of Economics, by Tunku Varadarajan, Commentary, WSJ: One doesn't interview a
man like Milton Friedman -- the Nobel laureate in economics in 1976 and among
the five or six most consequential thinkers of the 20th century -- without doing
some assiduous homework.
So I gathered his books -- reading some, re-reading others -- and made pages
and pages of notes. I also emailed several intellectual heavyweights, asking
them what they might enquire of Mr. Friedman -- now 94 years of age -- if they
had him cornered at a cocktail party. Replies flooded back. "Inflation
targeting," wrote a (marginally) younger Nobel economist. "Education," said
another Nobel laureate. "Does the recent record of spending with a Republican
president and Congress make him reconsider his support for the party?" wrote a
man who, until a while ago, worked on economic policy in the White House. "Is
there something distinctly difficult for capitalism in the Islamic world?"
wondered a Middle East scholar. "What music does he listen to?" a Democratic
political economist mused, unpredictably. More predictably, a big-cheese blogger
was "dying" to know whether "Milton reads blogs -- and will he ever write one?"
Everyone had a question -- and many had more than one (an economist in
Chicago had 10). For Milton Friedman is everyone's idea of an American oracle,
an American sage.
Sages, of course, have their oddities, and the interview last week -- at Mr.
Friedman's surprisingly petite office at the Hoover Institution, on the campus
of Stanford University -- got off to a surreal beginning. By his desk hangs a
map of Belize -- one of those stylized souvenirs made of cloth, embroidered to
catch the eye. Why, I asked him, did he have a map of Belize on his wall? Mr.
Friedman turned, looked at the object, and said: "I don't know. I really don't
know." Not a good start to the interview, some might say; so I asked, by way of
ice-breaker, whether he was keeping well. "Oh, yes!" was the spirited reply...
[W]e moved to economics, and here I made a reflexive apology for not being an
economist myself. "You mean you're not a trained economist," was Mr. Friedman's
comeback. "I have found, over a long time, that some people are natural
economists. They don't take a course, but they understand -- the principles seem
obvious to them. Other people may have Ph.D.s in economics, but they're not
economists. They don't think like an economist. Strange, but true."
Was Keynes a "natural economist"? "Oh, yes, sure! Keynes was a great
economist. In every discipline, progress comes from people who make hypotheses,
most of which turn out to be wrong, but all of which ultimately point to the
right answer. Now Keynes, in 'The General Theory of Employment, Interest and
Money,' set forth a hypothesis which was a beautiful one, and it really altered
the shape of economics. But it turned out that it was a wrong hypothesis. That
doesn't mean that he wasn't a great man!"
It cannot be said of too many economists that they "altered the shape of
economics." Would Mr. Friedman say -- modesty aside -- that he was one of them?
A long silence ensued -- modesty, clearly, was hard to put aside -- before he
mumbled, as if squeezing words out of himself, "Er . . . very hard to say . . ."
And then he was saved by the belle: The door opened, and in walked Rose, his
wife, bringing a waft of panache into the drab office...
Mrs. Friedman settled herself in a chair, her eyes twinkling, and my
questioning resumed. If they were to throw a small dinner party ... for Mr.
Friedman's favorite economists (dead or alive), who'd be invited? Gone was his
tonguetied-ness of a moment ago, as he reeled off this answer: "Dead or alive,
it's clear that Adam Smith would be No. 1. Alfred Marshall would be No. 2. John
Maynard Keynes would be No. 3. And George Stigler would be No. 4. George was one
of our closest friends." ...
The spark between the Friedmans is clear, and rather touching. So I'm tempted
to ask whether there is a romantic side to economics, in the way there is to
history, or to philosophy. "Is there a romantic side to economics?" Mr. Friedman
repeats after me, sounding incredulous, and then chuckling. "No, I don't think
so. There's a romantic side to economics in the same way there's a romantic side
to physics. Fundamentally, economics is a science, like physics, like chemistry
. . . It's a science about how human beings organize their cooperative
activities." Was that his preferred definition of economics? "Well, the standard
definition is the study of how a society organizes its resources. In that sense,
it's not particularly romantic."
Is immigration, I asked -- especially illegal immigration -- good for the
economy, or bad? "It's neither one nor the other," Mr. Friedman replied. "But
it's good for freedom. In principle, you ought to have completely open
immigration. But with the welfare state it's really not possible to do that. . .
. She's an immigrant," he added, pointing to his wife. "She came in just before
World War I." (Rose -- smiling gently: "I was two years old.") "If there were no
welfare state," he continued, "you could have open immigration, because
everybody would be responsible for himself." Was he suggesting that one can't
have immigration reform without welfare reform? "No, you can have immigration
reform, but you can't have open immigration without largely the elimination of
"At the moment I oppose unlimited immigration. I think much of the opposition
to immigration is of that kind -- because it's a fundamental tenet of the
American view that immigration is good, that there would be no United States if
there had not been immigration. Of course, there are many things that are easier
now for immigrants than there used to be. . . ."
Did he mean there was much less pressure to integrate now than there used to
be? Milton: "I'm not sure that's true . . ." Rose (speaking simultaneously):
"That's the unfortunate thing . . ." Milton: "But I don't think it's true . . ."
Rose: "Oh, I think it is! That's one of the problems, when immigrants come
across and want to remain Mexican." Milton: "Oh, but they came in the past and
wanted to be Italian, and be Jewish . . ." Rose: "No they didn't. The ones that
did went back."
Mrs. Friedman, I was learning, often had the last word.
With Mr. Friedman, personal questions are often inextricable from the
currents of history. How did he cope, I ask, with the great opposition to his
views in and out of the economics profession during much of his active career?
And how does it feel to have gone from being a person reviled in certain
quarters as Evil, to one revered across the world?
Milton (suppressing a laugh): "I don't think I was ever regarded as 'evil.'"
Rose (alluding to the protests that followed him everywhere, especially after he
gave economic advice to the Pinochet regime): "It was very difficult to go to
the colleges . . ." Milton: "I remember a fellow who came to see me from Harvard
or somewhere . . . he wanted to see 'that devil from the West'!" Rose: "Harvard
probably still feels that way!"
Here, Mr. Friedman explains "the story of the postwar period" in the U.S. "In
1945-46, intellectual opinion was almost entirely collectivist. But practice was
free market. Government was spending something like 20%-25% of national income.
But the ideas of people were all for more government. And so from 1945 to 1980
you had a period of galloping socialism. Government started expanding and
expanding and expanding." Mr. Friedman stopped, as if deciding whether to use
the word "expanding" a fourth time, before continuing: "And government spending
went from 20% to 40% of national income.
"But what was happening in the economy was producing a reverse movement in
opinion. Now people could see, as government started to regulate more, the bad
effects of government involvement. And intellectual opinion began to move away
from socialism toward capitalism. That, in my view, was why Ronald Reagan was
able to get elected in 1980." I noted, here, that Mr. Friedman, too, had some
role to play in this shift in opinion. He was, characteristically, reluctant to
take any credit. "I think we have a tendency to attribute much too much
importance to our own words. People saw what was happening. They wouldn't have
read my Newsweek columns and books if the facts on the ground hadn't been the
way they were." (Rose: "Oh, don't be so modest!")
Does it disappoint Mr. Friedman that the Bush administration hasn't been able
to roll back spending? "Yes," he said. "But let's go back a moment. During the
1990s, you had the combination that is best for holding down spending. A
Democrat in the White House and Republicans controlling Congress. That's what
produced the surpluses at the end of the Clinton era, and during the whole of
that era there was a trend for spending to come down. Then the Republicans come
in, and they've been in the desert, and so you have a burst of spending in the
first Bush term. And he refuses to veto anything, so he doesn't exercise any
real influence on cutting down spending. In 2008, you may very well get a
Democratic president" -- (Rose, interjecting: "God forbid!") -- "and if you can
keep a Republican House and Senate, you'll get back to a combination that will
Mr. Friedman here shifted focus. "What's really killed the Republican Party
isn't spending, it's Iraq. As it happens, I was opposed to going into Iraq from
the beginning. I think it was a mistake, for the simple reason that I do not
believe the United States of America ought to be involved in aggression." Mrs.
Friedman -- listening to her husband with an ear cocked -- was now muttering
Milton: "Huh? What?" Rose: "This was not aggression!" Milton (exasperatedly):
"It was aggression. Of course it was!" Rose: "You count it as aggression if it's
against the people, not against the monster who's ruling them. We don't agree.
This is the first thing to come along in our lives, of the deep things, that we
don't agree on. We have disagreed on little things, obviously -- such as, I
don't want to go out to dinner, he wants to go out -- but big issues, this is
the first one!" Milton: "But, having said that, once we went in to Iraq, it
seems to me very important that we make a success of it." Rose: "And we will!"
Mrs. Friedman, you will note, had the last word.
When I was younger, a little before the time I was going up for tenure, Friedman sent me a long, detailed letter about one of my papers (he liked it and his comments were, of course, insightful and helpful). I'm still amazed that he took the time to do that, he surely had plenty of other things he could have done with his time. But receiving that letter pretty much out of the blue provided a motivational boost just when I needed it and I'm grateful to him to this day for doing that. So, while I may not agree with 'that devil from the West' on every issue, I am going to let somone else argue against his point of view.