Fortune issue: July 6, 1998
The Economist of the Century
By N. Gregory Mankiw
Anyone who thinks that ideas matter (and who doesn't?) naturally takes an interest in people who generate more than their share. Milton Friedman is one of them. As he approaches his 86th birthday, Friedman remains one of the world's most influential living economists.
Fans of this great intellect are in for a treat: Friedman and his wife, Rose, have just published their memoirs, Two Lucky People (University of Chicago Press, $35). The Friedmans take turns telling their story as they trace their lives from humble childhoods in Rahway, N.J. (Milton), and Portland, Ore. (Rose), through a lifetime of teaching, research, and policy controversies.
The Friedmans are best known for their articulate and unwavering defense of the free market. Their policy objective is, simply, "the promotion of human freedom." This goal, they tell us, "underlies our opposition to rent control and general wage and price controls, our support for educational choice, privatizing radio and television channels, an all-volunteer army, limitation of government spending, legalization of drugs, privatizing Social Security, free trade, and the deregulation of industry and private life to the fullest extent possible." Milton and Rose were libertarians--aggressively vocal libertarians--before libertarians were cool.
Their campaign for a freer society led them into the confidence of some of the great political figures of our times, including Barry Goldwater, Richard Nixon, Ronald Reagan, and Margaret Thatcher. The authors don't shy from judging these leaders: we are told, for instance, that Reagan's choice of George Bush as his Vice President was "the worst decision not only of his campaign but of his presidency."
The Friedmans' political involvement came with its share of controversy. Most notably, in 1975 Milton spent six days giving lectures on public policy in Chile and had one brief meeting with right-wing dictator Augusto Pinochet. The result was a firestorm of protest. When Friedman won a Nobel Prize the next year, public objections came from all directions, including previous prize-winners David Baltimore and Linus Pauling.
Friedman was--and is--unrepentant. Of course, he did not endorse the dictatorship. But, he wrote, "I do not regard it evil for an economist to render technical economic advice to the Chilean government to help end the plague of inflation, any more than I would regard it as evil for a physician to give technical medical advice to the Chilean government to end a medical plague." He also notes that years later, when he offered similar economic advice to China, there were no similar protests, even though the left-wing Chinese dictators were no less oppressive than Pinochet.
Friedman's politics may have generated public controversy, but his scientific contributions yielded a consensus of admiration among his professional colleagues. When students today are taught about the determinants of consumer spending, the history of monetary policy, or the relationship between inflation and unemployment, they owe much to the intellectual legacy of Milton Friedman. Legend has it that economist George Stigler once called Friedman "the best economist in a bad century." Stigler may well have been right that Friedman doesn't quite measure up to the 18th century's Adam Smith or the 19th century's David Ricardo--economists, like many of the things that they study, are subject to the law of diminishing returns. But Friedman runs a good race against such 20th-century luminaries as Paul Samuelson and John Maynard Keynes, and that is no mean feat.
The book does drag at times, especially when it lingers over the minutiae of the Friedmans' home life. (How much detail do we really need to know about Friedman family vacations, for example?) But overall, it's charming. It's almost like a letter from a couple of old friends--a couple of old friends who had a long, compelling intellectual journey, came to know some of the great world leaders of this century, and had 60 years of happy, supportive marriage. After reading Two Lucky People, you really can't help but agree with the title.
N. GREGORY MANKIW is a Harvard economics professor and author of Principles of Economics.