MFI

Becker and Posner talk about the Milton Friedman Institute over at their blog. Not surprisingly, Becker's is much more glowing than Posner's. Posner's not negative, but it's not enthusiastic either. I don't know the story there, but on several occasions Posner has said some slightly negative things about Friedman. For instance, he seems to have felt he was ideological, whereas Becker vehemently thinks to the contrary. I would love to hear the two of them debate that point. When I was a committed libertarian, Friedman was definitely my hero. And I'm sure he would still be my hero if I were interested in money or macroeconomics, but I'm not so there's very little overlap between his work and my own work. Still, from what I understand, the naming of the institution is deserved and financially sensible. One of the things I liked in Becker's tribute on his blog, though, was his explanation of the Pinochet incident. I actually had never read these kinds of caveats about that meeting before, so it was news to me.

One of the most persistent accusations is that he advised and collaborated with the Pinochet regime. In Two Lucky People, Rose and Milton Friedman's autobiography, he discusses his dealings with that government. He also includes the relevant documents so that readers can judge a lot for themselves. He turned down two honorary degrees from Chilean universities because they were state universities under Pinochet. He made one six-day trip to Chile in 1975 at the invitation of a private bank. He gave two lectures on the "fragility of freedom". He did have a brief meeting with Pinochet and wrote a letter to Pinochet afterwards urging "shock treatment" of reduced government spending and reduced growth in the money supply in order to cure the rampant inflation then afflicting Chile. His letter contains many detailed suggestions, including a call for "generous severance allowances" for laid off government workers, and a safety net to alleviate hardship and distress among the poor.

Even if I hadn't read that, I would stick by Friedman on principle. If a dictator is harming his people through his economic policies, then how is it not humanitarian to give that dictator counsel that would've improved the economy and minimized that particular source of harm on his people? The only way you can claim that his act was wrong is if you can credibly show that the people would've been better off had Friedman not explained how to deal with runaway hyper-inflation. That is, the counter-factual would need to convincingly show that Chileans were better off under hyper-inflation than without it. That's an argument I've never heard. Instead, in principle, it's wrong to help a right-wing dictator with his economy, even if his economy is killing those citizens. (What if he had been a left-wing dictator, though, like Chavez? Is it then okay to offer help?).

Almost always, the critics' own failure to see the moral dimension to capitalism is what keeps them from giving an inch there. The movement towards freer markets is itself another dimension of evil to them, and so of course Friedman's efforts are even doubly worse. But rarely is that phrased that way - it's just a strong condemnation of his talking to Pinochet only.