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Eye on the News

Daniel J. Flynn
Monetarism and the Man
Remembering Milton Friedman on his 100th birthday
31 July 2012

After Milton Friedman’s death on November 16, 2006, the diminutive intellectual cast such a long shadow that even as staunch an adversary as Paul Krugman begrudgingly remembered him as “a man of intellectual courage who was one of the most important economic thinkers of all time, and possibly the most brilliant communicator of economic ideas to the public that ever lived.” But upon his birth to immigrant parents 100 years ago today, the chances of Friedman’s becoming an academic, let alone one of the century’s most influential, seemed remote. And yet it’s Friedman’s obscure beginnings—not the months he spent on the bestseller list in 1980 or the day in 1976 when he shook hands in Stockholm with the King of Sweden—that best explain his impact.

Milton Friedman changed the world. The University of Chicago professor touted floating exchange rates, an end to wage-and-price controls, legalization of private gold ownership, dramatic tax reductions, and an end to conscription. And all of these things came to pass. Friedman the monetarist warned in the 1960s of “inflationary recessions” and rejected a tradeoff between inflation and unemployment presumed by the Phillips Curve. Fellow economists laughed at him before the 1970s laughed at them. Fledgling market economies from Europe to South America to Asia relied on Friedman as a guide.

How did this small man make such big changes? The answer lies as much in his story as it does in his solutions.

Friedman’s economics worked because he had worked. Friedman explained to fellow economists in the 1950s that “theory is to be judged by its predictive power for the class of phenomena which it is intended to ‘explain.’” He rejected ideas that worked in smart men’s heads but failed in working men’s lives. Former Obama cabinet member Austan Goolsbee (Skull & Bones ’91) can afford his bad ideas; his most famous forebear on the University of Chicago faculty couldn’t. The future Nobel Prize winner scooped ice cream in his parents’ in-home parlor, sold fireworks by the roadside, waited tables in exchange for lunch, and peddled clothing and books to his fellow Rutgers undergraduates. Friedman came from the real world. So did his economics.

Friedman sought to persuade adversaries, not demonize them. Friedman shifted from New Dealer to libertarian. If he could be won over, then others could, too. He converted without condemning, and he debated adversaries with unfailing patience and graciousness. When conversing with progressives, the modern-liberal-turned-classical-liberal found it easier to offer counterproposals (e.g., a negative income tax to replace welfare) than to use a word—“no”—that progressives don’t appreciate. “If someone wants to achieve something, it’s easier to say ‘here is a better way of achieving your objectives’ than to say ‘you’re wrong,’” Friedman’s son David, also an economist, told me. “He made arguments that people found hard to answer. He made them politely, and without implying that the people who disagreed with him were stupid or wicked.”

A product of the concrete jungle didn’t retreat into an idealist’s fantasyland. Friedman was an odd creature: a pragmatic libertarian. Instead of arguing for the privatization of schools, a position that might have made him feel good but would have done no public good, he advocated vouchers, so that parents could choose among competing public and private institutions. Some communities adopted the policy. His arguments appealed to his opponents’ sympathies, which left friends and foes exasperated. Consider some quotes from his fascinating, lengthy 1973 Playboy interview: “Under free enterprise, a person who has a prejudice has to pay for that prejudice”; “the minimum-wage rate is the most anti-Negro law on the books”; “you tax the people of Watts to send children from Beverly Hills to college.” In life and work, the ever-practical Friedman approached the world as it was. He earned a state scholarship to a state college, worked for the federal government during Franklin Roosevelt’s presidency, and propagated his ten-part 1980 documentary series, Free to Choose, via public television.

“If my fellow citizens are going to be so foolish as to establish these [programs], there is no reason I shouldn’t benefit from them,” he explained to the Associated Press on the eve of Free to Choose’s PBS premiere. “I was long an enemy of rent control, but that did not prevent me from living in a rent-controlled apartment.”

The son of immigrants appropriately judged ideas on merit, not connections. At a time when pundits often echo party talking points, Friedman’s principled public intellectualism was bracing. He opposed the Iraq war, the drug war, and the draft. He didn’t mute his criticisms of Richard Nixon, Ronald Reagan, or even Fed chairman Arthur Burns—his former professor—when they ran afoul of his principles. Friedman embodied the Aristotelian wisdom: “Where both are dear, it is right to prefer truth to friends.” Good ethics proved a good career move. When honesty talks, people listen.

Friedman spoke the everyman’s language so well because it was his native tongue. Economists do numbers; words, not so much. Friedman spoke with the authority, but not the pedanticism, of an academic. “Professors sometimes have the habit of writing only for other professors, but your book is written in a way that the man on the street will understand and get your message,” Senator Barry Goldwater observed on the eve of Capitalism and Freedom’s 1962 publication. Every three weeks, from 1966 to 1984, Friedman descended from the ivory tower, and readers ascended from the style section, to tackle complex matters accessibly in his Newsweek column. So relaxed with his ideas was Friedman that he spoke to viewers of Free to Choose without a script. TV, glossy magazines, pamphlets—Friedman took his ideas to the people. The banker’s suit and geeky glasses may have deluded some into thinking that he was raised in an economics department; he grew up in Rahway, New Jersey. Coming from the masses made him better equipped to speak to them.

Ironically, Friedman regarded biography as nothing; ideas, everything. Behind the scenes, Friedman confessed to the Free to Choose producers that he was “unhappy with any [narrative] string that is not primarily intellectual.” The proposed reliance on the star’s compelling life story made him uneasy in the extreme. The documentary had to be about his ideas, not him.

That was part of his decency. But in reflecting on the economist’s influence on the 100th anniversary of his birth, biography matters. A good man is the best salesman of great ideas. Knowing how Milton Friedman remade the world requires knowing Milton Friedman.

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