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UW erred, lost vital economist

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by Ryan Masse

Thursday, November 30, 2006

Imagine what could have been.

When thinking of the late Milton Friedman, one surely recalls his contributions in forging the "Chicago School" of economics, the group of influential free-market academics at the University of Chicago who rocketed to international acclaim during the middle parts of the 20th century.

Before that, though, Mr. Friedman called the University of Wisconsin home. Most folks around here probably don't know that, and it's hard to blame them — Mr. Friedman spent only one year in Madison.

Unfortunately, it was not a banner tour of duty. In a 1991 interview in Stanford, Calif., he called his stay in Wisconsin "the most traumatic event" of his formative years as an economist.

The year was 1940, and Mr. Friedman had been lured to UW by an arts and sciences dean seeking to bolster the economics department. Equipped with a high salary and tenured position, the fledgling economist soon drew hostility from his colleagues, who viewed him as a cocky east coaster being forced upon them by the dean. Relationships were also strained by Mr. Friedman's outspoken advocacy in favor of the United States entering World War II, which did not sit well with many in the department. Several people in the department were even strong German sympathizers.

Furthermore, Mr. Friedman became embroiled in a heated interdepartmental feud. At the time, the school of business was trying to take over the economics department. The business school resented the dean's attempts to keep the department an autonomous unit — such as through the hiring of Mr. Friedman. Add shades of anti-Semitism to the mix, and it became too much for the economist. He left UW after one year.

That Mr. Friedman, the 20th century's greatest opponent of government interference in the market, was forced out of Wisconsin in part because of the business school's meddling in others' affairs is a great irony. And Chicago capitalized on it, landing Mr. Friedman a few years later. The rest is history.

Of course, a Friedman-led "Wisconsin School" of economics was probably never in the offing anyway. He didn't even obtain his PhD until several years after his stint at UW. Madison was a temporary stop en route to bigger and better things.

But then, who knows? If treated better, maybe he would have stuck around the Badger State. What could have been?

Today, Mr. Friedman's views can seem less than revolutionary. His support of laissez-faire capitalism, control of inflation through the money supply and other ideas have become so ingrained in modern economic thought that it is hard to conceive of how groundbreaking they were decades ago.

Quite importantly, Mr. Friedman refused to let his ideas be confined solely to the realm of academia. He brought his support of personal freedom and free-market solutions to the masses in a Newsweek column during the 1960s, '70s and '80s. His was a simple message that people could easily latch onto, backed by hard empirical evidence from the time; he had predicted (though not coined the term of) stagflation, the combination of high price inflation and a stagnating economy with rising unemployment that reared its head in the '70s.

His monetarist views earned him a Nobel Prize, and he argued the Great Depression could have been lessened considerably if the Federal Reserve had known what to do with the money supply. He argued that there is a "natural rate of unemployment," and that inflation will occur if the government artificially attempts to go below it.

Sadly, people in Madison just didn't have any need for him in the '40s. Some probably don't today, either. Dave Zweiful of The Capital Times recently commemorated Mr. Friedman's death by decrying him as a corporate shill bent on screwing poor people. He remarkably bemoaned Mr. Friedman's insistence on letting people — and not the government — control their own destinies.

Alas, Milton Friedman's destiny was not in Wisconsin. Now that's something I'll bemoan.

Ryan Masse (rmasse@badgerherald.com) is the editorial board chairman of The Badger Herald.

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Anonymous (November 30, 2006 @ 7:40am):

Bemoan? Someone needs to take your thesaurus away.

You're right, Masse, UW suffered tremendously without Friedman. We should have re-named the city of Madison after him and offered him hourly massages to get him to stay.

Anonymous (November 30, 2006 @ 8:45am):

I was a bit more "bemoaning" when I found out that UW had a chance to land Bo Schembechler as football coach and Bobby Knight as basketball coach in the 1960s.

Instead, it wound up with John Coatta and John Powless.

http://www2.jsonline.com/sports/century/nov99/mill21112099.asp

Anonymous (November 30, 2006 @ 12:01pm):

Anyone who would dismiss the loss of a Nobel prize winner so lighty obviously cares not a bit about this university, it's funding, and it's status, and it's students. The university would be providing a far better education, and it's students would be making a greater impact in the world if we had not lost a man more influential than many presidents.

Anonymous (November 30, 2006 @ 1:14pm):

Lighten up!

I'd have loved to see it referred to as the "Wisconsin School" of economics instead of "Chicago School", but I'm afraid that the left-wingnut faculty at UW would have stranged that baby in its cradle.

Anonymous (November 30, 2006 @ 2:39pm):

UW Job Posting:

Nobel Prize winner wanted. Qualifications: winning Nobel Prize, not being gay, not supporting 9/11 conspiracy theories.

Anonymous (November 30, 2006 @ 2:44pm):

Actually, I would be horribly ashamed if Madison was home to Friedman's Economic School, the people responsible for Augusto Pinochet and his Fascist regime, the deaths and "disappearances" of tens of thousands of social activists, their friends and family, as a result of the 1973 coup backed by the U.S. government which overthrew the democratically elected administration of Salvador Allende. The US Diplomat to Chile at the time, Edward Malcolm Korry, was a student of Milton Friedman's, and was acting on behalf of Pepsi Cola corporation (Richard Nixon's former employer) ITT Corporation, Anaconda Copper, and Citibank.

And this was only the start of Friedman's legacy. The neo-liberal onslaught we see today across the globe, in the policies of the IMF, World Bank, and WTO, are the product of Friedman and his students.

The truth is, neo-liberalism is predicated upon brutal state repression. This is the inconvienent little fact that Friedman left out of his theories and writing. There are countless modernday examples of this, playing out in action (Argentina in 2001, Chiapas in 1994, Nicaruaga in the 80s). Or you can go back and look at when similair policies were put into place in the Western world 200 years ago, at the dawn of the industrial revolution, and see the inherint contradiction of "laissez-faire" -- that allowing one class of powerful elites unlimited freedom to plunder and exploit, neccessitates an ever-stronger state to uphold the market system and repress opposition to it.

Good Riddance Milton Friedman!