ARTIFICIAL INTELLIGENCE

“One of the great mistakes is to judge policies and programs by their intentions rather than their results.” – Milton Friedman – Nobel laureate

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Context and Origin

Milton Friedman first expressed this idea during a 1975 television interview on The Open Mind, hosted by Richard Heffner. Discussing government programs aimed at helping the poor and needy, Friedman argued that such initiatives, despite their benevolent intentions, often produce opposite effects. He tied the remark to the proverb “the road to hell is paved with good intentions,” emphasizing that good-hearted advocates sometimes fail to apply the same rigor to their heads, leading to unintended harm¹. The quote has since appeared in books like After the Software Wars (2009) and I Am John Galt (2011), a 2024 New York Times letter critiquing the Department of Education, and various quote collections¹³.

This perspective underscores Friedman’s broader critique of public policy: evaluate effectiveness through empirical outcomes, not rhetoric. He often highlighted how welfare programs, school vouchers, and monetary policies could backfire if results are ignored in favor of motives¹⁴.

Backstory on Milton Friedman

Milton Friedman (1912–2006) was a pioneering American economist, statistician, and public intellectual whose work reshaped modern economic thought. Born in Brooklyn, New York, to Jewish immigrant parents from Hungary, he earned his bachelor’s degree from Rutgers University in 1932 amid the Great Depression, followed by master’s and doctoral degrees from the University of Chicago. There, he joined the “Chicago School” of economics, advocating free markets, limited government, and individual liberty¹.

Friedman’s seminal contributions include A Monetary History of the United States (1963, co-authored with Anna Schwartz), which blamed the Federal Reserve’s policies for exacerbating the Great Depression and influenced central banking worldwide. His advocacy for floating exchange rates contributed to the end of the Bretton Woods system in 1971. In Capitalism and Freedom (1962), he proposed ideas like school vouchers, a negative income tax, and abolishing the draft—many of which remain debated today.

A fierce critic of Keynesian economics, Friedman championed monetarism: the idea that controlling money supply stabilizes economies better than fiscal intervention. His PBS series Free to Choose (1980) and bestselling book of the same name popularized these views for lay audiences. Awarded the Nobel Prize in Economic Sciences in 1976 “for his achievements in the fields of consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy,” Friedman influenced leaders like Ronald Reagan and Margaret Thatcher¹.

Later, he opposed the war on drugs, supported drug legalization, and critiqued Social Security. Friedman died in 2006, leaving a legacy as a defender of economic freedom against well-intentioned but flawed interventions.

Leading Theorists Related to the Subject Matter

Friedman’s quote critiques the “intention fallacy” in policy evaluation, aligning with traditions emphasizing empirical results over moral or ideological justifications. Key related theorists include:

• Friedrich Hayek (1899–1992): Austrian-British economist and Nobel laureate (1974). In The Road to Serfdom (1944), Hayek warned that central planning, even with good intentions, leads to unintended tyranny due to knowledge limits in society. He influenced Friedman via the Mont Pelerin Society (founded 1947), stressing spontaneous order and market signals over planners’ designs¹.

• James M. Buchanan (1919–2013): Nobel laureate (1986) in public choice theory. With Gordon Tullock in The Calculus of Consent (1962), he modeled politicians and bureaucrats as self-interested actors, explaining why “public interest” policies produce perverse results like pork-barrel spending. This countered naive views of benevolent government¹.

• Gary Becker (1930–2014): Chicago School Nobel laureate (1992). Extended economic analysis to non-market behavior (e.g., crime, family) in Human Capital (1964), showing policies must be judged by incentives and outcomes, not intent. Becker quantified how regulations distort behaviors, echoing Friedman’s results focus¹.

• John Maynard Keynes (1883–1946): Counterpoint theorist. In The General Theory (1936), Keynes advocated government intervention for demand management, prioritizing intentions to combat unemployment. Friedman challenged this empirically, arguing it caused 1970s stagflation¹.

These thinkers form the backbone of outcome-based policy critique, contrasting with interventionist schools like Keynesianism, where intentions often justify expansions despite mixed results.

Friedman’s Permanent Income Hypothesis

Linked in some discussions to Friedman’s consumption work, the Permanent Income Hypothesis (1957) posits that people base spending on “permanent” (long-term expected) income, not short-term fluctuations. In A Theory of the Consumption Function, Friedman argued transitory income changes (e.g., bonuses) are saved, not spent, challenging Keynesian absolute income hypothesis. Empirical tests via microdata supported it, influencing modern macroeconomics and fiscal policy debates on multipliers¹. This hypothesis exemplifies Friedman’s results-driven approach: policies assuming instant spending boosts (e.g., stimulus checks) overlook consumption smoothing.