Philosopher Gary Gutting argues that current conservatives are mis-reading conservative economist Milton Friedman.
It follows that, on Friedman’s own account, capitalism is not an economic system that operates independently of the political system in which it is embedded. It is a creature of that system, which has goals (of morality and social responsibility, for example) that go beyond the profitable exchange of goods. Therefore, the owners of businesses must accept governmental restrictions on their profit-making for the sake of overriding social values.
It might seem that this activist role for government flies in the face of Friedman’s libertarian insistence on the magic of Adam Smith’s “invisible hand” to produce “public goods from private vices,” without political control. In fact, however, Friedman makes it clear that the invisible hand is attached to the body politic. Here is how he introduces Smith’s famous phrase: “It is the responsibility of the rest of us to establish a framework of law such that an individual in pursuing his own interest is, to quote Adam Smith again, ‘led by an invisible hand to promote an end which was no part of his intention.’”The “invisible hand,” therefore, operates for the public good only because it is directed by the social values that our political system enacts by its laws. These values shape the function of the capitalist economic system.
Whereas Friedman believed that capitalism served other social ends, current conservatives seem to promote the means as the ends:
Our current political impasse over economic issues has arisen because so many conservatives have moved well beyond Friedman’s position. They object to almost all regulation of business, reject the need for any governmental solutions to social problems, and often seem to insist on judging corporate success in terms of short-term profits.
I have long objected that many conservatives of the last decade or so have misunderstood Ronald Reagan and his legacy. Reagan promoted tax cuts as necessary means to larger ends. They would spur economic development, lift America out of its late-70's malaise, inspire entrepeneurial efforts which could lift all boats (and help in the defeat of the Soviet Union). They were part of his optimism about the future of American life. I am convinced that he did not believe in continual tax cuts at all costs. I don't believe a true Reaganite could support the Bush tax cuts of 2001, as the properly prudent thing to do in 2001, that which would have moved us closer to achieving the larger goals of American life, would have been to keep running surpluses so that we could have paid off the national debt (which projections said could have been accomplished in a decade).
I believe this analysis of Friedman argues similar points.