When I was a senior at the University of Chicago in 1975, many professors engaged in the now shocking and politically incorrect practice of serving sherry to undergraduates, in the name of fostering intellectual discussion in an adult atmosphere. I was one of several students in charge of sherry hour at the notoriously louche Shorey House, and I took it upon myself to invite almost every Chicago student’s hero, Milton Friedman, to join us for drinks and conversation.
I just walked into his office, said hello and invited him to the sherry hour. He responded with such unstudied humility that I wasn’t even sure I had the right guy. But he came to the sherry event, signed a Monopoly board with the motto “Down with monopoly!” and left a couple dozen impressionable undergraduates feeling that they had been touched by greatness.
This was not necessarily destined to happen.
Thirty years earlier, as Friedman emerged as a lonely voice for capitalism in a collectivist era, he seemed doomed to a hundred years of solitude. Instead, he arguably became the preeminent public intellectual of the hundred years that followed his 1912 birth.
Politicians such as Winston Churchill, Franklin Roosevelt, John Kennedy and Ronald Reagan are better known for their contributions to social progress, but ideas – not personalities – were at the center of such change. Milton Friedman’s great idea, that free-market capitalism is the only economic system that maximizes prosperity and human liberty, has become the prevailing wisdom. It provides direction (not fully realized) for China, India, Russia, much of Latin America and Eastern Europe and many other parts of the world. As our own growth in the U.S. falters, these places, governed at least partly under the influence of Friedman and the Chicago School of economic thought, are undergoing the most rapid improvement in human welfare ever experienced.
A sample of Friedman’s writings, both on public policy and on economics, is available in a remarkable new collection entitled The Indispensable Milton Friedman, edited by Lanny Ebenstein. These writings are previously unpublished or appeared in small-circulation journals. Thus, readers of Capitalism and Freedom and Free to Choose, his most popular books, will find the essays fresh and new.
Friedman is, of course, also known for “monetarism,” a term that he did not like. Monetarism is the view that economic outcomes are explained at least partially by the money supply, which Friedman thought should grow at a stable and predictable rate. Monetarism has the advantage of providing near certainty about future prices to businesses and consumers. It also keeps the government from trying to fine-tune the economy, a practice that has generally backfired (as we are currently re-learning).
But it is in public policy, not economic theory, that Friedman’s influence is most widely felt. The 1940s and 1950s, when Friedman began his career, were dark days for the idea, if not the practice, of capitalism. While government had not grown as large as it is now, the almost universal consensus among intellectuals and policymakers was that virtually all desirable social goals would be best achieved by expanding government and shrinking the role of private business. No such consensus exists now, in part due to the impact of Friedman’s work on other academics, public officials, opinion leaders and voters.
Friedman gives credit for his intellectual independence to the fad-resistant University of Chicago and the associated, market-oriented Chicago School of economics. If he had pursued his academic career in New York or Massachusetts, he wryly remarks in his essay “Schools at Chicago” in this book, “I would have been regarded as a ‘kook’ and no doubt would have begun to act like one even earlier than I did.”
An overview of the new collection
The Indispensable Milton Friedman is divided into two sections: politics and economics. Happily for most readers, the politics section is not about what we now call politics (elections and public officials); it’s about political economy, the application of economic ideas to governance. Likewise, the economics section is not about economics in a technical sense – it’s about intellectual history, especially merits and foibles of various influential economists.
Of the 20 essays in this book, my personal favorite is “Liberalism, Old Style,” originally published in Collier’s. One of my pet peeves is that leftists have expropriated the lovely word “liberal” (freedom-loving, open-minded, generous) for illiberal causes such as state control of major economic activities. This leaves classical liberals with the less lovely word “conservative.”
Now, there are many things worth conserving, including the environment, works of art, old buildings and certain old manners and mores – but not others. A free market does not conserve anything. As the great economist Joseph Schumpeter said, capitalism is “first and last a process of change.” Schumpeter famously called capitalism an agent of “creative destruction,” and he saw that as a good thing. So Friedman wins my heart in sticking to the old, 18th century terminology in which liberalism means what its etymology says it should mean: freedom-ism.