Inspired by Pete Boettke’s semi-recent post, I’ve just finished re-reading Milton Friedman’s Capitalism and Freedom. It is a great work articulating and defending liberalism “in its original sense.”

It is also a work that illustrates the ways in which classical liberalism differs from the kind of 20th century libertarianism espoused by Ayn Rand, Murray Rothbard, and Robert Nozick. The difference between these positions is sometimes blurred over, perhaps even in Pete’s first post here. But in the way I see the libertarian landscape, they are distinct positions, even if they share a strong family resemblance.

Take the issue of the size and scope of the legitimate state. The standard libertarian view is that the night-watchman state is the most extensive state that can be justified – police, courts, and military. Milton Friedman, however, believes that the state is often justified in going beyond these narrow bounds:

“The scope of government must be limited. Its major function must be to protect our freedom both from the enemies outside our gates and from our fellow-citizens: to preserve law and order, to enforce private contracts, to foster competitive markets. Beyond this major function, government may enable us at times to accomplish jointly what we would find it difficult or expensive to accomplish severally. However, any such use of government is fraught with danger. We should not and cannot avoid using government in this way. But there should be a clear and large balance of advantages before we do.” (Capitalism and Freedom, pp. 2-3)

Note the tension here. Friedman (especially by the time of Free to Choose) is aware of the kind of public choice considerations that make it risky to give the government the power to good. But he sees the government, like the market, as a kind of tool that we can and should use to achieve gains for society when it is appropriate. It is a dangerous tool. But sometimes it is the best tool that we have.

Much of Friedman’s book, of course, is devoted to criticizing government – its monetary policy, its role in education, its licensure of various occupations, and so on. But toward the very end of the book, Friedman points out that government has done some things well:

“The expressways crisscrossing the country, magnificent dams spanning great rivers, orbiting satellites are all tributes to the capacity of government to command great resources. The school system, with all its defects and problems, with all the possibility of improvement through bringing into more effective play the forces of the market, has widened the opportunities available to American youth and contributed to the extension of freedom. It is a testament to the public-spirited efforts of the many tens of thousands who have served on local school boards and to the willingness of the public to bear heavy taxes for what they regard as a public purpose. The Sherman antitrust laws, with all their problems of detailed administration, have by their very existence fostered competition. Public health measures have contributed to the reduction of infectious disease. Assistance measures have relieved suffering and distress. Local authorities have often provided facilities essential to the life of communities. Law and order have been maintained, though in many a large city the performance of even this elementary function of government has been far from satisfactory. As a citizen of Chciago, I speak feelingly.” (Capitalism and Freedom, p. 199)

There’s some mixed praise in there, to be sure. But the basic message is clear. Government has done a lot of good. And the implication certainly seems to be that government has done good in ways that the market on its own could not have done. For Friedman, that’s good enough. For Rand, Rothbard and Nozick, of course, it wouldn’t be.

It’s easy to assume that the practical difference between classical liberalism and libertarianism stems from differences in their underlying moral philosophy: Friedman is a utilitarian, while Rand, Rothbard and Nozick are all natural rights theorists. But notice that nothing in the passages I’ve quoted here commits Friedman to consequentialism at all, let alone a naive utilitarianism. You could agree with everything that Friedman said and still believe that liberty has intrinsic value (i.e. that it is not merely instrumentally valuable for the utility it produces). You could agree with everything that Friedman has said and still believe in natural moral rights. To say that government is a tool that we should use when it works is not to commit oneself to consequentialism. It is merely to commit oneself to the view that we face a variety of moral demands, the balance of which does not always preclude state action.