More on MFI

David Warsh at Economic Principals talks about the Milton Friedman Institute controversy. He also pointed out that this is more like Stanford's Hoover Institute. It seemed to me to be one additional Chicago economics department at Chicago - to go along with the Harris School and the GSB - but he's right, it is more like the Hoover Institute. He writes:

Nor is it surprising that plans for a Friedman Institute have struck sparks. The very name calls to mind The Hoover Institution on War, Revolution on Peace, established in 1919 as a research institute on the campus of Stanford University by alumni Herbert Hoover, who later became the thirty-first president of the United States. For many years, the Hoover Institution served mainly as a center for scholarly research amid the rich collection of European documents – and the occasional Russian refugee – that Hoover brought home from his tour as relief administrator after World War I. Its relative autonomy within the university was symbolized by its garish tower at the center of the Stanford campus.

I have a hard time understanding academic politics, and tend to think of these things very privately. I'm sure there are many issues at play. Warsh notes things like the gentrification of the divinity school closer towards the ghetto-y areas around Hyde Park, and also that this really benefits economics to the exclusion of all the other departments. That point is hard to quantify, but I can see in a real sense how that is the case. But is it really an overstatement to say that the University of Chicago is indebted to the legacy of Milton Friedman, far more than it is indebted to any other person or department within that university? And with what now almost universally understand about not only the failure of socialist planning and the crucial, humane importance of economic and political freedom, is it also not an understatement to say that we probably do not, as a race, owe a tremendous to that great, unwavering soldier for freedom, Milton Friedman? We forget how unfashionable all of his ideas were for so many years, and how with great humor and friendliness, he fought and won argument after argument showing the failure of the socialist state, fighting and winning so many freedoms that are now being enjoyed around the world, and home in the US? The intellectual bankruptcy of the political left has forced a retreat by those intellectuals into the academic departments of the humanities in higher education, and I guess I tend to just reflexively think they are ignorant and naive, if not outrightly evil, when they try to refashion their outdated and falsified modes of human organization and economic arrangement, and so just think without thinking, "Yes, a Milton Friedman Institute at Chicago. Yes, $200 million towards it. Yes. Yes. Yes." I'm sure there is more to it than that, but I tend to believe that if enemies of Milton Friedman were economically literate in the least, they'd chill out.

Walsh, mid-article, has an interesting comparison beyond that of Hoover. Maybe this will be more like MIT's Whitehead than Hoover - more pioneering and scientific than political. There are, after all, two legacies of Milton Friedman. There is Milton Friedman the economist and Milton Friedman the political prophet, and though they sometimes intersect, his scientific work for which he won the Nobel Prize had to do with the permanent income hypothesis and the consumption function. Not really things which might have gotten him a PBS miniseries. But this is Chicago, really. It's simultaneously a place that in the mid-20th century held the ground on classical liberalism and pushed forward in pioneering work in economics. Had it just been the former, it would've been like George Mason has become. But it wasn't just the former, and so has cranked out Nobel laureate after Nobel laureate. Here's what he says in the article:

An alternative interpretation of the perils at hand might recall the history of the Whitehead Institute, named for the instrument manufacturer who in the late 1970s sought to give $100 million for a program of directed biomedical research. Edwin “Jack” Whitehead offered the grant first to Duke University, then to Harvard, but was turned down in each case because of disagreements about who would be in charge. Nobel laureate David Baltimore, of Massachusetts Institute of Technology, then talked the entrepreneur into relaxing the demands for control he had sought; finally, over fierce opposition from a faculty minority, MIT accepted the grant. First under Baltimore, then Eric Lander, the unconventional lab was a brilliant success. Today director David Page compares it to an artists’ colony. “What we do here at Whitehead is… empower maximally creative—really wildly creative—individuals to realize their dreams within these walls,” he says.

Granted, even heavily empirical economics is not molecular biology; but given the series of surprises that have emanated from Chicago in recent years (floating exchange rates, modern finance, new growth theory, D. Gale Johnson’s mission to China, compelling work on the benefits of early childhood intervention), it is not unthinkable that the Friedman Institute might pay off in unexpected ways. Faculty misgivings are sometimes misplaced. (The Becker Center on Chicago Price Theory, which routinely describes itself as “founded by Richard O. Ryan MBA ‘66,” loosely resembles the Whitehead model.)