I picked this one up after listening to the Know Your Enemy episode in which the hosts interviewed the author. Before reading this book, I knew that Friedman was one of the central figures of the “Chicago School” of economics, a faction that displaced the rival Keynesian approach to become essentially synonymous with mainstream economics. Reading Burns’s book probably wouldn’t offer a different one-sentence summary of the Chicago School’s trajectory, but my picture of the characters on the stage has appreciably changed, as well as my sense of Friedman, “the first neoliberal”, himself.
It’s interesting to think about the world in which Friedman goes on to become a professor of statistics rather than economics. I hadn’t realized that it was within the field of statistics where Friedman made his first academic contributions (such as his involvement in the development of sequential analysis). One of the most interesting aspects of the book is how Burns contrasts Friedman with his contemporaries, especially in the middle of Friedman’s career. Despite being talented mathematically, Friedman comes off as being practical, avoiding overly formal or mathematically complex treatments of economic theory. This is perhaps best seen in the debates between Friedman and members of the Cowles commission, which Burns uses to illustrate Friedman’s rejection of physics-inspired mathematics applied economic modeling. Another example is Friedman’s collaboration with Anna Schwarz in A Monetary History of the United States, whose arguments (enabled via painstaking data collection from Schwarz) gain their fundamental heft through descriptive analysis.
Some of Friedman’s signature policy views (such as fixing growth of monetary supply to GDP) were abandoned after being attempted, but in many ways Burns argues we’re still living in the world that Friedman helped create. I hadn’t fully appreciated Friedman’s role in popularizing the idea that anticipating and managing lender expecations is critical to controlling inflation. By the time I was born in the 90s, this notion was on its way to becoming conventional wisdom. Under Alan Greenspan, the Fed took steps to publish its meeting notes more frequently and began requiring the Fed use fresher (rather than lagged) data for its reporting. These reforms might seem small (or even boring), but they’re a powerful example of how institutional transparency and consistency undergird the regularity of day-to-day life. Burns shows that Friedman’s correspondence and public writing influenced Greenspan’s decisions over these reforms, at least to some degree. Considering Friedman’s often antagonistic views towards the Fed, it’s ironic that he helped reform the institution to better support its stabilizing role for the US economy.