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Milton Friedman’s influence looms so large over the Chicago school of economic thought that Nobel laureate Gary Becker, University Professor of Economics and of Sociology, says he feels Friedman’s presence in all of his work. “I will always think of him looking over my shoulder at everything I do,” Becker said during a panel paying tribute to Friedman at Hyde Park Center on November 20. Friedman, Nobel laureate and Paul Snowden Russell Distinguished Service Professor Emeritus in Economics, died November 16. “I’ve said throughout my career, ‘What would Milton think of these ideas?’ Unfortunately, a lot of the times he wouldn’t think they were very good.”
Friedman embodied a rare combination of great scientific skills and great charisma, Becker said. He was an outstanding, fierce intellectual debater, but at the same time hosted a popular television series on PBS, Becker said. “That’s a combination you don’t expect to find,” he said. “He’s not a person you’re going to replace easily, if at all, in his combination of skills. He was, in that sense, unique. There are some good public intellectuals now, but their correlation as good academics is weak. Milton Friedman was an outlier in that regression, but by definition there aren’t many of them.”
Eugene Fama, Robert R. McCormick Distinguished Service Professor of Finance, said it is difficult to explain Friedman’s intellectual influence on economics at Chicago. “His mind was just kind of in the air around the campus,” said Fama, who took Friedman’s price theory class as a student and then worked on the faculty with Friedman until he retired. “The so-called Reagan-Thatcher revolution is really the Friedman revolution. In the end, it’s all about returning to free markets and personal freedom.”
Friedman did not envision a perfect society, but rather one where individuals decided what was best for themselves and learned from their mistakes, rather than through government intervention, said Sam Peltzman, Ralph and Dorothy Keller Distinguished Service Professor Emeritus of Economics. “His view on the welfare state follows that,” Peltzman said. “He said that the government trying to do for ordinary people what’s best for them will do more harm than good. He didn’t say, ‘It won’t do any good to anybody,’ but rather, ‘On balance, it will do more harm than good.’”
Before he was considered an icon, Friedman was regarded within the study of economics as a member of the “lunatic fringe,” Peltzman said. “His ideas were not accepted,” he said. “A lot of us here at Chicago very much had the feeling that we were an embattled fortress between two hostile coasts that were fighting us.” At one time, virtually an entire undergraduate macroeconomics course at Columbia University was devoted to “why this guy Friedman was a nut,” Peltzman said.
Harvard University, Massachusetts Institute of Technology, and University of California at Berkeley did not hire Chicago graduates for many years, Becker said, “mainly because of Milton Friedman, who was considered this way-out person,” he said. “It was difficult for him at times, but he had this strong conviction that he was right, that shoddy analysis was going in the opposite view, and somebody had to take the logic of economic analysis and push it to its logical extreme.”
Friedman opened every session of his price theory course with a real-world question, said Nobel laureate Robert Lucas, a former student and John Dewey Distinguished Service Professor in Economics at the College. “The question would involve some policy problem, some crazy newspaper editorial, or Monday morning stock-market nonsense,” Lucas said. “Then we’d have to sort out the economics in these statements and work them out.”
Friedman taught students that everything in life has an application of price theory, Lucas said. “Over and over again, we came out of this class with the notion that we were now in possession of a hugely powerful intellectual tool,” he said. “We’ve been using it all our lives. People who took that class had a different attitude toward Milton Friedman.”
—Phil Rockrohr