The Return of Milton Friedman’s Ideas in the United States: What Impact on Global Economic Policies? 🇺🇸

The re-election of Donald Trump as the 47th president of the United States, combined with the abandonment of diversity, equity, and inclusion (DEI) policies by several major American companies, signals a significant economic shift. This change could be interpreted as a revival of Milton Friedman’s ideas, the iconic 20th-century economist who advocated for free markets, reduced government intervention, and profit maximization as the sole responsibility of businesses. But what consequences might this return to fundamental liberal economic principles have on global economic policies?

Pro-Market Leadership in the United States

Donald Trump’s return to the White House marks a sharp break from the political directions of previous years. His pro-business agenda aligns closely with Friedmanian principles, emphasizing deregulation, tax cuts, and refocusing companies on their primary mission: generating profits.

Trump has also demonstrated a willingness to refocus the American economy on pragmatic principles, rejecting commitments perceived as “ideological,” such as ESG (Environmental, Social, Governance) initiatives. In this context, major American companies like Walmart and Microsoft have begun phasing out DEI policies, a trend that could spread internationally.

Domino Effect on Global Economic Policies

1. Increased Adoption of Pro-Market Policies

The central role of the United States in the global economy means its directions directly influence other countries. Aligned economies, such as the United Kingdom, Canada, or Australia, could also strengthen their pro-market policies to remain competitive in a more liberal America.

• Taxation and Competitiveness: If the United States adopts aggressive tax reductions, other nations might follow suit to attract investors and retain capital.

2. Pressure on Emerging Economies

Emerging economies, often dependent on foreign investments, could be forced to adopt more liberal economic policies. This would include increased privatizations, reduced public subsidies, and broader openings to international markets to attract American capital.

3. Reconfiguration of International Institutions

Under American influence, institutions like the IMF and the World Bank could reorient their recommendations toward reforms focused on economic liberalization. These institutions might promote an agenda reminiscent of the 1980s, emphasizing privatization, deregulation, and fiscal discipline.

Impact on Multinational Corporations

1. Relocation of Capital

An America offering a more favorable business climate could attract capital flows at the expense of other regions. This could lead multinationals to reassess their investment strategies, particularly in countries adopting less business-friendly policies.

2. Abandonment of ESG Commitments

Companies operating in multiple markets could gradually reduce their ESG initiatives to focus on financial performance. This refocus on profit maximization could redefine investor expectations and reshape international norms.

Geopolitical and Economic Tensions

1. Opposition to the Chinese Model

The return to Friedmanian principles contrasts sharply with the Chinese state-driven model, where government intervention plays a central role. This divergence could heighten tensions between the two powers and further polarize global economies between these competing models.

2. A Europe Out of Sync

The European Union, focused on strict regulations and strong ESG commitments, might appear out of step with this evolution. However, increased economic pressure could force some European countries to reassess their priorities to maintain competitiveness.

Conclusion

The return of Milton Friedman’s ideas in the United States could rewrite the rules of the global economy. By favoring a realignment on the principles of free markets, deregulation, and profit-focused economic responsibility, this orientation could inspire other nations while also exacerbating tensions between competing economic models.

However, the context of the 21st century, marked by complex environmental, technological, and geopolitical challenges, will likely require adaptations of Friedmanian theories to address current issues. In this framework, the United States could once again become the beacon of a revised economic liberalism, while redefining its influence on the global economic order.

Aïssa Christophe Agostini

Founder & CEO

Prosper Atlas

prosperatlas.com

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