Best of Both Worlds

Milton Friedman reminisces about his career as an economist and his lifetime "avocation" as a spokesman for freedom.

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Reason: You've also had some history of advising candidates and presidents. How did you get involved in the Goldwater campaign?

Friedman: Through Bill Baroody at the American Enterprise Institute. The American Enterprise Institute was originally the American Enterprise Association, and had established a board of academic advisers to advise them on their publications. I had been a member of that I think since its inception, and Baroody arranged sometime in the early '60s a number of dinners at his house at which Goldwater was present. Baroody was the brain trust for Goldwater. I was also at some of those dinners, so I got to meet Goldwater. And then when the campaign came along, Baroody asked me to serve as economic adviser. I didn't go on the campaign trail. I sat at home and wrote memos.

Reason: Were you impressed with Goldwater's acumen?

Friedman: It depends on what you mean by acumen. There's no doubt whatsoever that he's a man of principle and strong character. His IQ is perfectly reasonable but it's not outstanding among the various politicians I've met, and that shows why IQ is not a good measure. The highest IQ was Richard Nixon's and he was a terrible president.

While I was never a governmental official, I was a member of an economic advisory group that Nixon appointed of which Arthur Burns was chairman. I saw Nixon from time to time when he was president, until he imposed price controls. I saw him only once after that.

Reason: Did you stop giving him advice?

Friedman: I kept giving him advice from Newsweek, but not personally.

Reason: Do you have a clear memory of how your political philosophy formed? Was it any specific teacher you encountered, book you read, or experience?

Friedman: I'm sure it was a combination of all of those. I was exposed as an undergraduate at Rutgers to two very strong influences: Homer Jones, who was a student of Frank Knight's from Chicago, and Arthur Burns. They both had a considerable influence on me as an undergraduate in my thinking and my writing.

But it would be hard to say what philosophy that left me with. One of the things I regretted all my life is that when I graduated from Rutgers and came home, I wrote out a statement of my beliefs. I put that away in a drawer somewhere in my mother's home and I've never been able to find the damn thing! I'd love to have it! So I can't really tell you what I believed at that time.

But obviously my ideas were not very well formed. I was an innocent youngster and what I was impressed by, of course, was the Great Depression, and the belief that somehow or another there ought to be something that can prevent any such thing from happening.

Thanks to Homer, I was offered a scholarship at the University of Chicago and I went to Chicago and studied with Frank Knight, Jacob Viner, Henry Schultz, and so on. The atmosphere in Chicago in 1932 was very lively and active and encouraging. Of course, I got a very good grounding in economic theory and statistics as well.

Next year, I managed to get a fellowship to Columbia. I spent a year at Columbia mainly to study with Harold Hotelling, who was a mathematical economist and statistician.

Then I went back to Chicago for one year and was a research assistant to Henry Schultz. There were a group of students in Chicago who were very, very important. George Stigler, Allen Wallis, Rose Director, and myself. We ate almost every lunch and dinner together. We spent all the time discussing economics, both economic theory and economic policy. And we were very close for the rest of our lives. George died about two years ago. Allen, I'm glad to say, is still alive.

In the 1930s, both Rose and I at separate times went to Washington and worked on the New Deal, but we were technical statisticians and economists, not anything that had any policy role.

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