Economics professor and blogger Brad DeLong declares the end of the "Age of Friedman"—as in Milton Friedman. The past 30 years, DeLong writes, have been dominated—both in rhetoric and in policy—by principles such as an anti-inflationary monetary policy and less regulation. But while admitting that the "movement in Friedman's direction was by and large positive over the past generation," he now thinks that "the gains to be had from further movement in that direction are far less certain." It's time to reassert that "government should play a powerful role in managing the market to avoid large depressions, redistributing income to produce higher social welfare, and preventing pointless industrial structuring produced by the fads and fashions that sweep the minds of financiers."
My take: Given the upturn in protectionist sentiment and the proliferation of banking bailout plans floating around Washington—plus the desire by Democrats to further regulate healthcare and energy and raise taxes—DeLong may be right that the "Age of Friedman" is over. Yet at the same time, globalization is pushing many nations to lower tax rates and make their labor markets more flexible. DeLong's backlash may prove short lived, especially if the world's economies decide to "go for growth" to deal with the demographic and financial problems caused by their aging populations.