Brad Delong and Austan Goolsbee on Milton Friedman
Friedman published his first academic paper that I am aware of in 1935, the year my own parents were born. His most important academic work was done before I was born, although his popularizing efforts like the PBS series “Free to Choose” came later. It is amazing to me that he left University of Chicago almost 30 years ago and yet rarely does a day pass when his name is not invoked in some fashion there.
The first time I ever heard of Friedman was in junior high. I wan’t the type to watch PBS at that age, so I knew nothing of Free to Choose. One of my teachers (and still a good friend) named George Leiter had just returned from a cruise. George prided himself on being quite a good ping pong player. So he was quite surprised when a senior citizen barely tall enough to see over the table had repeatedly destroyed him in ping pong. Only after they were done playing did George figure out it was Milton Friedman on the other side of the table. That was my first introduction to Friedman.
Although I got to see him a number of times, only once did I get to witness first hand the Friedman debating prowess he is so known for. A year ago he visited Chicago with his wife Rose and a handful of faculty were having lunch with him at the faculty club (the “Quad Club” as it is known). It was towards the end of lunch. The conversation had been an unusually polite and constrained Q and A session with the young faculty like me asking questions of Friedman. (Partly it was polite because of respect for the great man, but mostly it was polite because the proceedings were being filmed for a documentary. Scrutiny no doubt affects people’s behavior!) The conversation turned to the fact that relatively few economists these days practice the sort of economics that Friedman embraces — what is known as Chicago Price Theory. Chicago Price Theory involves combining simple, basic principles of economics with the analysis of data. Friedman complained bitterly about the fact that the profession had bifurcated into a group of pure theorists who had no contact with data and a group of highly technical econometricians who he felt had lost touch with the facts.
Then my colleague Casey Mulligan offered the first real challenge to Friedman that he faced all day. Casey asked Friedman whether that wasn’t just the market at work — that the fact that the profession had gone in these other directions simply reflected the fact that these other approaches had more value. For someone like Friedman who believes in markets above all else, this was a powerful attack. Friedman had seemed pretty flat all through lunch, but in response to Casey’s words, he sprung to life. His voice changed completely and he began to debate with a ferocity I could not imagine. And he was persuasive, too, in making his case that the profession of economics was far from a free market and thus you could not trust that the path it was on was due to market forces. He argued using precisely the economic principles that have come to be of little interest to most economists, and he was amazingly convincing. Although I didn’t need to be convinced, for me this was just one more example of how powerful these tools are.