The Role of the Irish Potato Famine in the Repeal of the Corn Laws

In one of his more famous, and outrageous, essays, George Stigler argued that economists do not matter, because changes in policy do not arise from changes in ideas, but from changing circumstances and special interests.
One of the cases that he briefly mentions is the repeal of the English Corn Laws that had restricted the importation of wheat (in England “corn” is what we call “wheat) into Britain. The usual account is that the free market arguments of Cobden and Bright made the difference.
The account quoted below, might be taken as support for Stigler’s position. But it might also be evidence for the more optimistic position of Stigler’s buddy, Milton Friedman. Friedman held that on major issues, economists’ policy proposals go ignored until some crisis occurs that sends the politicians looking for policy alternatives. (Friedman thought that this is what occurred in the case of his own proposal for floating exchange rates.)

(p. A23) THE feast of Ireland’s patron saint has always been an occasion for saluting the beautiful land “where the praties grow,” but it’s also a time to look again at the disaster that established around the world the Irish communities that today celebrate St. Patrick’s Day: the Great Potato Famine of 1845-6. In its wake, the Irish left the old country, with more than half a million settling in United States. The famine and the migrations changed Irish and American history, of course, but they drastically changed Britain too.
. . .
The first intimations of Ireland’s looming calamity reached the British government in August 1845. Although Britain was responsible for the social and economic iniquities which had made Ireland so susceptible, the government of the day deserves some credit for its efforts to avert mass starvation. There were political as well as logistical difficulties.
. . .
To Peel it was obvious that the Corn Laws would have to go, but his electorate of large landowners was vehemently opposed to their abolition. The Duke of Wellington, leader of the House of Lords, complained that Ireland’s “rotten potatoes have done it all — they put Peel in his damned fright.” Peel drew heavily on the news from Ireland as he urged Parliament to vote for abolition:
“Are you to hesitate in averting famine which may come, because it possibly may not come? Are you to look to and depend upon chance in such an extremity? Or, good God! are you to sit in cabinet, and consider and calculate how much diarrhea, and bloody flux, and dysentery, a people can bear before it becomes necessary for you to provide them with food?”
The bill abolishing the Corn Laws was passed in May 1846 in the House of Commons, with two-thirds of Peel’s party voting against it and the entire opposition voting in favor. A month later, Peel was out of office.
. . .
. . . Ireland’s famine, by ending the Corn Laws, prompted the beginning of the free trade that established the success of Britain’s industrial economy.

For the full commentary, see the article referenced immediately below, or see his forthcoming book Propitious Esculent: The Potato in World History:

JOHN READER. “The Fungus That Conquered Europe.” The New York Times (Mon., March 17, 2008): A23.

(Note: ellipses added.)

The Stigler essay mentioned above is:
Stigler, George J. “Do Economists Matter?” Southern Economic Journal 42, no. 3 (1976): 347-54.
(I will try to dig out a reference for the Friedman position when I have more time.)

Professor Dowling’s Defense of the University Against Big-Time Spectator Sports

 

  Professor William C. Dowling.  Source of photo:  online version of the NYT article quoted and cited below.

 

(p. C15)  For more than a decade at Rutgers, Dr. Dowling has stood as an idealistic absolutist, an intellectual convinced that the thunder of big-time athletics was crumbling the ivory tower of academe.

He has been the conscience, the Cassandra, the crank, the nag, the pain, infuriating opponents and, at times, exasperating allies. Enough years of being the whistle-blower, after all, can make even a tuneful musician sound shrill.

But now, just as Rutgers’s recent triumphs in football and basketball might seem to have justified the university’s investment of tens of millions of dollars, Dr. Dowling has answered in his own subversive way. His memoir of the decade-long campaign against high-stakes athletics at Rutgers, “Confessions of a Spoilsport,” has just been published by Penn State University Press. It is his valediction, and its tone, far from mournful, is defiant.

“I wanted this book to be a monument,” Dr. Dowling, 62, said after class. “I wanted it to be a monument to the kids and the faculty who rallied around this issue. We tried to take on the monster of commercialized sports, even if it swallowed us up and passed us out the other end. Someone should know that we fought the good fight. And because I believe in literature as a form of symbolic action, I want readers to see the possibility of another way. Think about the impact of a book like ‘Uncle Tom’s Cabin’ on slavery.”

. . .  

Dartmouth . . . instilled in Dr. Dowling an appreciation for what he calls now “participatory sports” — sports without scholarships, separate dorms, team tutors, product endorsements, television contracts, reduced admissions standards, easy classes and so many other tropes of Division I-A sports.

Rutgers, in turn, provided a striking example of before and after. For more than 100 years after playing Princeton in the first intercollegiate football game in 1869, Rutgers had competed against schools like Lafayette and Colgate with which it shared academic standards. Then, in 1991, Rutgers joined the Big East Conference, making it a peer of ethically challenged football factories like Miami.

Dr. Dowling grew convinced that the shift was degrading the caliber of students, indeed the entire communal culture.  . . .   And while he enjoyed teaching many members of the track, swimming and crew teams in his courses, he vociferously resisted the notion that athletic scholarships offered opportunity to low-income, minority students.

“If you were giving the scholarship to an intellectually brilliant kid who happens to play a sport, that’s fine,” he said. “But they give it to a functional illiterate who can’t read a cereal box, and then make him spend 50 hours a week on physical skills. That’s not opportunity. If you want to give financial help to minorities, go find the ones who are at the library after school.”

 

For the full story, see: 

SAMUEL G. FREEDMAN.  "EDUCATION; To the Victors at Rutgers Also Goes the ‘Spoilsport’."  The New York Times  (Weds., September 26, 2007):  C15. 

(Note:  ellipses added.)

 

Here is the description of Dowling’s book that appears on Amazon

"Universities exist to transmit understanding and ideals and values to students . . . not to provide entertainment for spectators or employment for athletes. . . . When I entered a much smaller Rutgers sixty years ago, athletics were an important but strictly minor aspect of Rutgers education. I trust that today’s much larger Rutgers will honor this tradition from which I benefited so much." –Milton Friedman, Rutgers ’32, Nobel Prize in Economics, 1976

In 1998, Milton Friedman’s statement drew national attention to Rutgers 1000, a campaign in which students, faculty, and alumni were resisting the takeover of their university by commercialized Division IA athletics. Subsequently, the movement received extensive coverage in the New York Times, the Wall Street Journal, the Chronicle of Higher Education, Sports Illustrated, and other publications.

Today, "big-time" college athletics remains a hotly debated issue at Rutgers. Why did an old eastern university that had long competed against such institutions as Colgate, Columbia, Lafayette, and Princeton, choose, by joining the Big East conference in 1994, to plunge into the world of such TV-revenue-driven extravaganzas as "March Madness" and the Tostitos Fiesta Bowl? What is the moral for universities where big-time college sports have already become the primary source of institutional identity?

Confessions of a Spoilsport is the story of an English professor who, having seen the University of New Mexico sink academically in the period of a major basketball scandal, was galvanized into action when Rutgers joined the Big East. It is also the story of the Rutgers 1000 students and alumni who set out against enormous odds to resist the decline of their university–eviscerated academic programs, cancellation of minor sports, loss of the "best and brightest" in-state students to the nearby College of New Jersey–while tens of millions of dollars were being lavished on Division IA athletics. Ultimately, however, the story of Rutgers 1000 is what the New York Times called it when Milton Friedman issued his ringing statement: a struggle for the soul of a major university.

 

The reference to Dowling’s book, is: 

Dowling, William C. Confessions of a Spoilsport: My Life and Hard Times Fighting Sports Corruption at an Old Eastern University. University Park, PA: Pennsylvania State University Press, 2007.

 

  Source of book image:  http://www.amazon.com/Confessions-Spoilsport-Fighting-Corruption-University/dp/0271032936/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1196229303&sr=1-1

 

The Courage of Milton Friedman

 

The following two paragraphs are from a paper I am currently working on.

 

Milton Friedman wrote a Newsweek column many years ago that caused a firestorm of anger among his colleagues in the economics profession. Friedman’s argument was that, in general, the government is not going to do a good job of identifying the best and most productively innovative economists. In particular, he argued that economics funding by the National Science Foundation (NSF) had made the economics profession more mathematical than was appropriate.

Even his ‘Chicago’ colleagues, who were otherwise inclined to be sympathetic to his work, were appalled: Robert Lucas wrote against Friedman in the New York Times, and Zvi Griliches spoke against him before Congress. 

 

Not too long after Friedman’s article came out, I praised it during one of the sessions of a Liberty Fund colloquium held in California.  After the session, a very distinguished economist came up to me, and started talking about the Friedman article in a very irritated and animated manner.  He said that what Friedman wrote in the article, might be true, but he shouldn’t have written it in a public forum.[i]  He said that within the NSF, the physicists have always been opposed to funding economics, and that Friedman’s article gave the physicists just the ammunition they needed.  I remember distinctly that after this conversation, the distinguished economist got into his very large and very expensive car and drove off.  To the cynical, it may also be worth mentioning that this economist had received very substantial funding from the NSF.

I also remember mentioning to George Stigler my disappointment that Lucas had written contra Friedman, and Stigler gave me his cynical smile, and said that I should have expected that Lucas, and the rest of the profession, would defend NSF funding.


[i] Most of the conversation I remember in broad terms, but specifically, I remember he said something very close to:  ‘Friedman shouldn’t air the profession’s dirty laundry in public.’

 

The reference for the Friedman article, is: 

Friedman, Milton.  "An Open Letter on Grants."  Newsweek, May 18 1981, 99.

Atlanta Police Killed Innocent Elderly Woman Who Attempted to Defend Her Home

 

JohnstonKathrynShotAtlanta.jpg  "The victim, Kathryn Johnson, was described as either 88 or 92."  Source of caption and photo:  online version of the NYT article cited below. 

 

In my 11/23/06 blog entry on Kathryn Johnston’s death at the hands of the Atlanta police, I thought that she was an innocent by-stander in a legal drug bust (though I criticized the drug laws).  But it turns out that the situation was even worse than I thought. 

In the article excerpted below, it appears that the police lied to get a no-knock warrant, and when no drugs were found anywhere in the home, they planted marijuana that they had obtained from a previous drug bust.

(One more bit of evidence that Milton Friedman was right that we need a serious policy discussion on the economics and ethics of the War on Drugs.)  

 

ATLANTA, April 26 — After the fatal police shooting of an elderly woman in a botched drug raid, the United States attorney here said Thursday that prosecutors were investigating a “culture of misconduct” in the Atlanta Police Department.

In court documents, prosecutors said Atlanta police officers regularly lied to obtain search warrants and fabricated documentation of drug purchases, as they had when they raided the home of the woman, Kathryn Johnston, in November, killing her in a hail of bullets.

Narcotics officers have admitted to planting marijuana in Ms. Johnston’s home after her death and submitting as evidence cocaine they falsely claimed had been bought at her house, according to the court filings.

Two of the three officers indicted in the shooting, Gregg Junnier and Jason R. Smith, pleaded guilty on Thursday to state charges including involuntary manslaughter and federal charges of conspiracy to violate Ms. Johnston’s civil rights.

. . .

The day she was killed, narcotics officers said, they arrested a drug dealer who said he could tell them where to recover a kilogram of cocaine, and pointed out Ms. Johnston’s modest green-trimmed house at 933 Neal Street.

Instead of hiring an informant to try to buy drugs at the house, the officers filed for a search warrant, claiming that drugs had been bought there from a man named Sam. Because they falsely claimed that the house was equipped with surveillance equipment, they got a no-knock warrant that allowed them to break down the front door.

First, according to court papers, they pried off the burglar bars and began to ram open the door. Ms. Johnston, who lived alone, fired a single shot from a .38-caliber revolver through the front door and the officers fired back, killing her.

After the shooting, they handcuffed her and searched the house, finding no drugs.

“She was without question an innocent civilian who was caught in the worst circumstance imaginable,” Mr. Howard, the district attorney, said at a news conference on Thursday. “When we learned of her death, all of us imagined our own mothers and our own grandmothers in her place, and the thought made us shudder.”

When no drugs were found, the cover-up began in earnest, according to court papers.

Officer Smith planted three bags of marijuana, which had been recovered earlier in the day in an unrelated search, in the basement. He called a confidential informant and instructed him to pretend he had made the drug buy described in the affidavit for the search warrant.

 

For the full story, see: 

SHAILA DEWAN and BRENDA GOODMAN.  "Officials Investigate Broad Corruption in Atlanta Police Dept."  The New York Times  (Fri., April 27, 2007):  A16.

(Note: ellipsis added.  The online title of the article was: "Prosecutors Say Corruption in Atlanta Police Dept. Is Widespread.")

 

Communist Dictator Chavez Destroys Freedom of the Press in Venezuela

 

   Supporters of freedom in Venezuela protesting communist dictator Chavez’s shutting down the television network that dared to criticize him.  Source of photo:  online version of the NYT article that is quoted and cited below. 

 

My Wabash College economics professor, Ben Rogge, used to say that political freedom ultimately depended on economic freedom:  how could you depend on a socialist government to provide a printing press to those who seek to undermine socialism?

(In his article "The Case for Economic Freedom" published in his Can Capitalism Survive? Rogge gives credit for the argument to his friend Milton Friedman in his Capitalism and Freedom, which was based on lectures given at Wabash.)

Well, if there is a heaven, I can imagine Rogge there, reading the following passages, and reacting with his sad, knowing, half-smile.

 

(p. A3)  CARACAS, Venezuela, May 27 — With little more than an hour to go late Sunday until this country’s oldest television network was to be taken off the air after 53 years of broadcasting, the police dispersed thousands of protesters by firing tear gas into demonstrations against the measure.

. . .

The president has defended the RCTV decision, saying that the network supported a coup that briefly removed him from office in 2002.

RCTV’s news programs regularly deride Mr. Chávez’s Socialist-inspired transformation of Venezuelan society. “RCTV lacks respect for the Venezuelan people,” said Onán Mauricio Aristigueta, 46, a messenger at the National Assembly who showed up to support the president.

Mr. Chávez has left untouched the operations of other private broadcasters who were also critical of him at the time of the 2002 coup but who have changed editorial policies to stop criticizing his government. That has led Mr. Chávez’s critics to claim that the move to allow RCTV’s license to expire amounts to a stifling of dissent in the news media.

“The other channels don’t say anything,” said Elisa Parejo, 69, an actress who was one of RCTV’s first soap opera stars. “What we’re living in Venezuela is a monstrosity,” she said at RCTV’s headquarters on Sunday, as employees gathered for an on-air remembrance of the network’s history. “It is a dictatorship.”

 

For the full story, see: 

SIMON ROMERO.  "Dueling Protests Over Shutdown of Venezuela TV Station."  The New York Times  (Mon., May 28, 2007):  A3.

(Note: the excerpts above are from the updated online version of the article that appeared online under the title: "Venezuela Police Repel Protests Over TV Network’s Closing.")

(Note:  ellipsis added.)

 

On 5/28/07 CNN broadcast a Harris Whitbeck report on students protesting the Chavez censorship under the title "Hear No Evil, See No Evil."

 

   Monica Herrero protests Chavez closing down the television network that dared to criticize his government.  Source of photo:  screen capture from the CNN report at http://www.cnn.com/video/partners/clickability/index.html?url=/video/world/2007/05/28/whitbeck.chavez.tv.affl

 

“Remarkable Entrepreneur” Bob Chitester

 

ChitesterBob.jpg   Bob Chitester.  Source of image:  online version of the WSJ article cited below.

 

I was in the audience for the discussion portion of a couple of the episodes of the original "Free to Choose."  On January 29, PBS broadcast a sort of coda to the series entitled "The Power of Choice:  The Life and Times of Milton Friedman."

 

As much as the show is a celebration of Friedman’s life and work, it also showcases the remarkable entrepreneur who made it and "Free to Choose" possible. Bob Chitester produced the original series while serving as the only public-TV station manager in the country who didn’t believe in government subsidies. A tireless promoter, he raised the equivalent of $8 million today for the series — entirely from private sources, an achievement that delighted Friedman.

Mr. Chitester came to the project with an unusual background. In 1966, he became the general manager of the PBS station in Erie, Pa., at age 29. An opponent of the Vietnam War, he handed out literature for George McGovern in 1972 and admits he knew nothing about economics. Then, in 1976, he met with economist W. Allen Wallis, who gave him a copy of Friedman’s "Capitalism and Freedom." Mr. Chitester soaked it up, became a believer in markets, and immediately began pursuing Friedman to do a series that would provide a counterpoint to one by liberal economist John Kenneth Galbraith that PBS was airing.

After all these years, Mr. Chitester is still surprised by how easily Friedman’s cooperation came. "I was a bearded, leather-jacketed, small-town TV executive, yet he treated me as competent and honorable, as he did everyone he met, until you proved otherwise," he recalls.

Surprisingly, Friedman insisted on not writing a script in advance of filming. The points that would be made in each scene were discussed, but his commentary was extemporaneous. This resulted in such gems as the economist sitting in a sweatshop in New York’s Chinatown, where he recalled the days when his mother worked in a similar environment. "Life was hard," Friedman noted, "but opportunity was real." He then transports the audience to a junk floating in the harbor of Hong Kong, "the freest market in the world," where Friedman discusses how the then-British colony’s leaders refused to collect some economic statistics because they feared they would be used as an excuse for government intervention in the booming economy.

. . .

This week’s PBS special pays tribute to the many achievements of Milton Friedman. One that is often underappreciated is the extent to which he demonstrated how visual images could influence and shape public debate. As his most ardent electronic disciple, Bob Chitester deserves the free-market community’s equivalent of an Oscar.

 

For the full commentary, see: 

JOHN H. FUND.  "TV’s Evangelist for Capitalism."  The Wall Street Journal  (Weds., January 31, 2007):  D10.

(Note:  ellipsis added.)

 

Milton Friedman’s School Vouchers Pass Utah Senate

I received an email mailing yesterday (2/9/07) from Robert Fanger, who is the Communications Director of the Milton and Rose Friedman Foundation.  He wrote:  "By a vote of 19 to 10, the Utah Senate passed the universal school voucher bill this afternoon."

On Wednesday, the Wall Street Journal ran an editorial on the issue that is excerpted below:

 

Proving that the best reforms often pass by the slimmest of margins, Utah’s house voted 38-37 late last week to create a state-wide voucher program that will allow students to escape failing public schools.

Union opponents can be expected to mount a furious assault in the state senate, and then head to court. But the senate is likely to pass the reform supported by GOP Governor Jon Huntsman Jr., so Utah may soon become the first state with a universal school choice plan. It would offer students who attend private K-12 schools from $500 to $3,000 in tuition reimbursement based on family income.

Meanwhile, South Carolina could be next. Legislation is now being drafted to allow nearly 200,000 poor students to opt out of failing public schools by giving them up to $4,500 a year to spend on private school tuition. Middle class parents would be eligible for a $1,000 tax credit.

 

Reference for editorial:

"Choice Advances."  The Wall Street Journal  (Weds., February 7, 2007):  A14.

 

Becker on Friedman

 

MiltonFriedmanDay.jpg   Source of graphic:  http://www.ideachannel.com/Friedman.htm

 

David Levy has noted in an email that at the reception to preview the new Friedman documentary, Gary Becker gave a great presentation on Milton Friedman, and it was a great shame that no one recorded it.  I feel especially guilty, because I had thought of recording it, and had even brought a small camera that would have (badly) done the job.  But the room was dark and crowded, and by the time the talk started, I was in conversation a long way from where Becker started speaking. 

Levy suggests that maybe those of us who were there, should record our memories of what Becker said.  I like that idea, and will record mine here.

 

Becker started out by saying to Bob Chitester that he wasn’t sure that the documentary did justice to Friedman.  (Chitester was the producer, I think, of the original Free to Choose series, and a moving force behind the new Friedman documentary, to be first shown on PBS on January 29th, 2007.)  

Becker mentioned that Friedman was a missionary.  He would talk economics to anyone–if a taxi driver made a mistaken comment about economics, Friedman would set him straight.

Becker mentioned that while Friedman liked to argue about ideas, he never saw him be mean to anyone.

Becker mentioned that a friend of his taking Friedman’s price theory class (I think Becker may have said the friend was Gregory Chow?) asked Becker how he could keep asking questions in Becker’s class, when Friedman would keep showing the ways in which Becker was mistaken.

Becker mentioned that he talked to Friedman a few days before his death, and that they even talked a little economics.

Becker emphasized that Friedman had been both a great economist, and had made an enormous difference in the world, in particular in making the world more free.

 

Some background:  Becker spoke about Friedman at two sessions at the Allied Social Sciences Association meetings in Chicago in early January.  One was in the afternoon (about 2:30 PM?) of January 5, 2007, and also included Robert Lucas, and Tom Sargent.  I missed that session because I wanted to attend a session featuring the research program of Robert Fogel on longevity.  The second session, at 6:00 – 7:30 PM on Sat., January 6, 2007 was at a reception sponsored by the University of Chicago to preview the new documentary on Friedman.  I attended this reception through Becker’s presentation, but did not stay for the documentary preview.  My friend Luis Locay attended both sessions, and told me that some, but not all, of the stories Becker told were similar in both sessions.  Locay also mentioned that Becker appeared to get more choked-up at the session on January 5, 2007.

 

Hugely Wasteful Health-Care Spending

CureBK.jpg   Source of book image:  http://www.encounterbooks.com/books/cure/

 

Milton Friedman is gone now, but the new book reviewed below, includes a forward written by him.  Friedman can be praised for many reasons; a minor one is that he was tireless and generous in offering praise and support for others who were seeking to better understand free markets. 

 

About 10 years ago, I broke my leg playing basketball.  After I came out of surgery, with a cast stretching from my ankle to the top of my leg, an orderly asked me whether I had ever used crutches before.  I hadn’t, so he showed me what to do, swinging through them from one end of the room to the other.  The whole lesson lasted about 90 seconds.  When I got my hospital bill, I saw that I had been charged $150 for "gait training on crutches."  I did what all insured Americans do:  I forwarded the bill to my insurance company.  Why should I care?  I wasn’t paying for it.

One of the problems with American health care, as David Gratzer notes in "The Cure," is precisely a payment system that takes the patient out of the equation.  In the early 1960s, the average American paid out of pocket one of every two dollars that he spent on health care; today the figure is one dollar in seven.  The inevitable effect is hugely wasteful spending (and inflated hospital bills like mine).  In fact, per-patient costs have gone up almost exactly in inverse proportion to the share of spending borne by the consumer.

Dr. Gratzer cites a remarkable Rand Corp. study that tracked health-care spending by 2,000 families over eight years.  The families who got free health care spent 40% more than the families with cost-sharing arrangements.  And yet the health outcomes for the two groups were the same.  The lesson:  Market-based health insurance systems, such as health savings accounts, cut out inefficiencies and lower costs without compromising quality.

. . .

. . . :   America is clearly at a crossroads in medical care.  Within the next decade we will get either some version of Hillary-care or more free-market medicine, starting with universally available health savings accounts.  Let’s hope that our nation’s policy makers read "The Cure" before they decide.  They will learn that the government route flattens costs only by holding back the pace of technology, artificially controlling its price and rationing its use.  That is not a prescription for better health.

 

For the full review, see: 

STEPHEN MOORE.  "BOOKS; The Market and Its Medicine."  The Wall Street Journal  (Tues.,  By  December 5, 2006; Page D6. 

 

The reference to the book under review, is: 

Dr. David Gratzer.  The Cure: How Capitalism Can Save American Health Care.  Encounter Books, 2006.  (233 pages, $25.94)

 

Milton Friedman, Freedom’s Friend, RIP

 

A week or so ago my mother and I were sharing our disappointment at the firing of Donald Rumsfeld, who we both thought was a good man.  She told me that she had thought he would have made a good President.  I told her that she was in good company, because in his memoirs, Milton Friedman had expressed the same thought (p. 391).

We were in very good company while Milton Friedman was with us, and I feel a sense of loss, both personally, and for the broader world. 

By chance, I sat behind Milton Friedman, and his wife and son, at the Rockefeller Chapel memorial service to honor Milton Friedman’s good friend George Stigler.  I can’t remember if Friedman spoke it at the service, or wrote it later, but I remember him saying (or writing) that the world was a darker place without Stigler in it. 

And it is darker yet, without Friedman in it.  (It is reported that he died of heart failure sometime early this morning at the age of 94.)

My first memory of meeting Milton Friedman was in the early 1970s at Wabash College.  My Wabash professor, Ben Rogge, was a friend of Friedman’s.  They attended Mount Pelerin Society meetings together, and Rogge, along with his senior colleague John van Sickle, had invited Friedman to deliver a series of lectures at Wabash College, that became the basis of what remains Friedman’s meatiest defense of freedom:  Capitalism and Freedom.  (Free to Choose is better known, broader, and important, but Capitalism and Freedom is more densely packed with stimulating argument, and provocative new ideas.)

The members of the small, libertarian Van Sickle Club were gathered around Friedman in a lounge at Wabash, and I remember Rogge asking Friedman:  ‘If there was a button sitting in front of you, that would instantly abolish the Food and Drug Administration, would you push it?’  I remember Friedman smiling his incredibly delighted smile, and saying simply, with gusto:  "yes!"

I remember attending some meetings at the University of Chicago, I think the first History of Economics Society meetings, with Rogge in attendance.  (This was in my first couple of years as a Chicago graduate student, when I was mainly doing philosophy.)  Stigler invited Rogge up for a drink, and Rogge said said ‘sure’ as long as Diamond could come along.  (E.G. West, the Adam Smith biographer, was also there, I think at Rogge’s behest.)  The apartment had been Milton Friedman’s for many years.  In fact I think he had built the several story apartment building, because he wanted convenient, comfortable living quarters close to his Chicago office.  Friedman’s apartment occupied the top floor, and I vaguely recall, afforded a nice view of the campus. 

I lived for a year at International House, next to the Friedman apartment building.  I remember on Sunday morning’s seeing Friedman dash into International House to buy his copy of the Sunday New York Times.  ("Dash" is too strong, but he certainly moved with more vigor than I ever have on Sunday mornings.)

When Friedman left Chicago for the Hoover Institute in California, he sold, or sublet his apartment to Stigler, who apparently used it on evenings when he did not want to drive out to his modest home in the Chicago suburb of Flossmoor.

I was stunned to be in the presence of Stigler in Milton Friedman’s former abode.  (I seem to remember E.G. West seeming almost equally overwhelmed.)  I remember much of the time being spent with Stigler trying to convince Rogge to join him for golf the following day.  Rogge demurred because he was wanting to see, for the first time, I think, a newly born grandchild in the Chicago area.  (Family was extremely important to Rogge, both in theory, and in practice.)

I also remember Stigler asking Rogge about Rogge’s having convinced Friedman to give a speech at a fund-raiser at Wabash.  Stigler said something to the effect that this was the level of favor that he could not ask often of Friedman, and did the cause really justify it.  (I think one of Stigler’s sons had been a Wabash student while Rogge was Dean of Students at Wabash.)  Rogge seemed to appreciate Stigler’s point, but seemed to believe that solidifying Wabash’s endowment was a worthy enough cause.

(This, by the way, is ironic, since Rogge agreed with Adam Smith that endowments were apt to be used for purposes different from the donor’s intent.  In the founding of Liberty Fund, Rogge had tried to persuade Pierre Goodrich to have the Fund spend all of its funds in some modestly finite number of years.)

After I gradually made the switch from philosophy to economics, at Chicago, I got to know Stigler fairly well, but unfortunately did not know Friedman, personally, as well.

I remember attending a reception at Chicago in honor of Friedman’s winning the Nobel Prize in 1976.  (It was at that reception, that I first struck up a conversation with my good friend Luis Locay.)

I registered for Milton Friedman’s price theory class the final time he taught it, I think.  It was in a large, dark tiered classroom.  At the beginning of every class, Friedman would almost bounce into the classroom, bursting with pent-up energy.  I do not smile easily, or often, but I always smiled when I saw Friedman.  There was so much good-will, joy in life, enthusiasm for ideas. 

During one of these entrances, I noticed that Friedman, well into his 60s, was wearing the counter-culture-popular ‘earth shoes’; apparently he was out-front in footwear, as well as ideas.

One characteristic that came through in class, as well as in his public debates and interviews, was that he was focused on the ideas and not the personalities expressing them.  I remember seeing Friedman debating some union official on television.  He talked at one point about how he and the official had had to work hard in their youth.  Friedman seemed to like the union official; he just disagreed with some of his ideas, and wanted the union official and everyone else, to understand why.  By the end of the "debate", the union official had a warm, amused, expression on his face.

I remember once Friedman saying that more of us should speak out more often on more topics; that the bad consequences to us weren’t as bad as we supposed.  Probably he was right; though he had a lot working in his favor—his quick-wittedness, his good will, his sense of humor, and probably his being so short in physical stature—it was probably hard for anyone to feel threatened by him, so they were more apt to let down their guard and listen to what he had to say.

One of the unfair hardships of some of Friedman’s years at Chicago, was the constant harassment from a group of Marxist students called, I think, the Spartacus Youth League.  Whenever Friedman was scheduled to speak, they would disrupt the event, and try to prevent his speaking.

So when it was time to tape the discussion half-hours of each hour episode of the original "Free to Choose" series, the discussions were scheduled as invitation-only.  I was in the audience for two or three of the discussions.  (They were fine, but personally, I would have preferred another half hour of pure Friedman.)

 

As a poor graduate student, I counted myself extremely lucky to find an auto-repairman who was a wizard at finding creative ways to keep old cars running, at low repair cost.  He was a man of few words, put he kept the words he gave.

I ran into him and his wife in a little Lebanese restaurant that was run out of the secondary student union just down from I-House.  He invited me to sit with them, which I did.  I remember him telling me that they were gypsies, and him mentioning that people sometimes had the wrong idea about gypsies.  He told me that he had been rais
ed never to go into debt.  He told me how cheap White Castle hamburgers used to be.  When I told him that I was studying economics, he surprised me by saying that Milton Friedman had been a customer of his, and that he really liked Milton Friedman.

This gypsy was a simple, decent, hard-working fellow.  I don’t know, but I strongly guess that Friedman saw the good in this fellow, and treasured what he saw.  And the gypsy liked Milton Friedman back.

 

Whenever I saw Friedman interviewed on television, or read one of his letters, or op-ed pieces, in the Wall Street Journal, I would feel a bit more optimistic about freedom, and life.  A lot of people give up, at some point, but Friedman never did—he just kept on observing, and thinking, and speaking.  The last time I had any interaction with him was at the meetings of the Association of Private Enterprise Education (APEE) on April 4, 2005.  He was hooked up with the conference via video camera from an office in California.  He gave a brief presentation, and then spent quite some time answering questions.  (I recorded some of these in grainy, small video clips that can be viewed on my web site, or viewed on the web site of the APEE.)

I asked him a question about whether he agreed with Stigler in Stigler’s memoirs that Schumpeter had something important to say about competition.  I wasn’t as impressed by his answer to this question, as I was to some of his other answers.

I think that Schumpeter may be remembered as a crucial economist for our understanding of the process of capitalism:  innovative new products through creative destruction.  But if capitalist innovation prospers, part of the credit will belong to Milton Friedman.  

Friedman and Stigler were led into economics in part because of the challenge to capitalism posed by the Great Depression.  If depressions of that magnitude were an essential part of what capitalism was about, then a lot of people would prefer to have nothing to do with capitalism.  Schumpeter’s response basically was to say that every once in awhile, really bad depressions will happen as part of the process of capitalism, and we just have to suck it up, and live through them. 

One of Milton Friedman’s major contributions to economics, was to show that ill-advised government policies, such as a contraction of the money supply, were responsible for making the depression much deeper, and much longer than it needed to have been.  (See, e.g,  A Monetary History of the United States.)

In other words, he showed that Great Depressions are not an inescapable price we must pay if we choose to embrace the economic freedom, and the creative destruction, of capitalism.

 

When Friedman cleaned out his Chicago office to head for California, he left in the hallway for scavenging, extra copies of some of his books, and offprints of articles various academics had sent him.  So I have a Spanish copy of Capitalism and Freedom (even though I don’t read Spanish), and several offprints of articles from distinguished economists who sent "best wishes" to "Milton." 

After the office was cleared out, I remember sticking my head in, and looking around the empty office, one final time, for sentiment’s sake.  I was stunned to see a bright red, white and blue silk banner left hanging on the wall.  It was festooned with American flags, and said, in large letters:  "Buy American!" 

I felt anxious and confused:  was one of my heroes inconsistent on such a basic issue?  So I entered the office, and went over to the banner, and examined it more carefully.  It was then that I noticed, in small letters at the bottom of the banner:  "Made in Japan".

 

Some book references relevant to the discussion above:

Friedman, Milton. Capitalism and Freedom. Chicago: The University of Chicago Press, 1962.

Friedman, Milton, and Anna Jacobson Schwartz. A Monetary History of the United States, 1867-1960, Nber Studies in Business Cycles. Princeton: Princeton University Press, 1963.

Friedman, Milton, and Rose D. Friedman. Free to Choose: A Personal Statement. New York: Harcourt Brace Jovanovich, Inc., 1980.

Stigler, George J. Memoirs of an Unregulated Economist. New York: Basic Books, Inc., 1988.

West, E. G. Adam Smith: The Man and His Works: Arlington House, 1969.

 

 In vino veritas.  Photo from Tio Pepe Bodega, Jerez, Spain.  Photographer:  Dagny Diamond.

 

Continue reading “Milton Friedman, Freedom’s Friend, RIP”

Hong Kong’s Growth Was Due to Cowperthwaite’s “Positive Noninterventionism”

In Free to Choose, Milton Friedman compared Hong Kong’s free market, with India’s state control of the economy.  The dynamism and growth of Hong Kong was a stark contrast to the inertia and stagnation of India.  In the decades since Free to Choose, India has become more free and, alas, Hong Kong less free:   

(p. A14) . . . it was sadly unsurprising to see Hong Kong’s current leader, Donald Tsang, last month declare the death of the policy on which the territory’s prosperity was built.

The really amazing phenomenon is that, for half a century, his predecessors resisted the temptation to tax and meddle.  Though a colony of socialist Britain, Hong Kong followed a laissez-faire capitalist policy, thanks largely to a British civil servant, John Cowperthwaite.  Assigned to handle Hong Kong’s financial affairs in 1945, he rose through the ranks to become the territory’s financial secretary from 1961-71.  Cowperthwaite, who died on Jan. 21 this year, was so famously laissez-faire that he refused to collect economic statistics for fear this would only give government officials an excuse for more meddling.  His successor, Sir Philip Haddon-Cave, coined the term "positive noninterventionism" to describe Cowperthwaite’s approach.

The results of his policy were remarkable.  At the end of World War II, Hong Kong was a dirt-poor island with a per-capita income about one-quarter that of Britain’s.  By 1997, when sovereignty was transferred to China, its per-capita income was roughly equal to that of the departing colonial power, even though Britain had experienced sizable growth over the same period.  That was a striking demonstration of the productivity of freedom, of what people can do when they are left free to pursue their own interests.

 

For the full commentary, see: 

MILTON FRIEDMAN.  "Hong Kong Wrong."  Wall Street Journal  (Fri., October 6, 2006):  A14.

(Note:  ellipsis added.)