V.P. Vance's Baseless Attack on Milton Friedman.

V.P. J.D. Vance recently made it clear that he rejects the laissez faire- free market economics of Milton Friedman. Vance has not provided a clear and detailed economic criticism of free markets, but he did leave a few clues about his views on laissez faire.

Vance recalls how his early professional life among hyperrational elites- focused on worldly achievement- was morally hollow, and was turning him into a “bad person”. The people who he had dismissed as “superstitious bumpkins” seemed to have life figured out. He learned not to idolize worldly achievement (while still becoming V.P.). The elites he came to oppose are unaware of the importance of “Christian Guardrails” that supposedly limit what Vance sees as the worst tendencies of Capitalism.

Various people have speculated that Vance has turned toward socialism. There is nothing in Vance's recent remarks to indicate that he supports either Marx's utopian nonsense or John Rawls's redistributive social democracy. Vance fears meritocracy warping into “ambition for ambition’s sake, to make money for money’s sake… a vice just to be better than other people”. You can’t “be your own person” if you focus on outdoing others in careers, rather than on family. Vance also claims that we can use Colbert-Hamiltonian policies (subsidies, tariffs, Mercantilist industrial policies) to “build the kind of lives that matter”.

The Republican shift towards Mercantilism is nothing new. Vance is trying to add his disdain for status-seeking to the new Republican agenda. The idea that status-seeking is wasteful is not obviously absurd. Economists examined these issues over a century ago. Sociologist Thorstein Veblen raised the issue of status seeking- which early 20th Century economists did overlook.

Veblen ridiculed the conspicuous consumption and pecuniary emulation of America’s leisure class- getting rich not to live better lives, but to outdo others. Veblen’s critique of the Gilded Age yielded neither practical policies nor a useful academic research program. While most people may agree that status seeking is in some sense wasteful, there really isn't much that anyone can do about it1.

Vance's attack on Milton Friedman fails for numerous reasons. First, Friedman didn't argue either for or against status-seeking in free capitalist democracies. Friedman specialized in analyzing macroeconomic issues, especially the effects of inflation. Second, Friedman's student, Gary Becker, did analyze socioeconomic issues. But Vance doesn't even scratch the surface of Becker's work. Third, Friedman's colleague, Friedrich Hayek, did analyze problems with hyper-rationality among elites. If Vance read Hayek's book The Counter Revolution of Science, he likely would have gained a greater appreciation for free markets- either with or without Christian Guardrails. Fourth, V.P. Vance seems to accept the simplistic and fallacious notion that the American prosperity that followed Hamilton's Report on Manufacturers must have derived from Hamiltonian policies: post hoc, ergo propter hoc. Economists have proved the importance of free international trade to real prosperity. Most importantly, there isn’t anything that politicians can do to prevent the “waste” of status seeking. Vance's attempt to resuscitate Thorstein Veblen’s critique of US capitalism is futile2. Finally, his claim that Laissez Faire made sense only back when Christian Guardrails were in place here in the US ignores other examples where Christians are in the minority achieving great progress (e.g. Japan, Singapore, South Korea, Taiwan, Hong Kong). Is there substantial evidence of the so-called Asian tigers being plagued by remediable status-seeking problems?

V.P. Vance 's arguments against free markets are charitably described as unproven, more accurately described as baseless, unfounded.