Latest / The Capitalism and Freedom in the Twenty-First Century Podcast / Jennifer Burns on the Life and Lasting Influence of Milton Friedman

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Jennifer Burns on the Life and Lasting Influence of Milton Friedman · The Capitalism and Freedom in the Twenty-First Century Podcast

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Welcome to the new Books Network.
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>> John Hartley: This is the capitalism and freedom in the 21st century
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podcast where we talk about economics, markets, and public policy.
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I'm John Hartley, your host.
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Today, I'm joined by Jennifer Burns,
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who is a research fellow at the Hoover Institution and
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is an associate professor of history at Stanford University.
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Jennifer has a fascinating new book out, a biography of the late economist
1:07
Milton Friedman titled Milton the last Conservative.
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Welcome, Jennifer.
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>> Jennifer Burns: Thanks so much for having me.
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Great to be here.
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>> John Hartley: Well, I'm really excited to have you on because your last biography
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was a biography of Ayn Rand titled Goddess of the Market, Ayn Rand and
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the American Right.
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I'm curious, like, how did you first get interested in history, economics, and
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political economy?
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And how did you get interested in writing biographies about free market thinkers?
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>> Jennifer Burns: Yeah, I can't say it was an overall plan.
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So I've always loved history.
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I've always loved reading.
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And I also really was drawn to reading novels as well as nonfiction.
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And so I had a lot of questions about sort of how ideas move through society,
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how they get picked up, how they're moved from the author or
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the thinker's mind more broadly.
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And these questions started to kind of focus around Ayn Rand when I
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was early in graduate school in history.
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So I knew I wanted a PhD in history.
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I knew I wanted to do some deep research.
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And in the first months of graduate school, I kept seeing people reading
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Ayn Rand, sort of everywhere, reading her on the bus,
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a friend who doesn't read a lot, suddenly reading Ayn Rand.
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And I thought, well, let me learn about her as a historical figure.
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And then I realized there was very little
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information about her as a historical figure.
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And I thought, well, she's really important, and
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people are still reading her today.
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She definitely had an influence on conservatives and libertarians and
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our politics.
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So why don't I figure this out?
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And so it's pretty unconventional to do biographical work in the context of
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a history PhD.
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It's not unheard of for an intellectual historian, and
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so I began this project on Rand.
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And I think that was kind of the first step along the road to having the Friedman
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project as well, although I didn't know that at the time.
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>> John Hartley: Fantastic, I'm curious,
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what got you interested in Milton Friedman?
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>> Jennifer Burns: So I think when I first started thinking about Friedman,
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I was thinking of him through the lens of Rand, and
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that he seemed like a popularizer of economic ideas.
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And what I was fascinated about with Rand was that she had these ideas that you
3:17
could see some of their origins in sort of political philosophy or
3:20
political movements, but then she expressed them in fiction.
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And so I thought of her as kind of working from the bottom up in terms of how she
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spread her ideas.
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And then I was thinking, if I'm trying to write a larger history, which I was
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interested in doing, kind of conservative ideas in America, well, what is
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the top strata, the kind of professional university level purveyors of ideas?
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And so I quickly came to Friedman, and
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I think what happened along the way was that he became more interested
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in Friedman as an economist than just as a political figure.
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And so the book really tries to show both aspects of him and
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talk about their interrelationship, but
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also show that they're kind of distinctive projects he was embarked upon.
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>> John Hartley: Fantastic, and so
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compared to other Milton Friedman biographies that have been written,
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Milton Friedman only died nearly 20 years ago, in 2006.
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I'm curious, but
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there have been a few that have been written at this point, though not many.
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What makes yours different?
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I believe that this is the first archival biography of Friedman.
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I'm curious, what does that mean to somebody that's not very literate
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in history and different types of biographies and archival work?
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>> Jennifer Burns: Yeah, so that means that I read what Friedman wrote and
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produced, and
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then I also went sort of a layer deeper into the structure of his life.
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So who he was writing letters to, drafts of those first books,
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what he was reading in graduate school, the syllabi he had and
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the books he was reading when he was, before he was MiLton FrIEdman,
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before he was famous, the behind the scenes kind of arguments and
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debates that eventually were smoothed out and became part of his published work.
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And so that's one distinguishing feature that I'm not relying on what
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people said happened or what they remembered happened or
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what they wrote down for publication happened.
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I actually dig into what the documentary record generated at the time says.
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And so in some cases, I'm able to correct the record pretty significantly.
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And one of the people I ended up correcting is Milton Friedman himself,
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because he wrote a memoir of his life that's been very influential, but
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it really was based on his memories and his desire, which I think is laudable
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to put a positive spin on the people he met and the people he interacted with.
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And what I found in the archive is sometimes these were more difficult
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relationships than he was willing to write down publicly.
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So that's one piece of it.
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There's just a lot more information about the origins of his ideas and their
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evolution and development that I was able to find by doing this type of research.
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And I should say, I spent pretty much as much time writing this book as Friedman
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and Anna Schwartz spent writing A Monetary History of the United States.
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And there's about 200 boxes of archival material held at the Hoover Institution,
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and I pretty much went through those systematically.
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The other thing I try to do that's different is because I'm a historian,
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I'm really trying to relate him to the bigger picture, and I'm trying to use him
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as a lens into social and political and intellectual change over the 20th century.
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So if I'm talking about what Friedman is doing during the Great Depression,
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I'm gonna kinda zoom out and kinda characterize that time more broadly.
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Or if I'm talking about the shifts in the 1970s, I'm going to kind of give us a tour
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of where we are politically versus the 1960s and what's going on and changing.
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And so you see Friedman reacting to events, shaping events,
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being shaped by events in a way that I think other treatments of him that
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are more focused on his ideas or more focused on the public and
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published record, that's not what they're trying to do.
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>> John Hartley: Fascinating, I'm curious, in the process of doing all this
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fascinating and amazing archival research, and going through 200
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boxes at the Hoover Institution I'm sure must be thrilling at some times.
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And I'm sure some items are maybe just sort of no consequence.
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I don't know if there's, I'm sure there's all sorts of details.
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>> Jennifer Burns: Yeah, I can tell you what his favorite lunch was at
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the Quadrangle Club because there's a whole folder of receipts from every lunch
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he had there, and then I decided nobody really knows to know about his love for
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vanilla ice cream.
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That's kind of [LAUGH].
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>> John Hartley: Did he play tennis a lot at the Quadrangle Club, too, or?
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I think that was a big thing for a lot of- >> Jennifer Burns: There's a bunch of
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pictures of him on the tennis court.
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So tennis was hugely popular among academics of his generation.
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It was the pickleball of its day.
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I hate to say it, but it was [LAUGH].
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>> John Hartley: I remember when I was an undergrad, Gary Becker was still alive and
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at the University of Chicago, and
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he played a lot of tennis on the tennis court.
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So I'm not totally surprised.
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I think a lot of those in the University of Chicago economics department play a lot
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of golf nowadays, is sort of my rough understanding of it.
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But I'm curious, what were some of the most surprising things that you learned
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going through these 200 boxes?
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And what were things that you thought particularly stood out when you're going
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through this systematic exercise and
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taking on this big project of writing this book?
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>> Jennifer Burns: So I think kinda two things stand out.
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One actually came from my work in the Chicago archive.
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So I went, and in order to characterize the milieu in which Friedman immersed him
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as a graduate student, I went and looked at all the records in Chicago and
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of his professors, which also included him, but also gave me a flavor for
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what they were thinking about and what they would have been teaching him.
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And I was really astonished.
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I kept having these proposals written in the depths of the Great Depression
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being sent to President Hoover and then President Roosevelt, calling for
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really radical, far-reaching reform in the American economic system.
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Calling for banking reform, some of which were the banking reforms that we came to
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know in the 1935 Banking Act, but even going further, essentially calling for
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the outlying of deposit banking and fractional reserve banking.
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And then urgent telegrams saying more relief spending is needed.
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And this was not what I expected to find in the Chicago School of Economics.
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And so that was really helpful because I realized, okay,
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I need to set aside some of my preconceptions.
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Here, I have the teachers of Milton Friedman and
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the Chicago School of Economics advocating for a much bigger role for government.
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So I have to set aside my idea that this is a laissez-faire place or
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a laissez-faire set of doctrines.
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It's more complicated than that.
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So that was really interesting.
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And that helped me kind of think about Friedman as someone who was interested
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in the form and shape of government as well as in reducing its size.
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So again, a little more complexity there.
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The second major thing I discovered is I kept finding all of these women
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in the archive that he was working with and collaborating with and
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letters between them and drafts.
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And I came to realize that it wasn't simply Anna Schwartz, who's very
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well-known for her co-authorship with him, of a monetary history.
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It wasn't even just Rose, director of Friedman,
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who also co-authored several of his popular works.
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There were these other women I had never heard of, like Dorothy Brady,
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Margaret Reid, and they played this really foundational role in his economic work.
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And so I had no idea that would be a theme of the book or a relevant finding.
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And I think it's really one of the major things I have to contribute.
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>> John Hartley: Fascinating, so I guess I'm curious,
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someone well known like Friedman that had some sort of
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an intellectual evolution over his lifetime in that he sort of
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was a Keynesian up until working at the US Treasury Department.
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>> Jennifer Burns: I actually don't think that's true.
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I will dispute that, and I do dispute that.
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Yeah, I think there's a couple of reasons that the misconception is out there,
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and I think some of the misconception comes from the fact that
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we have these very clear ideas in our heads now what is Keynesian and
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Keynesianism versus monetarism?
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And so we tend to look at the past through those two frameworks when those aren't
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always the most accurate framework.
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So what I found again in the archive is,
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he embraces the early part of the new deal.
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He embraces relief spending and banking reform.
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He rejects the major ideas that underlay the new deal in terms of secular
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stagnation or the idea that government needs to manage demand.
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And he's rejecting these by the late 1930s.
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And he's very clear on that, not in his published work,
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cuz he's not publishing, but in his teaching.
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So I have the notes.
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I know what he's teaching his students, and
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I know in these notes that you can see him expressing very strong skepticism about
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sort of all aspects of what's emerging as the fiscal revolution.
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Now, then World War II breaks out, and he goes, and
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he's working for the Treasury Department.
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And he is sounding to our ears like a Keynesian, because he's saying,
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tax, to prevent inflation, we need more taxation.
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And so this is where I think it's important to keep the broader context
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in mind.
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This is a Jewish man, very aware that we're fighting Nazi Germany,
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and very aware that a wartime economy is not like a peacetime economy, and
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also very aware that what is the set of policy options out there in DC?
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If you don't tax, you do price control.
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And so for him, taxation is a lesser evil than price control.
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And then final point is these public statements are made as an employee
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of the Treasury Department.
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So again, this seems like something Friedman is saying.
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This isn't like, so Mr. Friedman, in your capacity as a scholar and intellectual,
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what do you think we should do?
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It's no, Mr. Friedman is a paid employee of the Treasury Department appearing
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before Congress.
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What does the Treasury Department think of this policy?
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And then I've got his letters, and he's writing with his Friends, and
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the phrase inflation is always a monetary phenomenon is in this correspondence.
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And he's a believer in this idea.
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And this is in the period when he's supposedly a Keynesian.
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So once you add the historical context and the bigger picture,
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I don't think that claim can be substantiated.
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>> John Hartley: So what about when he writes Capitalism and Freedom,
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he's got this whole chapter on fiscal policy.
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It's highly, highly critical of what he terms balancing the wheel and
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running sort of countercyclical deficits.
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Is that not sort of a change or any kind of a break
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at all from sort of the pre-World War II Friedman, or?
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I feel like over his life, he increasingly becomes even more libertarian and
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increasingly opposed to any sort of government intervention.
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Even sort of his view of, I think, monetarism sort of shifts a little bit,
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too, whereas I think in sort of the earlier period,
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he's sort of fine with, I think, more sort of activist sort of fed policy.
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And then by the end, he's sort of very much in favor of
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adopting some sort of money growth, mechanical target,
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percentage change target of money growth.
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I remember some interview he did, I think,
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as recent as the early 2000s before he passed, that he'd be in favor of
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a computer running money supply rather than the Federal Reserve.
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So I feel like he increasingly became more libertarian and increasingly skeptical
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of any sort of government spending or intervention over his lifetime.
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But is that sort of- >> Jennifer Burns: So, yeah,
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let me take that in two pieces.
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And to some degree, it is true that he becomes more anti-government,
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especially then he is in this early 1930s period when we're in an economic crisis.
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And so Some of that we could say, okay, it's an evolution in his thought.
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We could also say, what is he looking at?
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And what is happening with the growth of government, right.
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And so when you go through the great society,
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you come out to the other side of the great society.
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He says, you know, I'm now learning the logic of the state is growth, and
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we need to, and also not even just the great society, but
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Nixon as well, continues this pattern of growth.
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And so then he says, I need to be much more aggressive in
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my anti-government views because what's happening is there's this
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dynamic of sort of perpetual growth that maybe I didn't grasp before.
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So I think some of that's in relation to the size of the state.
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And he ends up saying that I found this really interesting.
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His ideal federal budget would be something like 10% of GDP is what he
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would like the size of the federal government to be 30,
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heading towards 40 during the latter part of his life.
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So he's perceiving that this wartime growth has never reversed and
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that he thinks the political dynamic is just towards evergrowth.
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So I think part of that is the context that he starts to put the brakes on more
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sharply.
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So that's definitely true.
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For the monetarism thing, I mean, it comes and goes in waves.
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So there's a period in the early 1950s when he's making headlines like,
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economist says, abolish the Fed.
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I mean, he is the original and the fed in the 50s.
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And then he sort of figures out, I think, like, this may get you good headlines,
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but it doesn't really get you influenced to show up and
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say, let's abolish the central bank.
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So he starts moderating his ideas.
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And I think that's when he comes up with this, like, money growth percentage rule,
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which enables him to appear more moderate.
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And that he's not saying, let's abolish the Federal Reserve,
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but he is saying, let's remove its discretionary policymaking or
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let's have a much more of a check on it by passing.
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He would like Congress to legislate money supply should only grow at 4% a year or
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something like that, which would mean the Fed then would be
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a technical implementer of policy, not a discretionary designer of policy.
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And one thing that's so interesting is one of his big allies in this
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crusade against the Fed is white Patman,
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who is a Texas populist Democrat, sort of straight out of the Dust Bowl.
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And he hates the Fed because he thinks it's like banking money power that's,
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grinding down the little guy.
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And so he'd like to get rid of the Fed,
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and Freedman would like to get rid of the Fed.
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And the two of them become like political allies, you know?
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And Patman is constantly calling him before Congress because he loves that he's
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got this University of Chicago guy who's saying pretty much the same thing he is,
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that the Fed is unaccountable and undemocratic and all of this.
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>> John Hartley: Fascinating, fascinating.
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So I'm curious in terms of sort of examining the role of Milton's authors or
19:01
co-authors and colleagues and other sort of influences like
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Anna Schwartz Milne Friedman's own wife, Rose Friedman.
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How instrumental were they in making Milton Friedman a household
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name as far as economists go?
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And what are some of the sort of hidden stories that you've uncovered
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in terms of sort of the development of a lot of Friedman's key ideas in terms
19:30
of who was influential that they didn't maybe realize were as influential?
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>> Jennifer Burns: Yeah, I think so.
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So I'll just start with Schwartz.
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And I tell the story in my book, but it's not the full focus.
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So I think there's definitely room for someone.
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I'm hoping someone will come along and dig into this more.
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They have this research project and they are toiling away.
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And Schwartz is crunching the numbers and they're finding the data.
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And at a certain point she says, well, what do you want this to be?
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And he's like, well, I just think we ought to quickly write up what we found.
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And she's like, you know,
20:03
I think it will be really a shame if we just do a quick write up.
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I think there's a lot of stuff here.
20:07
And then she's like, by the way, I spent all this time looking at
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confederate money, right, which is not on his radar at all.
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But she loves history.
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And so basically, over time, she convinces him to make this a story,
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over a century long story of money in the United States.
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And she finds all these details about the Federal Reserve and Benjamin Strong and
20:29
all of this.
20:29
And so she really makes it into a narrative and a story.
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And I think this is what accounts for the book success.
20:35
If he had just published a research report of tables of money,
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economists would have argued about it, but it wouldn't have had the same impact
20:44
it had both in economics and more broadly because it was a new interpretation
20:49
of what happened in the Great Depression that was both looking at money and
20:54
economic forces and institutions and people and personalities.
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And Schwartz really brought all that to the table and also was the one who was
21:03
able to make the book happen because she had the time to do the work.
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So that's one huge piece of it.
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And that's the book but
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all of the research they did was kind of the foundation of monetarism.
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It made Friedman feel very confident that major changes
21:19
in the economy were caused by major changes in the money supply.
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And it's because they had this 150 year series that they did as part of the book.
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So all the theoretical work then that comes out of it that he publishes on his
21:31
own, it's really based on those findings to which Schwartz was essential.
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The other one is the permanent income hypothesis,
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which is really well-known among economists and is still one of these ideas
21:44
of Friedman's that's just sort of been incorporated into how economists think.
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And he had thought a little bit about this in his earlier work on dentists and
21:54
doctors, kind of measuring income and thinking about income.
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But he really got- >> John Hartley: The occupational
22:00
licensing work in his doctoral dissertation.
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>> Jennifer Burns: In his doctoral dissertation.
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>> John Hartley: Simon Kuznets.
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>> Jennifer Burns: Right, and so he and Kuznets had looked at income for
22:08
a lot of different profession.
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So what happened was he had a group of women economists that he was very close to
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because of they were all friends of his wife, Rose, and
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he socialized with them, and he just kind of.
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He lived, breathe, talked economics.
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So he found this correspondence.
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He actually intercepted this correspondence sent to Rose, and
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it was Dorothy Brady and Margaret Reed.
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And they were trying to figure out how to sort of talk about consumption when it
22:34
came to farm families that really had a kind of feast or famine.
22:38
You know, one year they might buy a lot of farm equipment,
22:40
then they don't buy another farm equipment for ten years.
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You know, they have a good harvest, they have a bad harvest.
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And so how do you sort of smooth this out?
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How do you think about it?
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And how do you understand the decisions that they make?
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And so these women had all their data, and they were kind of puzzling through it,
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and they would come to his summer house in New Hampshire, and
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they would all sit around the fire and talk until late in the evening.
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And they all collectively started thinking about this concept of permanent income,
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that what if the way farmers are making decisions is sort of
23:09
based on a forecast of how they think things are going to go over the course
23:13
of their life cycle as opposed to how things are going immediately right now?
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And then they kind of put that on all these empirical findings, and
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we're like this actually really seems to explain things.
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So that was the origin of the permanent income hypothesis.
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And what I discovered is that the reason Friedman wrote it up,
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that it went from discussions around the fire to an actual paper and then a book,
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was, he was trying to get Margaret Reed and Dorothy Brady hired at Chicago.
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And this was part of his effort to push out the Coles commission and
23:45
sort of reconstruct Chicago economics as combining empirical work and theory.
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And so Margaret Reed was under consideration for a job, and
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he wrote these ideas up into a paper that he could kind of circulate around.
23:59
And- Say, look how great she is, look how important this work is.
24:03
And he did succeed.
24:05
Margaret Reid was hired, but Dorothy Brady,
24:07
he did succeed in getting her a temporary position, but not a full-time position.
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So then he gets really into the idea and writes it up and publishes as a book.
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And he's the only author on the book.
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But if you read the preface, he's very open.
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He calls it a joint product.
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He says, my hand held the pen, but we all came up with this idea together.
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And my reading on that is because he was connected to these women
24:31
who in turn were connected to consumption economics, he had data and
24:37
ideas and perspectives that other economists of the time did not.
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Because the field as a whole was focusing more on ever more sophisticated macro
24:47
models, and they weren't really interested in these granular decisions about,
24:51
how do farmers spend their money?
24:53
So I felt like this was his sort of secret weapon,
24:56
that he took these women economists seriously.
24:59
And it had a really big impact on his career and on the field as a whole.
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>> John Hartley: Fascinating, so one other thing I wanted to talk about,
25:09
too, is Milton Friedman gets a lot of attention for
25:14
his time in Chile, meeting with Pinochet,
25:18
the then dictatorial leader of Chile, who enacted all
25:24
these liberalization, economic policy reforms.
25:29
Milton Freeman gets a lot of flack for meeting with Pinochet
25:34
from the sort of the general, I think, press and public.
25:39
But I'm curious, did you learn anything new about this episode where
25:44
I think Friedman went to Chile for, I think, maybe only a couple weeks?
25:50
But also the University of Chicago provided training to many
25:55
Chileans who would ultimately serve in the Pinochet government and
26:00
successive Chilean governments.
26:03
I'm curious, did you learn anything new about that whole episode
26:08
in all your research for the book?
26:10
>> Jennifer Burns: Yeah, I actually spend a chapter on it because it has been
26:15
such an important part of the kind of Friedman mythology,
26:21
mostly the demonology, maybe I should say.
26:25
And so a couple of things I learned and, I don't know, some are new and
26:28
some are just, be paying more attention.
26:30
But if you look at the chronology of this sort of series of events,
26:33
what's really interesting is, one, when Pinochet came to power,
26:37
he had no intention of pursuing what we would call a neoliberal economic program.
26:41
And he was in power for
26:43
a year or more before he realized that he needed to change up what he was doing.
26:48
So this wasn't the kind of guiding idea behind the coup.
26:52
And then the other piece that's interesting is the decision to kind of
26:58
move to more market-based reforms had already happened before Friedman came.
27:04
And Friedman really had nothing to do with that decision.
27:06
He wasn't close to the decision makers.
27:09
He wasn't connected to the regime.
27:10
He didn't really know what was going on.
27:12
It was requested that he come visit sort of after the policy had been
27:16
decided to sort of sell the policy.
27:19
Although it's a totalitarian regime, they still want buy-in.
27:22
And so he comes, and he's there for six days.
27:25
So that's not weeks, six days.
27:28
He meets with a bunch of people, and then he flies out.
27:31
And in retrospect, I think his role has been very
27:36
exaggerated because it makes for a good story of good and evil.
27:43
And one thing I did uncover was a travelogue, and
27:46
I quote from it extensively.
27:48
He recounted his trip there.
27:52
And on the one hand, it really tells you everything that he did.
27:56
On the other hand, it can be a bit discomforting to read because he
28:01
was pretty blasé about the political repression he witnessed.
28:06
I don't know if it's blasé or naivete, like he would say,
28:10
everything seems normal except there's soldiers everywhere with really big guns.
28:15
And so I think he sort of decided this is how they do things in
28:19
South America, and they don't have freedom.
28:23
He did believe that if they liberalized their economy,
28:26
their society would eventually liberalize.
28:29
And he did tell that to Pinochet, and he did follow up under pressure and
28:34
try to advocate for more political prisoners being freed.
28:38
But he didn't have a very strong kind of moral reaction against the regime
28:43
that I think a lot of his critics wanted him to have.
28:48
The way I come at it is just to think about this broader question of engagement,
28:54
given that I think inflation was about 300% annually, when he went.
28:59
It had been 600 under Allende, it came down to about 300.
29:04
He's sort of the world's foremost expert on inflation, and
29:08
he's requested to come and talk about a policy that he thinks will be better for
29:12
the country and better for all Chileans if they live in a society
29:16
that has stable prices rather than 300% price rise.
29:19
Is it legitimate for him to go, even if the regime is
29:24
an autocratic or violent sort of fascist regime?
29:29
Is it legitimate to engage?
29:31
And he clearly thought it was legitimate to engage.
29:33
And I think a lot of his critics think the proper thing to do
29:38
in that case is not to engage.
29:41
And that's how you stay kind of on the right side of history, is by not engaging.
29:46
And so that's not the choice Friedman made.
29:49
I think it's worth debating, was that the right choice or not?
29:52
But I don't think you can immediately conclude that
29:56
that was a morally bankrupt choice,
29:59
given that he felt he could do a lot of good by stabilizing the Chilean economy.
30:04
And he also believed that stabilizing the Chilean economy wasn't necessarily going
30:09
to mean stabilizing Pinochet's rule, but actually the opposite.
30:12
That once you had a more [COUGH] stable and prosperous market-based society,
30:16
eventually, that society would no longer put up with a dictator.
30:20
And as it turned out, Pinochet did leave power.
30:24
And Friedman did view that as ultimately a success story.
30:28
And it really influenced how he looked at China.
30:31
For example, he said, now that China is liberalizing,
30:34
the Communist Party is not gonna last.
30:37
And so, so far, he's been wrong on that one.
30:39
But the Chilean experience was very powerful for
30:42
him because it suggested if you did liberalize the economy,
30:46
eventually you would lay the foundations for a democratic society.
30:51
>> John Hartley: Right, and this all goes back to the first chapter of Capitalism
30:54
and Freedom, the 1962 Friedman book, where he talks about the relationship
30:59
between economic freedom and political freedom, and
31:02
that you need economic freedom in order to have political freedom.
31:06
And the first leads to the second eventually.
31:11
And I think he may have even recanted some of that in his last sort
31:16
of days in the 2000s when it sort of became increasingly
31:21
clear that China wasn't going democratic anytime soon.
31:26
I'm curious, how did you choose your title,
31:30
Milton Friedman: The Last Conservative?
31:34
I'm sure Milton Friedman hated the notion of being called a conservative and
31:39
preferred to be called a libertarian.
31:42
Then again, many libertarians criticize Friedman for
31:46
supporting limited government.
31:48
And many libertarians would say, Friedman isn't a real libertarian.
31:52
I'm curious, how did you come to decide on that title?
31:57
>> Jennifer Burns: Yeah, I decided on it.
31:59
I have Some ambivalence about it, but I couldn't really end up,
32:03
in the end, fondant title that I liked better.
32:05
And I think there's two ways in which it's justifiable to consider Friedman
32:09
a conservative.
32:10
And the first is just [COUGH] within the American context, he worked with and
32:14
allied himself with and
32:16
was part of a political movement that called itself conservative.
32:19
And, you know, I've written about this at length elsewhere.
32:23
The word conservative in American,
32:26
[COUGH] in the American context, excuse me, [COUGH] is distinctive.
32:31
It's not what we think of in the broader sense of political theory or
32:35
political thought or european history.
32:38
American conservatism is kind of its own unique beast.
32:42
And so that's the word they use, for better or for worse.
32:45
And Friedman was empirically allied with this movement.
32:50
He didn't really partner with Democrats for
32:52
New Deal liberals in any significant way.
32:55
So there's the kind of political affiliation piece, but
32:58
there's another piece.
33:00
If we think about his intellectual approach,
33:03
he was someone who, as an economist, tried to preserve and
33:08
rescue more traditional ways of approaching economics and
33:13
more traditional economic analysis.
33:16
And so we can see this in the quantity theory of money,
33:19
which people thought was totally outdated.
33:21
And he said, no, actually, there's still something here.
33:24
I think we can update it, we can revise it a little bit, and it can become
33:27
the foundation of monetarism, which became a new school of economics.
33:31
He's also, in some ways, the last institutional economist.
33:34
The work that he and Schwartz did of really digging into price data and
33:39
setting up these tables, that was sort of a lot of what people like Wesley Mitchell
33:44
did as pioneers in the field, and he kept doing that, and he kept believing
33:50
that was really important, and empirical testing of theories was critical.
33:55
So, he knew the math.
33:58
He was, in many ways, a neoclassical economist, but
34:01
he didn't leave behind these older approaches,
34:03
and he actually preserved them and sort of revitalized them.
34:07
So I think in that way, he's a conservative.
34:11
But I think overall, the title and
34:13
calling him the last conservative is, I think, in both of those ways,
34:18
those things he did are not really happening that much anymore.
34:22
Economics may be broadening a bit in the interest in psychology or
34:27
decision-making or big data, but mostly grew more narrow after Friedman's day.
34:32
And the conservative political movement, I think, is changing quite a bit.
34:37
And that synthesis that Friedman represented, kind of born out of
34:42
the Cold War, is nothing as powerful and dominant as it once was.
34:46
And so, yeah, I don't really know what happens next, but
34:50
I do have a feeling that Friedman is of a time and a place and the new Freedmen or
34:55
the next Freedman will be significantly different, I would say.
34:59
>> John Hartley: Fascinating,
35:00
this is exactly what I was gonna ask you about next.
35:03
It's been almost 20 years since Friedman's passing in 2006, and
35:08
I remember in this April 2020 Politico interview, then soon to be president,
35:13
Joe Biden, declared that Milton Friedman isn't running the show anymore.
35:18
And there have been sort of, I think, similar sorts of, let's say,
35:24
dancing on Milton Friedman's grave type moments, I feel like,
35:29
within, I think, the more progressive sort of side of the press.
35:34
But I'm curious, do you think that Friedman's influence has waned in some
35:39
respects, but maybe not others?
35:41
Obviously, many young people today, I think, aren't as familiar with his ideas
35:46
unless they've gone on YouTube to watch his famous TV series for you to choose.
35:51
Since the great Recession, which seems to be a bit of a turning point, it does
35:56
seem to be like there has been a growing revolt across both political parties
36:01
against the old Washington consensus free market doctrine of the 1980s.
36:06
Certainly a revolt of the old Buckley fusionist group of conservatives,
36:11
which Milton Friedman was certainly a part of, in the sense that libertarians
36:16
were sort of one of the three legs in the three-legged fusionist stool.
36:21
But then again,
36:22
we're also seeing renewed interest in a lot of Milton Friedman type ideas.
36:28
And there's been a lot of sweeping policy changes in the US in a number of areas
36:33
like occupational licensing and school choice.
36:36
>> Jennifer Burns: Mm-hm.
36:37
>> John Hartley: We've got all these states that now have passed universal
36:42
school choice vouchers or are enacting occupational licensing reciprocity.
36:48
Also, when you think,
36:50
about inflation, we're seeing sort of renewed interest in the monetary causes of
36:54
inflation with the big uptick in inflation in the early 2020s.
36:58
Do you think Milton Friedman's legacy is still alive in other ways, even though
37:04
that sort of big free market consensus thing seems to be shifting a bit?
37:09
>> Jennifer Burns: Yeah, I really do.
37:10
I mean, that's another sort of quibble I have with my own title about,
37:14
because by the end of the book, what I'm really trying to show is
37:18
that Friedman is not just a conservative thinker anymore.
37:21
He's really become taken up across the political spectrum.
37:26
And part of it is as common sense that people have forgotten was sort of
37:29
a new idea.
37:30
And even that Biden quote, right, why is Biden saying that?
37:33
Like, that's actually reflecting a kind of inter democratic
37:37
party debate between moderates and progressives and
37:40
Friedman kind of represents the moderate democratic stance, which is really
37:45
astonishing to say when you look at the overall trajectory of when he was alive.
37:49
But I think that's true.
37:50
And I do think there is a bit of a revival underway in some of his ideas because
37:55
they're still unfolding, like you said, occupational licensure,
38:00
school choice, I mean, even drug legalization, in a weird way.
38:05
And I think that the last years have been very much a vindication for
38:09
the broad freedman perspective on inflation.
38:12
I mean, you had a lot of people saying this rise
38:15
in m two is really problematic and others saying, no, it's not.
38:20
That's what happened a long time ago.
38:22
Like, that's back in the dark ages.
38:23
We thought m two mattered and boom, lo and behold, then you have brought inflation.
38:27
And I dig into this to some degree in the latter part of the book because there's
38:31
also the zero low bound, and why didn't that cause inflation?
38:34
And I think there's some explanations around that.
38:37
But I think regardless of where the inflation debate settles,
38:40
I think when you're talking about these questions, it's always good to go back to
38:44
the foundations, and Friedman is the foundation.
38:47
Friedman and Schwartz are the foundation of understanding inflation and
38:51
deflation in American history.
38:52
And I think it's really worth going back and seeing what he had to say.
38:58
And I think I always, you know, as a historian,
39:01
I try to fly up onto the kind of 30,000 foot level, and
39:05
if the granularity of monetarism breaks down in different institutional
39:10
arrangements, I think you can still step back to the big picture and
39:14
say a lot of the bigger insights he had are still really applicable today.
39:19
>> John Hartley: Absolutely,
39:20
I think people don't quite appreciate how much of a paradigm shift monetarism was.
39:25
You think even as recent as the 1970s, there was still sort of
39:30
a belief that price controls could work in fighting inflation.
39:35
And that corporations and sort of corporate greed and
39:39
market played a big role in inflation, even as recent as the Nixon Foundation.
39:44
But Friedman and
39:45
Schwartz really changed all that with the monetary history of the United States and
39:50
just Milton Friedman in general, I think, becoming more popular in the public eye.
39:55
Well, this has been such an interesting conversation, Jennifer.
39:57
It's been a real honor to have you on, and
39:59
I know many people are very excited to read your book.
40:01
Thank you so much for joining us today.
40:03
>> Jennifer Burns: Yeah, thanks for having me, I appreciate it.
40:05
>> John Hartley: Today our guest was Jennifer Burns,
40:07
who is a research fellow at the Hoover Institution and
40:09
associate professor of history at Stanford University, and
40:13
is author of a fascinating new book titled Milton Friedman, The Last Conservative.
40:17
This is the Capitalism and Freedom in the 21st Century podcast,
40:20
where we talk about economics, markets, and public policy.
40:23
I'm John Hartley, your host.
40:24
Thanks so much for joining us.
40:26
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