The Friedman Foundation
Drake Hotel, Chicago
July 31, 2012
Remarks by Leo Melamed
The Life & Vision of Milton Friedman
I must confess that I was a bit worried about accepting tonight’s role as chairman of this Milton Friedman celebration. My hesitation was based on my unabashed love for this man. What could I say? What could I say that already hadn’t been said? How does one describe the greatest economist of the Twentieth Century?
Like many in this audience I and my wife Betty had known Milton and Rose for a very long time. Our friendship grew with every passing day from the time I met him for the first time for breakfast in 1971 at the Waldorf Astoria in New York. I had this crazy idea for a futures market in currency. I was there to ask Milton Friedman---the man who I considered the world’s economic God---for his approval of this idea.
Ten years later, at the tenth anniversary of the International Monetary Market, the IMM---the world’s first financial futures exchange---here is how I explained it to our members:
Among us all, I said, one person stands out.
Someone who is in a category all by himself.
The only one among us who counted!
For when we proclaimed the IMM was a great idea,
An open market to determine financial values---the world yawned or laughed.
When he agreed, the world took notice.
I know he may deny it. He may say he had but a small role. And he can be convincing.
But don’t you believe it. I know better!
His 1971 paper, explaining why a futures market in currency was necessary, was the single most important factor to give our idea credibility.
His name was magical!
Because of his paper: People who would otherwise not listen, gave us an audience.
Private-sector officials, who would otherwise not have approved, gave us approval.
Presidents, financial ministers, central bankers who would otherwise not have allowed us near their doors, opened the door for us.
It was magical!
If we were told fixed exchange rates are coming back
We responded, Friedman said “Don’t be silly!”
If we were told our market was just for speculators
We responded, Friedman said that is not true!
If we were told that we were crazy
We responded, our psychiatrist, Milton Friedman, begs to differ;
And each and every time his name made a difference!
When we went to visit the likes of Arthur Burns, George Shultz, Alan Greenspan, and Paul Volcker, to tell them of our plans. They nodded in approval.
Friedman's message got there before we did.
So how can I be objective about this man?
The 1980s Free to Choose series, seen by millions around the globe, single-handedly changed the world’s perception of free enterprise.
Who but Milton could speak about the value of freedom in a language and with a logic everyone could understand. A logic that was irrefutable.
I dare say, when you check Wikipedia for “American Exceptionalism,” his picture should be first in line.
And if you look in Webster’s under the word “Pithy,” Milton Friedman is the definition. He was the master of the one liner:
I know you have heard all of these before, but who but Milton Friedman could get away with saying:
“If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.”
Or that “Nothing is so permanent as a temporary government program.”
Who but Milton Friedman would dare say, that “Underlying most arguments against the free market is a lack of belief in Freedom itself.”
Who had the credentials to state:
“I am in favor of cutting taxes under any circumstances, and for any excuse, for any reason, whenever possible.”
Or that “A society that puts equality before freedom will get neither.”
And of course who can forget Milton’s quintessential wisdom that “There is no such thing as a free lunch.”
And for those who question whether his ideas really made a difference?
George Will summed up the answer in 1990 after the fall of the Soviet Empire. Will quipped, “The Cold War is over, and the University of Chicago won.”
What he really meant was The Cold War is over and the free enterprise ideas of Milton Friedman won.
And when I told our members that Milton can be convincing, it was the understatement of the century.
It is a well-worn truth that the only one that ever won an argument with Milton Friedman was his wife, Rose.
His life long friend Secretary of State George Shultz once quipped: “Everybody loves to argue with Milton, particularly when he isn’t there.”
And his very good friend, Professor George Stigler of the University of Chicago, on the celebration for Milton’s Nobel Prize in 1976, introduced Professor Friedman in the following fashion:
“Milton,” he said, “will begin a debate by asking you to grant him three simple assumptions. For instance:
That $2 is better than $1;
That the law of diminishing returns is valid;
That individuals do not have complete knowledge of the future.
Simple, undeniable assumptions, right?”
“My fundamental advice,” said Professor Stigler,
”Do not grant him these assumptions.
For if you do, you will find yourself led, by inexorable logic, to conclusions such as these:
That the Federal Reserve System should be abolished,
That the Board of Governors of the Federal Reserve should be put on Social security,
And that Social Security should be abolished.”
Finally, in celebrating Milton Friedman’s centennial birthday today it is imperative to remember his oft quoted admonishment:
“The challenge for my generation,” he said, “was to provide an intellectual defense of liberty. The challenge for your generation is to keep it.”
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