Observations on the Milton Friedman Institute at the University of Chicago-Becker

Not long after the death of Milton Friedman in the fall of 2006, the president of the University of Chicago, Robert Zimmer, formed a committee drawn from the Economics Department, the Graduate School of Business, and the Law School. He asked the committee, which has Lars Hansen as chair and I am a member, to prepare a proposal for a large institute that would be named the Milton Friedman Institute (MFI) in honor of Friedman's long association with the University of Chicago. The president and committee considered this far preferable to naming the institute after a rich donor, which is the common practice.The committee presented a report early in 2008 to the Council composed of some faculty members at the University of Chicago. Apparently, not much opposition to the Institute was voiced at that Council meeting. However, in late spring of this year a letter was sent to various members of the faculty and administration opposing the MFI. It was signed by about 100 faculty members and was made available to the press. This first letter was a confused combination of hostility to the economics department, hostility to market economics, objections to a few statements in the document supporting such an institute, and personal opposition to Milton Friedman, partly because of his alleged involvement in the Pinochet dictatorial Chilean government. Over time the reasons for the opposition were more carefully articulated, and the number of faculty signing the opposition to the MFI grew to over 150. Each succeeding letter became available to the media, and many articles began to appear in magazines and newspapers. The latest statement of opposition mainly concentrates on whether it is appropriate to name such an Institute after Milton Friedman. I will address that issue in my discussion here. These comments are mainly taken from a statement I read on October 15, 2008 to a meeting of the whole faculty called by President Zimmer to discuss several issues, but especially the MFI. I elaborate in some places because our statements were limited to three minutes. A university names an Institute after a former professor because of 1) his contributions to the university, 2) his contributions to scholarship or science, and 3) his intellectual honesty and character. On all three grounds I believe Milton Friedman eminently deserves having this Institute bear his name. Let me first mention I knew him for over 50 years, first as a teacher, then as colleague and close friend. I admired him enormously at all these different stages. His main direct contribution to the University of Chicago was as an absolutely superb teacher, by far the best teacher I ever had. He opened my eyes and that of other students, including Eugene Fama, James Heckman, Robert Lucas, and Lester Telser, and George Tolley, all faculty members at the University of Chicago, to how to use economic analysis to understand the real economic world. Both in the classroom, and as a supervisor of doctoral dissertations, he was a blunt and trenchant critic of shoddy analysis, both theoretical and empirical. I along with others took a lashing from him when he thought we did some analysis badly. The effectiveness of his teaching alone could merit having an Institute in his name at our university. Many honors have recognized his enormous contributions to economic science. Equally important is that these have endured. A simple measure of that endurance is the large number of citations to his scientific work that still appear in the top economic journals. Only one or two other economists of his generation share this distinctive measure of longer run impact of their scientific work. He was perhaps the most intellectually honest person I have ever known. To be sure, he was an active participant in public policy debates, as are many economists with very different points of view. But in his policy papers and discussions he used the same economics as he did in his academic work. He did not try to say things to curry political favor, and never held a position in Washington, except when he had a low level job at the Treasury department as a young economist. He attacked and defended persons of various political persuasions, including some of his best friends, if he believed their opinions or writings had flaws. He publicly criticized Arthur Burns, his teacher and close friend, when Arthur was chairman of the Fed, for supporting policies that Friedman considered bad economics. That public statement put enormous strains on their friendship. He is called a conservative, but he opposed many conservative positions, such as support for the gold standard, the military draft, and the war on drugs, and advocated many others that were picked up by liberals, such as the negative income tax, and attacks on corporate welfare through government subsidies to corporations. One of the most persistent accusations is that he advised and collaborated with the Pinochet regime. In Two Lucky People, Rose and Milton Friedman's autobiography, he discusses his dealings with that government. He also includes the relevant documents so that readers can judge a lot for themselves. He turned down two honorary degrees from Chilean universities because they were state universities under Pinochet. He made one six-day trip to Chile in 1975 at the invitation of a private bank. He gave two lectures on the "fragility of freedom". He did have a brief meeting with Pinochet and wrote a letter to Pinochet afterwards urging "shock treatment" of reduced government spending and reduced growth in the money supply in order to cure the rampant inflation then afflicting Chile. His letter contains many detailed suggestions, including a call for "generous severance allowances" for laid off government workers, and a safety net to alleviate hardship and distress among the poor. Friedman has also been criticized for helping to train some economists who served in the Pinochet government, even though teachers cannot control what their students do. Pinochet turned to the "Chicago boys"-economists trained at the University of Chicago- only several years after the centralized control of the economy that he favored had failed completely to lift Chile out of its doldrums. What is interesting in this regard is that the Social Democratic governments that followed the fall of the Pinochet government and the reintroduction of democracy have continued the vast majority of policies introduced by these Chicago-trained economists. These policies include low tariffs and a mainly free trade policy, privatized social security, and competitive private companies and universities. As is well known, Friedman was a strong supporter of competitive market economies, but this was not defended by ideology. He used economic analysis to argue that this was the most effective way to raise the living standards of the world's poor. I strongly agree with him, and so do the great majority of economists in different parts of the world. To be sure, one can argue against this and other policy positions he took, but that is how intellectual progress is made on crucially important economic questions. To summarize, great teacher for 30 years at the University of Chicago, outstanding researcher, and absolute intellectual honest in everything he did. To my mind these are far more than enough for faculty, students, and alumni associated with the University of Chicago, and for others as well, to be proud to have a Milton Friedman Institute at the University of Chicago.

Comments

[gdgeiss]

F. A. Hayek, could not initially get a publisher for Road to Serfdom due to left wing "intellectual" opposition in the US and was, both before and after its eventual publication, subject to one ad hominem attack after another from the left for it (whether they read the book or not). He lamented there (among much else of more substance) the usurpation of the term "liberal" by the political left, who are, of course, anything but liberal in any sense of the word, but most strikingly in their response to any disagreement with their views, which invariably results in charges that the source of such opposition is incredibly stupid and/or evil.

It is these same anti-liberals who now, based on similar ad hominem accusations, seek to villify and discredit Professor Friedman.

This is not about the Friedman Institute. It's sure not about Pinochet. It's about the left's anti-liberalism (sadley, Judge Posner again proves with his post that he's one of their apolgists) and the domination of all of American acedemia by it that was first described (I believe) by Jacques Barzun, accelerated during the Viet Nam riddled 60's, and has now received a new shot-in-the-arm with Iraq and the credit crisis.

Milton Friedman was one of 20th Century America's great figures. His economics (and politics, for that matter) are not discredited by the current crisis. In fact, there's a fair argument to be made that if we had been nearer Friedman's views, we'd not now be in the current mess. His involvement with the Chilean government of General Pinochet was typical of Friedman writings and according to Prof. Becker, the man personally. They were direct, honest, and consistent with his strong views on economic freedoms being conditions precedent to political ones.

Hopefully, those who know the truth of Friedman (like Prof. Becker) will prevail here and allow UC to prove worthy of using his name.

[James N. Markels]

I think the anti-Friedman argument is, fairly, boiled down into two main points:

1. By assisting Gen. Pinochet's regime in Chile, Friedman "condone[d] the murderous actions of a totalitarian regime," as Publius puts it.

2. By assisting Gen. Pinochet's regime, Friedman extended the life of a dictatorship that would have crumbled on its own had it not received any assistance whatsoever, and thus Friedman's assistance perpetuated human rights abuses.

I think the first point is of little merit. By that logic, every single government worker/soldier implicitly should be held to "condone" every monstrous act perpetrated by the government. That is clearly not the case.

The second point is more interesting. Alluding to my earlier example, if Prof. Becker provides Kim Jong Il with free-market reforms that improve the economy of North Korea, it is possible that the dictatorship will last longer than it would have had its previous ruinous economic policies persisted. On the other hand, it is also true that the incorporation of some pro-freedom reforms will also grease the wheels for other reforms, possibly hastening the demise of the totalitarian regime. Introducing pro-freedom reforms to a totalitarian state also helps prepare the populace for a non-totalitarian future by changing the basic culture and expectations of the people. I think North Korea and, especially, Cuba have clearly demonstrated that "starving the totalitarian beast" is not the surest or swiftest way to promote regime change. So I do not think this criticism is strong, either.

[Rumple Stilskin]

The (extreme) left and right are remarkably similar in their behavior when it comes to other opinions. In fact, whether a particular person at either extreme is left or right seems to be largely a matter of chance. I imagine that an extreme right wing person if reborn would be just as likely to become extreme left as extreme right, what could be certain is that they would not find themselves in the middle. Friedman was an ideologue. He disregarded or misrepresented facts that did not accord with his views. Hayek was the same. Their freedom of property rights but not humans philosophy is a might is right philosophy and was not at all out of step with Pinochet, or except for a few details, with Kim Jong Il or the Chinese leadership or G W Bush. True, the extreme left were not receptive to Hayek but neither is the extreme right to anyone who steps marginally out of line. Look at the vehemence with which Heckman was turned on when he merely contemplated being reasonable about the naming of the institute.

[Rumple Stilskin]

Further, there is a world of difference between trying to starve "the totalitarian beast" which in the case of the US government and Cuba involves an attempt to stop any individual feeding it and feeding it, oneself. Friedman and the CIA not only were happy to feed the beast, they gave birth to, trained and suckled the beast from birth.

[James Bryan]

I probably have no right to make a comment here, since I am neither an economist nor an alumnus of the University of Chicago. I am just an educated (Harvard and the University of Pennsylvania) semi-retired lawyer interested in the subject. My comment: Professor Becker's comments demonstrate that upon occasion Nobel prize winners not only have immense knowledge and learning, but that they also (albeit less frequently) have wisdom. Keep writing Professor Becker!

[Chris Graves]

It is not really surprising that college professors, who are not merely experts in their respective fields, but intellectuals, are repulsed by Milton Friedman. Even though George W. Bush differs in key respects from the right libertarianism of Friedman, they share certain basic philosophical starting points that places them both on the political right. So, it is also no surprise that I see on the local news here in Dallas a stream of stories about Southern Methodist University professors making a similar case to SMU Trustees and the United Methodist Church in an attempt to block construction of the George W. Bush Presidential Library on the SMU campus. There is a long history throughout the Twentieth Century of intellectuals being drawn to the political left with its commitment to statism and forcibly achieved equality of condition. Anyone who stands in the way of this leftist agenda will be accused of any and every crime against humanity conceivable.

For the left, opposition to their egalitarian agenda is on par with Satanic opposition to the Christian Church in spreading the Gospel. For the secular (or religious) left, Heaven can be achieved here and now if we would only redistribute enough wealth and income as well as effectively enforce civil rights laws and racial quotas. Then the Millennium would be ushered in and we would all live together in peace and harmony in an egalitarian utopia. Only demonic forces would oppose such a vision.

Why are intellectuals primarily drawn to such unrealistic proposals? Friedrich Hayek touched on this key aspect of why intellectuals oppose the principles of classical liberalism in his “Intellectuals and Socialism” by observing that intellectuals hate realism and making trade-offs to move closer to practical improvements in the human condition. They hate piece-meal, practical reforms. They do not want to see the harshness of life or the limitations of this world. Instead, due to their abstract and conceptual mindset, they prefer to dwell on grandiose visions that are frictionless in their implementation. Imaginative, heterodox innovations fascinate them. No matter how far-fetched the vision, in fact the more far-fetched the better, nothing seems impossible or impracticable within the confines of their speculations. What Hayek noticed about intellectuals was exactly what Edmund Burke 160 earlier had warned against even among classical liberals in France who wanted to directly and forcibly implement the same political philosophy that Burke himself accepted. This immediate, decontextualized forcible implementation of an abstraction is part of the problem with the left or any political philosophy even that of Milton Friedman, Hayek, and Burke, as the French showed. One cannot simply set down ideals in an established culture and redesign the underlying structure of the political, social, and economic regime without brutality on a massive scale.

That is why it is disingenuous for critics of Friedman to bring up the association of his economic policies with the political regime of General Pinochet in Chile. Of course, when one overthrows an authoritarian leftist regime, one must use violence to gain and maintain control. But leftists would be the first to agree that to overthrow an existing regime and maintain power and achieve the social goals that they aspire to, there must be bloodshed. These same leftists do not seem as outraged by the brutality of leftist regimes. They do not decry using violence to achieve greater equality of result. In fact, they realize that they must use the State to violently displace those they see as unjustly in power. What they do not like in Chile is that a leftist was taken out.

Another aspect of the left that makes them hostile to the right is their moral nihilism. We have already seen that tendency with their willingness to kill millions to stamp out the upper and middle classes. They seem fascinated with primitive people whom they (falsely) perceive as sexual libertines with little interest in planning for their futures or hard work. Many intellectuals see middle class “bourgeois” values of hard work, self-control (especially sexual self-control), personal responsibility, and a certain rectitude as stifling and inauthentic. They see true freedom achieved only by first introducing complete social and economic equality followed by liberation from bourgeois morality. Of course, as Daniel Bell observed about capitalism, the creation of wealth is based on self-control especially to defer gratification and save and plan for the future. Individual self-control is exactly what the left led by the Frankfurt School see as gross violations of freedom. This nihilistic streak also explains their seemingly cultural suicidal hostility to Western Culture. Not only does the focus on preserving European culture in Europe and the United States strike them as racist on egalitarian grounds, the Western focus on rational self-control, science and technology, and, paradoxically intellectual achievement, is at odds with the adoration they place on the simplicity, cooperation, equality, and pristine quality of those indigenous cultures overwhelmed by modernity.

This adoration of the exotic plays back into the left’s humanitarianism. I see humanitarianism as rooted in the impulse to feel sorry for the plight of certain people, and find pleasure and a sense of significance in taking care of them. Some humanitarians use private, voluntary means to help others while other humanitarians prefer to use the State to force the general public to fund their efforts.

Humanitarians tend to view humans as innately good and kind. They want to facilitate whatever each person wants to do, no matter what it may be. They enjoy a sense of paternalism as they provide for and protect their wards. This tendency might be appropriate at times but can easily drift into a subtle form of control and dominance.

Humanitarians cannot believe that people are naturally selfish and sadistic. They tend to hold a pollyannish view of criminals and attempt to mitigate their punishment. They hate to see anyone suffer pain under any circumstances.

Humanitarians have a hard time concentrating their affection on a limited set of people, such as their family or their community. They seem emotionally restless and transient. They continually seek out new people to befriend and help without ever settling into a committed, intimate relationship with any one person or group in particular.

Utilitarians (watch out Judge Posner), followers of the Social Gospel, collectivists, and the political left each find their roots in humanitarianism. The origin of humanitarianism is likely to be found in a certain reading of the Bible and understanding of Christianity that emphasizes unilateral forgiveness, charity, and the brotherhood of all humans. This focus is quite different from Christians who emphasize the depravity of humans and the need for personal redemption.

The humanitarianism helps explain the meliorism, the egalitarianism, the adoration of primitive people, the concern for the marginalized, and their hatred of free markets, especially free trade. They see free trade as destructive of the pristine native populations who live in harmony with the earth and with each other. We should become more like the people we have dispossessed through empire (trade or military—hence the tie between Bush and Friedman in the left’s eyes) and exploited rather than converting the “savages” and “civilizing” them as happened in the Nineteenth Century and is happening once again with global capitalism.

Of course, Milton Friedman was an honorable man who courageously fought for liberty and the preservation of the founding principles of our country. The people who oppose honoring his memory hate the United States of America and the classical liberalism, capitalism, and the traditions from which it was built. What these opponents of Friedman stand for is the destruction of our country and its way of life. They are correct to hate Friedman and to oppose all that he stood for. Anything less than total opposition from these enemies of liberty would be an insult to Milton Friedman and all who have stood with him. We should be honored by their opposition as we stand with Milton Friedman.

[neilehat]

Rumpled, Using "Historical Revisionism" as a last refuge to cover the tracks of a failed KGB covert op.?

And what about the Christian Democrats in the Legislature, who controlled it, and who turned on Allende and later found themselves on the "Secret List" and began to disappear or were outright assasinated? Hmmm!?

Remember, the "Shadow knows and has the power to cloud men's minds".

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[Does it Matter]

Great, I read all the comments, none of them was against Milton Friedman,is that a coincidence? Have you sellected only the pros and erased the cons? You might not post my comment on this blog, but there is only one thing I have to say.
Hitler is held responsible for the death of millions of Jews, maybe Hitler himself never killed a man, but his ideas led to the death of so many people. Just like Milton Friedman's ideas led to the death of millions of people. I think he is just as guilty and greedy. A Faculty should be named after a man that helped millions not a man responsible for the death of millions. From Chile, to China to Poland, Russia and today Iraq! Devil covered with rose garments!
Milton Friedman needs to be forgotten for ever!!

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