Andrew Leonard: Milton Friedman's bullets
That was the night Ronald Coase came to dinner at Aaron Director's home to defend his views of transaction costs against a skeptical Chicago department. Coase had submitted a paper arguing that simply assigning property rights and then letting market processes take their course was usually a better solution than costly government regulation. The referees were certain that something was wrong with his argument. Hence the occasion of the dinner. George Stigler later recalled,"In the course of two hours of argument the vote went from twenty against and one for Coase to twenty-one for Coase." Midway, Milton Friedman opened fire, and the bullets hit everyone but Coase."What an exhilarating event!" wrote Stigler. The guests said good night knowing that intellectual history had been made.
Warsh also writes that Friedman's"little book,""Capitalism and Freedom," published in 1962,"persuaded countless young persons ... that conservative didn't have to mean dumb."
If John Maynard Keynes is the liberal economist's hero, the man who provided intellectual cover for the basic concept that government policy could significantly influence the workings of the economy for the betterment of all, then Milton Friedman is the corresponding icon for conservatives, the economist who, more than any other single thinker in the 20th century, provided intellectual justification for"limited government." Friedman's contributions can be fairly described as the root of all modern market fundamentalism.
Milton Friedman died this morning, at age 94. As I write these words, the econoblogosphere is no doubt already exploding with assessments of Friedman's legacy, and the front-page obituaries are being rushed into print. As will be obvious, it is impossible to separate Friedman's work from its political implications. Friedman was friends with Ronald Reagan, and his 10-part television series,"Free to Choose," broadcast in 1980, provides a clear starting point for the so-called Reagan revolution. If you think the past 25 years of generally conservative ascendancy in economics as practiced in politics has been a wrong turn, then you likely hold Friedman partially responsible. If you think that the main problem with current economic policy is that we haven't gone far enough down Friedman's road (and, as many conservatives have been bemoaning since the election, their main cause for grief about George W. Bush is that he is insufficiently Friedman-esque,) then you regard Friedman as your patron saint. The one thing you probably don't think is that Friedman was dull at the edges. His work must be reckoned with.