Chicago, Athens, and Jerusalem

From Terry Savage at the Chicago Sun-Times:

Today has been declared Milton Friedman Day, and he will be honored today at the University of Chicago Rockefeller Chapel at 2 p.m., a ceremony that will be open to the public, and is co-sponsored by the University of Chicago and the Chicago Mercantile Exchange.

If you want to know more about his formidable influence, you can watch his biography, “The Power of Choice” on PBS tonight.

For more info, see http://www.miltonfriedmanday.org/

Here is a special feature from the website of The Economist.

Economist Arnold Kling has a commemorative essay here.

Milton Friedman, internationally-renowned advocate for personal and economic freedom, Nobel Laureate in Economic Sciences in 1976, and Professor Emeritus of Economics at the University of Chicago died in the morning of Thursday, November 16.

Thursday was a sombre day for many of us here at the University of Chicago. The University flags were lowered to half-mast, and professors in the Department of Economics and the Graduate School of Business were frequently recognizable by their downcast stares and more formal comportment and attire. Kevin Murphy (winner of the John Bates Clark Medal in 1997 as well as a MacArthur “genius grant” last year) who famously wears a baseball cap and sneakers every day, changed to a black cap and nicer shoes. According to his students, Gary Becker (Nobel Laureate 1992) who was a doctoral student of Friedman’s, was particularly distraught. Becker reflects on Friedman’s intellectual contributions here on his blog.

A panel discussion to commemorate Friedman’s achievements, featuring Becker, Robert Lucas, Sam Peltzman, and Eugene Fama, was held in the afternoon of Friday, November 17. Video of the discussion is now available.

Here are news stories about Friedman’s death from Reuters, The Economist, and the Chicago Maroon.

Economists Austan Goolsbee, Brad DeLong, Thomas Sowell, and Greg Mankiw have written excellent essays about Friedman. Milton’s son David Friedman wrote this poem on his father’s death.

Milton Friedman’s substantial contributions to economics and economic policy are adequately covered by the above links. It is illustrative that his developments in the areas of consumer theory, statistics, and monetary theory and history are widely used and taught today, with some updates to account for more data and more sophisticated mathematical techniques. However, I believe it worthwhile to highlight Friedman’s thoughts on the nature of classical liberalism. Before I even picked up his book Capitalism and Freedom, I realized that my views on politics and society were closer to Friedman’s than to any other contemporary public intellectual. The following passage from that book demonstrates Friedman’s deep understanding of classical liberalism and his dedication to human freedom:

As it developed in the late eighteenth and early nineteenth centuries, the intellectual movement that went under the name liberalism emphasized freedom as the ultimate goal and the individual as the ultimate entity in the society. It supported laissez faire at home as a means of reducing the role of the state in economic affairs and thereby enlarging the role of the individual; it supported free trade abroad as a means of linking the nations together peacefully and democratically. In political matters, it supported the development of representative government and of parliamentary institutions, reduction in the arbitrary power of the state, and protection of the civil freedoms of individuals.

Beginning in the late nineteenth century, and especially after 1930 in the United States, the term liberalism came to be associated with a very different emphasis, particularly in economic policy. It came to be associated with a readiness to rely primarily on the state rather than on private voluntary arrangements to achieve objectives regarded as desirable. The catchwords became welfare and equality rather than freedom. The nineteenth century liberal regarded an extension of freedom as the most effective way to promote welfare and equality; the twentieth century liberal regards welfare and equality as either prerequisites of or alternatives to freedom. In the name of welfare and equality, the twentieth-century liberal has come to favor a revival of the very policies of state intervention and paternalism against which classical liberalism fought. In the very act of turning the clock back to seventeenth-century mercantalism, he is fond of castigating true liberals as reactionary!

The change in the meaning attached to the term liberalism is more striking in economic matters than in political. The twentieth-century liberal, like the nineteenth-century liberal, favors parliamentary institutions, representative government, civil rights, and so on. Yet even in political matters, there is a notable difference. Jealous of liberty, and hence fearful of centralized power, whether in governmental or private hands, the nineteenth-century liberal favored political decentralization. Committed to action and confident of the beneficence of power so long as it is in the hands of a government ostensibly controlled by the electorate, the twentieth-century liberal favors centralized government. He will resolve any doubt about where power should be located in favor of the state instead of the city, of the federal government instead of the state, and of a world organization instead of a national government.

Because of the corruption of the term liberalism, the views that formerly went under that name are now often labeled conservatism. But this is not a satisfactory alternative. The nineteenth-century liberal was a radical, both in the etymological sense of going to the root of the matter, and in the political sense of favoring major changes in social institutions. So too must be his modern heir. We do not wish to conserve the state interventions that have interfered so greatly with our freedom, though, of course, we do wish to conserve those that have promoted it. Moreover, in practice, the term conservatism has come to cover so wide a range of views, and views so incompatible with one another, that we shall no doubt see the growth of hyphenated designations, such as libertarian-conservative and aristocratic-conservative.

Partly because of my reluctance to surrender the term to proponents of measures that would destroy liberty, partly because I cannot find a better alternative, I shall resolve these difficulties by using the world liberalism in its original sense—as the doctrines pertaining to a free man.

Written almost forty-five years ago, these words have yet to be equaled as a constructive and comparative explanation of classical liberalism (although Hayek’s “Why I Am Not a Conservative”, the postscript to The Constitution of Liberty, is also quite insightful—Hayek focuses more on the contrasts between classical liberals and conservatives, but his prose is more difficult by today’s standards).

The death of Milton Friedman diminishes the community of economists, political thinkers, and classical liberals. We may take some comfort from the fact that his work will undeniably live on.

UPDATE: A memorial service for Milton Friedman was held in Rockefeller Chapel at the University of Chicago on Monday, January 29.

Today, May 20, marks the 200th anniversary of the birth of John Stuart Mill. I’m sure that I don’t need to extol the greatness of Mill to this audience, but we should all take the opportunity to learn more about the philosophical inspiration for Mankind Minus One [the now-defunct group blog to which I previously contributed].

In honor of the occasion, Catallarchy has a series of essays on Mill. Roger Scruton, willfully disregarding the history of economic and political thought, attacks Mill in this op-ed, as he believes that Mill’s defense of minority rights and opposition to senseless traditions paved the way for the greatest excess of the sham “liberalism” of the Twentieth Century. Andrew Sullivan offers a terse and insightful response here. Finally, at the Library of Economics and Liberty, Professors David M. Levy and Sandra J. Peart have written essays discussing the leading role of Mill and other classical economists in the British antislavery and anti-racism movements.

President Bush has nominated Ben Bernanke to replace Alan Greenspan as the Chairman of the Federal Reserve Board of Governors. Bernanke is the Chairman of the White House’s Council of Economic Advisers and a former member of the Fed Board of Governors. He is considered to be one of America’s foremost monetary theorists, surpassed only by Greenspan and Greenspan’s predecessor Paul Volcker.

After the farce that is the Harriet Miers nomination, Americans of all political stripes should be breathing a collective sigh of relief. While his personal party affiliation is Republican (as was Greenspan’s before his nomination to the Fed), Bernanke is an academic economist, not a political operator, and it is highly unlikely that he would risk the nation’s economic stability for short-term political gain. Bernanke also has stronger credentials in matters of monetary policy than the others rumored to be on the president’s list to succeed Greenspan. For example, R. Glenn Hubbard, a Columbia professor and former Council of Economic Advisers Chairman, is an expert in the field of corporate finance, but he is less distinguished in monetary matters than Bernanke. If confirmed, Bernanke is likely to broadly continue Greenspan’s policy choices. Two important differences, which can be inferred from his time as a Fed governor, are that Bernanke possesses a greater understanding of the symbolic (i.e., media) importance of the Fed Chairman, and that he has a desire to increase the amount of debate and dissent during Fed meetings. As many people consider the Fed Chairman to be the second most powerful person in the US government, the ability to avoid media frenzy and the willingness to address criticism are qualities that should serve Bernanke very well.

UPDATE: This post, at its original home of www.mankindminusone.com, was cited by the Blogpulse Newswire.

I have heard references on both CNN and Fox News to the “price gouging” that occurred before and after the disaster of Hurricane Katrina. The Office of the Attorney General of Florida has issued notices reminding citizens that price gouging is illegal and that suspicions of price gouging should be reported via the state hotline.

However prevalent it may be, the common understanding of “price gouging” is inaccurate because it ignores the principles of economics. “Price gouging”, is an emotionally charged term for a process that, unless it involves fraud, is essential to the national well-being. Two articles written in response to last years devastating Florida hurricanes, one by journalist David M. Brown and the other by world-renowned economist Thomas Sowell, explain the popular misconception.