Thursday, November 16, 2006

RIP Milton Friedman

It seems as though it must have been an awfully good life: a long one filled with accomplishments, a happy marriage, and countless friends. Milton Friedman, who died today, was the economist nearly everyone's heard of, the architect of libertarian economic theories followed by Reagan and Thatcher, predictor of the inflationary problems of the 70s ("stagflation"), and hero of former Communist nations struggling to become capitalist.

Friedman believed that government should interfere as little as possible in the economy except for taking a hand in controlling the supply of money. His ideas were revolutionary at the time, since Keynes held sway, but they harked back to earlier thinkers such as Adam Smith.

I'm interested, as usual, in what factors about Friedman's life may have formed him. The shaping of a human being is always, at heart, a mystery, but here are a few clues:

Mr. Friedman’s father died in his son’s senior year at Rahway High School. Young Milton later waited on tables and clerked in stores to supplement a scholarship he had earned at Rutgers University. He entered Rutgers in 1929, the year the stock market crashed and the Depression began.

Mr. Friedman attributed his success to “accidents”: the immigration of his teenage parents from Czechoslovakia, enabling him to be an American and not the citizen of a Soviet-bloc state; the skill of a high-school geometry teacher who showed him a connection between Keats’s “Ode to a Grecian Urn” and the Pythagorean theorem, allowing him to see the beauty in the mathematical truth that the square of the sides of a right triangle equals the square of the hypotenuse; the receipt of a scholarship that enabled him to attend Rutgers and there have Arthur F. Burns and Homer Jones as teachers...

In his first economic-theory class at Chicago, he was the beneficiary of another accident — the fact that his last name began with an “F.” The class was seated alphabetically, and he was placed next to Rose Director, a master’s-degree candidate from Portland, Ore. That seating arrangement shaped his whole life, he said. He married Ms. Director six years later. And she, after becoming an important economist in her own right, helped Mr. Friedman form his ideas and maintain his intellectual rigor.

After he became something of a celebrity, Mr. Friedman said, many people became reluctant to challenge him directly. “They can’t come right out and say something stinks,” he said. “Rose can.”

In 1998, he and his wife published a memoir, “Two Lucky People” (University of Chicago Press.

His wife survives him...

Lucky people, indeed--but not blind luck. Friedman was obviously brilliant, but with a creative mind able to synthesize, some experience with the school of hard knocks as well as academia, and a heart that recognized a good potential spouse when he saw one plus the good sense to stick with her for what must have been something like seventy years.

Friedman had the ability to earn the grudging respect even of his opponents, and sometimes even their reluctant acquiescence in the end. That's the mark of a formidable thinker, one whose theories had predictive value. It's also the mark of an honest and open-minded opponent:

Mr. Samuelson...of M.I.T., [who often disagreed with Friedman], who was not above wisecracking himself, had a standard line in his economics classes that always brought down the house: “Just because Milton Friedman says it doesn’t mean that it’s necessarily untrue.”

But Professor Samuelson said he never joked in class unless he was serious — that his friend and intellectual opponent was, in fact, often right when at first he sounded wrong.

Mr. Friedman’s opposition to rent control after World War II, for example, incurred the wrath of many colleagues. They took it as an unpatriotic criticism of economic policies that had been successful in helping the nation mobilize for war. Later, Mr. Sameulson said, “probably 98 percent of them would agree that he was right.”

Friedman's major achievement, the one for which he received the Nobel prize, was linking rising unemployment to rising inflation. He also suggested a remedy, one that's generally been followed: to have the Federal Reserve keep the money supply growing steadily.

Here are some visuals for the imagination (I've seen Galbraith in person, by the way, and though far be it from me to doubt the veracity of the Times, he appeared even taller than this, if possible):

In forums [Friedman] would spar over the role of government with his more liberal adversaries, including John Kenneth Galbraith, who was also a longtime friend (and who died in May 2006). The two would often share a stage, presenting a study in contrasts as much visual as intellectual: Mr. Friedman stood 5 feet 3; Mr. Galbraith, 6 feet 8.

But--in a metaphor that's almost inescapable--Friedman was a giant of a man.

[NOTE: Liberals and leftists have criticized Friedman for giving economic advice to the government of Pinochet in Chile. I wouldn't doubt it if some commenters here feel like doing the same (criticizing him, that is, not giving advice to Pinochet). Friedman's pragmatic answer was this:

...if he could help reestablish a free market in Chile, political freedom would eventually triumph there as well.

For a fuller explanation by Friedman, see this as well.]

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