Writing his biography presents a unique challenge owing to the immensity of his professional stature and the duration of his excellence from the 1930s through the early 2000s. Jennifer Burns in Milton Friedman: The Last Conservative is every bit up to the challenge. Deeply researched and beautifully written, her book makes the personal and intellectual life of Friedman jump off the page. Burns not only captures Friedman’s life but conveys in her telling of that story the broader intellectual life of America and the global political and economic order of the 20th century. Her book gives us a history of the Chicago School and monetarism while delineating the methodological, analytical, and ideological battle lines of the economics profession. Along the way, we learn about the broader contours of the intellectual and political movements of the Cold War, among them the tension-filled coalition of free-market classical liberals and conservative anti-communist Republicans, and right-wing extremists from whom Friedman consistently strove to distance himself. And we learn too about the international spread of free-market ideas between 1980 and 2005.
As Burns explains, it was not merely Friedman’s uniquely persuasive powers as a writer and speaker that made his ideas have the impact they did. Those powers were no doubt impressive, but they do not account for how his positions went from being held by a distinct minority to defining an era. That can be explained only by the fact that Friedman’s ideas and insights “matched experience, offered new ways to tackle old problems, and predicted what would happen next.” It is because his theories align so closely with reality that “Friedman is too fundamental a thinker to set aside.” His ideas improved our understanding of the operation of economic systems, and in the realm of practical affairs led to improvements in the lives of billions of individuals as they escaped extreme poverty in the developing world, freed themselves from the grasp of totalitarians in the former communist world, and shook off the malaise of stagnation and inflation in the Western democratic states.
For the majority of seniors, Social Security has played a minor role in income growth. The typical senior household today enjoys Social Security benefits that have twice the purchasing power of benefits received by the average household in 1982. Yet because private savings and labor income have grown so much, Social Security’s contribution to income growth has been relatively small. Had Social Security benefits remained at their inflation-adjusted 1982 level, the typical senior household’s income would still have increased by 78%, more than twice as fast as the income of the typical younger household.
Beginning with the arrival of the Kennedy administration in 1961, it was said that the Charles River that flows by Harvard also flows into the Potomac. Washington was, for a while, enamored of academic luminaries. Of whom there were many: Moynihan himself, his Harvard colleagues John Kenneth Galbraith and Arthur Schlesinger, the Rostow and Bundy brothers, Eric Goldman, George Shultz, James Schlesinger, Henry Kissinger, Edward Levi, who left the presidency of the University of Chicago to become Gerald Ford’s attorney general, and many more.
Today is different. There still are academics serving in Washington, but eminent academics are no longer as coveted as they once were for the prestige they conferred as ornaments in several administrations. Academia has squandered its prestige by seeming to adopt an adversarial stance toward American society. And toward this society’s traditional values, including those affirmed by the First Amendment — which is first in the Bill of Rights for a reason.
Everything, from the pursuit of truth to the pursuit of happiness, depends on freedom of speech and inquiry, especially on campuses. It is especially necessary for those who espouse ideas that challenge majority orthodoxies that, when unchallenged, become lazy and stale. And lapse into bullying.
In a new study I co-authored with Jeremy Horpedahl and Marcus Witcher, we examined nine widely used US history textbooks and evaluated their accounts of the Great Depression. We then compared those narratives to assessments of the same event by economists and economic historians. The results show that historians are largely unaware of the leading economic explanations for the Depression.
At the heart of the commission’s charge must be a commitment not just to reduce some deficits but to put the government back on a sustainable track. As my colleague and former CBO Director Keith Hall convinced me, the commission will fail if it doesn’t have a clear target from the start. Then it will need to be both transparent and accountable by operating in the open, making its findings and deliberations available to the public, and thereby fostering an informed debate about the choices facing the nation.
The commission could be established through legislation mandating that Congress consider any resulting proposals on a fast-track basis, with limited opportunities for amendment and delay. Such mechanisms have been used successfully in the past with military-base closure commissions and trade agreements, and they could be adapted to the task of fiscal reform.
The commission’s work would inevitably confront entrenched interests and face stiff opposition from those who benefit from the status quo. It would therefore need to be composed of individuals capable of rising above partisanship and special interests to act in the nation’s best interest. Members of Congress might themselves want to sit on the commission, though few of them fit these requirements, considering who got us into this mess in the first place.
In short, a fiscal commission represents a pragmatic approach to a problem that has for too long been mired in politics and short-term thinking. It offers a pathway out of the fiscal morass, provided it is empowered to act, and its recommendations are taken seriously.