JOHN PASQUESI: I think for anyone in our generation in the United States, he’s done more to
improve our lives than anyone in the world. And if
you think about so many of the principles on which our
country more or less operates, there are things that he’s espoused and fought for, if
you look at things he was promoting as early as the 50s:
Social Security reform, all sorts of free market
opportunities, the notion that corporations exist for the shareholders’ benefit…and
that that’s the primary responsibility is a notion that exists
in the United States, it doesn’t exist in other places. And I
think it’s really had a profound impact on people’s everyday lives, both materially
and psychologically. LAWERENCE CHICKERING: Well, I think he made
markets a respectable thing to be in favor of. When I
went to college, Keynesian economics dominated everything, and he changed all of that. And
made people rediscover markets, rediscover the
basis of a free economy.
INTERVIEWER: Do you know Milton?
CHICKERING: I do, yes…well, yes. INTERVIEWER: What is he like?
CHICKERING: He’s fabulous! I’ve skied with him many years. And… he doesn’t ski
anymore, but he has a wonderful sense of humor. He makes everybody’s
opinion seem extraordinarily important. I was once at
a party at Stanford, and there were a whole bunch of people. One woman was quite drunk,
and there were a lot of professors there, and they all
ran away from her, because she was not interesting. Milton
was there, absolutely trying to persuade her, meeting her argument forever. And this really
just kind of embodied his passion, that there was no one
who was lost, no one who couldn’t be persuaded. JOHN WELBORN: There are two main ideas that
I can think of off the top of my head…there are many. The first idea Friedman is famous
for was the Permanent Income Hypothesis, what he won the Nobel Prize for. And that’s
the idea that…before Friedman, macroeconomists believed that people spent in the same way
that they earned, and that income and consumption tracked perfectly. And Friedman was one of
the first people to recognize, through good econometric work and macroeconomic work, that
people’s consumption was smooth over their lifetime.
While their income may go up and down, jagged or inconsistent in some way, that people tend
to spend the same amount of money in their lifetime.
The second idea I think Friedman had the most impact on is academic economics, especially
in policy making, is with the idea of monetary theory,
basically the idea of the money supply. And if I live in Europe, and if you look at what’s
happened in Europe today, almost every central bank in Europe,
including the ECB, has a mandated level of inflation.
And that’s because of Milton Friedman. Around here- we don’t have it in the U.S. yet,
we have it in practice, but not in policy. But that’s
extraordinary, and that’s because of Milton Friedman…his
contribution. PASQUESI: The first idea I had…I was on
a business trip in New York, and I opened the paper and it
was about some Fortune 500 company, and it had a big corporate art exhibit- art collection
that they owned. And they were giving it to a bunch
of museums around the country. And my first thought was “Gee, isn’t that nice?”
And my second thought was “No, that’s not really nice at all.
That’s the shareholders’ money, and they’re giving it away. And they’ll get some PR
benefit from it, but if they can’t do better with a hundred
million dollars in the shareholders’ money- and that
amount of PR, they should be fired.” And I thought the way- the reason I think about
it that way is probably partly in aid, but certainly partly
because of Milton Friedman, and some of the articles
that he had written. And that thought process and ethics class in business school - it’s
all a bunch of nonsense, plus one article by Milton Friedman.
He says it’s the article that he gets the most
royalties from, because all the business schools have an ethics class, and they all have to
have one moment where they give the right answer,
the rest of the time is nonsense. I cut class after
that day, it’s like why do I need to go? We have the answer here. And so, I thought
about how what he’d done here, and how important it
is to really- everybody in the country, and then
when I started thinking about all the other things he’s done, and I figured who’s
made my life great? It’s probably my parents first off,
and really after that- I’d have to look to Milton Friedman.
He’s done more to make my life a great life, than anybody other than my family.