Identity crisis.

• Author: Robinson, David
• Position: ECONOMICALLY SPEAKING

Everyone connected to the economy seems to be having an identity crisis. The economics profession has lost its way, the global financial system is confused, Ontario is showing a multiple personality disorder, and I am being confused with Milton Friedman. All these identity problems are related, but only some will affect Northern Ontario.

In the wild world of economics I think I am one of the good guys. Milton Friedman, now, there was a bad guy He was a good economist and he won the Nobel Memorial Prize in Economic Science in 1976. He was one of U.S. President Ronald Reagan's advisors, and leader of the radical free-market wing of the economics profession. His ideas helped lay the foundation for the current world economic crisis.

Imagine my dismay when a recent letter to the local paper called my views "Friedmanesque." Apparently anyone who discusses prices and markets in public -- any economist -- must be a devil. And the devil's name is Milton Friedman.

I was worrying about turning into a Milton Friedman clone when the Globe and Mail told me that the entire economics profession is having an identity crisis. "Economics has met the enemy and it is economics," said the headline for the business section. It claims Milton Friedman and this year's Nobel prizewinner, Thomas Sargent, have led the profession astray. Sargent's theories "may not have wrecked the world," but they have "blinded economists to reality."

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Fortunately, some of the early economists are coming back into fashion. More and more economists are remembering the early economists like Adam Smith, John Stuart Mill and Karl Marx. These pioneers wanted to eliminate unearned income. They saw land rent, monopoly, usury and banking charges as deductions that didn't actually add to output. These unproductive ways of getting an income let landowners, capitalists and financiers siphon money out of the system. They prevented growth and increased inequality. They might even lead to revolutions. These parasitical activities seemed to be declining in the early 20th century, but they have been growing rapidly since the 1970s. The Occupy Wall Street protesters seem to agree. They believe that the banking system, growing inequality and slowing growth are part of a package that is hurting "the 99 per...