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Comptes rendus

James Forder, Milton Friedman

J. Daniel Hammond
p. 395-401
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James Forder, Milton Friedman, London: Palgrave Macmillan, 2019, xvi + 495 pages, 978-113738783-7

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Crédits : Palgrave Macmillan

1James Forder’s Milton Friedman is a book that anyone interested in Friedman’s contributions to twentieth century economics should not miss. This is a scholarly work, though one that can be read and appreciated by those who are not trained economists. Forder treats Friedman neither as hero nor villain. He rather treats Friedman as subject for investigation and evaluation. His book is the product of detailed forensic investigation of Friedman’s writings in four areas: autobiography; scholarly work in monetary economics; scholarly work in economics other than monetary; and journalistic and other popular books and articles.

2Forder’s aim is to understand Friedman the man as much as to understand his scholarship. This approach is apt, for it is difficult to separate the power of Friedman’s economic analysis and ideas from the power of his personality. Friedman attracted devoted followers and determined foes alike. He was both admired and disdained, but he could not be ignored. Forder begins with Friedman the man. Part one of the book’s four parts examines the facts of Friedman’s life as they bear witness to the workings of his mind and thereby aid interpretation and evaluation of the products of his mind and energy—his economics. The primary source for part one is Milton and Rose Friedman’s memoirs, Two Lucky People. This is supplemented with facts about Friedman’s life from other sources. Of particular interest to Forder are the choices Friedman made over what to write or not write about in his memoir, as well as the content of what he wrote about himself and his life. Forder’s part two covers Friedman’s work in economics from his first publication in 1935 up to 1958, and part three covers his work in economics from 1958 on. The subject of part four is Friedman’s popular writings. Forder provides an introduction and conclusion for each of the four parts, along with an introduction and conclusion to the book as a whole. These introductions and conclusions provide a detailed yet succinct overview of the material Forder covers and his evaluations. They can serve as a reader’s guide for those who might have an interest in part but not all the material covered in the book.

3Parts two and three divide naturally at around 1958. Until then Friedman’s scholarly work was that of a generalist. He wrote on a variety of topics, including statistics, demand theory, the economics of Alfred Marshall, choice under uncertainty, labor economics, macroeconomics, exchange rate theory and policy, consumption, and scientific methodology. After 1958 his scholarly work was mostly in monetary economics. Among the more important themes that Forder develops are that in the earlier period what appears to be a miscellany is in fact a tightly connected body of work in which Friedman advocated and applied a methodological approach to economic analysis that ran against what was then the emerging fashion. Friedman believed that scientific economics was grounded in the use of theory to illuminate data. There should be as much emphasis on developing empirical data as on developing theory. Friedman reversed, or more accurately, he evened the weights that others gave to theory and evidence. And he altered the standard by which theory is judged. For Friedman the standard for developing theory was not to make it mathematically complete and elegant, or realistic in a minute manner, but in the words of his hero Alfred Marshall, for use as an engine for the discovery of concrete facts. These concrete facts are the facts of actual economic transactions and policies.

4Forder regards Friedman’s work in this early portion of his career as equal in importance to his monetary economics of the later period. Furthermore, he regards its importance as independent of Friedman’s famous essay on “The Methodology of Positive Economics” (1953). If anything, in Forder’s evaluation, the methodology essay is the weakest part of the set! Forder dismisses the essay as unworthy of the attention and acclaim it has been accorded. He interprets the essay as the product of Friedman’s failed attempt to provide philosophical grounding for his methodology. Forder concludes that Friedman was ill-equipped for this endeavor, for he did not know philosophy, nor did he care to learn it.

5Highlights of Friedman’s monetary economics that are covered in part three include: “The Quantity Theory of Money: A Restatement” (1956), written as the introduction to a set of four essays by students in his Workshop in Money and Banking; A Monetary History of the United States 1867-1960 (1963) with Anna J. Schwartz; Monetary Statistics of the United States: Estimates, Sources, and Methods (1970), also with Schwartz; and Friedman and David I. Meiselman, “The Relative Stability of Monetary Velocity and the Investment Multiplier in the United States, 1897-1958” (1963). Forder’s assessment of A Monetary History and Monetary Statistics is that they are superb works of scholarship, without regard to any influence they may have had on other economists’ views on money and the economy or on monetary policy. The Friedman and Meiselman piece along with commentary by advocates of countercyclical fiscal policy such as Donald Hester, Albert Ando and Franco Modigliani, and with Friedman and Meiselman’s replies, illustrate the methodological gap between Friedman and his critics in money and macroeconomics. Friedman and Meiselman set up a test of the relative stability of monetary velocity and the multiplier. This was in Forder’s words, “a contest between a method and a theory, against a theory” (401). The “method and theory” was the quantity theory used to discover concrete facts about money, business cycles, and policy. The “theory” was Keynesian income-expenditure theory. But more to the point, the Keynesians used “taxonomic” theory. That was highly abstract theory designed to cover all potential facts, as Friedman had suggested of the theory in his review of Oscar Lange’s Price Flexibility and Employment (1944). Friedman had written:

Lange seeks to answer the following question: Granted that the direct effect of a fall in the price of an underemployed factor of production is to increase the employment of that factor, what indirect effects may frustrate or reinforce this direct effect? There are, of course, an indefinitely large number of possible sources of indirect effects. …

The analysis is consistently abstract; the style is perhaps best described as verbal mathematics. … “Facts” are introduced to limit somewhat the range of possibilities considered but, except for the final chapter, play no other role in the analysis (1946, 613-614).

6The methodological gap between Friedman and the Keynesians was arguably more substantial than the differences in their economics. Friedman sought a relatively simple theory with broad empirical implications, providing ability to predict much from little. Keynesians put emphasis on the formal mathematical qualities of theory. Forder points to this difference being acknowledged in a rather stark manner by Donald D. Hester, who wrote:

The Friedman-Meiselman test is ill-suited for its task; components of autonomous expenditure will not be reliably selected by their procedure. Theory or “intuition” is necessary to specify components of autonomous expenditure (1964, 377).

7This is to say, economists should ground theory in intuition rather than in evidence.

8Forder’s evaluation of Friedman’s popular writings in part four is mixed. He judges Capitalism and Freedom (1962), Free to Choose (1980) with Rose Friedman, and Friedman’s 300 plus columns for Newsweek from 1966 to 1984 to be the high points of his popular writing. He considers Friedman at his best in making the case for free markets. In this capacity Friedman was in his true element as everyman’s teacher of economics. He was masterful at showing the power of markets to harness people’s efforts to provide for themselves for their own purposes, yet redounding to the wellbeing of others. On the other hand, Friedman was at his worst when he ventured outside economics proper into philosophy or the history of liberty. Forder argues that for Friedman freedom meant little more than allowing markets to work. He concedes that this is a great deal, but argues that freedom means much more than Friedman understood.

9Forder continues in part four showing how Friedman’s philosophy and history undergirding his advocacy of liberty are weak. He points to holes and mistakes in Friedman’s accounts of the history of liberalism and declares that Friedman had no philosophy worthy of the name to back his liberalism. In his account of writings leading up to Capitalism and Freedom, Forder describes Friedman’s contribution to a pair of Collier’s Yearbook articles on liberalism by himself (1955) and Seymour Harris (1955). Friedman’s and Harris’s accounts might be identified as right- and left-liberalism. They were commissioned as responses to a Collier’s article on conservatism by Russell Kirk (1954). Forder outlines Friedman’s account of “liberalism, old style,” much of which was repeated in other popular writings, including Capitalism and Freedom (1962).

10Forder does not provide a corrective account of the history and philosophy of liberalism to contrast with what he judged to be Friedman’s weak account. Perhaps this is because his focus was on Friedman more than liberalism. Yet, Friedman and his intellectual and political opponents on the left helped to define liberalism for two generations of Americans. So, I will conclude this review by suggesting an alternative account of liberalism, drawing on the conservative writer to whom Friedman and Harris responded in Collier’s Year Book, Russell Kirk.

11In “The Dissolution of Liberalism” (Commonweal, January 7, 1955), Kirk argued that the liberalism that flowered in the 19th century was dying, having been severed from its roots in tradition and religion. Every ethical and political system, according to Kirk, is rooted in myth. For some systems, the myth is genuine myth, which conveys truth about humans and society. For others, the myth is a distortion of truth. Kirk wrote:

As great ethical and political systems go, liberalism has been short-lived. And I believe that the ephemeral character of the liberal movement is in consequence of the fact that liberalism’s mythical roots always were feeble, and now are nearly dead. Liberalism is expiring under our very eyes for lack of the higher imagination. …

Liberalism, in short, found its popular support in myth, but in myth distorted: the myth of individual free will, but a free will stripped of divine guidance and grace; the myth of popular sovereignty, but a myth deprived of the saving phrase “under God”; the myth of natural rights, but a myth shorn of Providential order which gives such rights their sanction. (1955/2007, 24-25).

12Kirk identified four secular dogmas of liberalism. These are:

  1. Progress—“the notion that mankind, through its own efforts, is getting better and better, so that the Present is infinitely superior to any other age in history, and the Future will be still better, so long as private judgment and enlightened self-interest are allowed to prevail over tradition and authority” (1955/2007, 26).

  2. Change— “the desirability of Change on principle, and a detestation of Permanence—a craving for novelty” (1955/2007, 26).

  3. Selfishness— “that is, a spiritual atomism, a world in which community should be discarded in favor of a thoroughgoing individualism” (1955/2007, 26).

  4. Liberty— “political and private opportunity to undo all things established and make the world anew, without much respect for two principles which Christian thinkers always had made coordinate with reasoned liberty, Justice and Order” (1955/2007, 26).

13He predicted that “nineteenth century liberal humanitarianism would come down at last to a domination of squalid oligarchs, all in the name of ‘democracy’ and ‘progress’ and ‘security’” (1955/2007, 30).

14Like many other twentieth-century liberals, of the left and right, Milton and Rose Friedman abandoned the religion they received from their parents. In their case this was Orthodox Judaism. Rose recalled in Two Lucky People:

Milton had real reservations about a religious wedding ceremony. However, he bowed to my wishes, or rather arguments, and made the arrangements. I should say here that I was no more religious than he, but I knew very well that both my parents and his mother would be very unhappy if we were not married by a rabbi. Unlike him, I had no scruples about going through the religious act. Whereas he felt it was hypocritical to do so (1998, 81).

15For his part, Milton reported in the memoir that he later realized that Rose was right to insist that they honor their parents’ wishes, because “this gesture to please them involved no fundamental sacrifice on my part. It was a matter of pure form, not substance” (1998, 82). He apparently never explored the idea that the substance he rejected, his familial and cultural inheritance, undergirded the rule of law and equality between persons that were the core of his economics and politics. But these liberal principles are in fact derivatives of Judaism and Christianity.

16Russell Kirk’s critique of liberalism brings to light weaknesses of the social and political philosophy of liberalism as represented and endorsed by Friedman in “Liberalism, Old Style,” Capitalism and Freedom, and other writings. There is no Divine law undergirding Friedman’s liberalism; nor presumably is there Natural law. There are no values or ends other than the subjective values and ends of individuals. This implies that individuals’ values and ends can in principle take any form whatsoever. Concern for the wellbeing of neighbors can be regarded as a virtue or as a vice. So can any desire or action to fulfill a desire, because desires or actions are not objectively virtuous or vicious.

17Friedman regarded nations and other communities as nothing more than collections of individuals. Nations are at best “convenient administrative units.” He suggested that families are de facto “individuals” because children cannot be responsible for themselves. But as was to be fleshed out in Gary Becker’s economics of the family, families are also merely convenient administrative units. The implication for liberal individualism is that in principle natural families of mother, father, and their children have no substantial reality that would privilege them over other household and child-rearing arrangements.

18Milton Friedman was William Wordsworth’s happy warrior, “whose law is reason; who depends upon that law as on the best of friends.” Friedman supposed that he and others were guided by reason and respect for fellow humans. To Friedman the cup of human nature was more than half filled with good. His inclination to expect the best of himself and of others was not without exceptions, as pointed out by Forder. But I think his optimism was one of the features that accounts for the magnetism of his personality. Friedman saw clear skies where he might have seen clouds. If, however, Russell Kirk was prophetic rather than pessimistic about the trajectory of liberalism, then Friedman's and other liberals’ faith in liberal democracy was naïve. It is not at all clear that liberal democracy will withstand the winds of change that the past century and a half have unleashed in the name of perpetual progress based on unaided human reason and autonomy.

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Friedman, Milton. 1946. Lange on Price Flexibility and Employment: A Methodological Criticism. American Economic Review, 36(4): 613-631.

Friedman, Milton. 1953. The Methodology of Positive Economics. In Essays in Positive Economics. Chicago: University of Chicago Press.

Friedman, Milton. 1955. Liberalism, Old Style. In Collier’s Year Book. New York: P.F. Collier and Son.

Friedman, Milton. 1956. The Quantity Theory of Money – A Restatement. In Studies in the Quantity Theory of Money. Chicago: University of Chicago Press.

Friedman, Milton. 1962. Capitalism and Freedom. Chicago: University of Chicago Press.

Friedman, Milton, and Rose D. Friedman. 1980. Free to Choose. London: Penguin.

Friedman, Milton, and Rose D. Friedman. 1998. Two Lucky People: Memoirs. Chicago: University of Chicago Press.

Friedman, Milton, and David I. Meiselman. 1963. The Relative Stability of Monetary Velocity and the Investment Multiplier in the United States, 1897-1958. In Stabilization Policies. Englewood Cliffs, NJ: Commission on Money and Credit / Prentice Hall.

Friedman, Milton, and Anna J. Schwartz. 1963. A Monetary History of the United States 1867-1960. Princeton: Princeton University Press.

Friedman, Milton, and Anna J. Schwartz. 1970. Monetary Statistics of the United States: Estimates, Sources, Methods. New York: National Bureau of Economic Research.

Harris, Seymour E. 1955. Liberalism. In Collier’s Year Book. New York: P.F. Collier and Son.

Hester, Donald D. 1964. Keynes and the Quantity Theory: A Comment on the Friedman-Meiselman CMC Paper: Rejoinder. Review of Economics and Statistics, 46(4): 376-377.

Kirk, Russell. 1954. Conservatism. In Collier’s Year Book. New York: P.F. Collier and Son.

Kirk, Russell. 1955. The Dissolution of Liberalism. Commonweal. January 7. In George A. Panichas (ed.), 2007. The Essential Russell Kirk: Selected Essays. Wilmington, DE: ISI Books.

Lange, Oscar. 1945. Price Flexibility and Employment. Bloomington, IN: Principia Press.

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J. Daniel Hammond, « James Forder, Milton Friedman »Œconomia, 11-2 | 2021, 395-401.

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J. Daniel Hammond, « James Forder, Milton Friedman »Œconomia [En ligne], 11-2 | 2021, mis en ligne le 01 juin 2021, consulté le 22 septembre 2021. URL : ; DOI :

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J. Daniel Hammond

Wake Forest University.

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