Jennifer Burns on the Life and Lasting Influence of Milton Friedman

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>> John Hartley: This is the capitalism and freedom in the 21st century podcast where we talk about economics, markets, and public policy.

I'm John Hartley, your host. Today, I'm joined by Jennifer Burns, who is a research fellow at the Hoover Institution and is an associate professor of history at Stanford University. Jennifer has a fascinating new book out, a biography of the late economist Milton Friedman titled Milton the last Conservative.

Welcome, Jennifer.

>> Jennifer Burns: Thanks so much for having me. Great to be here.

>> John Hartley: Well, I'm really excited to have you on because your last biography was a biography of Ayn Rand titled Goddess of the Market, Ayn Rand and the American Right. I'm curious, like, how did you first get interested in history, economics, and political economy?

And how did you get interested in writing biographies about free market thinkers?

>> Jennifer Burns: Yeah, I can't say it was an overall plan. So I've always loved history. I've always loved reading. And I also really was drawn to reading novels as well as nonfiction. And so I had a lot of questions about sort of how ideas move through society, how they get picked up, how they're moved from the author or the thinker's mind more broadly.

And these questions started to kind of focus around Ayn Rand when I was early in graduate school in history. So I knew I wanted a PhD in history. I knew I wanted to do some deep research. And in the first months of graduate school, I kept seeing people reading Ayn Rand, sort of everywhere, reading her on the bus, a friend who doesn't read a lot, suddenly reading Ayn Rand.

And I thought, well, let me learn about her as a historical figure. And then I realized there was very little information about her as a historical figure. And I thought, well, she's really important, and people are still reading her today. She definitely had an influence on conservatives and libertarians and our politics.

So why don't I figure this out? And so it's pretty unconventional to do biographical work in the context of a history PhD. It's not unheard of for an intellectual historian, and so I began this project on Rand. And I think that was kind of the first step along the road to having the Friedman project as well, although I didn't know that at the time.

 

>> John Hartley: Fantastic, I'm curious, what got you interested in Milton Friedman?

>> Jennifer Burns: So I think when I first started thinking about Friedman, I was thinking of him through the lens of Rand, and that he seemed like a popularizer of economic ideas. And what I was fascinated about with Rand was that she had these ideas that you could see some of their origins in sort of political philosophy or political movements, but then she expressed them in fiction.

And so I thought of her as kind of working from the bottom up in terms of how she spread her ideas. And then I was thinking, if I'm trying to write a larger history, which I was interested in doing, kind of conservative ideas in America, well, what is the top strata, the kind of professional university level purveyors of ideas?

And so I quickly came to Friedman, and I think what happened along the way was that he became more interested in Friedman as an economist than just as a political figure. And so the book really tries to show both aspects of him and talk about their interrelationship, but also show that they're kind of distinctive projects he was embarked upon.

 

>> John Hartley: Fantastic, and so compared to other Milton Friedman biographies that have been written, Milton Friedman only died nearly 20 years ago, in 2006. I'm curious, but there have been a few that have been written at this point, though not many. What makes yours different? I believe that this is the first archival biography of Friedman.

I'm curious, what does that mean to somebody that's not very literate in history and different types of biographies and archival work?

>> Jennifer Burns: Yeah, so that means that I read what Friedman wrote and produced, and then I also went sort of a layer deeper into the structure of his life.

So who he was writing letters to, drafts of those first books, what he was reading in graduate school, the syllabi he had and the books he was reading when he was, before he was MiLton FrIEdman, before he was famous, the behind the scenes kind of arguments and debates that eventually were smoothed out and became part of his published work.

And so that's one distinguishing feature that I'm not relying on what people said happened or what they remembered happened or what they wrote down for publication happened. I actually dig into what the documentary record generated at the time says. And so in some cases, I'm able to correct the record pretty significantly.

And one of the people I ended up correcting is Milton Friedman himself, because he wrote a memoir of his life that's been very influential, but it really was based on his memories and his desire, which I think is laudable to put a positive spin on the people he met and the people he interacted with.

And what I found in the archive is sometimes these were more difficult relationships than he was willing to write down publicly. So that's one piece of it. There's just a lot more information about the origins of his ideas and their evolution and development that I was able to find by doing this type of research.

And I should say, I spent pretty much as much time writing this book as Friedman and Anna Schwartz spent writing A Monetary History of the United States. And there's about 200 boxes of archival material held at the Hoover Institution, and I pretty much went through those systematically. The other thing I try to do that's different is because I'm a historian, I'm really trying to relate him to the bigger picture, and I'm trying to use him as a lens into social and political and intellectual change over the 20th century.

So if I'm talking about what Friedman is doing during the Great Depression, I'm gonna kinda zoom out and kinda characterize that time more broadly. Or if I'm talking about the shifts in the 1970s, I'm going to kind of give us a tour of where we are politically versus the 1960s and what's going on and changing.

And so you see Friedman reacting to events, shaping events, being shaped by events in a way that I think other treatments of him that are more focused on his ideas or more focused on the public and published record, that's not what they're trying to do.

>> John Hartley: Fascinating, I'm curious, in the process of doing all this fascinating and amazing archival research, and going through 200 boxes at the Hoover Institution I'm sure must be thrilling at some times.

And I'm sure some items are maybe just sort of no consequence. I don't know if there's, I'm sure there's all sorts of details.

>> Jennifer Burns: Yeah, I can tell you what his favorite lunch was at the Quadrangle Club because there's a whole folder of receipts from every lunch he had there, and then I decided nobody really knows to know about his love for vanilla ice cream.

That's kind of.

>> John Hartley: Did he play tennis a lot at the Quadrangle Club, too, or? I think that was a big thing for a lot of-

>> Jennifer Burns: There's a bunch of pictures of him on the tennis court. So tennis was hugely popular among academics of his generation. It was the pickleball of its day.

I hate to say it, but it was.

>> John Hartley: I remember when I was an undergrad, Gary Becker was still alive and at the University of Chicago, and he played a lot of tennis on the tennis court. So I'm not totally surprised. I think a lot of those in the University of Chicago economics department play a lot of golf nowadays, is sort of my rough understanding of it.

But I'm curious, what were some of the most surprising things that you learned going through these 200 boxes? And what were things that you thought particularly stood out when you're going through this systematic exercise and taking on this big project of writing this book?

>> Jennifer Burns: So I think kinda two things stand out.

One actually came from my work in the Chicago archive. So I went, and in order to characterize the milieu in which Friedman immersed him as a graduate student, I went and looked at all the records in Chicago and of his professors, which also included him, but also gave me a flavor for what they were thinking about and what they would have been teaching him.

And I was really astonished. I kept having these proposals written in the depths of the Great Depression being sent to President Hoover and then President Roosevelt, calling for really radical, far-reaching reform in the American economic system. Calling for banking reform, some of which were the banking reforms that we came to know in the 1935 Banking Act, but even going further, essentially calling for the outlying of deposit banking and fractional reserve banking.

And then urgent telegrams saying more relief spending is needed. And this was not what I expected to find in the Chicago School of Economics. And so that was really helpful because I realized, okay, I need to set aside some of my preconceptions. Here, I have the teachers of Milton Friedman and the Chicago School of Economics advocating for a much bigger role for government.

So I have to set aside my idea that this is a laissez-faire place or a laissez-faire set of doctrines. It's more complicated than that. So that was really interesting. And that helped me kind of think about Friedman as someone who was interested in the form and shape of government as well as in reducing its size.

So again, a little more complexity there. The second major thing I discovered is I kept finding all of these women in the archive that he was working with and collaborating with and letters between them and drafts. And I came to realize that it wasn't simply Anna Schwartz, who's very well-known for her co-authorship with him, of a monetary history.

It wasn't even just Rose, director of Friedman, who also co-authored several of his popular works. There were these other women I had never heard of, like Dorothy Brady, Margaret Reid, and they played this really foundational role in his economic work. And so I had no idea that would be a theme of the book or a relevant finding.

And I think it's really one of the major things I have to contribute.

>> John Hartley: Fascinating, so I guess I'm curious, someone well known like Friedman that had some sort of an intellectual evolution over his lifetime in that he sort of was a Keynesian up until working at the US Treasury Department.

 

>> Jennifer Burns: I actually don't think that's true. I will dispute that, and I do dispute that. Yeah, I think there's a couple of reasons that the misconception is out there, and I think some of the misconception comes from the fact that we have these very clear ideas in our heads now what is Keynesian and Keynesianism versus monetarism?

And so we tend to look at the past through those two frameworks when those aren't always the most accurate framework. So what I found again in the archive is, he embraces the early part of the new deal. He embraces relief spending and banking reform. He rejects the major ideas that underlay the new deal in terms of secular stagnation or the idea that government needs to manage demand.

And he's rejecting these by the late 1930s. And he's very clear on that, not in his published work, cuz he's not publishing, but in his teaching. So I have the notes. I know what he's teaching his students, and I know in these notes that you can see him expressing very strong skepticism about sort of all aspects of what's emerging as the fiscal revolution.

Now, then World War II breaks out, and he goes, and he's working for the Treasury Department. And he is sounding to our ears like a Keynesian, because he's saying, tax, to prevent inflation, we need more taxation. And so this is where I think it's important to keep the broader context in mind.

This is a Jewish man, very aware that we're fighting Nazi Germany, and very aware that a wartime economy is not like a peacetime economy, and also very aware that what is the set of policy options out there in DC? If you don't tax, you do price control. And so for him, taxation is a lesser evil than price control.

And then final point is these public statements are made as an employee of the Treasury Department. So again, this seems like something Friedman is saying. This isn't like, so Mr. Friedman, in your capacity as a scholar and intellectual, what do you think we should do? It's no, Mr. Friedman is a paid employee of the Treasury Department appearing before Congress.

What does the Treasury Department think of this policy? And then I've got his letters, and he's writing with his Friends, and the phrase inflation is always a monetary phenomenon is in this correspondence. And he's a believer in this idea. And this is in the period when he's supposedly a Keynesian.

So once you add the historical context and the bigger picture, I don't think that claim can be substantiated.

>> John Hartley: So what about when he writes Capitalism and Freedom, he's got this whole chapter on fiscal policy. It's highly, highly critical of what he terms balancing the wheel and running sort of countercyclical deficits.

Is that not sort of a change or any kind of a break at all from sort of the pre-World War II Friedman, or? I feel like over his life, he increasingly becomes even more libertarian and increasingly opposed to any sort of government intervention. Even sort of his view of, I think, monetarism sort of shifts a little bit, too, whereas I think in sort of the earlier period, he's sort of fine with, I think, more sort of activist sort of fed policy.

And then by the end, he's sort of very much in favor of adopting some sort of money growth, mechanical target, percentage change target of money growth. I remember some interview he did, I think, as recent as the early 2000s before he passed, that he'd be in favor of a computer running money supply rather than the Federal Reserve.

So I feel like he increasingly became more libertarian and increasingly skeptical of any sort of government spending or intervention over his lifetime. But is that sort of-

>> Jennifer Burns: So, yeah, let me take that in two pieces. And to some degree, it is true that he becomes more anti-government, especially then he is in this early 1930s period when we're in an economic crisis.

And so Some of that we could say, okay, it's an evolution in his thought. We could also say, what is he looking at? And what is happening with the growth of government, right. And so when you go through the great society, you come out to the other side of the great society.

He says, you know, I'm now learning the logic of the state is growth, and we need to, and also not even just the great society, but Nixon as well, continues this pattern of growth. And so then he says, I need to be much more aggressive in my anti-government views because what's happening is there's this dynamic of sort of perpetual growth that maybe I didn't grasp before.

So I think some of that's in relation to the size of the state. And he ends up saying that I found this really interesting. His ideal federal budget would be something like 10% of GDP is what he would like the size of the federal government to be 30, heading towards 40 during the latter part of his life.

So he's perceiving that this wartime growth has never reversed and that he thinks the political dynamic is just towards evergrowth. So I think part of that is the context that he starts to put the brakes on more sharply. So that's definitely true. For the monetarism thing, I mean, it comes and goes in waves.

So there's a period in the early 1950s when he's making headlines like, economist says, abolish the Fed. I mean, he is the original and the fed in the 50s. And then he sort of figures out, I think, like, this may get you good headlines, but it doesn't really get you influenced to show up and say, let's abolish the central bank.

So he starts moderating his ideas. And I think that's when he comes up with this, like, money growth percentage rule, which enables him to appear more moderate. And that he's not saying, let's abolish the Federal Reserve, but he is saying, let's remove its discretionary policymaking or let's have a much more of a check on it by passing.

He would like Congress to legislate money supply should only grow at 4% a year or something like that, which would mean the Fed then would be a technical implementer of policy, not a discretionary designer of policy. And one thing that's so interesting is one of his big allies in this crusade against the Fed is white Patman, who is a Texas populist Democrat, sort of straight out of the Dust Bowl.

And he hates the Fed because he thinks it's like banking money power that's, grinding down the little guy. And so he'd like to get rid of the Fed, and Freedman would like to get rid of the Fed. And the two of them become like political allies, you know?

And Patman is constantly calling him before Congress because he loves that he's got this University of Chicago guy who's saying pretty much the same thing he is, that the Fed is unaccountable and undemocratic and all of this.

>> John Hartley: Fascinating, fascinating. So I'm curious in terms of sort of examining the role of Milton's authors or co-authors and colleagues and other sort of influences like Anna Schwartz Milne Friedman's own wife, Rose Friedman.

How instrumental were they in making Milton Friedman a household name as far as economists go? And what are some of the sort of hidden stories that you've uncovered in terms of sort of the development of a lot of Friedman's key ideas in terms of who was influential that they didn't maybe realize were as influential?

 

>> Jennifer Burns: Yeah, I think so. So I'll just start with Schwartz. And I tell the story in my book, but it's not the full focus. So I think there's definitely room for someone. I'm hoping someone will come along and dig into this more. They have this research project and they are toiling away.

And Schwartz is crunching the numbers and they're finding the data. And at a certain point she says, well, what do you want this to be? And he's like, well, I just think we ought to quickly write up what we found. And she's like, you know, I think it will be really a shame if we just do a quick write up.

I think there's a lot of stuff here. And then she's like, by the way, I spent all this time looking at confederate money, right, which is not on his radar at all. But she loves history. And so basically, over time, she convinces him to make this a story, over a century long story of money in the United States.

And she finds all these details about the Federal Reserve and Benjamin Strong and all of this. And so she really makes it into a narrative and a story. And I think this is what accounts for the book success. If he had just published a research report of tables of money, economists would have argued about it, but it wouldn't have had the same impact it had both in economics and more broadly because it was a new interpretation of what happened in the Great Depression that was both looking at money and economic forces and institutions and people and personalities.

And Schwartz really brought all that to the table and also was the one who was able to make the book happen because she had the time to do the work. So that's one huge piece of it. And that's the book but all of the research they did was kind of the foundation of monetarism.

It made Friedman feel very confident that major changes in the economy were caused by major changes in the money supply. And it's because they had this 150 year series that they did as part of the book. So all the theoretical work then that comes out of it that he publishes on his own, it's really based on those findings to which Schwartz was essential.

The other one is the permanent income hypothesis, which is really well-known among economists and is still one of these ideas of Friedman's that's just sort of been incorporated into how economists think. And he had thought a little bit about this in his earlier work on dentists and doctors, kind of measuring income and thinking about income.

But he really got-

>> John Hartley: The occupational licensing work in his doctoral dissertation.

>> Jennifer Burns: In his doctoral dissertation.

>> John Hartley: Simon Kuznets.

>> Jennifer Burns: Right, and so he and Kuznets had looked at income for a lot of different profession. So what happened was he had a group of women economists that he was very close to because of they were all friends of his wife, Rose, and he socialized with them, and he just kind of.

He lived, breathe, talked economics. So he found this correspondence. He actually intercepted this correspondence sent to Rose, and it was Dorothy Brady and Margaret Reed. And they were trying to figure out how to sort of talk about consumption when it came to farm families that really had a kind of feast or famine.

You know, one year they might buy a lot of farm equipment, then they don't buy another farm equipment for ten years. You know, they have a good harvest, they have a bad harvest. And so how do you sort of smooth this out? How do you think about it?

And how do you understand the decisions that they make? And so these women had all their data, and they were kind of puzzling through it, and they would come to his summer house in New Hampshire, and they would all sit around the fire and talk until late in the evening.

And they all collectively started thinking about this concept of permanent income, that what if the way farmers are making decisions is sort of based on a forecast of how they think things are going to go over the course of their life cycle as opposed to how things are going immediately right now?

And then they kind of put that on all these empirical findings, and we're like this actually really seems to explain things. So that was the origin of the permanent income hypothesis. And what I discovered is that the reason Friedman wrote it up, that it went from discussions around the fire to an actual paper and then a book, was, he was trying to get Margaret Reed and Dorothy Brady hired at Chicago.

And this was part of his effort to push out the Coles commission and sort of reconstruct Chicago economics as combining empirical work and theory. And so Margaret Reed was under consideration for a job, and he wrote these ideas up into a paper that he could kind of circulate around.

And- Say, look how great she is, look how important this work is. And he did succeed. Margaret Reid was hired, but Dorothy Brady, he did succeed in getting her a temporary position, but not a full-time position. So then he gets really into the idea and writes it up and publishes as a book.

And he's the only author on the book. But if you read the preface, he's very open. He calls it a joint product. He says, my hand held the pen, but we all came up with this idea together. And my reading on that is because he was connected to these women who in turn were connected to consumption economics, he had data and ideas and perspectives that other economists of the time did not.

Because the field as a whole was focusing more on ever more sophisticated macro models, and they weren't really interested in these granular decisions about, how do farmers spend their money? So I felt like this was his sort of secret weapon, that he took these women economists seriously. And it had a really big impact on his career and on the field as a whole.

 

>> John Hartley: Fascinating, so one other thing I wanted to talk about, too, is Milton Friedman gets a lot of attention for his time in Chile, meeting with Pinochet, the then dictatorial leader of Chile, who enacted all these liberalization, economic policy reforms. Milton Freeman gets a lot of flack for meeting with Pinochet from the sort of the general, I think, press and public.

But I'm curious, did you learn anything new about this episode where I think Friedman went to Chile for, I think, maybe only a couple weeks? But also the University of Chicago provided training to many Chileans who would ultimately serve in the Pinochet government and successive Chilean governments. I'm curious, did you learn anything new about that whole episode in all your research for the book?

 

>> Jennifer Burns: Yeah, I actually spend a chapter on it because it has been such an important part of the kind of Friedman mythology, mostly the demonology, maybe I should say. And so a couple of things I learned and, I don't know, some are new and some are just, be paying more attention.

But if you look at the chronology of this sort of series of events, what's really interesting is, one, when Pinochet came to power, he had no intention of pursuing what we would call a neoliberal economic program. And he was in power for a year or more before he realized that he needed to change up what he was doing.

So this wasn't the kind of guiding idea behind the coup. And then the other piece that's interesting is the decision to kind of move to more market-based reforms had already happened before Friedman came. And Friedman really had nothing to do with that decision. He wasn't close to the decision makers.

He wasn't connected to the regime. He didn't really know what was going on. It was requested that he come visit sort of after the policy had been decided to sort of sell the policy. Although it's a totalitarian regime, they still want buy-in. And so he comes, and he's there for six days.

So that's not weeks, six days. He meets with a bunch of people, and then he flies out. And in retrospect, I think his role has been very exaggerated because it makes for a good story of good and evil. And one thing I did uncover was a travelogue, and I quote from it extensively.

He recounted his trip there. And on the one hand, it really tells you everything that he did. On the other hand, it can be a bit discomforting to read because he was pretty blasé about the political repression he witnessed. I don't know if it's blasé or naivete, like he would say, everything seems normal except there's soldiers everywhere with really big guns.

And so I think he sort of decided this is how they do things in South America, and they don't have freedom. He did believe that if they liberalized their economy, their society would eventually liberalize. And he did tell that to Pinochet, and he did follow up under pressure and try to advocate for more political prisoners being freed.

But he didn't have a very strong kind of moral reaction against the regime that I think a lot of his critics wanted him to have. The way I come at it is just to think about this broader question of engagement, given that I think inflation was about 300% annually, when he went.

It had been 600 under Allende, it came down to about 300. He's sort of the world's foremost expert on inflation, and he's requested to come and talk about a policy that he thinks will be better for the country and better for all Chileans if they live in a society that has stable prices rather than 300% price rise.

Is it legitimate for him to go, even if the regime is an autocratic or violent sort of fascist regime? Is it legitimate to engage? And he clearly thought it was legitimate to engage. And I think a lot of his critics think the proper thing to do in that case is not to engage.

And that's how you stay kind of on the right side of history, is by not engaging. And so that's not the choice Friedman made. I think it's worth debating, was that the right choice or not? But I don't think you can immediately conclude that that was a morally bankrupt choice, given that he felt he could do a lot of good by stabilizing the Chilean economy.

And he also believed that stabilizing the Chilean economy wasn't necessarily going to mean stabilizing Pinochet's rule, but actually the opposite. That once you had a more stable and prosperous market-based society, eventually, that society would no longer put up with a dictator. And as it turned out, Pinochet did leave power.

And Friedman did view that as ultimately a success story. And it really influenced how he looked at China. For example, he said, now that China is liberalizing, the Communist Party is not gonna last. And so, so far, he's been wrong on that one. But the Chilean experience was very powerful for him because it suggested if you did liberalize the economy, eventually you would lay the foundations for a democratic society.

 

>> John Hartley: Right, and this all goes back to the first chapter of Capitalism and Freedom, the 1962 Friedman book, where he talks about the relationship between economic freedom and political freedom, and that you need economic freedom in order to have political freedom. And the first leads to the second eventually.

And I think he may have even recanted some of that in his last sort of days in the 2000s when it sort of became increasingly clear that China wasn't going democratic anytime soon. I'm curious, how did you choose your title, Milton Friedman: The Last Conservative? I'm sure Milton Friedman hated the notion of being called a conservative and preferred to be called a libertarian.

Then again, many libertarians criticize Friedman for supporting limited government. And many libertarians would say, Friedman isn't a real libertarian. I'm curious, how did you come to decide on that title?

>> Jennifer Burns: Yeah, I decided on it. I have Some ambivalence about it, but I couldn't really end up, in the end, fondant title that I liked better.

And I think there's two ways in which it's justifiable to consider Friedman a conservative. And the first is just within the American context, he worked with and allied himself with and was part of a political movement that called itself conservative. And, you know, I've written about this at length elsewhere.

The word conservative in American, in the American context, excuse me, is distinctive. It's not what we think of in the broader sense of political theory or political thought or european history. American conservatism is kind of its own unique beast. And so that's the word they use, for better or for worse.

And Friedman was empirically allied with this movement. He didn't really partner with Democrats for New Deal liberals in any significant way. So there's the kind of political affiliation piece, but there's another piece. If we think about his intellectual approach, he was someone who, as an economist, tried to preserve and rescue more traditional ways of approaching economics and more traditional economic analysis.

And so we can see this in the quantity theory of money, which people thought was totally outdated. And he said, no, actually, there's still something here. I think we can update it, we can revise it a little bit, and it can become the foundation of monetarism, which became a new school of economics.

He's also, in some ways, the last institutional economist. The work that he and Schwartz did of really digging into price data and setting up these tables, that was sort of a lot of what people like Wesley Mitchell did as pioneers in the field, and he kept doing that, and he kept believing that was really important, and empirical testing of theories was critical.

So, he knew the math. He was, in many ways, a neoclassical economist, but he didn't leave behind these older approaches, and he actually preserved them and sort of revitalized them. So I think in that way, he's a conservative. But I think overall, the title and calling him the last conservative is, I think, in both of those ways, those things he did are not really happening that much anymore.

Economics may be broadening a bit in the interest in psychology or decision-making or big data, but mostly grew more narrow after Friedman's day. And the conservative political movement, I think, is changing quite a bit. And that synthesis that Friedman represented, kind of born out of the Cold War, is nothing as powerful and dominant as it once was.

And so, yeah, I don't really know what happens next, but I do have a feeling that Friedman is of a time and a place and the new Freedmen or the next Freedman will be significantly different, I would say.

>> John Hartley: Fascinating, this is exactly what I was gonna ask you about next.

It's been almost 20 years since Friedman's passing in 2006, and I remember in this April 2020 Politico interview, then soon to be president, Joe Biden, declared that Milton Friedman isn't running the show anymore. And there have been sort of, I think, similar sorts of, let's say, dancing on Milton Friedman's grave type moments, I feel like, within, I think, the more progressive sort of side of the press.

But I'm curious, do you think that Friedman's influence has waned in some respects, but maybe not others? Obviously, many young people today, I think, aren't as familiar with his ideas unless they've gone on YouTube to watch his famous TV series for you to choose. Since the great Recession, which seems to be a bit of a turning point, it does seem to be like there has been a growing revolt across both political parties against the old Washington consensus free market doctrine of the 1980s.

Certainly a revolt of the old Buckley fusionist group of conservatives, which Milton Friedman was certainly a part of, in the sense that libertarians were sort of one of the three legs in the three-legged fusionist stool. But then again, we're also seeing renewed interest in a lot of Milton Friedman type ideas.

And there's been a lot of sweeping policy changes in the US in a number of areas like occupational licensing and school choice.

>> Jennifer Burns: Mm-hm.

>> John Hartley: We've got all these states that now have passed universal school choice vouchers or are enacting occupational licensing reciprocity. Also, when you think, about inflation, we're seeing sort of renewed interest in the monetary causes of inflation with the big uptick in inflation in the early 2020s.

Do you think Milton Friedman's legacy is still alive in other ways, even though that sort of big free market consensus thing seems to be shifting a bit?

>> Jennifer Burns: Yeah, I really do. I mean, that's another sort of quibble I have with my own title about, because by the end of the book, what I'm really trying to show is that Friedman is not just a conservative thinker anymore.

He's really become taken up across the political spectrum. And part of it is as common sense that people have forgotten was sort of a new idea. And even that Biden quote, right, why is Biden saying that? Like, that's actually reflecting a kind of inter democratic party debate between moderates and progressives and Friedman kind of represents the moderate democratic stance, which is really astonishing to say when you look at the overall trajectory of when he was alive.

But I think that's true. And I do think there is a bit of a revival underway in some of his ideas because they're still unfolding, like you said, occupational licensure, school choice, I mean, even drug legalization, in a weird way. And I think that the last years have been very much a vindication for the broad freedman perspective on inflation.

I mean, you had a lot of people saying this rise in m two is really problematic and others saying, no, it's not. That's what happened a long time ago. Like, that's back in the dark ages. We thought m two mattered and boom, lo and behold, then you have brought inflation.

And I dig into this to some degree in the latter part of the book because there's also the zero low bound, and why didn't that cause inflation? And I think there's some explanations around that. But I think regardless of where the inflation debate settles, I think when you're talking about these questions, it's always good to go back to the foundations, and Friedman is the foundation.

Friedman and Schwartz are the foundation of understanding inflation and deflation in American history. And I think it's really worth going back and seeing what he had to say. And I think I always, you know, as a historian, I try to fly up onto the kind of 30,000 foot level, and if the granularity of monetarism breaks down in different institutional arrangements, I think you can still step back to the big picture and say a lot of the bigger insights he had are still really applicable today.

 

>> John Hartley: Absolutely, I think people don't quite appreciate how much of a paradigm shift monetarism was. You think even as recent as the 1970s, there was still sort of a belief that price controls could work in fighting inflation. And that corporations and sort of corporate greed and market played a big role in inflation, even as recent as the Nixon Foundation.

But Friedman and Schwartz really changed all that with the monetary history of the United States and just Milton Friedman in general, I think, becoming more popular in the public eye. Well, this has been such an interesting conversation, Jennifer. It's been a real honor to have you on, and I know many people are very excited to read your book.

Thank you so much for joining us today.

>> Jennifer Burns: Yeah, thanks for having me, I appreciate it.

>> John Hartley: Today our guest was Jennifer Burns, who is a research fellow at the Hoover Institution and associate professor of history at Stanford University, and is author of a fascinating new book titled Milton Friedman, The Last Conservative.

This is the Capitalism and Freedom in the 21st Century podcast, where we talk about economics, markets, and public policy. I'm John Hartley, your host. Thanks so much for joining us.