Tuesday, July 31, 2012

Friedman centenary

Today (Tuesday 31st) is Milton Friedman's centenary.  It seems appropriate to link to some Milton Friedman quotes here and here.  Various bloggers have offered their comments, including Bryan Caplan's ode, Tyler Cowen notes how much he is still needed, Lars Christensen writes him a letter, and David Glasner continues his campaign against the Wall St Journal editorial pages. [UPDATE A black Marxist student remembers being impressed that, in 1960, Friedman had a black secretary.]

David Glasner's tribute is an excellent summary:
Milton Friedman, by almost anyone’s reckoning, was one of the great figures of twentieth century economics. And I say this as someone who is very far from being an uncritical admirer of Friedman. But he was brilliant, industrious, had a superb understanding of microeconomic theory, and could apply microeconomic theory very creatively to derive interesting and testable implications of the theory to inform his historical and empirical studies in a broad range of topics. He put his exceptional skills as an economist, polemicist, and debater to effective use as an advocate for his conception of the classical liberal ideals of limited government, free trade, and personal liberty, achieving astonishing success as a popularizer of libertarian doctrines, becoming a familiar and sought-after television figure, a best-selling author, and an adviser first to Barry Goldwater, then to Richard Nixon (until Nixon treacherously imposed wage-and-price controls in 1971), and, most famously, to Ronald Reagan. The arc of his influence was closely correlated with the success of those three politicians.
Milton Friedman would cheerfully advise anyone about how to improve the economic condition of their people including (infamously) Gen. Pinochet and (often ignored) Communist China. (Pinochet, of course, relinquished power after losing a referendum; don't see the Beijing regime doing that any time soon.)

Milton Friedman was an opponent of conscription [the highlight of his famous exchange with Gen. Westmoreland is here], in favour of drug legalisation, an innovative thinker on welfare (proposing the negative income tax and education vouchers) and a critic of the IMF and the World Bank. (In particular, he did not approve of the way the IMF protected banks and other institutions who lent to developing countries at the expense of their taxpayers.) As this paper (pdf) points out, Milton Friedman's comments on Japanese monetary policy make it pretty clear he would not have been impressed by our current "hard money" monetary-contraction inflation hawks.

There is also a "fantasy Friedman" on whom various falsities are projected--such as that he supported IMF policy, that the Euro followed his proscriptions (he was deeply sceptical about its prospects) or that he only worried about inflation. The last is hilariously untrue, since he co-wrote the classic analysis of the dire effects of monetary contraction deflation, A Monetary History of the United States.

One of his great virtues was his ability to be clear, with a gift for vivid explanatory metaphors. An OpEd on "the Fed's thermostat" (pdf) is a good example.  He once proposed "the mother-in-law test". Any economic idea he could not explain to his mother-in-law over a cup of tea was probably wrong.  If you couldn't be clear to interested lay folk, what was the point?

He thought Keynes was a great economist and was a friend of Friederich Hayek (though apparently they ended up agreeing not to discuss matters monetary, as their disagreements were too strong).

His son is also very independent minded, which speaks well of his parenting skills. David Friedman (who has no degree in economics and is one of the prominent early figures in the SCA) wrote one of the first pieces I ever read which applied economic reasoning to a non-"economic" subject--why C18th armies had bright complicated uniforms. (To make it clear if a soldier broke ranks, since the inaccurate muskets of the period worked best if fired at once in clumped groups, which also made the soldiers better targets.)

Paul Krugman [who respects Friedman] once wrote of something Milton Friedman had written that it was "typical Milton; too simple but mostly correct".  To be "mostly correct" seemed to me then, and does now, as high praise.

Milton Friedman, July 31, 1912 – November 16, 2006. Requiescat in pace.

1 comment:

  1. I totally agree with David Glasner. Because he was a really great economist. Thanks for sharing this article.