Tag Archives: Common Sense

Limits to Common Sense

Today’s Hamilton Spectator (September 31, 2019) has an opinion piece by Matthew Lau in praise of economist Milton Friedman, founder of the “Chicago School” espousing the virtues of unrestrained free market capitalism. He cites two of Friedman’s ideas, which he treats as obvious:

  • “nobody spends somebody else’s money as carefully as he spends his own.”
  • “overwhelmingly, government is the source of problematic monopoly control “
Milton Friedman shaking hands with Ronald Reagan while Nancy Reagan looks on.
Milton Friedman and the Reagans. (Wikimedia)

The first he calls ” a statement that just about everyone accepts as true”, and the second is “nearly universally accepted”. In other words, common sense.

https://www.thespec.com/opinion-story/9572354-milton-friedman-s-ideas-still-resonate-we-should-listen/

Now, I have problems with both those statements. I suppose that puts me in some niche, some outlier category of people with weird ideas. Why don’t I think like everyone else?

“Nobody spends somebody else’s money as carefully as he spends his own.” Speaking for myself, I am more inclined to be careful with someone else’s money than my own. I try to be scrupulous with money entrusted to me, but I reserve the right to spend my own money carelessly and indulgently. Most of the people who are my friends are like that. People who don’t care about harming other people are the people I don’t want in my own life. Fortunately, they aren’t hard to recognize, and easy to avoid.

My observation is that the characteristic most people share is fairness. Children generally have a strong sense of what is fair and what is not, from a very early age. Adults who believe in fairness would think that wasting someone else’s money would not be fair, but to waste ones own is “fair enough”.

“Overwhelmingly, government is the source of problematic monopoly control ” — oh, really? The source of monopoly control, surely, is the natural drive of corporations to capture as much of the market as they can. Governments have often used their legislative powers to fight against the restraint of trade through monopolies, and to instill fairness in the economic sphere. Of course, powerful economic entities try to corrupt governments to favour themselves and to deregulate the marketplace to their advantage.

When someone says that “everybody knows” something, I am inclined to be wary. Many things that were thought to be “common sense” have turned out to be false. “The earth is flat”, “the sun goes around the earth”, “immigrants steal our jobs”, “we can’t spend money we don’t have”, “we all have to live within our means.” (Of course, this last is nonsense. We all borrow from the future to pay for the present: mortgages, student loans, credit cards. If we didn’t, the economy would collapse.)

“Everybody knows” is the sign of the demagogue. If patriotism is the last refuge of the scoundrel, common sense is probably the second-last. Common sense means not having to explain, research, analyze, demonstrate, prove. Everybody knows, don’t they?