Phil Gramm Trips Over Milton Friedman Facts

At an event in Austin last week, former Sen. Phil Gramm, who advised Sen. John McCain’s (R-Ariz.) presidential campaign on economic issues, praised economist Milton Friedman’s ideas about sweatshops and all-volunteer armies, but tripped over the basic facts of the conservative thinker’s biography.

Gramm’s wife, Wendy, the board chair of the Texas Public Policy Foundation, which hosted the event, also ran afoul of historians. While discussing Friedman’s dialogue with General Augusto Pinochet, the Chilean dictator, about free-market policies, she said that former Chilean Pres. Salvador Allende was clinging to power against voters’ wishes before Pinochet’s 1973 coup. Historians told The Texas Independent that Gramm was flat-out wrong — Allende’s party had triumphed in an election just months prior to Pinochet’s take-over.

Revered by conservative free-market thinkers, Friedman is a polarizing figure due at least in part to how his economic theories were put into practice in the wake of major upheavals in South America and elsewhere.

At the luncheon Friday, Phil Gramm praised Friedman for his unwavering defense of the free market, even in the case of sweatshops — which Friedman said were a product of poverty, not capitalism.

Phil Gramm reprised a Friedman anecdote about how his own mother had worked in a sweatshop in New York City for three years after immigrating from Poland. Gramm said Friedman’s parents were part of the Jewish migration from Poland.

However, Friedman’s parents were not from Poland; they were from Austria-Hungary, according to Friedman’s autobiography on the Nobel Prize website.

Phil Gramm related how Friedman said that sweatshop workers make more money than average workers due to the lengthy hours involved, and that this was what had enabled his family to accumulate enough money to move to Chicago and pursue “the opportunity of the American Dream.”

However, Friedman’s parents met in New York City, where Friedman was born. They soon moved to Rahway, N.J., where his mother ran a dry goods store. Friedman earned an undergraduate degree from Rutgers University in New Jersey and did not move to Chicago until he was 20 years old, according to the autobiography.

Phil Gramm also praised Friedman for originating the ideas behind an all-volunteer army, flat taxes, the earned income tax credit and school choice.

“We are in a counter-revolutionary cycle in our own country,” Phil Gramm said.

This story originally appeared at The Texas Independent.