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>> Bill Whelan: It's Tuesday, October 31th, 2023, and welcome to Matters of Policy and Politics, a Hoover Institution podcast devoted to governance and balance of power here in America and around the globe. I'm Bill Whalen. I'm the Hoover Institution's Virginia Hobbes Carpenter Distinguished Policy Fellow in Journalism. I'm not the only fellow who's podcasting these days. You don't take my word for that. I suggest you go to the Hoover Institution's website, which is hoover.org.
Click on the tab at the top of the homepage it says commentary. Head over to where it says Multimedia. And up will come audio podcasts. There are about a dozen in all. I'm proud to say that my podcast is at the top of the list, not necessarily because of what I'm doing, but because I do my best to invite the best and brightest at the Hoover Institution, remarkable men and women who work here to come on this show. This episode is no exception. Today's guest is Jennifer Burns.
Jennifer Burns is a Hoover Institution research fellow and a professor of history at Stanford University, where she teaches undergraduate and graduate courses on modern US history, conservatism, and intellectual history. She's here to discuss her new book, Milton Friedman, The Last Conservative. Jennifer, welcome to the podcast. >> Jennifer Burns: Thanks so much for having me, Bill. >> Bill Whelan: First, congratulations on the book. You did me a huge favor.
I've been traveling a lot on airplanes lately, and I took this book along with me, and it was a great way to chew up many hours on a plane. It's the details of this man's life are just exhausted. My goodness, what a great job you did digging into it. >> Jennifer Burns: Thanks so much. It was really fun. I learned way more than I thought I was ever going to, not just about Milton Friedman, but about the history of economics and the history of the 20th century, too.
>> Bill Whelan: So let's talk about Dr Friedman, but first, let's spend a couple minutes talking about Dr Burns in this regard. I'm curious as to what drew you into the field of history. And then, Jennifer, I'd like you to explain what exactly an intellectual biography is, because this is, I believe, the second one of these you've done now, the other one being a book you did on the libertarian author Ayn Rand. >> Jennifer Burns: Yeah, yeah, great questions.
Well, I've always loved reading, so it was sort of inevitable that I was gonna do something that involved reading lots of books. And what really ended up drawing me to history was this kind of combination of, you have a lot of freedom in that sort of anything that happened in the past is fair game for you as a historian, but then you have a lot of structure. You have to ground what you find in documents, in evidence. You have to argue and make your case, and we never really know.
You can't run a control on history. You can't do it a different way a second time. You can't control all the relevant factors, but you can assemble arguments based on documents, based on current knowledge, based on patterns that repeat, and you can make an argument that's more or less persuasive. So I really enjoy that challenge. And then I'm not just reading books, I'm reading what goes into books, the kind of story behind the scenes.
I get that from archival research, and that I also find absolutely fascinating, kinda peeling back the covers on that. >> Bill Whelan: And the intellectual biography? >> Jennifer Burns: So intellectual biography is interesting. So I consider myself in some ways an intellectual historian, and that means I'm studying the history of ideas, but ideas in how they grow out of certain human contexts, social and historical context, and how they influence those contexts and are shaped by them.
So rather than sort of abstract political theory, it's very grounded in real people, in their lives, in their historic experiences. And I would say that taking a singular figure as a topic of historical research, obviously, there's a large genre of biography. Most of that exists outside the academy or professional historians.
What historians who work in universities do do when they study individuals, tends to be in the context of the history of ideas, because then you can find a thinker who really needs sustained attention on their life and their life's work. And so to think about the difference between biography and intellectual biography, yes, I'm interested in the person's life. I'm very interested in the times they lived in.
I'm less interested in, let's say, their psychological profile, their emotional makeup, although that's a very important part of the story. But what really drives the story for me when I write intellectual biography is the ideas they hold, the ideas they develop, and the ideas almost have a motive power in life of their own. And so I'm braiding the ideas with the actual lived experience of these people in their historical moment.
>> Bill Whelan: So why the decision to take on the life and times of Milton Friedman? And I would note, Jennifer, that the November 14th release date of the book is two days before the 17th anniversary of his death, which was November 16th of 2006. >> Jennifer Burns: That's a good call. I don't think we planned it that way, but I think I was sort of launched on this path of doing intellectual biography by my first book.
And I was drawn to Ayn Rand because she was such a widely read and widely known figure. And we actually didn't know much about her as a real historical person. She'd kinda become a symbol or myth or a legend. So I very much enjoy kind of taking these big figures and finding out some of the nitty gritty details.
When I started thinking about doing Friedman, it was in the context of thinking of them as both contributing to a reorientation of ideas and policy and politics that we talk about as conservative in the United States.
And I began thinking of Friedman, kind of the YouTube FrIedman, the famous Talking Head guy, who I thought was really interesting and seemed to have a resemblance to Rand in that he was a great popularizer of ideas, particularly ideas about what is the proper role of the state, how to balance state and markets. And so I sort of turned to him thinking I was writing about kind of a highly educated pundit, and I really quickly found so much more.
And I realized I didn't know much about economics as a discipline, and that had been tremendously important in shaping our world across the 20th century. So as the R]research unfolded, I really. He came to focus more on Friedman, the economist, although Friedman, the pundit, is definitely also a character in the book. >> Bill Whelan: Let's talk a bit about how you research this.
The good news is that there is a treasure trove of material on Milton Friedman literally in your backyard, since you're on the Stanford campus, and this is the Hoover archives. The bad news, though, Jennifer, is there something like 200 boxes of materially on Friedman in the bowels of our archive. So how did you approach this? >> Jennifer Burns: My gosh, yeah.
And actually, it was a great stroke of good fortune that I ended up being hired at Stanford as I was beginning this project and thinking about this project. So I had the luxury of kind of going in and out of the archive as I pleased, which was really terrific. So I sort of started from the beginning. I had this roster of his boxes, and one of the places I started was at the University of Chicago. What was his experience like there, now?
I went to Chicago and got a lot of material from their archives, but what they had at the Hoover Institution archives were things like his academic transcripts, and then papers he wrote, and this, the professor's comments on the papers. And then I found, one of my most interesting findings was the syllabus. Not for a class that he had taken, but it had his handwriting on it, and it had the prices of various books written on it.
So I think it had John Stuart Mill on Liberty and he wrote next to it fifty cents, and then you wrote individualistic next to it. And so I had very good evidence that he had been reading this book or wanted to read this book or this was sort of on his radar. So it's able to explain, you know, even though here's his transcript and the economics classes he took, he's also kind of assigning himself other books from this other syllabus.
He's not enrolled in this class, but definitely he's paying attention to it. He's trying to find this material. So that's the kind of thing that you only get when you open up these archival boxes. You won't find it. He's not going to remember that it doesn't go in the footnotes of his book. It doesn't go in his book, but it's still part of his. Intellectual development. >> Bill Whelan: You mentioned Ayn Rand. The Ayn Rand fascination I don't quite understand.
I've read her books, they're interesting, but I just don't understand why the cult that follows her, they're like Swifties, Jennifer. They don't wear bracelets, but they wear dollar signs. There's an Ayn Rand society, I mean, they're just wildly passionate about her. And then they have Milton Friedman. Here he is, arguably the most famous economist of the 20th century, yet scant writing about him until your biography comes along. Why such lack of attention to Friedman?
>> Jennifer Burns: In terms of books, I think that's true, although I must say we're in a wave of Friedman scholarship. Ed Nelson has two big books on him. There's a couple of other historical accounts out there. I think it's because it's mostly economists who've been interested in Friedman, people who are writing the history of economics, and they write articles. So I gotta tell you, Bill, there are probably 1500 articles about Milton Friedman out there.
And for every one article Friedman wrote, it's probably generated 25 to 30 articles about that article. So I had to do a lot of putting together fragments and trying to create a more cohesive story. And I think some of that goes from Friedman's politics, maybe being not copacetic with the vast bulk of people writing American history today. Some of it might be the economics. And I really hope that my book is kind of an invitation, and come on in, the water's fine.
You don't have to be a trained economist to understand the history of economics or to understand its consequences for the world. And so, I don't know. I mean, they will tell you at the archives that the Friedman papers are among their busiest collections. But I guess another answer might be, it took me almost a decade to write this book. And so probably there's a lot of other people out there who thought about doing it and decided they had other things to do with their time.
So, yeah, it's a pretty massive project. >> Bill Whelan: Yeah, I think what I was getting at, Jennifer, was that compared to, say, John Maynard Keynes, Keynes is forever dropped in conversations, people forever focused to Keynes, but I don't quite see the same pivot to Friedman. So is it just a reflection that Keynes was just a little more outlandish, just a lot more style to him, ran in kind of more interesting circles? >> Jennifer Burns: Yeah, I mean, I think that's part of it.
Keynes has this sort of cinematic life where he's an economist and a diplomat and a member of the Bloomsbury bohemian circle. I also think that Britain is a smaller world, universities in Britain are kind of in a smaller universe. And so it's just more likely that somebody in Britain would be interested in Keynes than someone in the United States would be interested in Milton Friedman.
And some of the great biographies that came out of Keynes in the early generation are, you know, people who knew him, people who interacted with him. And his legacy was still very much contested, not just in british society, but in british economics and in british, you know, intellectual life. So you had more concentrated world, I think, around him. And then once you get a couple biographies, the rest kind of build on that. So maybe we're at the beginning of a little Friedman boom, who knows?
>> Bill Whelan: Okay, let's talk a bit about the man's origins. He's born July 31st, 1912, in Brooklyn, New York. He is the fourth and last child and the first son of immigrants from Carpatho Ruthenia, which I believe is today's western Ukraine and Slovakia. He grows up in Raleigh, New Jersey. In his words, his mother runs a small retail dry goods store. His father engages in what Friedman would describe as jobbing ventures, that was his word.
He described his family as the following, income was small and highly uncertain. Financial crisis was a constant companion, that there was always enough to eat in the family, atmosphere is warm and supportive. Jennifer, he attends Rutgers. He studies math, he wants to be an actuary. So when does the light bulb click on? And when does Milton Friedman not want to be an actuarian? When does he want to become an economist? Where is the road to Damascus for him?
>> Jennifer Burns: Yeah, that's an interesting metaphor. I will say just briefly on his account of his own childhood. I dig into that in some detail in the opening chapters and in the footnotes, so I would refer listeners to that. He ends up with a bit more stability than you would get from that, rendering a bit more economic stability than he kind of recalls in his memoir.
Nonetheless, the Great Depression makes a really profound impact on him, as I think it does any thoughtful person living through those times. When he applies to graduate school, he ends up, I think it's an offer from Brown University in math and Chicago in economics. And it's at that point that he has a teacher, Homer Jones, who is an economist. He also has another teacher he reveres, Arthur Burns, who is an economist. And at that point, he's lost his father.
It's one of the kind of defining moments of his young life. His father dies when he's 16, and so these two men that he really looks up to and admires, they're both economists. The economy is going south really fast. And so I think that to him, it just seems more compelling. And I think the actuary idea really just comes from a narrowness of vision, that he hadn't seen enough of the world at that point to know what the options might be.
And once he kind of sees economists in actions, I think that becomes much more compelling. >> Bill Whelan: And how does he end up at the University of Chicago? >> Jennifer Burns: So Chicago really is Homer Jones, who is one of his early teachers. And Homer Jones is a student and ardent admirer of Frank Knight, who is one of the most prominent economists of his day. So Jones pretty much says to Chicago, you gotta take this guy, he's brilliant.
And says to Friedman, you gotta go to Chicago, there's no other place. And so that's where he ends up. Now, it's also worth noting that Chicago is extraordinarily meritocratic and diverse for its day. It has a tradition of accepting students from all backgrounds. What's most salient at this moment is that it doesn't discriminate against Jewish students to the extent that the Ivy leagues, the other private universities do.
So Friedman knows, whether consciously or subconsciously, that this is a place he can be himself, that he's welcome. He would have known a university like Princeton, for instance, just around the corner, would not really be friendly and hospitable to a child of jewish immigrants without significant family wealth. It would feel like a different atmosphere. So in that way, Chicago really benefits from its more open and meritocratic orientation.
>> Bill Whelan: Okay, let's look now at two years in his life, Jennifer. 1935, his first job working for the federal government. >> Jennifer Burns: Yeah, this is one of these mysteries that people say, well, how could Friedman have possibly worked for the New Deal if he felt the way he did? And I threw two answers to that. One is he was actually a supporter of quite significant parts of the New Deal, particularly the relief, early relief efforts and the reforms of the banking sector.
And then the New Deal is really the only game in town. It's the only place you can find work as an economist in the 1930s. And so he ends up working on, I think of this as the first era of big data. So the federal government is trying to figure out what is going out there in the economy so they can design policies to address it. So one thing they do is they develop a study. They survey a million families on their consumption habits. How many yams do they buy per week? Do they take in a boarder?
Do they take in a lodger? Have they paid for a funeral? Have they bought an ice skating costume? I mean, these incredible surveys. And again, I found this in the archive, these huge sheets where an interviewer would go out, interview the family, record their responses. And then here's Milton Friedman back in Washington, and he's got to figure out what to do with all of this information that then gets turned into punch cards. So that turns out to be really his first brush with applied statistics.
So he's mathematically inclined, he's very statistically inclined. And he ends up coming up with this interesting way, it's called analysis of ranks. And it's a basic statistical technique that is still used today to kind of figure out how to kind of group and analyze this mass data sort of quickly. To get your mind around the essential features of the data. So he ends up writing a paper based on this idea, and the paper ends up leading to a job offer, and he exits government.
But it's interesting because he does know how the federal government operates at that moment. And he has this deep immersion in how ordinary people make economic decisions and how those little granular decisions add up to larger holes. And I think that is really formative for him intellectually, and he'll really never stop doing that type of method in terms of empirical evidence, empirical analysis.
And from there, trying to build out a larger theory that becomes just the way he approaches problems. >> Bill Whelan: And that was my second year, 1939. That's the year that that manuscript paper comes out. Can you tell us a bit what is in that paper? Because I think this is an interesting window how the man thinks. >> Jennifer Burns: Yeah, so one of the things I found as I was going through these boxes was a paper from 1939.
And I can confidently say this is Friedman's first policy paper, and it's called a plan for guaranteeing a minimum income to all. And so this is an early version of the type of proposals that we hear about today that are called universal basic income. And so I was like, what is this doing? And where did this come from? And so I looked at all the surrounding material.
And what seems to have happened is that he went away for the weekend, and he met Gunnar Myrdal, who is a Swedish socialist who later becomes famous for his book on American race relations, An American Dilemma. And Myrdal and Friedman get in this big debate about poverty, what to do about poverty, right? Remember, we're still in the depths of the Great Depression. It's not really resolved, it's gotten slightly better.
But 1939, things are still pretty rough, and they end up deciding that some form of minimum income would make sense to alleviate poverty. And what's interesting is thinking about, how does Friedman go about tackling this problem? Number one, he's very concerned about poverty and inequality. This is something that he feels absolutely needs to be addressed.
But at the same time, he's concerned about markets and prices and doesn't want whatever you do to address poverty, to unduly impact incentives or how the economic system works. So he comes up with this idea of a minimum income, and he reasons something like this. Well, look, we have this new science of the 1930s, the science of nutrition. They just discovered the calorie, and so you can now know objectively how many calories a person needs to sustain their health.
Also, because of all these survey that he looked at in the new deal agencies, we also know how much people consume, and we can figure out how much it costs. So ergo, we can put these together, we can figure out how much would it cost for a family to provide for their nutritional needs, and we can make that the basic income. And he says, this can be objective.
It's not guesswork, it's not imaginary, and it will be a baseline that will ensure that nobody in this country goes hungry or nobody in this country starves. So he proposes this to Myrdal. Myrdal comes back, he kinda wants a little bit different, they argue a little bit, and then it fizzles out. But why this really caught my eye is not as if the story ended there.
Eventually, in his second stint working for the government, Friedman's an employee of the treasury department, so he learns an enormous amount about the tax system. He redesigns his proposal for what he calls a negative income tax, which is instead of paying taxes to the government, the government, if you file below an income threshold, pays you. And that idea debuts in capitalism and freedom in the early 60s, then it debuts in the early 70s as Nixon's family assistance plan.
And eventually, it comes out of the sausage making machine as the earned income tax credit, which has been considered one of the most effective poverty fighting programs out there. And moreover, the earned income tax credit, the idea of giving a refund through the tax system has become sort of a model policy idea. We see it in a child tax credit, some of the coronavirus relief was structured this way.
And it sort of grows out of Friedman's original belief that if you were trying to make a social reform, it would be better to do something that empowered people to be in the marketplace and make spending and consumption decisions themselves. Rather than giving them an in kind good or creating an office or a bureaucracy or a structure that would try to meet their needs.
That you could do it in this more dispersed way that he said was compatible with individual freedom and with the principles of liberalism that he believed in. >> Bill Whelan: So there he is, Jennifer, it's 1939, he's not even 30 years old, and he is already a policy innovator. I'd like to throw three of his innovations at you and get your thoughts on them. The first one, he was advocate of the volunteer draft. >> Jennifer Burns: Mm-hm, the volunteer draft, so that is fascinating.
This is another idea that seems kind of strange if you think of Friedman as someone who was allied with conservative political causes for a long time. But he considered this basically the biggest infringement on personal liberty possible, that the state could make claim on your life and your time. And so he shared this with several other conservatives like William F Buckley also had doubts about the draft.
Interestingly, some of the Austrian economists who he knew, like F.A Hayek and Ludwig von Mises, disagreed with Friedman quite a bit and thought a draft was necessary. Because you might have a situation such as in the rise of Nazism in Europe, where a state needed to raise an army and quickly, and therefore a draft was justified. So one of the things Friedman did, and he was a tireless promoter of this idea, is he really helped kind of legitimate it in the policy sphere.
And he got Nixon's attention on this idea. And so ending the draft did not necessarily have to mean opposition to the Vietnam War. It did not have to mean you were an anti war protester. It could mean, as Friedman presented it, that this was, one, an infringement on liberty, and two, not even really economically that good of an idea. And what he basically did with that was a kind of classic economics reasoning. He said, look, it's not just the cost of paying someone to serve in the army.
You have to think about the opportunity costs. When you draft a whole segment of society's young people from 18 to 24, whatever, you are taking them out of the market. You're taking them out of production, creation, innovation. And that is a cost that hasn't been factored in. Once you factor in that cost, you find paying for a volunteer army is actually a good deal.
So again, I think that we see, again, sort of using the price system as a way to get where you need to go rather than state compulsion, rather than having a notice that says you have to show up for your tour of duty, you say, if you show up for your tour of duty, here are some of the advantages you're going to gain. So, yes, people still register with the selective service system, but there has not been an active draft for many decades, and a lot of that is due to Friedman.
>> Bill Whelan: Now, Jennifer, I've been at the Hoover institution since 1999, and I can proudly say I actually had a conversation with Milton Friedman once about education. This is early when I was there, he wanted to talk about school vouchers and school choice and why it was not working at the ballot box in California, an initiative on it had just been crushed. Why was he so fascinated with school vouchers?
>> Jennifer Burns: So again, this, I think, falls into this pattern of belief in privatization, and there's a couple pieces to it. One is when I found that syllabus way back in the day, and I saw the books that he was reading, you know, I went and brushed up on what they said. And John Stuart Mill talks about school vouchers, essentially, so it's an old idea.
That Friedman then kinda resuscitates, says, starting as a thought experiment, and it eventually works its way into becoming a policy experiment that's tried in a number of different places. One episode I talk about at length in the book, I won't dig into it here, is that it is taken up in the context of resistance to civil rights, the civil rights movement and civil rights law. And so I cover that in some Detail. And Friedman eventually decides he's okay with that.
However, people wanna promote his idea, so there's that. But over time, education becomes more and more important to him. And partly I ended up seeing towards the end of his life, he begins to watch globalization unfolding. And while he's always been a cheerleader for open borders, free trade, for most of his life he's been doing that in the context of the Soviet Union and the Soviet bloc. Just half the world or so is not available for this open economy.
And then he lives through the falling of the Berlin wall, the opening up of China, and he starts to see what it looks like to have a truly integrated global economy. And he starts to worry that low skilled workers in the United States are going to be profoundly left behind. And he decides the only way that you can really ensure that they're not left behind is that they have the skills they need to compete. And the only way to get this is through education.
So over time, education really comes to occupy this central place in his thinking. And I would say in the first part of his career, when he thought about poverty and inequality, he would start talking about the negative income tax or the guaranteed income in the second half of his career, when he starts thinking about that, he goes to education. So that really becomes the field where he thinks you address some of the sort of intrinsic challenges of capitalism.
And he believes that the United States is falling behind other industrialized nations because there isn't competition in the k twelve education sphere. And the best way to improve performance would be to inject some competition in. So that's really where the idea of vouchers comes. >> Bill Whelan: And a third area, Jennifer, would be mail competition.
I imagine if he were with us today, Doctor Friedman would be quite amused with the idea of UPS and FedEx and Amazon delivery and paying your bills online. >> Jennifer Burns: Yeah, exactly, there's a moment in the book where he was doing a talk. And so in Capitalism and Freedom, he makes all of these proposals that just seem totally wild. We don't need national parks and we don't need international currency ratios and the post office could be privatized. We don't need that.
And so one of the times he goes to give a talk, some of his followers, they decide to pick at the post office. So when he comes to town, he sees people saying, privatize the post office. Down with the post office. And so, yes, he argued that you should have more competition. Now, I think UPS was in existence through most of the 20th century, but it was highly regulated.
So in the 1970s, there's a whole wave of deregulation, which, interestingly enough, comes from many times from Democratic politicians and appointees. Because some of the ideas that Friedman has promoted have become really widespread, no matter your political orientation. And eventually we get to the place we are now, where there are multiple ways to send your package, and the us postal service sort of has to compete for your business, and he would have hardly approved of that.
>> Bill Whelan: Now, Jennifer, while I'm very grateful for you and your publisher to have sent me a copy of your fine book and let me read it, you owe me a lot of sleep. Because part of researching Milton Friedman sent me down a very bad rabbit hole, which is YouTube. For listeners, Want to go on YouTube and look up Milton Friedman, spelled f rhink I e d m a n. They're gonna find all kinds of Friedman.
And this starts with a book which turns into a tv show called a tv series called free to choose. Let's talk a bit about this. Let's start with the book itself. On the COVID of the book, Jennifer, he is holding up a pencil. Would you like to explain the significance of the pencil? >> Jennifer Burns: Yes. So the pencil is.
It's sort of an example of an idea that goes back to Adam Smith, which is that market processes coordinate all different types of activity without anyone really having to direct it. So he'll hold up the pencil and say, well, look, the pencil has lead, it has wood, it has paint, it has a little rubber thing on the end. It has a metal thing that holds the rubber to the wood. And where did all this come from? And sort of who planned it?
And his argument is that it's the price system, really, that planned it, because there were many different transactions that came together in this pencil. And so this becomes his way of really summarizing for the ordinary person. You know, you may think you don't understand economics, but if you think about it a little bit, you do. And that, let's not take everything for granted.
Let's think about the sort of wonder of this very cheap pencil, which honestly, another part of it is that we're so wealthy. We can throw this pencil away and not worry about it and get another one. And we ought to appreciate both the price system and the sort of mass production that has led to this.
Now, he then goes from there to sort of travel the world to these different hotspots and talk about, you know, the experience of Hong Kong or the different ways experience of education in the United States, and it becomes really a hit tv show. It's then turned into a book. Now, interestingly, he's really motivated to do this by a BBC series featuring one of his great rivals, John Kenneth Galbraith.
And so Galbraith laid out his economic vision and thinking, and Friedman sort of thought, well, I should do this, too, although I'm pretty sure it was Rose who was the big supporter of this idea. And I'm guessing it was Rose who watched Galbraith doing this and said, you know what? Milton could do it better. And so they then put together this ten part tv series, which, again, you can watch. And I think it's really remarkable.
You know, Friedman sits down in the second half of each show with people who disagree with him and they debate and they argue. And it's not the gotcha style argument where you bring in somebody who's not as well prepared as you are and kind of flame them and crow. It really is a genuine argument and a genuine debate. And I was just talking to someone recently who had seen those for the first time and was just really surprised and was like, we don't do enough of this today.
And it's amazing to see this conservative economist standing up and arguing his point of view and engaging with different points of view. And so anyhow, I say your listeners, take a look at it and just think about, okay, here we've got an example of debate in action. Maybe we could try doing this sort of thing again.
>> Bill Whelan: So, Jennifer, somebody who watched that series with Arnold Schwarzenegger, who was still trying to make sense of economics, and Arnold, as you know, is a raging capitalist and a raging free marketer. After Friedman passed away, there was a memorial service for him at the Stanford campus, and Arnold came to speak at it, and he actually held up a pencil and told the story of the pencil there. So it was a very nice moment for him. But so here's Milton Friedman now.
He's pushing 70, and now he is a Media presence. He's kind of a rock star, if you will. Does it change him in any way? >> Jennifer Burns: You know, I think in some ways it does. I think there is he's not doing research in the same way as he was. And so he's starting to step away from the field of economics. So you see him less engaging in these economic debates and more commenting on politics or policy.
I think he gets a little narrower intellectually and a little bit more wanting to push his ideas as far as they go. What I do think happens, though, and I was surprised to see this because I had seen as so, for instance, in Free to Choose, just one example is he has a segment on his monetary history of the United States, and he says something like The government caused the Great Depression. And that's an oversimplification of what he and Anna Schwartz actually found in A Monetary History.
And I think some of that is it's hard to get on YouTube and get on TV and summarize a 600 page book and really do it justice. But there's a little bit of a simplification of his ideas, I think, as he tries to purvey them to a broader audience. What I did find, though, in, in the last, say, five years of his life, he really becomes quite reflective. And there's a lot of him saying, maybe I didn't quite get it right and maybe my first take was too simple.
So, for instance, the idea that capitalism and freedom are very interwoven. He always recognized this wasn't inevitable, but he did present it in the height of his career, as these two things are really quite related. And towards the end of his life, he started, well, I don't know, maybe they're not quite as related as I thought. Or with globalization, he said, my first take on globalization was privatize, privatize, privatize.
He said, now that I've seen it in action, I think you actually really have to get institutions and the rule of law down before you can privatize. So I see kind of a narrowing in the 70s and 80s, and then a bit of a more expansion towards the end of his life when he's really reflecting on the kind of whole arc of his career. >> Bill Whelan: All right, you've mentioned a couple of women in passing, so why don't we go back to them and explain them a little bit more?
You mentioned, for example, Anna Jacobson Schwartz, tell us briefly who she was. >> Jennifer Burns: Yeah, so Anna Jacobson Schwartz was Friedman's real intellectual partner and the sort of co-founder of the School of Monetarism. And co-author of his most famous book, A Monetary History of the United States.
And she was a researcher at the National Bureau of Economic Research and was sort of paired with him on this project to construct a money supply of the United States to kind of measure the money stock over time. Friedman was interested in this because he was interested in the quantity theory. Schwartz was interested in this because she was an expert on the british economy and now she was getting the chance to analyze the american economy. And they did a prodigious amount of work.
Most of it, to be honest, was Schwartz, because Friedman was a tenured professor at Chicago and Schwartz was one who had day-to-day responsibility for the project. And I just found these incredible documents, these just stacks and stacks of paper where she was literally measuring how much money was in circulation in each of the 50 states and then adding them together to get a national figure.
The kind of thing you would get in a few clicks of a keyboard today, she had to spend years of her life toiling on. So it's really a remarkable story. I talk about their collaboration at some length in the book. She really pushed Friedman to make this a story and a narrative that was comprehensive, that covered 150 years of American history.
And then the really terrible thing is she really couldn't get any respect from her colleagues at the National Bureau of Economic Research, and they pretty much refused to give her a doctorate until Friedman finally figured out what was going on and became very angry. And so for a while they were saying that the manuscript of a monetary history of the United States, you know, for which Friedman later was awarded the Nobel Prize, was not adequate as a dissertation at Columbia University.
And so he became very angry and eventually they relented. But it's really an extraordinary story of what this woman was able to do. And she was really pushed into a corner and diminished in the economics profession. And she nonetheless had this enormous impact. So when it came into the project, I knew about Anna Schwartz. I mean, how can you not know about her, her name's on the book.
What I didn't know about and what I found in the archives were all these other women who had been very integral to lots of Friedman's academic work. >> Bill Whelan: This is Margaret Reed, Dorothy Brady. >> Jennifer Burns: Yes, those are two women I talk about, and Rose Friedman is also an influence here.
And essentially one of Friedman's more technical works of economics, A Theory of the Consumption Function, came out of this series of conversations he had at his summer house with Dorothy Brady, Margaret Reed, and his wife. And Dorothy Brady was one of Rose Freeman's closest friends from their time in DC. And she ended up partnering with Margaret Reed, who was another consumption researcher. And they were doing something similar to what Friedman had done in DC.
But they were looking at farm families. How much did farm families spend from year to year? And they found that some years they spent a lot, and some years they spent a little, some years they earned a lot. Some years they earned a little. And they were trying to make sense of their economic behavior in light of this. And eventually the four of them together came up with this idea that farmers were looking at their permanent income.
They were kind of forecasting a sort of ersatz, or composite income range, and that's what really guided their decisions, not the day to day. And so there was all this data. They were all having these conversations. What I uncovered in the archive is that the impetus for Friedman to write this up as a paper was that he was trying to get Margaret Reed and Dorothy Brady hired at the University of Chicago.
And the University of Chicago, uniquely, had a tradition of having at least one woman economist on its faculty. And the woman who held the title was retiring, and Margaret Reed was sort of in the running. And so Friedman wrote up this paper, circulated it to his colleagues, and said, you know, we should hire both of them and we should make Chicago a center of consumption research. Well, his colleagues didn't bite on that, they only hired Margaret Reed.
But then he had this manuscript, and he kept working on it, and eventually it turned into the book. So that's this whole story that really hasn't been known. He's generous in his introduction in acknowledging them, but he doesn't go into the details and they're not on the cover page. So that was really exciting, actually, to try to track down these women and learn more about them. I never even found a picture of Dorothy Brady.
It was really hard to find details about her life, but she really came to life in these letters to Milton and Rose. >> Bill Whelan: And finally, Rose Friedman, who Milton described as, quote, shy, withdrawn, lovely, extremely bright, I love that description of her. Tell us about her presence at the Hoover archives. This is something of a trick question, I think. >> Jennifer Burns: Yeah, the real challenge is that she's not in the archives, which is. [LAUGH] >> Bill Whelan: Why not?
>> Jennifer Burns: Not a mistake. I was wondering about this. And then I look at, you know, in every finding aid, they tell you how the archive came together, and it was, like, assembled by Rose Friedman. I'm like, uh-oh, this is what happened. She's not in the archive, she took herself out. And so I've never even seen an example of her handwriting. And I found something in another person's papers. I found their annual Christmas letter that they used to send.
And, you know, I would love to have 25 years of those Christmas letters. That's a biographer's dream. And I have one in someone else's paper. So I know that she pulled herself out of the archive, or capitalism and freedom, Milton Friedman said Rose was really the driving force behind this. She put the book together and said, great. I wonder what the drafts look like. I couldn't find the drafts.
I wonder what they said to the University of Chicago when they were selling this book, no correspondence about selling the book. So my strong suspicion is, as historians, we know that the silences of the archive often speak volumes. And so the fact that she's not in there tells me that she was in there in quite a significant way. And she was someone who was very shy and who didn't want someone like me digging into her business. So she took herself out of the archive.
But we know she's there because of what they said and because this is really my hunch. But you look at some of the popular writing that Milton. Friedman did and it has a bit of a different flavor, and a feel than his academic writing, and I think that's Rose's editorial hand. I can't really document it. It's just something I will stand on my authority of my general research and say, that's my hunch. >> Bill Whelan: Yeah, professor Burns, let's now talk about what's probably gonna be.
The first question of somebody who looks at your book and that is the title, Milton Friedman, the last conservative. Professor Burns, Ted Cruz is on line one. Clarence Thomas is on line too. The staff of the natural review is on line three. How dare you say that he was the last conservative. >> Jennifer Burns: So it's a bit of a provocation, I admit. But I am also using it to talk about a certain formation of conservatism that arose in the 20th century that Friedman really was emblematic of.
And this was grew up after the Cold War, was strongly internationalist in orientation, believed in us engagement in the world. Believed in the restoring the price system and price system, and reducing the role of government as much as possible, and really centered claims of individual freedom, and individual autonomy.
And I think Friedman was really instrumental in becoming a spokesperson for this set of ideas, translating them for a broad audience, translating them for politicians and policymakers from Nixon to George Shultz to Ronald Reagan. And so in those ways, he's very firmly allied with the conservative political movement and he didn't call himself a conservative.
I'm well aware of that fact and I'm also aware there's a long discussion of how American conservatism is different than conservatism in other countries. And how could you really have a pro capitalist conservative, given the sort of rush of social change and the perennial gale of creative destruction that characterizes capitalism? Well, all that aside in the United States had this political movement that we called american conservatism. Now of course, we still have it.
But I think it's clear that since the ending of the Cold War and more noticeably in recent years, there's sort of new syntheses emerging and vying for the name of conservatism. And they tend to be more skeptical of global engagement, more nationalistic in origin rather than individualistic in origin. And most notably skeptical of conservatism or skeptical of the market consensus and wanting to carve out a larger role for the state whether it's industrial policy, or family policy, or immigration.
So I think in those ways, the ideas that Friedman represented are not as dominant as they were. He probably is not the last of the breed, but it's to get us thinking. I will say though, that one thing my book really ends up showing is that Friedman is more than a conservative intellectual and more than an inspiration to conservatives. And he in some ways, you know, has come to define the political center in recent years. He's influential among moderate democrats as well.
And then many of his ideas, we sort of don't recognize them as Friedman's ideas anymore. They've just kind of trickled into the ether, they're just there. They're just what reasonable people or educated people think. And so in that way, he's kind of transcended his own particular politics, I think, and become even more significant in that way. >> Bill Whelan: Now, Jennifer Friedman with us today.
I don't think he'd be writing for Newsweek cuz national magazines are just not what they used to be, but he would not lack for material to write about. Let's do four topics here and just get your thoughts quickly on what he said. >> Jennifer Burns: I'll do my best. >> Bill Whelan: Okay, first one is bidenomics and the printing of money. >> Jennifer Burns: My goodness. Okay, I'll take those in two pieces.
So Friedman would be among those, I think alarmed by the jag in M2 in the later years of the pandemic. I do think he would have supported the original rounds of coronavirus relief. And I say that based on his response to the great depression when he and his professors at Chicago believed you needed to take immediate relief and sort of meet the emergency. But basically, those were all what Friedman called a helicopter drop.
A helicopter drop was a way to pump money into the system to create inflation when it was needed. And so he would have said, great, this needs to be done, but it's going to create inflation. So I think it would be a mixed record, but he would not hesitate to say, to have said, inflation is coming, it's not gonna be transitory. And it has something to do with the relief that we provide the federal government, provided by dynamics.
I think to the extent that encompasses industrial policy, that was never something Friedmande would have been comfortable with or would have endorsed and would have just said, it's not, the government's not going to be good at this, and so we shouldn't be trying to do it. And I think also regulations to tilt things in a certain direction.
I think when you look at say for addressing global warming or environmental protection, I think he's really a sort of cap and trade or price price of the pollution would be his favorite solution. >> Bill Whelan: I think helicopter drop is a University of Chicago phrase, Jennifer. Whenever I talk to John Cochran, a Hoover economist and UChicago professor as well about this, he loves to use the phrase helicopter drop. Second topic is Jerome Powell and the Fed and inflation.
>> Jennifer Burns: So similarly, I mean, I think on the one hand, what Powell and the Fed are trying to do now is have a gradual reduction in inflation and Friedman was actually an important voice of gradualism in the 1970s, the last time we faced inflation. So I think in that way he would be aligned. I think he would be concerned. His big emphasis was rules and frameworks over discretion.
And a couple years before the pandemic, the Fed revised its framework and it began to de emphasize rules like the Taylor rule and these are very small changes. If you read the documents, it's only a matter of a few words, but it's nonetheless, a significant reorientation.
And I think Friedman would be concerned that, say, for instance, you really have to focus on stable prices, and you have to focus on stable prices before unemployment, because if you don't have stable prices, eventually you'll have unemployment. And so to the extent that the Fed has kind of rebalanced its dual mandate towards lowering unemployment and letting a little inflation out of the bag, he would just say that's short term thinking and it's not a wise idea.
>> Bill Whelan: Okay, topic three, Jennifer, drugs. He would have lived to see marijuana be legalized in states like California. But California, the governor just vetoed a bill that would have legalized magic mushrooms, psilocybin's. I assume Friedman would have been all in on mushrooms. >> Jennifer Burns: Boy, I wonder about this.
>> Bill Whelan: Because if you go back and look at him in the seventies, but Phil Donahue, for example, he is very adamant about drug legalization and he's cocaine, heroin doesn't have a lot of boundaries. >> Jennifer Burns: He doesn't have a lot of boundaries. I wonder what he would say if he went to civic center in San Francisco and saw that it has become a sort of open air drug market. I don't know that he saw the consequences spill out and I don't know how he would react.
So I think it sounded very good and it was extension of his principles and he was extremely non-paternalistic. You know, if you were in trouble, we could also look, maybe Gary Becker's article that, you know, sort of analyzes addiction as an economic problem might be a key of how he would approach it. I think he would at least think it over if he looked at how some drug legalization has been or decriminalization rather, has been playing out as a social problem.
>> Bill Whelan: Then the final one, Jennifer, Trump populism. >> Jennifer Burns: Trump populism. That one, I think is fairly easy. He would be adamantly opposed to and alarmed by the sort of populist strains around Trump and I say that, because he spent much of his career fighting the sort of earlier historical analogs of that. In the 1950s, he was concerned about what he called the McCormick McCarthy wing of the Republican Party.
That's Joe McCarthy and [COUGH] Robert McCormick, the editor of the Chicago Tribune and they were nationalistic, isolationist, a bit anti-Semitic, conspiratorial minded. And he drew his lot in firmly with Eisenhower and saw Eisenhower as the kind of moderating force to cut out the extremists. And then he had a similar feeling about the John Birch society in the 1960s, another very conspiratorially minded, kind of secretive and populist organization.
So I think he saw himself for most of his career as trying to carve out this sort of sane and moderate and intellectually rigorous conservative position and I think he would still be trying to do that today. >> Bill Whelan: So final question, Jennifer, where are today's intellectuals or is the Friedman brand of intellectualism not possible in an age where we have social media and there's just a lot of anger and your thinking is condensed only so many words.
Is Friedman a unicorn, is he a vision of a past age or are there other intellectuals out there doing what he is doing? >> Jennifer Burns: I mean, there's definitely lots of economists who have the gift for translating, things into more common speech. Anything from the freakonomics to some of the calmness you read in the newspaper, I think what's different about Friedman are two things.
One, I have to go back to the role of women in his life because he simply would not have been able to publish in so many fields of economics and be a public intellectual without this sort of roster of five women working behind the scenes supporting him.
And so to the extent that that's less likely to happen now because women are able to get full credit for the things they do on their own, I think you're less likely to have these kind of shadow contributors that can really bulk up a person's capacity. And then I do think the media environment is part of it. Newsweek Magazine was huge and really set the tone.
Newsweek and time it was just a few information sources and have a column in those places gave you a sort of cultural dominance that is very hard to attain now, unless you're a rock star or an entertainer. And so I think in this fragmented age, I think he'd probably have a mean sub stack [LAUGH] and he'd have a YouTube channel, for sure. He'd be well known, but he would have less ability to kind of stride atop the national conversation than he did in his day.
>> Bill Whelan: Okay, I think we covered a lot of turf here on Milton Friedman, Jennifer, anything we've left out that you'd like to mention? >> Jennifer Burns: I think we haven't touched upon the kind of international dimensions of his thought and so all I would say is that in the book, I really root him in the United States in the Great Depression. And then in the last part of the book, I show how his ideas became more consequential, I covered United Kingdom.
I cover the experience of Chile and there's lots more to say about his international career. I talked little bit about China in the last concluding part but Friedman was not just a national figure, he was a global figure. >> Bill Whelan: Okay, well put, well, Jennifer, thanks for coming on the podcast and again, congratulations on the book. It really is an outstanding read, you did a great job. >> Jennifer Burns: Thanks so much.
>> Bill Whelan: You've been listening to Matters of Policy and Politics, a Hoover Institution podcast devoted to governance, balance of power here in America and around the globe. If you've been enjoying this podcast, please don't forget to rate, review, and subscribe to our show. The Hoover institution has Facebook, Instagram, and X feeds, X is the new name for Twitter. Our X handle is @hooverinst, that's spelled H-O-O-V-E-R-I-N-S-T.
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Her excellent book, Milton Friedman, The Last Conservative, is out now, you can get it on Amazon wherever I hope good books are sold. Jennifer, a good look on the book tour. >> Jennifer Burns: Thanks so much, Bill, great to chat. >> Bill Whelan: For the Hoover Institution this is Bill Whalen, we'll be back soon with a new installment on Matters of Policy and Politics. Until then, take care thanks for listening and buy this book.
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