your new book, milton friedman

the last conservative, is the first full biography of milton frdman let's start off with, who was milton friedman? so milton friedman was probably best known as a famous economist he, along with maynard keynes, is one of the most influential economists in the 20th century and he worked over the course of his career to establish an alternative to keynesian economics and keynesian economic policy. and he awarded the 1976 nobel prize in economics. but as i show in my book, he's first and foremost an economist, much more than that. i also call him a philosopher of because he articulated a vision of individual freedom, limited government and personal initiative that really became

wrapped up in the 20th century conservative movement made him really a political icon and also a household figure. so how did americans, though, come to know friedman so i read his famous book, capitalism and freedom and high school. but he was also he was a figure on television, had a column. how did americans come to know friedman? well, here's what's interesting, i thought like maybe, you would imagine that, oh, capitalism and freedom, the big famous book that everyone reading, but actually his most famous book that really him started as a political figure is this 800 page book of economic that he coauthored with anna schwartz called the monetary history of the united states. and in this they tell a story of 150 years of american history due lens of money, how much money there in the economy, which sounds kind of dry but then what they do in their most

famous chapter, which was called the great contraction, is they go back and they examine the great depression. and you have to imagine this book comes out in the early 1960s. it's not that far away in time. people are still around who have lived through the great depression, say 30 years before or less so. friedman and schwartz argue that the reason the great depression was so bad and lasted long was because the united states lost a third of the money in circulation due to the banking crisis. and then they go on to argue that federal reserve system, which was supposed act as a lender of last resort, had not done its job and had therefore let this crisis, the banking sector, spread throughout the whole economy and create decades misery. now, why this is important, that critique of the federal reserve is because it feeds into this larger question about the great depression and about capitalism itself and what friedman and schwartz are implicitly arguing is not. there is a basic flaw in the capitalist system that emerged

in the 1930s, rather, they're saying we can understand this as a failure of human and of state management, the economy, and therefore we know a few things we can fix and we need not have erected the large apparatus of policy excuse me, government agencies interventions and government supported the economy. in response to the great depression, they basically say everyone got wrong. so this argument comes out and it's immediately arresting it's immediately read by. policymakers widely reviewed by academics. and it's also very interesting to. one of the politicians who becomes very in this idea is senator barry goldwater, who's mounting a run. the president in 1964. so the first moment comes with the publication of this book and it's broad discussion and then friedman signs on as an advisor to goldwater and becomes one of the most effective spokespeople

for what he calls a goldwater view of economics. i mean, that was quite a radical thesis at the time, wasn't it? i mean you take a look at the dominant keynesian models that were there at the time, the dominant paradigms in economics and. what's shocking, at least to a modern audience think and especially to non economists, is how little a role money play in our understanding of the economy before and schwartz really came along and made it a big deal their book and is it fair to say that this influence his influence and her influence has lasted to today and still influences us. yeah and i think a lot of what and schwartz proposed seemed outlandish and today seems common sense. you know, when they were writing the book, monetary policy was often said, be pushing on a string. it didn't really have any purchase in the economy or money

was kind of a veil that laid over economic activity and their argument is subtle because they're basically saying it is true that the fundamentals of economic and activity have to come from other things besides the monetary system. you can't sort of goose the economy by pushing in a lot of money and have that last in any meaningful way. but monetary policy can really knock the economy off course if done badly so. so there's a subtlety to their argument. but it's safe to say that when they made that there really much focus on money at all and we didn't have the kind of we have today and basically on a schwartz and i went and sort of assembled this historical series of the actual quantity money in the economy at different points in. and then with that 150 year lens, it really gave them a broad perspective and enabled them to arguments that other economists, you know, really weren't interested in or hadn't seen. and so, yes, it's a great case of two scholars kind of burrowing into an area that

their field has left behind and finding something really interesting. so i want to come back to schwartz in a second, but friedman became really associated with and was, i think, fair to say, like the prime mover for this new of thinking about the economy, about macroeconomic called monetarism, which really had a long history after him even to today what it is monetarism and how has it impacted the world and central banking since then. so probably the easiest way to summarize monetarism with a saying that that friedman loved just love to repeat, which is inflation is always and everywhere a monetary phenomenon and so what he meant by that inflation starts the central bank or with the monetary authorities it also ends there and this was a very different idea than those that been held at the time.

so people thought of maybe inflation is caused by labor unions asking for higher wages and you get a wage price. and friedman's like, well, you know, maybe that is happening, but it's only happening if you have enough money in the economy to be driving prices up such that labor unions feel they have to ask for that and have really pressure for that. they couldn't do it themselves. in other words, if if the quantity of money was fixed, there wouldn't be that elasticity to push prices up. and when he talks about inflation he's really talking about a pervasive and consistent rise in the price level generally. so today we tend to modify by saying, oh, it's gas price inflation or housing price inflation or wage inflation and. freeman was really trying to go a level deeper and say not talking about specific sectors of the economy are talking about a kind of pervasive trend. so what he really did was get everybody's attention on the monetary authorities and their ability to let inflation go or their ability to hand it in. and i think what jumps off both

of monetarism and friedman's later theories which point to the role of expected nations in inflation is our monetary framework and model today. so the fact the federal reserve is very open, first of all, it was not in friedman's time. it was like a secret club. they only released reports of they had done after the fact. they didn't really tell anyone what they were talking about. and one of friedman's insights was inflation. while it is connected, the monetary authorities, it has a pace driven by what people think is going happen next. and so that's why you see things like forward guidance and all the communication with the fed, the other piece of monetarism, that's really important is, is friedman's policy idea. and over time, he came up with what he a monetary growth rule and. he basically said, fine, we have maybe have to have the federal reserve, maybe we're not ready to and the fed, although earlier in his career he thought might be a good idea. so if we have a federal reserve.

they should be more accountable to congress and they be more accountable to everybody by this is what we're going to do. and he wanted them to grow the supply of money at a fixed rate eventually he said something about 4% would be good and it needs to grow because you need to have economic growth, demographic change, expansion. you can't have a flat money supply, but if it's growing at a steady rate, everybody can make their and their predictions around that steady rate and then what should happen? we should forget about monetary policy if. we do it right. we should completely forget about it. and it sort of shouldn't matter because it's background noise. and then the other factors, such as innovation, productivity growth, you know, change over time. these should be what drives, economic growth? so so again, while we don't talk a monetary growth rule per say, the sort of modified creations that were made to that idea by bankers and by monetary

economists, basically came out to where we are today, which is inflation targeting or frameworks for monetary policy, which the policymaker says, here's what we're trying do. and that gives outsiders the capacity to judge how well they're doing that. yeah, one of his famous lines that you bring many times is he wants to replace the fed with the computer that could do that job. but it's not just that was from the outside producing these theories with schwartz and others, but had a really personal relationship with many fed chairman. i one of the parts of your book that i found the most emotionally effective was his relationship ship with arthur burns, who had become a sort of, as you tell it, a sort of father figure to friedman and several ways. can you talk about his relationship with burns? how that sort of got friedman an intensely involved with the fed

and how that that started sort of just just this long running correspondence with with later fed chairs but also just start with, you know, his relationship with burns and why that was so so emotionally effective. in fact. yeah. so that's it's a it's a really fascinating story. he met burns when he was a young probably his late teens early when he was an undergraduate at rutgers and burns was an instructor for his economics classes. burns was actually not that much older than friedman, but because they met as and teacher, they had this of mentor mentee bond and lost his father at a young age right. is it towards the end of high school you imagine he arrives. it's the great depression. he's getting excited about economics as a field that can offer explanations for that sort of social crisis he's seeing around him. he's also a young jewish man at a moment when opportunity is opening up, but is still quite

limited by the fact of being jewish. and here he gets to college and sees, you know, another young jewish man who's been very successful as an economist and is now professional economist. and the two of them really hit it off and have this relationship that friedman would describe as he was my surrogate father in that he looked up to him and as i wrote my book, what i found these incredible letters that friedman would to burns at sort of every stage of life. and so when i wanted to know what is friedman thinking, what is friedman feeling, i would often go to what is he writing to arthur burns? because these letters were kind of like a dear diary, you know, very reflective of my hopes and fears so that relationship continues. they're always helping each other out where they can. you know, burns is trying to hire friedman. friedman is trying to hire burns. but for most of their life, it's a letter writing or a visit a couple times a year relationship. they also do end up spending time in summers together in near the new hampshire, vermont border. so they connect with each other

personally and on a friendship. so so time goes on and arthur burns is career advances and eventually selected by richard nixon to be head of the federal reserve. and so, you know, immediately the newspapers with articles, you know, saying well, we have a monetarist in the federal reserve or the federal reserve will now be friedman right or friedman is finally at the center of power. and so it seems like a great victory for him and i see the first letters, you know, friedman so happy that burns is there. and then comes the bombshell. he opens the newspaper and finds that arthur is supporting what's called income's policy. now income's policy is a democratic party idea not associated with republicans, and it's basically an effort to use guidelines and political persuasion to convince labor unions to raise their wages and convince businesses not to learn to raise their prices. it's a it's a way to in hibbert, inflation and inflation is

starting run in the early seventies in because the johnson administration is both an ambitious social agenda and a war in vietnam and as a consequence has been pushing for a looser monetary policy. and so now burns comes as chair of the federal reserve. and instead of saying something like, friedman might expect like, you know, the fed will do its best to sure this inflation doesn't get out of hand. he comes with a completely different proposal. it's not about monetary policy. and to friedman, he is convinced that this income's is a first step to wage and price controls and so you you know he reads this in the newspaper and then apparently he goes to sleep. then he wakes up in the middle the night and he writes this letter that i describe in the book. and it basically, arthur, how could you do this? you know i am profoundly shocked and betrayed. and what what really interested me was that friedman this intellectual difference as a real personal difference.

and it really threw into question entire relationship. he had. and arthur burns was very offended at criticism and kind of pushed back. and they have a couple of letters back and forth. then friedman kind of realizes, wait, i'm i'm a of the federal reserve my entire public identity is built a scholar of and a critic of the federal reserve and if i disagree with what arthur burns is doing, i have to speak up like it's i can't just say he's my and therefore it's fine. right. so it becomes a question of sort of friedman's own intellectual integrity. and as it turns out before long, burns is advocating wage and price controls just like friedman predicted, which, you know, to him is just a complete backwards way to approach inflation. it won't work in addressing the fundamentals. and so there's a series of these really fraught letters, and then they just kind of fizzle out and, you know. friedman and do find a way to connect based their long history

but their relationship is really profoundly and so for me it was interesting that you know he has this moment you might think is a moment of triumph for him but it's on a personal level rather it is. and one of the points that i think really brought it home as he wrote this first letter that you describe, and then i think it was even the next day or shortly thereafter before burns had even responded, sends off another letter, which is a little bit more personal and nicer, and trying to paper over some of the harshness of. his original criticisms, because i think. friedman, you know, realize what describe very well in the book is, is the depth of this relationship and perhaps what friedman wrote in his first letter being being negative too that one of the and this brings me a bit i think that the the friedman's life you know his family his background you know why why was burns such a surrogate father figure what happened before friedman matt

burns that sort of set that up and made that possible so yeah, i begin by kind of examining his family life. so his parents were immigrants from the area that would now be russia sort of hungary eastern europe and they arrive and this is a great wave of immigration. jewish immigrants, eastern europe, they end up settling a small town of new jersey. and there is about ten other families that are jewish and in this much larger sort of anglo protestant world and he friedman from the beginning is just absolutely brilliant and he loves math and he he'll be an actuary. but the family that he grows in does not have a great deal of education. they don't have a great deal of social connections. his father is sort of a middleman. arbitrage where buys low, sells high. his mother runs a shop in their town. and so he doesn't really have a vision of where he can go. and so that's why when he meets

burns at rutgers and burns a graduate degree, you know has professional work as an economist and is from the very similar background. friedman he becomes just a vision of what he can be. and at that, friedman has lost his father. so he's really looking for a mentor guide and his family incredibly supportive of his education his sisters, who all had equally outstanding, if not better academic records. it was just sort of, well, you're going to work to support family and we're going to put the boy through college. and so he had you know, he had emotional support, had financial support, but he didn't have a kind of model for his life. and burns really becomes that. and then burns a safe harbor in this discipline that's only beginning to open to jewish professionals. and so he knows he can always write to burns about job questions, interpersonal questions and feel like is on his side and on his team. you mentioned, the family life

of friedman and had sisters, his mother, his father. when friedman was fairly young. and what's what's interesting, too, of course, is beyond the other women his life, who he coauthored with, who he worked with, who who influenced his ideas greatly and coauthored them, we mentioned anna schwartz already, of course, his wife rose, director. friedman was a frequent coauthor, but why don't you tell us a bit about anna schwartz, with whom he coauthored a monetary history of the united states. i mean, how common was it back then for economists who were overwhelmingly male to work with women? it was it was very uncommon, especially to have women as coauthors. now, schwartz was someone who similar background, immigrant background. friedman but she grew up in new york city. so she went to barnard college and pretty quickly, her professors figured out she was

brilliant and she actually started working as a coauthor. her professors in college, and then afterwards when she went to graduate school. so she then went to the national bureau economic research where she was working under burns and. i talk in some detail in book about the relationship with burns and schwartz which was not positive, and schwartz had spent a lot of time in columbia, and she had somehow never gotten a doctorate for all her work. and she had coauthored a three volume history on the british economy. much she was still technically a doctoral. and so then when she was working for the national bureau of economic research, got the idea to put her and together and it really was an inspired idea. they were both willing to questions that other economists weren't interested in. they were both incredibly, but they had different cast of mind. so schwartz was willing to go deep into the empirical, which friedman was willing to do that.

he simply didn't have the time as a tenured professor. chicago. but this was schwartz's full time job. so schwartz also loved. so as i looked at how they put the monetary history together, it really was schwartz who went back in time. she she wanted to look at the civil war era and confederate money because there were all these monetary experiments at the time. and she thought these would be very revealing about the role money plays in economies and she also was interested in archival research pulled out all these stories about the different personalities at the federal reserve so that of them worked together for ten year more than ten years. it was about 12 years. and she would be new york, he would be in chicago. they would write letters and forth. so we have this sort of paper trail of their interactions and, you know, it's a story i tell the book, so i want to tell it all here. but eventually. friedman out that she still doesn't have a doctorate and he starts sayinto her mentor,

like, why doesn't she have a doctorate? and it's not until a monetary is on the cusp of publication that. columbia finally decides that schwartz deserves a doctorate. and of course, the next year the book comes out, and it's really the talk the town and they got her the degree just in the nick of time and so then i talk about her career as it unfolds after that, by the time i'm by the end of her life she has nine honorary doctorates so she really lives this shift when women economists there's not a place for them in the discipline other than is sort of a worker bee helping a male economist to where they can be recognized. finally as scholars in their own right and then you you talk about some of the other work with female economists, dorothy brady, margaret reed. you recount in the book that friedman even called himself a feminist at one point. why you think he was sort of so far ahead of the of the

profession? was it the ideas about human theory from the university of chicago? was it was it something else? was it his background? what do you think explains that. you know, i think part of it is that friedman lived a life in ideas in that almost all of his closest relationships were people who shared his interest in and often shared his particular more free market economic orientation. what he saw first about a person really was their ideas rather say their personality or their sense of or also their. it kind of washed out for him. now, of course, he knew these women were women, but he didn't automatically, as many of his seemed to that. therefore they had nothing interesting to contribute to economics. so that's one piece of it. the other piece of it is that, you know, he's married to a fellow economist, rose director, who has a lot of friends who are also women economists. so he first gets involved in

research because one of them is writing a paper rose and they're corresponding back and forth. and he kind of grabs the letter and says, well, here's what i think and it launches them on you know really decades long conversation so much of which happens in social time. so again, because is so sort of focused on his interests when rose's friends come to new hampshire or to vermont where they have their second home. they're all economists. and their idea of a good time is to stay up talking economics. so these come out of these conversations come. what he eventually publishes is his theory of the consumption function. when i started my research, i had no idea about these other women. sure, i knew about rose friedman couldn't schwartz. and then i found these letters where he's really working out some of his biggest ideas in these letters. and so one woman is dorothy brady and. she has a very close, personal relationship with a couple. i talk about how they have a very lost pregnancy, actually a

stillbirth. it's very difficult for them. and dorothy becomes their main during this time and she connects them to margaret reed, who eventually is up for a position at chicago. and as she's potentially becoming freedman's colleague. he decides to these conversations they've been having and to write them up in a memo to convince his colleagues that they should hire margaret reed. he would also like them to hire dorothy brady. so eventually, margaret is hired. brady gets like a one or two year position and then from there they move the the project moves forward. there's one last facet of his interest and his connection with women economists, and that goes the way friedman was always interested in approaches, economic life approaches, economic analysis that were established and was much slower than rest of his colleagues to say now that economics is

becoming more quantitative and mathematical and model driven, we can sort of set aside all the other work that's been done and. typically, women economists worked consumption. they were figuring out who bought and sold what they were deeply empirical, adding up who, how many yams did this household buy? what did they for a funeral? do they have a larger border? so they were immersed in this sort of empirical research that most economists of friedman status had decided was sort of old news. but friedman was like, well, i still think there's there. and so also came from his intellectual orientation that made more receptive to the expertise these had, rather than assuming that was kind of yesterday's news and the future of economics was purely model driven or mathematical and theory of the consumption function was essential for him winning the nobel prize writer is one of the most. it was one of the papers that was cited foremost to justify giving a prize right?

yes. and it comes before a monetary history. so as i was describing friedman's rise to fame, the monetary history is really what does it for a broader audience, for economists, what really restore his reputation is this theory of the consumption function because he ties it to several key concepts in keynesian economics about so the consumption function helps you understand how government stimulus spending or the multiplier will affect consumption decisions. and so friedman provides an alternate way of thinking about this question that's really at the heart of the discipline. and so unlike money, he's kind of coming in from left field with consumption. he's sort of stepping into a live conversation and. you know, you have economists who really disagree with friedman and actually personally dislike him saying we have to reckon with this book and. everyone is going to have to

reckon with this book from on so. so that that's an important publication for him. the field of economics. we've briefly mentioned his wife so far, rose director friedman, who an accomplished economist in her own right, she stopped short of her ph.d., although later she got an honorary ph.d. but it's really impossible, i think, to tell the story of milton friedman without telling the story of wife, who is a coauthor. they're really like a dynamic duo over time. how does how did friedman and how milton and rose meet? so they both were at the university of chicago they both joined the economics department. in 1932. and let me just pause right there because that's unusual for a to be in an economics department. 1932. pursuing her ph.d. is quite unusual. one part of it is that chicago was more open to women, maybe

other top universities. a second is that she had older brother who had gone to chicago and who convinced parents to let her come to chicago as an undergraduate and. then he was continuing on for the ph.d. and he convinced her to continue on the ph.d. so she had an interest section to the department. so friedman arrives. he's kind of brand new. he doesn't know anybody. rose director has technically just begun her ph.d. program, but she already the professors she knows the students she's been around the department, so she's very comfortable there. and her last name is director, and friedman's last name is friedman. and they're seated alphabetically. so it's very prosaic. in the beginning, he's seated near her in class. and of course, you can imagine this is the one woman in the class surrounded by young men. so getting her attention is not an easy task and it will take a couple of years. they go from a friendship actually becoming a couple and

then the the mores of time really mean that there's only room for one career in married couple and specific. most universities have rules where if they hire their husband, they cannot hire wife in any paid position whatsoever because it would be considered nepotism. and so if if the husband in the couple is going to be an economist almost by definition the woman cannot be a professional economist. so there are a lot of structural reasons she doesn't pursue her degree. she also from from what she says that she would rather devote her time to her family than to pursuing her professional path. so it comes to that friedman is married to a sort of peer economist, and so he always has someone interested in his work, talking about what he has to do, and also who is more interested in how his ideas can be taken to

a audience. so what friedman really does is sort of provide the motor behind, his emergence as a public intellectual. she's the one who puts together a capitalism and freedom, takes raw material that milton has and kind of so is it all together and makes it something she convinces him to do the newsweek column that's incredibly and then later she's a co-produr on free to choose their wbz-tv series and then with him coauthors. the book that comes out so she's really indispensable to the public milton friedman as well as doing a basic of keeping the family going while immersed in economics in his every waking moment. it's there. yeah it certainly becomes obvious reading your book that most major public works free to choose a capital them in freedom. the great series this would not have happened without without

her work. something else that comes across though the book is how intensely private they appeared to be. i mean, i think you mention in their that rose burned a lot of their correspondence. yes. that must have made your job your first curse. yeah. that must have made your job very difficult. i. yes, for sure. on the other hand, it might have been more material. even i could manage but but it was interesting because yes. if you read two lucky people, which is the memoir they wrote, they quote at length from their. and so when i started project, i was like, great, i would love to see these letters. and i was told they've been destroyed and i asked both their children and they said that, you know, that sounds something she would do. so i had to find other ways why these letters to arthur burns are so because it's actually the letters between rose and milton. would only have captured their early courtship years where the letters to burns kind of capture the whole arc of his his career.

and then in some cases, like, i wasn't really able to say exactly how did influence the writing of capitalism? freedom, because i wasn't able to find any drafts of the book or really any correspondence with the publisher about. and that was very curious to me. and that makes me think that probably rose friedman was worried someone like would come along, decided to kind of all that more personal material out of the archive. and so i guess i can understand her point of view and every every biography has its challenges, and you never all the sources you want. but i did my best to kind of show their family life, although i was restricted in what i could really document. how was their family life? so, so apparently it an economics seminar and then you a, you know, just nonstop and debate they had a code for

saying four apologize saying i'm to remember what it was i think it was number two man i was wrong and you were right. and so the fact that they had these kind of numerical, i think is really interesting, really telling. and so, you know, it was a very close family, but it was i driven by argument and debate sort of at its core. i learned that milton was a very laissez faire parent, as you might imagine, would say to the kids on halloween. you go ahead, eat as much candy as you want and i think apparently after a while, he was like okay. no, i need to take some of the candy away. but he he tended to be more lax and rows tended be more of that sort of just disciplinarian. enforcer. but they lived in the university of chicago, in hyde park, you know, they were in this academic enclave. and it wasn't until the children towards the end of their childhood in launching that they realized oh, like dad's really famous. they kind of they didn't shadow

over their childhood, which i think was probably a good thing. you mentioned their memoir titled two lucky people now i must have met a somebody who's read a lot of work by friedman. i was always sort of baffled by the title of that book because so much of friedman's work both the popular work and lot of the academic work focuses on human behavior are affected incentives and how a lot of individual initiative responding to incentives is what a lot of achievement in social economic advancement. but then you have the title of their memoirs and it's luck plays a huge role. what do you think that yeah, i mean, that's a great question i think i think there's two aspects to it. one is there looking back sort of the scope of their life and it's been a very successful life and they're wanting to modest

and they're wanting to be grateful and they're recognize saying, you know, had they been born in a different place, none of this would have happened. so the villages that they came from turned out to be, you know, stop on the way to auschwitz. and they know they would not be alive if they hadn't come to the united states. so part of it is kind of a reflection of that. there is a theme in his especially his early work that i try to pull out and it's pretty much muted the time he's famous although you're pointing out it comes back you know it's not just all about incentives and he's aware that you know in a capitalist system it's not as simple matter of you get you deserve because. he's aware that people have different endowed gifts and people start from different places. and so one of his major ideas that i talk about throughout his life is he starts is first idea. he advocates for is a minimum income. what we today about is a

universal basic income. and that's because just recognizes there are some people who, through fate or fortune or at a moment in time, are not going to be able to compete in this incentive driven market economy. and so what a government should do is provide a basic sustenance, basic income that people can always rely upon. so he is aware that that luck does play a huge role in this and especially in the early part of his career he's really setting himself up in opposition to particularly american conservatives, some american business conservatives are taking much more. we would call like a social darwinist lines like shouldn't provide any support whatsoever. and, you know, unemployment support or this or that will ruin incentive lives. and, you know, people should just sort of take what's coming to them. and he's always opposed to that from the very beginning both on i humanitarian humanitarian and ethical reasons and also because

he believes that that's not good economic policy that you need to have some resilience and some supports because capitalism is a dynamic evolving system and you know riffing off continuing on the locke theme here one of the more unlike lucky moments partially due his own actions and others, but also unlucky was when he went to chile. and you know at that chile was ruled by the augusto pinochet friedman went there to a series of lectures down there and actually met pinochet. can you talk about that? and the controversy and how that sort of put a pall over his nobel prize? yeah, i think that was one of the more difficult moments for friedman. and so i should just by saying he believed there was going to visit a country, going to advise its government, did mean endorsing that government and. he had gone to many different

places, communist china to yugoslavia to chile. and so he saw is just another thing if you're an in the macroeconomy particularly you're an expert in inflation, it makes a lot of sense that a country that i when he came there it was 300% annualized inflation down from 600% under allende. so this was a pervasive inflationary situation. it just made sense to him, okay, i'm being asked to come and give my advice how to, you know, correct the make this inflation go away, basically. and the other thing that so then i so so knowing that i think it's really important and it's been as oh friedman to talk with pinochet because he thought he was a great guy and that's really not the case at all. and so then the other piece that that is kind of there is this idea that friedman's ideas pinochet or inspired coup or inspired that and it actually happens that the economy is doing so poorly it's about a year into pinochet's regime.

they decide we have such big problems. mainly this 300% inflation. we have to do something. so a new group of economists come to the fore and they invite friedman to sort of explain what they're doing to both the the inner structure of, the regime and to the broader chilean public. and so that's the context in which he comes. but what next is that pinochet an assassination campaign and he actually assassinates a former member of the gandhi regime on the streets of washington d.c. so so it's a terrible and then just a few weeks later, the nobel prize committee gives the prize to friedman. and so kind of that combination of those two coming together, it looks like this sort of thinking people of the world are okay with pinochet and have sort of endorsed him by endorsing

friedman. and i think that's an over interpretation. but nonetheless, i can see how that happens, given how destructive the pinochet regime is. so friedman doesn't see this at all? he really has no idea this is coming. and it's a he's sort of dogged by controversy in his public appearances from then on. and he can never really understand it because, again, he's like, i've been to these other places. i wasn't endorsing the regime when i went there. and what think is it's this transitional moment where human rights are of emerging as a broad, popular and friedman has very much the economy is kind of technocratic orientation like i'm a problem solver and a fixer and go where i'm needed and there'another set of ideas coming out which is a sort of politics of purity and that any engagement tantamount to endorsement and the way to really telegraph your moral standing is to not engage in anything that might be morally

odious. and that's is just not the perspective that friedman takes particular in a situation where he feels like he has something to say about inflation so that's a difficult aftermath for him and i would say over he would eventually he tells pinochet if you liberalize the economy you're eventually you're going to have to liberalize politically. and that is fact. what happens in chile. and i think by the end of his life, he views that that that whole trajectory is ultimately ending in a positive place, that that is the great irony of this whole episode is the public speeches, many of them that he gave while he was in chile which was this for less than a week. many of them were about how economic freedom and will lead to political freedom and. even in his only 45 minute meeting with pinochet, he brought that up as you recount, which is quite a gutsy move, i think, to bring up to to a dictator. but, you know, if i were to summarize his friedman's

thoughts about about polity hayek's about economics. i think just the capitalism and freedom is probably the simplest explanation. he changed his mind little bit. he went a little back and forth about capitalism, free markets leading to political freedom and social freedom and and different times his life sort of thought about maybe there's a tension between democracy and freedom. can you describe some of his thoughts about this and where he really sort of ended up by that by time he got older. yeah think and part of it part of the story is when he wrote capitalism and freedom he was addressing an american audience and he is you know his whole life been a professor in american academia and. he felt he really needed to emphasize freedom, that in the sixties there was not the economics of freedom in the united states was not fully

appreciate. he really wanted to push that forward. so in the aftermath of chile he sort of realizes you i've been talking so much about economic freedom maybe people haven't realized the political freedom also matters to me. so he starts to recalibrate a little bit and realize you need both sort of working. you can't just have economic freedom because if you don't have political freedom, eventually the state will will over the economic processes. so that's kind of one modification. the other comes towards the end of his life as he's observing events in asia. now, when it comes to china, he remains that china is somewhere on the trajectory that chile, chuck, he thinks, will be more tiananmen square. he thinks there'll be more protests and he thinks that eventually the chinese government will fall just the ussr fell. but what catches his eye are, you know, we might call the asian tigers, the asian city states, singapore, hong kong, south korea that are economically very prosperous but

limit political freedom in significant ways and. so he ends up deciding that maybe there's something called civic freedom which to him is the ability to gather and so it's not totalitarian regime. in other words, you have a stasi or secret police keeping track of you, but you still can't vote. so you really have a choice of your political, but you have some limited freedom, civic and economic. so by the end of his life, he's realizing it's complicated. and i would say this implicit of capitalism and freedom has, a lot to do with this simplicity of the world, such that it was when you had, you know, a by polar world roughly, you know, united states representing capitalism and its allies, soviet russia and its allies representing, communism or planned economy was easier to kind of make these synergistic after the cold war. you just see a proliferation of different forms of governance and market economy. and so he's trying to sort of adjust what he has to say in the

closing years of his life. i mean, one of the interesting things is, you know, being ahead of these and a lot of these intellectual trends that we've talked about, being ahead of social trends that that friedman was is was always a fierce critic of, communism. but that wasn't unusual. but what was unusual is that so many other folks like john kenneth galbraith, economist paul samuelson, others thought that the soviet union was doing fairly well economically. and friedman sort always maintained that they were kind of basket case, a basket case economy. why do you think friedman was so i guess right that ahead of his time about that while so many of these other well-known economists were i mean samuelson i mean in his textbooks which everybody had to read i mean the dominant economics it talked

about soviet economic growth converging with that of the united states over time. what did friedman that so many of these brilliant economists missed. well i think some of it goes back his interest in empirical studies. so he had a couple of students who were working on the soviet and so he was paying little bit more attention to sort of what was what you could measure that was not in the official statistics or what was reported. so i think part of it is not just assuming that you have a model of how economies develop, but actually questioning what's there underneath. and then i think part of it is just his very strong belief that economic growth comes from this sort of aggregate of myriad individual decisions and that that people have to be free to make individual decisions and have individual initiative.

and if that was being being snuffed out in the soviet, that they would simply would not be able to. now, you know, part of this analysis is, is drawing on the work and ideas, f.a. hayek and von mises, who basically say, you can't really have a price system in a plan economy, and if you don't have a price system, people don't have the information they need in order to make good decisions. economic so you're just kind of closing eyes and there's no way an economy will be able to function in that way. so, you know, he's always very ethically opposed to the idea of a planned economy and he just thinks there's not any evidence that it will work. and so he's just very suspicious of the claims that it will also because he has no reason to want to believe this, because he does not want more planning in the united states. and so some of the more credulous economist he may be credulous because they think it will strengthen their hand in

the policy debates within the united states. that's not meaningful for friedman. see what i one of the other things that really struck in your book is you a few quotes from modern like you know, president joe biden when he was running one of them is quote and he said and joe biden said this during the 2020 campaign, milton friedman running the show anymore. and then in another occasion, biden said, did milton friedman die and become king? and i thought i thought these quotes were extraordinary as they were state know, over a decade after. friedman had passed away. i mean, why is friedman just important nowadays, even still that presidential during campaigns in 2020 are talking about him and his ideas. yeah i mean i found those those

quotes fascinating as well. i mean, that's one reason i wanted to write this book because friedman is one of those few economy that becomes kind of a touchstone after his death and just politics. and in our thinking about society more broadly. so i think that really points to is the way which friedman's ideas he started off very closely allied with a movement that called itself conservative with conservative politicians or republican politicians his ideas about the importance of market incentive gives about the benefits from reducing the size of government. you know, focusing on monetary policy. these kind of flowed out of where they started and became really pervasive in the general thinking of people on the left, right and center. and it can't all be laid at friedman's feet. and one thing i try to do in a book is show these bigger shifts in you, you know, economic

structures across the world. and in the 1970s inflation has enormous consequences in many different ways. the fall of the soviet union has enormous consequences. so friedman's don't cause these, but they help us interpret and understand them. so when i look at that biden quote what that says to me is it's you might read at first blush and say this is biden criticizing republican economic policy, but it's also biden criticize izing people within the democrat party who might be more friendly to friedman style ideas and really kind of planning a flag allegiance to a more progressive economic outlook. and so that quote tells you how important friedman is to kind of intramural democratic politics as well being a representative of a sort of concern republican view that has been very dominant i would say until recently. so so that that just shows you that friedman has become definitely larger than life and a symbol of everything that the

united states has experienced over the past 50 years. really? yeah, he definitely has become a symbol, you know friedman was a scholar, a public intellectual, a policy adviser to president and governments around world. he was a brilliant communiquer you watch his tv appearances on phil donahue or on pbs or in the free to choose and the ideas so clear and well communicated. and of course, a big supporter of free markets and capitalism. is there anybody like him alive today who? has all of those skills wrapped into one? yeah you know, i don't i don't think there is. and i think i think there's of two reasons. one is and there are, you know, economists who do great work popularizing economic ideas, who are known outside of their discipline. so there's there's kind of a lane that friedman created for public intellectual the

economist but few of those also have the connections to policymakers and other few of them have breadth and depth of economic thinking that friedman have. i think there's kind of two reasons for this. one is what we talked about earlier in conversation. you know, friedman is not just friedman. he has a number of women collaborators who because of the mores of their day, cannot be independent intellectually rules. and so they pour their energy and their gifts and their strengths into milton friedman. and he tremendously benefits from that. so that wouldn't happen today. margaret reed today would be elevated in her own right and given full support of her colleagues, given a workshop training her own students. and she lives in a world she has to give her ideas to. friedman for them to go anywhere. and then i also think it's just the media landscape. i mean, friedman's on youtube he'd be great on youtube if he were alive, he'd probably have a mean substack and tick tock.

nothing like newsweek column today you know, it really was the era of big media when you had a few networks, you had a few magazines that educated people and we're just in a much more fragment and media landscape. i think it's much harder for one person to emerge as a sort of figurehead. the last thing will say is that friedman became allied with a conservative movement that was sort of growing under the surface for while and then burst more into prominence and was looking for people who could carry the message. and so he really stood the top of other conservatives who saw him as a good spokesperson. and so we have so much political flux today. i think it's harder for an intellectual to stand top of a coherent, evolving and growing political movement that maybe will happen. you know, i'll definitely be watching. it could happen in the next coming years. so there's one last question

that i want to ask you. the subtitle of your book, milton friedman. the subtitle is the conservative. this was it surprising to me when i received the book in the mail? frankly, you i've never really thought of friedman, a conservative. he often described as a liberal or classical liberal. he said he was a small l libertarian, so not affiliated the libertarian party, but a sort of ideological libertarian at times. he said he was a republican at different times he said he was a radical. but i never got the sense conservative. why did you choose that subtitle? the last conservative both last part and the conservative. you know, there's a couple of different reasons i did, and i'm very aware that friedman did not call himself a conservative and would probably not like the title of it but heidn't go so far as f.a. hayek did to write

an essay why i'm not a conservative maybe if he had written that essay, i wouldn't say i can't you know, i can't move for its title, but i kind of mean it in two ways. one is when you look at his the people he interacted with, the people he gave his ideas to within american politics, those who found him most compelling, most of those people called themselves and conservatives in the united states is different than conservatism in other countries, in large part because it incorporates what in other countries is called liberalism or neo liberalism. it celebrates end of the market and celebrating capitalism. it's the dynamic economic system is in some in tension with being conservative because it drives a lot of social change nonetheless in the united states you have this sort of hybrid movement of people who are socially or religiously conservative with economists dedicated to the free market, with you know, during the cold war era, people who

felt very strongly russia needed to be combated. these people come together. they call themselves conservative, called by others, conservative. and friedman part of this movement. so that's sort of empirically a reason. call him that. the other that is maybe even more substantive is came from understanding his approach as an economist which was to look at ideas traditions and approaches that had to the discipline that really being left behind in the postwar era. and to say like, hold on a second, there's something here worth. and so i do see him as someone who conserves the kind of inherited wisdom of his discipline. so monetarism is based on the quantity theory of money. you know, an older idea that most economists in the fifties said, you know, it's not really relevant anymore. likewise, the very practice of empirical, historical research was very of fashion. and so i think that was his intellectual orientation. think within american society,

his political orientation in terms of the last. i mean, that's really gesturing a little bit. the current state of affairs where conservatism is very in flux and i think contested and up for grabs. and that type of conservatism that friedman represented that synthesis of free capitalism or religious aditionalism and, an aggressive foreign policy and a sort of to global markets and to global influence. that synthesis and the pieces are all there, but they don't together in the same coherent way they did when friedman was at the height of his influence. so i think it's sort of a provocation and sort of an invitation. we don't know if the last conservative or not it might look like that right now. for some people, that will be cause for celebration. for others cause for loss. but you know, the book is yet written. so with book, i want to give people resources to think about kind of how we got here and to

think what what our past do. we want to with us into the future. well thank you very much, professor burns. it certainly was a provoking title. it certainly provoked me. but the book is really wonderful. it's well written, it's thorough. it gives insight into his life that i had no idea. d the book, again, is milton friedman, the conservative. so thank you for it. and thank you for being here. thank you so much.