they feel similarly, for example Ray Dalio, the head of the largest contemporary hedge fund, who perhaps I should have included on my earlier list of elites whom I respect.)

But it does make you wonder just what Dr. Friedman would have recommended for societal leaders to do in the face of this pandemic. To answer that one needs to decide to which Dr. Friedman we are referring – the contemporary perception of what he stood for, the man who wrote his doctrine as the pendulum reached its most extreme position disfavourable to his own views, or the man who was assisting President Reagan and PM Thatcher to reform their economies. 

I am prepared to accept that the 90 year old man that stood in front of President George W Bush to be conferred a Hero of Freedom, and so warmly embraced by the elites that had already benefitted so greatly from this movement towards extreme capitalism, might work at explaining and justifying the situation as his ego and conscience might dictate. However, I cannot help but believe that the 58 year old man that stood from his desk, after hand-writing the final draft of his doctrine, would feel disappointed and perhaps saddened that his writing and thoughts were co-opted in a fashion to arrive at such an extreme form of capitalism that has made only a very few so very wealthy and has failed so very many Americans, and many others around the world, as so devastatingly exposed in the COVID-19 pandemic.

As I pause to reflect on this piece I concede that some might suggest that I have not met my brief as indicated in the title, that I have not provided a plan for responding to COVID-19 which Dr. Friedman might have recommended. To my knowledge he had no special understanding of virology or any field of medicine, so any answer must centre predominantly on what is the state of the system into which the pandemic was seeded.

Just as in the old Irish joke, Dr. Friedman might have said “If I was going to formulate a response to this pandemic I would not be starting from here”.

As Dr. Friedman was venerated as a Hero of Freedom Present George W Bush said:

He has used a brilliant mind to advance a moral vision: the vision of a society where men and women are free, free to choose, but where government is not as free to override their decisions. That vision has changed America and it is changing the world. All of us owe a tremendous debt to this man’s towering intellect and his devotion to liberty.

But the economic system that his writing and early advice is credited with creating a moral vision of society for has led to a middle class on a knife edge, just one act of misfortune away from homelessness and destitution, and a chronic underclass of working poor with inferior outcomes across the range of critical social services and especially for health.

That is only freedom to the elite and to people blinded by unquestioned devotion to an ideology.

Any objective observer surely would ask whether this is a better form of “freedom” than in any contemporary autocracy which has lifted living standards for broad society by adopting some open market reforms.

It might be easily said that the problems in America’s response to COVID-19 is due primarily to one man, President Donald Trump. While I am in no doubt that history will show that President Trump failed Americans miserably in the COVID-19 pandemic, it would be a mischaracterisation if he and his administration attracted all of the blame.

Undoubtedly the power was in President Trump’s hands to respond more aggressively to the threat as explained to him and his administration by February, and he clearly chose not to do all in his power to protect human life. However, Donald Trump is most definitely a product of the system, both in the way he has lived his life and how that was widely perceived from his regular appearances on television and wider media, and in the messages that he expressed to the electorate which led to him winning the 2016 election. And even moreso for the messages that he gives the powerful business elites in the bubble in which he and many of them have occupied for all or large portions of their lives.

The evidence has long been in that the system has failed the health of Americans. Even if in February 2020 a decision was made to do everything possible to protect human life, the chronic failings of the system was going to be challenged in ways that would show greater similarity with developing countries than other developed countries. The disparity of living conditions between the haves and have-nots, especially along racial lines, have been shown up globally in the COVID-19 pandemic in the tragedy of infection and mortality rates and nowhere is that more true than in America.

That President Trump so callously disregards the realities of the failings of the American health system, especially on demographic and racial lines, emphasises that, while the blame for America’s poor performance in protecting the public during the COVID-19 pandemic is not entirely his, the necessary reforms cannot begin while he remains President.

As I draw to a conclusion, I already recognise what many – if my writing were taken seriously enough – would proffer in counter-argument. “In earlier writing he said Trump was standing firm against businesses profiting from China’s emergence, now Trump is too close to business elites!” – well, yes, but to suggest that Trump has not lived a life in a bubble of elitism is patently absurd. He is obsessed by wealth – measuring his Presidential success by the level of asset prices, chiefly the stockmarket – and he is most comfortable surrounded by other wealthy businessmen (intentionally gender-specific) as long as one condition is met, that they do not disagree in the slightest with him or suggest in any way that they are more anything (successful, intelligent, …) than he.

Perhaps more than ever before we citizens of Western countries – and possibly elsewhere – have developed a habit of believing what we want of what has been said or written by others. President Trump’s success has largely been built on asserting to his base that he knows perfectly what are others’ motives and intentions, and this has further stripped nuance from public discourse resulting in greater intolerance, misunderstanding and outright misinformation. Such behaviour detracts from public debate as the value of expressed opinion is diminished because there is a loss of faith that others will take the time to consider those views faithfully prior to responding.

Thus debating views in open fora on the internet can seem fruitless, especially when opponents are shielded by a fog of anonymity and might well be a paid troll (who has little conviction for what they are argue other than to earn an income) or even an artificial intelligence “bot”.

The one issue I do want to address, though, is the re-emergence of what Dr. Friedman referred to as “social responsibility” in the business sector, including through activist, impact and\or ESG (Environment, Social and Governance) investing themes, as well as what I mentioned briefly above, corporate leaders responding to critical social issues of the time.

These activities would certainly fit that description and thus be the prime target of Dr. Friedman’s main objections stated within his doctrine.

Again, the contemporary reality has moved on from the time in which Dr. Friedman wrote his doctrine. A leadership void has opened in the developed world. This void was growing before President Trump adopted an “America first” foreign policy. It is a result of the dearth of genuine political leadership over recent decades throughout much of the Western world.

In my own country of Australia discontent with poor political leadership has been growing through this millennium, and to me this issue reached a real low point earlier this year when Australia’s Ambassador to the United States, and former Australian Treasurer, Joe Hockey, appeared on 7.30 on the ABC:

LEIGH SALES:  Do you think that ministerial standards are at the same height that they were 20 years ago?

JOE HOCKEY:  I mean, it’s all changed, Leigh. Social media has changed everything. Social media has made the voice of the critic much, much louder than the voice of the advocate.

And the second thing that’s changed is disruption.

Everyone keeps calling for government to initiate reform, but really, what’s happening is the private sector is initiating reform, on a scale that we’ve never seen before.

LEIGH SALES:  Is there something fundamentally wrong with that though, if Government is not leading?

JOE HOCKEY:  No. Because it empowers individuals and we all believe that individuals should be their best.

When I heard Mr. Hockey’s intellectually feeble utterings I was immediately transported, to the words of a brilliant actor bringing to life a period that lingers long in humanity’s collective imaginations:

Gracchus: I think he [Commodus] knows what Rome is. Rome is the mob. Conjure magic for them and they’ll be distracted. Take away their freedom and still they’ll roar. The beating heart of Rome is not the marble of the Senate, it’s the sand of the Colosseum. He’ll bring them death…and they will love him for it.

From the motion picture “Gladiator” directed by Ridley Scott, a Dreamworks production.

I see social media platforms as modern day arenas; Facebook the Colosseum.

(I leave it to the reader to imagine who might be Commodus.)

The truth is that individuals can not fill that void and that is creating widespread insecurity and thus anxiety (no matter how much I and others, like Brene Brown, might attempt to inspire and\or cajole all to have the courage to lead). That is why behaviour on social media often resembles that of a mob.

In Steve Biddulph’s seminal book “Raising Boys” (Finch Publishing, Sydney, 2003) he describes how young males require structure.

Boys act tough to cover up their fear. If someone is clearly the boss, they relax. But the boss must not be erratic or punitive. If the person in charge is a bully, the boys’ stress levels rise, and it’s back to the law of the jungle. If the teacher, scoutmaster or parent is kind and fair (as well as being strict) then boys will drop their ‘macho’ act and get on with learning.

Biddulph further explains that without that structure males become insecure and fearful, and relationships within groups become turbulent as they attempt to establish hierarchies.

I find a lot of similarity between these descriptions and broader society where politicians have withdrawn from their leadership roles and thus from providing their vision on where our societies are heading.

Right now society in much of the developed world is behaving like the fearful teenage boys that Biddulph describes. The lack of direction provided by mainstream, conventional politicians has led to at first a flirtation with, and then an acceptance of, populist leaders because their willingness to express strong ideas made the anxious mob feel more secure. Many within the mob have become aggressively supportive because they do not want to go back to feeling insecure and directionless, and so are prepared to accept their leaders’ short-comings unless and until the consequences are very personal.

As I mentioned earlier, there are a few female politicians who have stepped into that leadership void. But they remain the exception.

Into that leadership void business leaders have also stepped forward. Whereas 1970 Dr. Friedman painted a picture of business leaders feeling that they were pressured by Government bureaucracy, or agents of socialism, to act with social responsibility, it seems clear this time around that businesspeople recognised the vacuum from the political withdrawal and stepped forward in part out of necessity. In many nations, including my own, that is especially the case with diversity and inclusion, and environmental policy.

On diversity and inclusion, there has been a growing awareness that more than just a social issue, diverse and inclusive cultures are more productive and innovative. Consequently, filling the void left by politicians in relation to diversity and inclusion within society, and even at times countering their divisive impulses, comes with significant benefits to business which will positively impact their financial performance.

It is important to note that businesspeople now acting on climate change is not antithetical to Dr. Friedman’s views as some will no doubt suggest.

Critically, this issue has not “blown up” overnight or even recently. Global warming from greenhouse gases had been identified and was being taught when I studied for my undergraduate science degree in the late 80’s. Businesspeople have observed the ebbing of global political leadership, even in areas of critical concern for humanity, and have become concerned by the impacts of that on business functioning and certainty.

More to the point, however, businesspeople are recognising that the collective view of the human beings that decided to specialise as scientific researchers is that our climate is changing due to humanity’s actions and that the consequences to us humans and our planet are severe and will be devastating if corrective actions are not progressed urgently.

It is this faith in human specialisation, a key underpinning of capitalism, that provides the majority of businesspeople with the surety that they need to act definitively on climate change. It would be better if politicians would leave behind their partisan political self interest, often due to lobbying from disaffected industry sectors, so that a truly global response could be formulated to guide businesses. Absent this, businesspeople now realise that taking measures alone or with the support of localised groupings which may assist in the battle against climate change is far preferable to continuing business as usual which they know will contribute to more climate change.

This is the political and social environment into which the COVID-19 pandemic was seeded.

Martin Wolf, a highly regarded Financial Times journalist, recently suggested that the critical distinction between populist leaders in their varying responses to COVID-19, thus the impacts on their people, is whether the leaders are more interested in the theatre of leading rather than actually governing. Perhaps whether they seek to be a modern-day Commodus. Mr. Wolf is clear that even theatrical populists definitely do want to effect change on their societies.

I would suggest a more relevant factor, however, is how closely these leaders are linked with the business elite. In the extreme capitalism in Western societies that linkage has become very close, but it does exist elsewhere. On the other hand, in a few other countries, especially autocracies such as in China and Vietnam, the link is not as strong and this separation has allowed their governments to act assertively to stamp out clusters.

The Chinese Communist Party, for example, clearly decided early that their political fate would be decided by how well they protected their people and as such have proven themselves to be the gold standard in stamping out a serious outbreak and at working at preventing the seeding of new clusters.

Just one example of their relentless efforts to identify and manage risks is remaining open-minded on the potential for re-introduction with processed meat, a risk that I have discussed on these pages since end of April with an open letter to Prime Minister Morrison and a detailed post, but which has been ignored throughout much of the world including in my own country. In recent weeks Chinese scientists have published data linking two clusters in China to frozen food imports.

It is noteworthy that the International Monetary Fund forecasts that it is only China amongst the major global economies that will make a genuine V-shaped economic recovery on the back of their ability to get the pandemic under control to the point that in a country with over a billion people they have had few clusters of community transmission in recent months. What is more, the only thing that appears likely to dampen that recovery at this stage appears to be the economic impacts from the uncontrolled pandemic in the majority of the rest of the globe and especially in important consumer markets in America and Europe.

Together with a growing appreciation of the severe pitfalls to many in society from the current extreme capitalism in the Western world, the better performance of countries prepared to protect human life above protestations from business elites has coalesced to suggest that the economic paradigm that Dr. Friedman and others heralded and initiated has been taken to an unsustainable extreme.

As with any change of paradigm, what occurs from here will be determined as much by the incumbents as the proponents for change. History suggests that incumbents do not willingly relinquish any of their favoured position, and given the current state of society in extremis (especially in America, patent to the most objective of observers), the pain that humanity is collectively suffering in the COVID-19 pandemic, and the pressure of a re-emergent geopolitical superpower, this transition to a new paradigm is shaping to be more disruptive than most in recent human history.

We should all hope that from the midst of the Western world comes a cohort of brilliant leaders, with intellectual rigor and iron fisted determination to sustain the effort to continue to carry humanity forward with the least possible disruption. Presently it is the European female leaders who are leading the way, though as great as they are, they cannot do it alone.

If assistance comes in the form of a re-awakened, progressive America, such that it retained the mantle of global leadership, then there would be nobody happier than I. What I have observed over recent decades, however, prevents me from being sanguine for America. I hope that that recency bias proves to be my error in the same way it was Dr. Friedman’s.

Gained value from these words and ideas? Consider supporting my work at GoFundMe

© Copyright Brett Edgerton 2020

%d bloggers like this: