Many people are more qualified than I to assess the enormous impact of Milton Friedman on the field of economics, so I will devote these brief remarks to my perceptions of Milton the man and to his influence on the legal field, which I entered as an academic in 1968.
Our paths overlapped at Chicago for about four years. I arrived in the fall of 1972 after a four-year stint teaching law at the University of Southern California. Milton was in many ways the reigning intellectual figure on a campus that included such giants as George Stigler, Gary Becker, and Ronald Coase. Watching him perform at workshops, it was easy to be impressed by the force and simplicity of his prose. Milton always had that rare capacity to get to the heart of an issue in language that everyone could understand, but few could resist.
One day he was faced with an argument about the importance of the second best, in which one critic announced that a second intervention in the market was needed to offset the first. Milton’s response went something like this: “You have shown there is a hole at one end of the boat, and you propose to cure the imbalance by creating a hole at the other end.” It was a wonderful and vivid physical image that lay bare the weaknesses of a supposedly sophisticated second-best critique of market institutions. There are always imperfections in markets. Indeed one of their functions is to minimize, by creative endeavors, the cost of regulation by devising alternative solutions that get around its inefficiencies. Milton understood, instantly and clearly, the risks of any argument that used one imperfection to justify a second, and the first two to justify a third.
|Milton always had that rare capacity to get to the heart of an issue in language that everyone could understand, but few could resist.|
More concretely, Milton understood that it was unwise to fight a restriction on entry in some given market through the creation of a subsidy. In a way that combined an insightful economics with a strong political sense, Milton both knew and preached this gospel: the only proper legislative response to man-made obstacles to market operations was their prompt removal. Move always down the path of simplification, and never tolerate the slippage toward further regulatory and political obfuscation.
Milton’s worldview and his indomitable spirit had an enormous influence on my own outlook at work. In 1968 it was mildly risky in academic circles to have strong libertarian instincts, which I had developed while studying the writings of the great nineteenth-century English judges while a law student at Oxford. And relatively early in my academic career, I received a boost from Milton that I recall to this day. I had written in 1975 a draft of an article calling for a contractual solution to the issue of liability for medical malpractice, which somehow had caught Milton’s eye. He had put a quotation from that article on one of his final examinations, with instructions for the students to find out what was wrong with the passage. But such was his eminence and influence, that several of his examinees wrote me excited notes to say that Milton had put something I had written on his examination. It was a measure of the esteem that his students had that, right or wrong, any person who attracted Milton’s attention had to be taken seriously.
In reality, of course, his influence goes far beyond that personal anecdote. The dominant legal culture of the 1970s still held that our constitutional norms and legislative institutions should all work to advance the central tenet of Progressive and New Deal thought: state-created monopolies and barriers to entry in labor and product markets always worked to the long-term benefit of the nation.
The harm of this doctrine has been felt everywhere. The original vision of the U.S. Constitution restricted federal power over interstate commerce to regulating those transactions that involved the sale or shipment of goods over state lines. That narrow vision of federal power could not allow, however, the Department of Agriculture to keep the world price of grain nearly threefold the world price, given the risk that grain destined for the national or international market would be sold in-state or indeed used by its grower to feed its own cattle. American constitutional law was (and is) so misguided because Supreme Court justices who did not read Milton’s work were determined to let Congress have its way. It is not official United States constitutional law that feeding one’s own grain to one’s own cows counts as “commerce among the several states.” Similar statist impulses were used to justify the imposition of collective bargaining regimes on firms that made or mined goods in local markets for sale outside the original state.
|The political battle remains even if the intellectual battle has been largely won. Much work remains to be done, and Milton’s greatest influence is, I suspect, still to come.|
I have often wondered whether these massive accretions to the federal power to regulate, which were decided in the late 1930s and early 1940s, when Milton was coming of age, would have come to pass if the justices had had any understanding of the power of markets and the need for government structures that allowed them to function. Many of my own efforts to attack these well-entrenched constitutional principles derived in part from understanding the power of market ideals that Milton was able to express so well. And just as all new justifications for the expansion of state power are contested in economics, owing to Milton’s influence, so too in law today, many scholars of all ages have taken more than one page from his book to argue forcefully against the New Deal paradigms that held unquestioned dominance nearly 40 years ago.
Milton was quite right to think that the political battle remains even if the intellectual battle has been largely won. Much work remains to be done, and Milton will in the decades to come be the inspiration for countless scholars and public figures, here and abroad, who care about the fields that he cared about: education, monetary policy, labor markets, regulation, taxation, international trade, and so much more. His greatest influence is, I suspect, still to come.
A good man has lived a long, honorable, and productive life.