Best of Both Worlds

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

Brian Doherty from the June 1995 issue

(Page 8 of 8)

Friedman: Well, not from economics, but from that kind of work. There's been a tremendous advance in specialization in economics, particularly in the econometrics area. I was just looking at recent working papers published by the Federal Reserve Bank of Chicago. These are clearly built on work of mine, going back to the 1970s. But there's been a new development in econometrics that I haven't kept up with. The techniques they've adopted here are all different from ours. I'm not an expert in them anymore; I really couldn't deal with this material on the level on which they are dealing with it, although I can understand the thrust of what they're doing.

I'm not making any pretense of trying to do any more basic, fundamental economics work. I believe that almost all important contributions of a scientist are made in the first 10 years after he enters the discipline. Not the first 10 years of his professional life; he may shift from one discipline to another. And I've been impressed as I've been going over my memoirs, that my basic contributions all have their roots in the early years of my work. I was reading over some preliminary professional papers in the 1950s, and I could see there the whole future of the next 30 years of work that I did; it was all outlined in there.

You add things to it, you change it, but the fundamental ideas come early. The 1940s-'60s was when I did my most important economic work, even though it wasn't all published then.

Reason: I read an article recently in the Washington Monthly that repeated all the silly ideas about inflation that you've been fighting your whole career. Are battles like this ever won?

Friedman: No. All battles are perpetual. You go back in the literature of economics, and you'll find the same kind of silly statements 100 years ago, 200 years ago. And you'll find the same sensible statements the other way.

Reason: Are those kind of mistakes still made among professional economists?

Friedman: If you look at the views of the profession as a whole, no. There's a great deal of agreement among economists, contrary to what people may think. You won't find much difference of opinion on the proposition that raising the minimum wage will cost jobs. You won't find much difference of opinion on the desirability of free trade. And you won't find any difference of opinion on the idea that you cannot have inflation without monetary expansion. There's no doubt that there's very widespread agreement about those simple ideas.

Reason: How do you make that consensus spread to the general public?

Friedman: You just have to keep on trying to do it. There's no short cut. There's no way in which you're going to end the discussion, because new generations arise; every group has the same crazy ideas. I get a great many letters from people who think that the way to solve budget problems and fiscal problems is to simply print money and pay off the debt. And there's almost no way of making those people realize just what a bunch of nonsense that is.

I'm inclined to think that there's no field so rife with cranks as currency and money, but I'm sure there are other fields that are just as bad. I'm just ignorant of them.

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It’s Not Really Your Money Anymore « noot's observatory links to this page. Here’s an excerpt:

…Keep in mind: that was your money to begin with.  If you think that’s kind of messed up, then you’ll be even more surprised by this fact: the whole thing was Milton Friedman’s idea, of all people.  Why?  He explained a few years ago: I was an employee at the Treasury Department. We were in a wartime situation. How do you raise the enormous amount of taxes you need for wartime? We were all in favor of cutting inflation. I…

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