The economist Milton Friedman continues to divide opinion from the grave.
Admirers believe that his free-market gospel helped to spur the greatest surge of global entrepreneurial activity and wealth production in the last 100 years. His critics say he provided an ideological alibi for the biggest upward redistribution of wealth in living memory, with a devil-take-the-hindmost attitude toward the non-rich.
So when the University of Chicago, whose economics department has been an incubator for the free-market creed, announced in May that a new institute would be named in his honor, it set off a fierce intellectual skirmish.
Seven committee members were appointed last year to formulate a plan for a research center on “economy and society.” Five were economists, the sixth came from the law school and the seventh was based at the business school.
“The economics department is small, compared to some of its rivals,” said Lars Hansen, the interim director of the new institute.
This is a chance, he believes, “to reach out and broaden” its approach, resources and influence.
The university is coughing up US$500,000 for start-up costs this fall and is seeking US$200 million more. Anyone donating a million or more is offered “privileged access” to the institute.
But 101 tenured professors — 8 percent of the teaching staff — have petitioned the university’s president, Robert Zimmer, to convene a meeting of all staff in the coming academic year to discuss the purposes of the institute. Zimmer has agreed.
Distinguished anthropologist Marshall Sahlins is among those who fear that the institute will operate as “a rich man’s club” and operate on the principle that “the people who have the most money have the most truth.”
Fellow petitioner Bruce Lincoln, a professor in the department of religion, anticipates that the institute will generate “a symbiosis of a certain kind of donor with a certain kind of institute” in what he calls a “feedback loop” to help the wealthy to become wealthier at the expense of everyone else.
“This is a big departure from the mission of the university,” Lincoln says.
Hansen responds: “To set up an institute with no criticism from outside would be silly to us. That’s not our ambition.”
Friedman, who died in 2006, was one of the very few economists to become a household name, partly due to writing in popular publications such as Newsweek, partly because of several TV series championing his market-knows-best ideology and partly as a result of his enormous appeal to conservatives.
In postwar America, Friedman’s market fundamentalism was regarded as lunatic-fringe stuff until overspending on the Vietnam War, the collapse of the gold standard in 1971, stagflation and oil crises. The problems seemed to be at least as political in nature as economic.
In the 1980s, US president Ronald Reagan invoked Friedman’s anti-governmental philosophy as the answer to the US’ economic woes — although Reagan heretically indulged in protectionism, corporate tax breaks and subsidies at the same time as he cut taxes and regulations.
The free-market case spread to Britain, too, where prime minister Margaret Thatcher was an ardent supporter. She shared the dislike of Friedman and his followers for regulation, trade unions, the welfare state and public works.
The institute debate reopens old sores on campus stretching back to a 1970s uproar about the “Chicago boys.”