The Best Of Both Worlds Mp3 Download

[Domenec Reynolds]

Ithas also brought him much satisfaction. Now, in what he is acutely conscious are probably the last years of his life, he and his wife and longtime writing partner Rose Friedman are working on their memoirs.

I met Friedman in January in his elegant high-rise San Francisco condo, with an absorbing view of both the Pacific Ocean and the San Francisco Bay. His study is filled, but not cluttered, with his own books and economics reference works. While some Great Men in his position in life might refuse nuisances like interviewers entirely, Friedman is friendly and mostly forthcoming, speaking with the slow assurance of a lifelong professor and teacher very comfortable with explaining things. He welcomed me cordially but with a distinct set of limits, both in time and in subject matter. He has a large project to finish, and not much time to finish it in; and he refuses to psychoanalyze himself, largely avoids indulging in discussion of personalities, and wants to save some stories for his memoirs.

Friedman is used to discussing policy, but except for his assessment of the new Congress's potential, we wandered far afield into reminiscence; assessment of his intellectual development; and his thoughts on the history, significance, and successes of the intellectual movement for freedom that he has served so staunchly.

Milton Friedman: I'm skeptical. The talk is good. But I expected so much out of the Reagan administration and was disappointed. I'm a great admirer of Ronald Reagan himself, and I suspect he would have gotten much more done if it hadn't been for the Cold War and the problem of Nicaragua and El Salvador.

Congress wants to talk in this direction. Would they really want to move in that direction? The most important reform would be term limits, six-year limits. Because from an economic point of view, one of the worst features of our system is that you have a new tax law every year or every two years. However bad the tax law is, if you didn't change it for five years it would do less harm. Why do you keep changing it? Because that's the most effective way to raise campaign funds. Lobbyists will pay you to put loopholes in; they will pay you to take them out.

Friedman: I was an employee at the Treasury Department. We were in a wartime situation. How do you raise the enormous amount of taxes you need for wartime? We were all in favor of cutting inflation. I wasn't as sophisticated about how to do it then as I would be now, but there's no doubt that one of the ways to avoid inflation was to finance as large a fraction of current spending with tax money as possible.

In World War I, a very small fraction of the total war expenditure was financed by taxes, so we had a doubling of prices during the war and after the war. At the outbreak of World War II, the Treasury was determined not to make the same mistake again.

You could not do that during wartime or peacetime without withholding. And so people at the Treasury tax research department, where I was working, investigated various methods of withholding. I was one of the small technical group that worked on developing it.

Friedman: Through Bill Baroody at the American Enterprise Institute. The American Enterprise Institute was originally the American Enterprise Association, and had established a board of academic advisers to advise them on their publications. I had been a member of that I think since its inception, and Baroody arranged sometime in the early '60s a number of dinners at his house at which Goldwater was present. Baroody was the brain trust for Goldwater. I was also at some of those dinners, so I got to meet Goldwater. And then when the campaign came along, Baroody asked me to serve as economic adviser. I didn't go on the campaign trail. I sat at home and wrote memos.

Friedman: It depends on what you mean by acumen. There's no doubt whatsoever that he's a man of principle and strong character. His IQ is perfectly reasonable but it's not outstanding among the various politicians I've met, and that shows why IQ is not a good measure. The highest IQ was Richard Nixon's and he was a terrible president.

While I was never a governmental official, I was a member of an economic advisory group that Nixon appointed of which Arthur Burns was chairman. I saw Nixon from time to time when he was president, until he imposed price controls. I saw him only once after that.

Friedman: I'm sure it was a combination of all of those. I was exposed as an undergraduate at Rutgers to two very strong influences: Homer Jones, who was a student of Frank Knight's from Chicago, and Arthur Burns. They both had a considerable influence on me as an undergraduate in my thinking and my writing.

But it would be hard to say what philosophy that left me with. One of the things I regretted all my life is that when I graduated from Rutgers and came home, I wrote out a statement of my beliefs. I put that away in a drawer somewhere in my mother's home and I've never been able to find the damn thing! I'd love to have it! So I can't really tell you what I believed at that time.

But obviously my ideas were not very well formed. I was an innocent youngster and what I was impressed by, of course, was the Great Depression, and the belief that somehow or another there ought to be something that can prevent any such thing from happening.

Thanks to Homer, I was offered a scholarship at the University of Chicago and I went to Chicago and studied with Frank Knight, Jacob Viner, Henry Schultz, and so on. The atmosphere in Chicago in 1932 was very lively and active and encouraging. Of course, I got a very good grounding in economic theory and statistics as well.

Then I went back to Chicago for one year and was a research assistant to Henry Schultz. There were a group of students in Chicago who were very, very important. George Stigler, Allen Wallis, Rose Director, and myself. We ate almost every lunch and dinner together. We spent all the time discussing economics, both economic theory and economic policy. And we were very close for the rest of our lives. George died about two years ago. Allen, I'm glad to say, is still alive.

Throughout my career, I spent most of my time on technical economics. This policy stuff has been a strict avocation. If you really want to engage in policy activity, don't make that your vocation. Make it your avocation. Get a job. Get a secure base of income. Otherwise, you're going to get corrupted and destroyed. How are you going to get support? You're only going to get support from people who are ideologically motivated. And you're not going to be as free as you think you're going to be.

One of the most important things in my career is that I always had a major vocation which was not policy. I don't regard what I've done in the field of monetary policy as on the same level as what I've done about trying to get rid of the draft or legalizing drugs. One is a technical byproduct of scientific work, and so that's the only sense in which my vocation has affected my policy. But by having a good firm position in the academic world, I was perfectly free to be my own person in the world of policy. I didn't have to worry about losing my job. I didn't have to worry about being persecuted.

I think you'll make a mistake if you're going to spend your life as a policy wonk. I've seen some of my students who have done this. And some of them are fine, and some of them, especially those who have gone to Washington and stayed, are not.

Friedman: What really got me started in policy and what led to Capitalism and Freedom was, in an indirect way, the Mont Pelerin Society. The first Mont Pelerin Society meeting was in 1947 in Switzerland. Hayek arranged it. It was his idea.

The reason the Society ever happened was that Hayek had written The Road to Serfdom, which attracted the attention of the Volker Foundation, and it was the Volker Foundation that financed the American participation in the Mont Pelerin Society. A Swiss group financed the Swiss and European participation.

In the middle '50s, the Volker Foundation undertook a program of summer institutes for junior academics who were favorably inclined toward a free-market point of view or were interested in such issues. Capitalism and Freedom was based on a series of lectures that I gave at one of those seminars. Those seminars forced me to systematize my thoughts and present them in a coherent way. And they also provided a very good audience because the people who were there were lively, outspoken, didn't hesitate to criticize. It was a very good audience. There was a lot of free time as well for discussions outside of the formal seminar. And I learned a great deal, not only from the students who were there, but also the fellow lecturers.

Another thing that helped form my policy orientation was when Hayek came to Chicago in 1950. He attracted quite a number of very able students, Sam Peltzman, Ron Hamowy, Ralph Raico, Shirley Letwin. There were quite a group of them. Hayek drew very high quality people. I was an adviser to their New Individualist Review and contributed articles to it. They were a very lively group that had organized discussion sessions and so on, which was part of the atmosphere.

I was persuaded at that time in the early 1960s that we were on the verge of developing a strong libertarian movement. These were libertarians, all of them, though Hayek would not have labeled himself a libertarian. As you know, he always avoided the term conservative, too. He would call himself an Old Whig. The others would have called themselves libertarians.

Ayn Rand was receiving increasing attention at that time. I believed a big upsurge in the libertarian philosophy and views was pending. And to some extent it was. You had the Randian group, and the Murray Rothbard group. But the developing libertarian movement was repressed by the Vietnam War and what it led to. You've only got room for one big movement at a time.

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