Defending the Friedman Institute

By John Mark Hansen

I’d like to address a few questions that have been raised about the intentions behind the Milton Friedman Institute and how such an institute will fit within the University.

Let me start by saying a word or two about the name. Our new economic research institute bears the name of Milton Friedman in recognition of his contributions as a 30-year member of the University of Chicago faculty and in honor of the impact he had on the discipline of economics, ranging from his early work on the theory of the consumption function to the monetary history of the U.S. to the branch of macroeconomic thought known as monetarism. Friedman’s ideas were controversial within economics but they are now part of the broad mainstream of economic thought in the US and Europe – you’ll find “ Chicago School ” economists in every top economics department. Even economists who do not share the policy views Friedman propounded – which includes economists at the University of Chicago as well as economists elsewhere – would number Friedman among the five most important economists of the 20th century.

It is not unusual in this University in this way to honor faculty who have been major contributors to the University and major figures in their fields. Two research institutes in the sciences bear the names of two other Nobel laureates, the James Franck Institute and the Enrico Fermi Institute. Within the humanities and the social sciences, the Center for the Advanced Study of Religion is named in honor of Martin Marty, and the Center for Mexican Studies is named in honor of Friedrich Katz. I am unaware that in naming the centers the University was endorsing the political views of Professor Marty and Professor Katz. They are centers that enable the faculty and students affiliated with them to pursue their scholarship, without preconception about the direction it will take.

And so it is with the Milton Friedman Institute. The primary purpose of the Friedman Institute is to make sure that the University of Chicago is the leading influence in economics well into the 21st century, just as it was in the last half of the 20th. Central to that goal is a robust program of visitors. The visitors – and the Chicago faculty and students who will interact with them – will be chosen on the basis of the importance of their work within economics, not on the basis of their politics. The model for the MFI is not the Hoover Institution. In all the months the ideas for the MFI were in development, I never once heard anybody argue that the Hoover Institution is the kind of center we want or need on this campus. Rather the model for the MFI – articulated frequently – is the Institute for Advanced Study. We want the MFI to be the destination for every important economist, just as the Institute for Advanced Study is the destination for every important mathematician and theoretical physicist. The MFI can attain that status within economics – as the place where the best ideas in economics are debated and advanced – only because it’s an economics research institute whose focus is scholarship.

One of the unfortunate implications of some of what has been said about the MFI is that the economists, alone among members of this University’s faculty, would put ideology before scholarship. I hope that this implication was unintended, but perhaps I can share a story that illustrates the relative importance the economists have placed on politics versus scholarship. In the late 1940s, the Committee on Social Thought appointed the well-known “conservative” economist Friedrich Hayek to its faculty. Hayek desired an appointment in the Department of Economics, which in that day included Milton Friedman among its members. A majority of the Department’s members may well have endorsed Hayek’s political views. But Economics refused to make the appointment, on the grounds that Hayek’s work was not – or was not any longer – important in economics. I have heard several of the members of the current Economics faculty make a similar distinction between Friedman’s work as an economist and Friedman’s work as a libertarian thinker. It’s the first – Friedman’s contributions as an economist – that inspires the Department’s admiration and its interest in his ideas.

The University is eager to facilitate well-conceived faculty initiatives that have the endorsement of the deans. I support the creation of the MFI because I believe it is important for the Social Sciences Division and the University as a whole. True, the MFI will not serve every member – or even most members – of the SSD faculty, but the SSD could do hardly anything to help the faculty if we limited ourselves to initiatives that (somehow) include nearly everyone. Whatever one might think of the Chicago Economics Department, its members are now and historically among the University’s most distinguished and most influential. As a university and as a division, we must needs support the initiatives that sustain and advance the scholarly excellence of the faculty.

In supporting the creation of the MFI, then, the University is simply doing in economics what it is already doing in many other diverse fields. The Social Sciences Division supports a wide range of centers and institutes: the Center for Latin American Studies, the Center for Cognitive and Social Neuroscience, the Chicago Center for Contemporary Theory, the Center for the Study of Race, Politics, and Culture, the Urban Education Institute, and many more. In some instances, we have already provided direct monetary support for their activities that is well greater than the sum total of direct support the University plans to provide for the MFI. None of these initiatives draws in the entire SSD faculty (and some involve faculty who have political views they hold just as strongly as Milton Friedman did his). But they all make us a better University by leveraging the scholarly capabilities and the scholarly passions of important thinkers doing important research on important issues in the social sciences. That is why we support all of our centers and institutes.

Allow me to make one last observation, this one about the organization of MFI supporters known as the Milton Friedman Society. Let me read you something:

“Friends of the Institute … are partners in the advancement of research and scholarship at the highest level and, as such, are encouraged to participate in the intellectual and cultural life of the Institute. In accepting our invitation to become a Friend, you will have the opportunity to interact with Institute Faculty and Members, attend forums, lectures, concerts and films, receive Institute publications and access to our libraries and dining hall.”

That is a description of the benefits reserved for Friends of the Institute for Advanced Study. And it is a good description of the benefits of membership in the Milton Friedman Society. The Friedman Society will play the same role in the MFI that the Visiting Committee to the Social Sciences Division plays in SSD: supporters and boosters and engaged friends, yes – but not governors.

John Mark Hansen is Dean of the Division of the Social Sciences at the University of Chicago.