Milton Friedman: Nuances and complexity
In writing her new biography of the Nobel Prize-winning economist Milton Friedman, known throughout his long life for his endorsement of deregulation and free markets, Jennifer Burns had her work cut out for her. Reflecting on how controversial her subject was, she says that one of her goals was “to restore the fullness of Friedman’s thought to his public image”. She depicts Friedman, who died in 2006 at 94, as a victim of a “bipartisan assault,” besieged by radicals on the left and populists on the right who decry the “neoliberalism” that he so ardently promoted. “As he increasingly came to symbolize a political movement”, she writes, “the nuance and complexity of his ideas was lost.”
But even Ms Burns has to admit that this attention to “nuance and complexity” was something that Friedman did a lot to discourage. He spent decades fashioning himself into a public celebrity, issuing confident pronouncements on the miracle of markets, whether in his columns for Newsweek or in his 1980 television series, “Free to Choose”. One famous scene has Friedman holding up a pencil, marveling that thousands of people who didn’t know one another had helped to create it. The principles underlying such intricate cooperation were “really very simple”, he said. Productivity and harmony could be conjured by “the magic of the price system”.
Ms Burns — a historian at Stanford — devotes a good part of this book to parsing Friedman’s work before 1970, when he was still railing against the Keynesian orthodoxy of the day. At the University of Chicago, where Friedman spent most of his teaching life, he edged out the leftist scholars clustered in the Cowles Commission for Research in Economics, shrewdly getting the Rockefeller Foundation to pull its funding from the commission and finance Friedman’s workshop instead.
Charismatic in the classroom, Friedman didn’t just teach students; he created converts. The eventual result was a faculty that Ms Burns calls “unusually inbred”. Friedman may have had to bide his time on the periphery of his field, but inside the University of Chicago, he surrounded himself with a posse of like-minded economists. He was one of the few economists to predict the stagflation of the 1970s, when the Keynesian tool kit seemed powerless in the face of high inflation and high unemployment.
For all Ms Burns’s promise to reveal the underlying subtlety of his ideas, what becomes clear in this book is how frequently drawn he was to an insistent simplicity. There was a political dimension to this. Complicated econometric models suggested that a complicated economy could be planned. But price theory — which holds that prices are the most efficient mechanism for coordinating economic activity — suggested that planning is destructive or moot.
As a kid in New Jersey, the only son of parents who immigrated from the Austro-Hungarian Empire, Friedman carried himself like “an ebullient and self-assured princeling”. He married his grad school sweetheart, Rose, who gave up her own promising career as an economist to raise their two children. From all accounts, they seemed to have a happy, loving marriage, and they even co-wrote a memoir, Two Lucky People.
Much of the book is given over to dissecting disputes over Friedman’s monetary concepts, yet glimpses of his personality do emerge. He was a blithe optimist and, when he collaborated with women in his field, he could be a blithe credit hog. Although he made supportive phone calls on behalf of Anna Schwartz, his co-author on A Monetary History of the United States (1963), Ms Burns also shows Friedman taking ownership of shared ideas and leaving it to women collaborators to do the grunt work.
Ms Burns is a research fellow of the Hoover Institution, the think tank dedicated to free markets where Friedman was also a research fellow for three decades after leaving Chicago. Her biography is far from hagiography. But when she encounters the most notorious episodes of Friedman’s life, she is so keen to recreate his point of view that her writing gets windy and protective. She details Friedman’s opposition to the civil rights movement, which “casts a shadow on his legacy”. Yet here, as elsewhere, she strains to be generous, constantly repeating Friedman’s own repeated denials of prejudice. In one convoluted passage, she suggests that his refusal to denounce the segregationist use of school vouchers was, however troubling, a matter of him sticking to his hands-off principles.
Her chapter on Friedman’s relationship with the regime of the Chilean dictator Gen. Augusto Pinochet is similarly awkward. Friedman tried to deny there was much of a relationship: He simply spent a few days in Chile and offered some economic advice. That advice amounted to a ruthless austerity programme, which Friedman insisted was ultimately to the good.
Unsurprisingly, he wanted to have it both ways — all the credit without any blame. Ms Burns casts Friedman as a babe in the woods, “literal-minded to a fault”, so caught up in the wonders of price theory that he didn’t understand why meeting with the general responsible for a military coup and the torture and disappearance of dissidents might be a hideous look.
Ms Burns, even while lamenting Friedman’s “blind spots and imperfections”, seems committed to portraying him as mostly well-meaning yet occasionally oblivious. At the end of her book, she allows herself to get wistful for what might have been: “Imagine the forces of moderate Republicanism buttressed by Friedman’s intellect!” Exactly how this idyll would differ from the deregulated neoliberal order that prevailed in this country until recently is something she never quite explains.