Robert Chitester on Milton Friedman and Free to Choose
Intro. [Recording date: August 27, 2020.]
Russ Roberts: Today is August 27, 2020. My guest is Robert Chitester. Bob is an educational entrepreneur and filmmaker who has spent most of his career creating video resources to help people understand market economies and the power of economic liberty. With Milton and Rose Friedman, he created the acclaimed PBS [Public Broadcasting Service] series, Free to Choose. He created the Idea Channel, an archive of over 200 interviews with leading scholars including F.A. Hayek, Norman Borlog, Thomas Olan, James Buchanan. He created Izzit, I-Z-Z-I-T, Izzit.org, which produces resources for teachers in the classroom. Bob, welcome to EconTalk.
Robert Chitester: It’s a delight to be here, Russ, and I compliment you on your ongoing efforts with EconTalk, very important.
Russ Roberts: Thank you. I do what I can.
Russ Roberts: You began your career in public television. How did you end up working with Milton Friedman?
Robert Chitester: Oh, boy. Well, I’m going to try to keep my answers as short as possible, but I want to start, though, with me in college. I enrolled at the University of Michigan in their engineering department, because in high school I was sharp enough that, for example, in algebra I could mainly figure out the answers were, but I wasn’t disciplined enough to learn the process. So, my first blue book–and I was great in demonstrating physics and all that. The professor who taught that, he urged me, ‘Bob, you should be an engineer’; this, that and the other thing. I didn’t have much understanding of what an engineer might be. So, I entered the University of Michigan as an engineer. My first algebra blue book put the end to that. I know I had the lowest score in the class–it was like a 40 or 41 or something. And, I knew that I didn’t have a clue what the process of algebra was.
So, I had a scholarship from the Navy. Had I not had that scholarship, I might have transferred to the music school, because my dream up until I was 30 years old was that I wanted to be the next Bing Crosby; and I finally got rid of that unrealistic assumption.
But, the important thing was, then: so, I had to pick a curriculum to move to and the Navy would not allow me to go into music. I guess they understood that wouldn’t be of great help out there on the destroyer or whatever. So, I chose radio and television just because I thought, ‘Well, if I’m going to have a musical career, I’m going to be singing on radio and TV, so I may as well study that.’ It’s just crazy, Russ, how I ended up. But, basically what it did was–and it took a while, not too long–but to understand–me understand–the creative, artistic creative bent that was inside me. Which has made all the difference in terms of the projects I’ve undertaken and the results from them. As Peter Boettke–and I was always so gratified that Peter felt this way–the Friedmans would disagree with him. He maintains to this day that Free to Choose is a better book than Capitalism and Freedom, because it is more accessible. And[?], because the transcripts of the TV show converted it to a book that the average reader can get more out of it than they can out of Capitalism and Freedom, which is a little bit heavier trip.
Russ Roberts: Yeah, it’s definitely a more demanding read. I have recommended both books at various times to different types of people, obviously. They’re both worth reading, but they’re very different. I’m not going to weigh in on which one’s better, but–
Robert Chitester: No, no, no. And, in effect, it’s a silly way to approach it because they both have their role. And, from my point of view, I’d love to have everybody read both of them.
Russ Roberts: Here you go.
Robert Chitester: But, it might very well be that they start with Free to Choose and then go to Capitalism and Freedom. When we do our events at Capitaf, the Friedmans’ summer home in Vermont, we assign readings and we discuss chapters from both books.
Russ Roberts: So, how did you come to work with Milton and Rose on that TV series, which was the genesis for the book? And, the book actually came out before the series went on the air, but the book was proceeded by the filming and those transcripts.
Robert Chitester: Yeah. Well, before I ever became an entity in the freedom movement that people would recognize in any way, I followed up on my radio and TV. I came from the university–well, I did two years in Saginaw; I was setting up a system in high school–but I came to this area to work with what was then a state teacher’s college. And, was immediately thrown into the mix of people here in the area who were working to bring an educational television station to Erie. And through the fact that I was the only one in the entire group–they were mainly educators; the Erie County superintendent of schools was in the group–I essentially became the expert by default. And, when it came time to hire a general manager, the president of the board of directors of the group that held the license said, ‘Gee, we better go look for a general manager.’ And, I said, ‘Well, I agree with you, but I’m going to recuse myself because I’m going to apply.’ And, his answer was, ‘Oh. Well, then you got the job.’
Russ Roberts: How old were you?
Robert Chitester: So, literally I was handed the job of building a public television station, which I succeeded at, at great cost. I was clinically depressed for about two, three years afterwards because I had pushed so hard to get it done. So, I ran that station for 16 years.
Russ Roberts: How old were you when you started, Bob?
Robert Chitester: Oh, gosh, I have to be careful there, but I was in my late 20s.
Russ Roberts: Okay.
Robert Chitester: So, I took on building this TV station, never having done any of that. And, I succeeded. But then, I also–and this, of course, everybody today knows that Bob never hesitates to share his ideas or to tell you what he thinks–and, so, I became involved in the politics of PBS at the national level. And I’m from this tiny little station in Erie. But I go to these events; and I engage in the debate over what our policies should be.
I admit to one thing: People think of me and they think, ‘Oh, well you were probably liberal and then you became conservative.’ No. No. Not my track. I am an individualist. I recognized that very early in life, even in high school. And–but, I did vote for McGovern. And I did so because of the dustup over communications. Because Nixon was thinking: Well, we’re going to censor public television, do this and that.
So, I was very involved and outspoken. The reason why that’s relevant–to get us to Milton Friedman–was I also, then, was ambitious. So, I persuaded a local businessman to sponsor an activity in Erie called the National Symposium on Science and Technology. And, that was my effort to counter the Back to Earth movement that was going on in the late 1960s, 1970s, and the rejection of technology.
And, I managed to bring to Erie a fairly high-level group of people. The Mayor came to our dinner in the evening and he said, ‘I’ve never seen so many corporate jets at the airport.’ Now, that was because I was introduced to Ed David, who was at one point head of The National Science-something-or-other. But, he introduced me to a number of people; and W. Allen Wallis was one of them.
W. Allen Wallis at that time was Chancellor of the University of Rochester. And, he was also Chairman of the Board of the Corporation for Public Broadcasting [CPB]. And, it was a fascinating encounter/meeting because Allen couldn’t believe there was a public TV station manager who held the views I did. And, I had not paid much attention to the hierarchy at CPB. And, I was astonished that now I’m dealing with the guy who is the chairman of the organization that hands out grants to public TV stations.
Galbraith’s series goes on the air in the mid-’70s.
Russ Roberts: John Kenneth Galbraith.
Robert Chitester: Yep. And, he did a series tied to his book, The Age of Uncertainty. And, I, by then, have established a relationship with Allen Wallis. And I made it clear to him. I said, ‘Boy, this is too bad that there’s not a response to this.’ What they did do is they stuck people for about five minutes at the end of each of the programs to do a counter-statement to whatever Galbraith had said. From a communications point of view that was a throwaway: he had accomplished nothing.
So, Allen agreed that there ought to be something. And, I said, ‘I’ve got some ideas.’ He said, ‘Well, share them with me.’ I put together a little, on a pad, some ideas. He said, ‘Okay.’ And, I’m sitting in his office; and he picks the phone up and calls Milton Friedman.
Now, I have to admit that I’m not sure I knew who Milton Friedman was at that point in time.
But, within a five-minute phone call, Allen persuaded Milton to meet with me in January of 1977. Milton had retired from the University–mandatory retirement at 65.
Russ Roberts: The University of Chicago.
Robert Chitester: Right. University of Chicago; and had won the Nobel Prize in 1976. And, so he agreed; and he said, ‘Well, when we get back from Stockholm, we’re going into a sublet apartment in San Francisco and Bob can meet us there.’ And, that’s how I got to meet Milton and Rose.
Russ Roberts: And, the concept, for people who haven’t seen it: How did each episode work? What was the way that the series was organized? How many parts was it? Do you remember? I want to say 16?
Robert Chitester: Yeah. It was 10 hours.
Russ Roberts: Ten hours. Okay. Yeah.
Robert Chitester: And, the model in my mind, by the way–not in terms of content, but in terms of feel, in terms of style–was Jacob Bronowski’s The Ascent of Man. And, on the other hand, Milton–and he was a quick learn–but early on he didn’t have much sense of–he’d been on a lot of TV talk shows, but had no sense of what it would take to do a major series.
So, he got this idea. He said, ‘Bob, Harcourt Brace Jovanovich is going to publish the book associated with this. And, they’ve also agreed. They like the idea. And they are going to put up $ 150,000 so that I can do a total of 15 lectures across the country. And, you will, with your remote van, record those presentations, and the Q&A [questions and answers].’ And, he said, ‘Then you can just stick pictures on there and that’ll be the TV series.’
Well, I thought illustration was the best way to counter that. So, I didn’t push hard. About five of those lectures in, Milton kind of sheepishly looks me in the eye and said, ‘Well, Bob you were right. I can see this ain’t going to work the way I had in mind. And, now I’m stuck having to do 10 more lectures.’ Those 15 lectures are available–Milton Speaks. They’re available on our website.
And, they are interesting in that they’re like–and part of my strategy and everything–is leverage. You do a TV series and you make it as exciting and interesting and lots of stories and people in. And, what’s your goal? Well, your goal is then to get them to read the book. And, if you can get them to read the book, then maybe they’ll also watch more of those lectures. That, you looked at your effort in a project way. Not a TV series: a TV series plus this, plus this, plus this, plus this to gain the leverage.
Russ Roberts: So, he gave those lectures, but that was not the only thing, even though he changed maybe his style. So, how does an episode unfold when you were in the finished product?
Robert Chitester: While on the finished product, first of all, we–the very first night that I met with Milton, we talked about my background: what I’d done, what I hadn’t done. And, I made it very clear to him that I was proposing to undertake something that I had never done; and, that was, in my mind, at the top of the documentary game. Meaning: Expensive to do, wide-ranging in terms of subject matter.
And, so with that in mind–and Milton in that early discussion before he and Rose had agreed to do it–I pointed out to them. I said, ‘Milton, here’s some things I’ve done.’ And, I said, ‘I’m happy to share with you.’ I’d done a swimming meet for ESPN [Entertainment and Sports Programming Network]. And, I’d done some concerts out of Chattaqua[?], etc. And, I said, ‘So, I have done things; but, we’re going to go and hire the best documentary maker we can find in the world.’ So, ‘And, my goal and my role for you, is to ensure that in the role of Executive Producer, I have the ultimate say as to what happens, and I can then guarantee what goes on the screen is what you want, not what the Producer wants on the screen.’ Because, in these kinds of situations–obviously Producers are creative and they are not above wanting to insert their perspective in the creative process. Well, as Executive Producer then I can step in and say, ‘Hey, nope; that’s not going to happen, Milton wants it this way.’
We also arranged that Rose would be Associate Producer, which was kind of an unusual arrangement. So, now I have a Producer; I have Milton and Rose as a team. And how they did it was the following.
First of all, we sketched out what the 10 programs would, in general, cover; and the critical points that Milton wanted to make on equality, on the markets, etc.
Then the Producer and his team, they go to work to come up with ideas of: Where do we tell these stories? What examples can we find?
And, when you watch the series, you’ll see: We go to India and we show Milton, and he goes to a small village, and he’s standing there by the hand-weavers, and able to talk. He’s in Faneuil Market in Boston buying tomatoes and talking about the marketplace that way.
So, the Producer and his team of people, they are identifying where they think they can do each of the segments in the hour program. I’m sorry, I want to be clear. The documentaries were only a half hour long, and then there was the half hour debate following. But, the documentaries then were all laid out in terms of, ‘Okay, we’re going to start here. We’re going to end up in India. We’re going to do some taping in Greece. We’re going to do this.’ And, then: How does it happen when they’re actually there?
And, this is the difference–this is what sets Milton apart. There was no script. There was no written script: so that, when he got to that Indian village, he had already, it had been written out and he was going to memorize it or something. Where you can imagine: No way would Milton do that.
And, so what they did was every night, he and Michael Latham[?] and Rose would sit down together and say, ‘All right, tomorrow, here’s what we’re going to be doing. We’re going to be going to this hand weaver. And, by the way, Milton here are the two or three key points that you wanted to make with regard to that story.’ And, they’d go out and shoot it, ad lib.
Russ Roberts: Yeah. Mike Latham was the Director?
Robert Chitester: He was the Producer.
Russ Roberts: The Producer.
Robert Chitester: Yeah. Actually Producer/Director. I think he held both roles.
Russ Roberts: So, I’m not surprised he [Milton Friedman] improvised. He was pretty good on his feet. You know, I took his last class at the University of Chicago in 1976, when I was a first year grad student. He offered a non-credit class for first year grad students. And what he would do–and we all took it because, of course. What he would do is he’d stand in the front of the class and we’d ask him questions. And, I don’t know if I’ve ever told the story on EconTalk before, but I’ll tell it again if I have, which is that: at the University of Chicago, at the end of your first year, you have to pass an exam–that’s not pro forma. It’s pretty tough. About two thirds of the people fail the exam. So, it’s a [?] that would let in a lot more people than they expected to graduate.
Robert Chitester: Is this specifically in Econ?
Russ Roberts: Yeah. This is the Core–we called it the Core Exam. And, when you got to Chicago in graduate school, a lot–then; I don’t know what it’s like now–but then, the first thing you did is you went to the Office of the Department and you bought a xerox of all the past exams. So, you could start studying for what was coming, 8- to, 8 or 9 months later. So, people had varying degrees of stress about that. And, [crosstalk 00:20:55].
Robert Chitester: I would guess.
Russ Roberts: As you might expect. But, what we would do is we’d ask Milton questions off that exam that we couldn’t answer. And, he would answer them on his feet. It’s was a comfort to us. He didn’t answer them all easily. Many of them were, of course, were questions that didn’t quote have a right answer, per se. They were very open ended, but we enjoyed that.
And, in the beginning of that class, fairly early on, he won the Nobel Prize. It was a pretty exciting time. But he was very quick on his feet.
But I want you to talk about what made him such an effective communicator. He–I think you could say he was one of the two great economic communicators of the 20th century with–you could argue Keynes was another great one. But, Milton had some unusual abilities, one of which he was very quick on his feet. But what else do you think was valuable to him? What made him so effective?
Robert Chitester: Well, I’m going to answer that and if I have it here in my pile of things, I’m going to read you a poem. But, my answer to that is his inexhaustible curiosity. And, what that does is, is that in any conversation, exchange, with anyone Milton very quickly in most cases makes it clear to the other person that they are important.
And, as a result, you end up with an environment in which you have a natural, spontaneous discussion. No pretension, no games being played. And, when Milton asks you a question, you don’t have the feeling that he’s just doing it pro forma to be nice, but that he truly does have an interest in who you are and what your interests are.
And, that also creates a situation in which he, then–and he often did–can play on those interests in relating[?] a point with regard to economics and by doing so in an area that you are already comfortable in. It’s an area that’s part of your life.
Therefore, he has the opportunity to give you an example about, we know it was private property costs, opportunity costs, whatever issue he wanted to share with you, but he does it in the context of subject matter that you’re familiar and comfortable with. And, of course, that’s a powerful, powerful tool in terms of getting people to consider your ideas.
Russ Roberts: Now, you mentioned that after the 30 minutes’ of Milton standing in a village in India, having spoken about, say, hand-weaving, there was the last hour of the Free to Choose series–each episode was, quote, “a debate.” What was the nature of that?
Robert Chitester: Well, the nature of that was–and by the way, that idea came up from the Brits, from Michael Latham. I failed to mention: Michael was with the BBC. We worked with a group in Britain that agreed to hire him away from the BBC, give him other work after he did Free to Choose, because otherwise he would not have wanted to give up his situation at the BBC.
And, so it was Michael who came to me fairly early in our process and said, ‘Bob, I think we ought to’–initially we were thinking of doing 10 one-hour documentaries. And, Michael said, ‘No.’ He said, ‘Look, this is a master of debate. Milton is heads and shoulders above anybody else. We should take advantage of that,’ which we did.
And, then, but there was an interesting dimension to it. The Brits were very used to paying people to be on those panels. That’s not something at least at that time in my career that we did. So, Michael and I had an interesting debate about that. And, he said, ‘Well, Bob, I feel I should offer these people some money.’ And, I said, ‘No, no, no, no, no.’ So, we finally agreed that if somebody asked, it was okay if he negotiated a price for their participation. But, that he wasn’t going to offer to anybody. But the people who participated were wide-ranging. We’d get somebody, I think the woman who is head of the Pennsylvania Consumer Protection. We had her on there. And, then we had Francis Fox Bevan whom Tom Sowell had this brilliant exchange with. So, it was a wide-ranging group. And, then we hired Robert McKenzie who was with the CBC [Canadian Broadcasting Corporation] to be the moderator. And, I think that somewhat worked. I think my memory is that Milton and I thought we might have had a better moderator. But it worked out all right. And, Milton was brilliant.
Russ Roberts: Incredibly quick. You mentioned his empathy or his conveying of taking you seriously as an intellectual adversary–which he did. I think there were two other parts of his skill set–and I encourage listeners and viewers to go watch and listen to Milton in action online. There are a lot of great videos that you have up on your website, Bob, that we’ll link to.
Well, one of the things that–I thought there were two pieces to his repertoire that made him so effective as a communicator. Obviously he was a great, simple stylist as a writer. He wrote incredibly clearly; he was a good storyteller. But there were two, I thought, character traits of his that were very effective. One is that he always smiled. If you watch him eviscerate people on some of those videos intellectually, he always did it with a smile. So, that made him, I think, more sympathetic to third parties watching the conversations. He was never angry. He was never mean-spirited. He was always smiling. And he did this by the way–I’ve said this before on the program, but I think it’s important to emphasize it here. It’s hard to remember how much he was in the intellectual wilderness as a young man. And a lot of people who go through that experience end up bitter. They have a chip on their shoulder. They struggle to relate to people who disagree with them. And Milton, for whatever reason–probably genetic, but I know he also worked at it based on what you’ve written about him–he decided, or was able to stay calm despite the fact that he was viewed with disdain by many–not just disagreed with him, but had no respect for him.
And, that was true, by the way, in his scholarship. I want to add that as well, because when he first started suggesting that inflation was a monetary phenomenon and only a monetary phenomenon, he was viewed with great criticism and mocked. And, he stayed strong; but not just stayed strong in his views. He stayed strong without becoming embittered or defensive or cruel.
And, so one of his skills was that demeanor, that cheerful demeanor, which I think was extremely effective with objective observers who didn’t have an axe, a horse in the race, an axe to grind.
The other thing is that, and this is fun for me because of my intellectual journey: He didn’t convey any doubt. He was extremely self-confident, as if his views were so obviously true–not in an arrogant way; he didn’t come across as arrogant–but he never conveyed any uncertainty. And, as I’ve gotten older, as listeners and viewers know, I’m obsessed with the challenge of knowing what we know. Milton never conveyed that. He was very sure of himself, but not in an arrogant way. And, he had plenty to be arrogant about. He was a Nobel Prize winner. His intellect was extraordinary. He was successful in the academy and in the public sphere. But, he was able to maintain ‘the common touch,’ as Kipling says.
Robert Chitester: Absolutely right.
Russ Roberts: So, react to that. What are your thoughts on those points?
Robert Chitester: Well, I want to go back to the very point you started with, which is: How does someone endure and remain positive and upbeat the attacks that are directed at one? And, of course, the United States has unfortunately. But, we should accept the fact that in a democracy, in a free market capitalist society, where you vote to establish the government that you are going to have–politics is always going to be a brutal game. It didn’t take very long before Thomas Jefferson and the Democratic Republicans were fully prepared to vilify our first President. So, there’s a huge, huge question of how they survive.
Well, I actually started a project and we’ve recorded, I think maybe 20, as much as 20 hours’ of material, that I was calling The Chicago Five.
And, I reflect back to George Will’s comment when the Soviet Union fell. I think he said the University of Chicago won; the Soviet Union lost. I narrow it down. It was Milton Friedman who won–in the sense that he was predisposed: He liked the engagement. He loved the interaction.
Whereas somebody like George Stigler just would not need didn’t want any part of any of that kind of public kinds of chess game. And, Milton just relished it. But, he also had refuge.
And, I want to share two things. One: W. Allen Wallis, George Stigler, Milton, entered the University of Chicago to start work on their Master’s Degree in the same year. From that point until their death, they were the tightest of friends. When Allen Wallis died–no, Stigler died first. When Stigler died, Milton revealed to me, he said, ‘Bob, now there’s only two musketeers.’ There were three musketeers.
Now, I then added to that Rose and her brother, Aaron Director. And, in my mind, it was that group of four people that were critical to Milton having a place he could go where he could get some relief, some sense. As well as: They were tough on him.
Russ Roberts: Sure.
Robert Chitester: I had dinner at their home and sea ranch with just the four of us–Aaron Director, Rose, Milton, and me. And, this was far enough along in our relationship that I did participate in that. Early on I would not have said probably a word. But I would say that at least three times, maybe four, maybe five we’re chatting along and then Aaron would say, ‘Milton, you’re just a statist.’ And, they’d engage in a discussion debate.
So, that Milton had a chance. He had this place where he could go, reliable people. He knew that they would be honest with him with regard to issues that were important. And, I think that made a huge difference in his ability to sustain over, I don’t know, what was it, Russ? Twenty, 25 years before he started to have many, many helpers in the field. He was just a lone soldier.
Russ Roberts: He was a bit of a statist in that he was much more pragmatic, I think, than many of the philosophical comrades in the movement of liberty.
Robert Chitester: I use the example of Marshall Fritz’s in that Marshall wrote at least one little paper–if not, I don’t know if he wrote a book–but Milton wrote some Forward to it, which I read. And, it was very complimentary of Marshall’s–and, Marshall Fritz’s goal was to go back to the early 1800s and get government totally out of schools. So, Milton writes a little endorsement of that. But he never pursued that. I think he fully understood that was a step too far in terms of what might be practical within his lifetime. So, instead he pulls back the school choice in what others would think of as compromise.
Russ Roberts: Yeah. But, I want to go back to your point about his character and his personality. I never thought about this. I was making the point earlier that he was always smiling? I always thought it was a strategic aspect of him. I thought part of his demeanor in those conversations was simply strategic: that he’d be more effective if he was smiling. But I think you’ve hit on something that I think I’ve never really thought about enough, which is that he just was enjoying himself.
Robert Chitester: Oh, absolutely.
Russ Roberts: He loved sparring intellectually for its own sake. It was a–I think he just delighted in it and it was great fun for him. It was never, ‘Here I am being attacked.’ There’s footage online where people are so cruel to him and his reaction is just, ‘Okay, so you’ve brought your queen out, and now I’m going to respond with my knight. You’re going to have to move your queen back.’ It wasn’t like, ‘Oh my gosh, I’m being attacked.’ Which is a human response. But, he would often just keep smiling. But, I think it’s because he enjoyed it. I never thought about that.
Robert Chitester: And, Russ, he enjoyed everything. And, he did things with gusto. We were visiting Capitaf–my son Mark at that time was maybe 10 years old and we were there for three days, and this was in 1978, 1979. So, we are near the end and getting, starting to worry about marketing and such. So, we’re there at Capitaf–
Russ Roberts: That’s his house. That’s his house in Vermont.
Robert Chitester: That’s right. His summer house in Vermont which he and Rose built. They had a pond on the property and they had a canoe on it. Well, we’re having discussions up at the house and Milton says to Mark, ‘Hey Mark, would you like to go in the canoe, go down and play around with the canoe?’ ‘Oh sure.’ So, we go barreling out of the house, jump into his Blazer, and he tears down over the hill. I thought he was going to roll us right into the pond, he was so excited and enthusiastic about it.
And, that’s what I’ve witnessed about almost every interaction he had, with anybody. It had this excitement about life. And, it’s one of the things I try to convey to students or anybody: Milton Friedman–I don’t know how to describe it, but, the whole idea of what markets mean opened my eyes in a way–I mean, it was just like a totally different world for me, once I began to understand the role of markets and the enormous amount of information that’s in front of you every second of your life. And, I think that was something Milton just instinctively also–was constantly sucking in data just from ordinary interactions. And, just was hugely enthusiastic in doing it.
Russ Roberts: You may be able to settle a question I don’t know the answer to, I’ve never heard discussed.
Which is: when I went to grad school at Chicago in 1976 there was a popular T-shirt for sale, or that somebody made available, of Milton Friedman walking down a street in Hyde Park with George Stigler. George Stigler was like, I’m guessing maybe 6’5″. And Milton was probably 5’4″? Maybe?
Robert Chitester: Oh, less than that. Maybe 5’3″ or 5’2″, even maybe.
Russ Roberts: Yeah. And–well, they were young; they were both at their maximum height in this photograph but–
Robert Chitester: Right. You’re right.
Russ Roberts: But, they also, I think–didn’t they play tennis?
Robert Chitester: Oh, my, yes. Oh, Milton loved tennis.
Russ Roberts: So, you’re talking about his enthusiasm–I’d love to see a video of one of their tennis matches. But, my question is, do you know who was the usual winner in those matches? Because, although Milton would have a disadvantage in leverage of being 5’3 or so, I would think his competitive nature might help make up some of that gap. Do you have any idea how they did?
Robert Chitester: I don’t have specific evidence. But, I do know this: He certainly was confident in his ability as a tennis player. Because, I managed to get him to come to Erie, maybe three, four or five times during the course of our activity together. For various reasons–both to show the flag, so to speak. So, people didn’t think I was, you know, ‘I can’t believe Chitester is really working with this Nobel Prize winner.’ And, to make sure that they realized that we were going ahead. And, Milton then said, ‘Bob, could you arrange for me to play tennis while I’m there?’ And, I did. I got ahold of somebody who belonged to a tennis club that was fairly close to where our offices were. And, then Milton said, ‘Go to K-mart,’ I think at that point, ‘and buy me some tennis shoes.’ Well, I had no idea what buy, but I had watched[?] the series. And, he went and he played, and I talked to the people afterwards. Now, they never talked about score, but they said, ‘Oh yeah. He’s a really good player.’
Russ Roberts: Yeah. I’m sure it was [?] ferocious, would be my main–
Robert Chitester: Oh yeah, I think so.
Russ Roberts: Yeah. Just as he would be in everything that he wanted to explore and experience, for sure.
Robert Chitester: Ferocious, but not mean-spirited.
Russ Roberts: Yep. No, no: He would not be a dirty player. He would be a happy warrior.
Robert Chitester: Very happy warrior.
Russ Roberts: So, I talked earlier about his self-confidence. And, I don’t know if I’ve ever told this story, but after he was on EconTalk in 2006–I think I was the last, as far as I know I was the last person to interview him–we talked about a bunch of things. But one of the things we talked about was monetary policy. And, I told him, I said, ‘You know, Milton,’ you know, he made this claim during the conversation, ‘I went back and looked at the data and I’m not so sure that that relationship between money supply and what might’ve been nominal GDP [Gross Domestic Product] at the time,’ I can’t remember, ‘but it looks pretty–it doesn’t look a clear cut as you claimed.’
And, he wrote back and he said, ‘You know, you’re looking at the wrong data.’ And, he sent me a spreadsheet. He had a different definition–I can’t remember it was M3 or M4 or M2–some different measure of money. But, here was this man in his 90s still sending me a spreadsheet. He cared a lot about truth.
But, as I said, he was very confident. His views on monetary policy didn’t change much over his lifetime. We’re in the 50th anniversary of his 1970, New York Times, Sunday Magazine article where he argues that the social responsibility of business is to make money–to make profit, within the letter of the law, of course, without fraud and deception.
So, I don’t think he changed that, his views on that. Is there anything that you were aware of during his lifetime that he either came to reconsider or recant or admit some uncertainty about it, even?
Robert Chitester: I have very, very significant answer to that.
A quick footnote, I had occasion to also ask Hayek that question: What mistake did he make in life? You might find it interesting. He said, ‘My advocacy of one-government world.’
Russ Roberts: One world government.
Robert Chitester: One world government. That apparently he, at least in the early stages of his career, thought that was a good idea. Until he said, ‘I came to the recognition that if it was one world government, it means there was only going to be one; and it could be a dictatorship, and it could be whatever.’
Russ Roberts: And, you need competition.
Robert Chitester: And, you needed competition.
Well, in Milton’s case–
Russ Roberts: That was Hayek.
Robert Chitester: Yup. That was Hayek.
In Milton’s case it was quite different. And it related to Hong Kong and China, in that, Milton–and from the very beginning, the mantra that I picked up from Milton instantly was: Economic, personal, political freedom are a package. You cannot separate them. If you try to separate them, you’re not going to end up with the results that you want.
Russ Roberts: Yup.
Robert Chitester: So, his prediction that, when China liberalized in the economic area, he was, of course, convinced that would lead to a liberalization in both personal and political freedom.
And, we were talking about why we had seen, quote, “success of free market capitalism” and yet government sizes kept growing, etc., etc. But, in the context of that, he said, ‘Well, in the case of China and Hong Kong,’ he said, ‘I realized–I did not realize; I had to come to it–that without rule of law it would not happen.’ That, rule of law has to be the fourth ingredient. Economic, personal political freedom can only–you will only end up with all of them if you have rule of law. One law applies to everybody.
And, of course, that’s not what’s the case is with Beijing and China, and now they’re taking over Hong Kong. And, by the way, Milton, I think Milton would–well, he was–he was surprised, say, the last year of his life, he was surprised that Beijing hadn’t clamped down on Hong Kong already.
Russ Roberts: Yeah. Yeah. It’s taken longer than I thought, too.
Robert Chitester: Yeah. He was amazed it lasted that long.
Russ Roberts: When I interviewed Milton in 2006–and, of course those interviews are still available; we’ll link to them. You can find them in our archive; you can Google them and find them. And, we transcribed those online as well before we are regularly transcribing EconTalk. Now we do that as well for every episode.
But, I went back and I read Capitalism and Freedom. And, the first part of that interview is about Capitalism and Freedom. And, I told Milton, I was struck by how many of the ideas in that book–which were extremely radical when he wrote about them in 1962 and some of them he had been writing about before–how many of them have become mainstream.
You know: He argues for private social security, argues for flexible exchange rates. He argues for a volunteer army. He argues to get rid of price supports for agriculture. He has a huge menu of things he would get rid of–corporate subsidies. He has a huge menu of policy proposals–which at the time were viewed as ridiculous, impossible. Vouchers, being another one–school vouchers.
And virtually every one of those ideas either happened or entered the intellectual debate.
So, he didn’t win. But, they became, at least–they were on the table. And, part of that, of course, had nothing–he at the time said it wasn’t so much his doing; but we’re not going to talk about that.
But, when I mentioned that to him, his reaction surprised me. He said, ‘Actually, I’m struck by how few of them have actually been successful.’
The volunteer army is the most obvious one. That’s a radical, incredibly radical idea. A famous exchange, I think it was with General Westmoreland, who said, ‘I don’t want to volunteer army. I don’t want my country defended by mercenaries.’ And, Milton said, ‘Better mercenaries than slaves,’ fighting against the coercive power of the draft.
Now, I don’t know if Milton was right about that, but he did win that debate.
But, his reaction at the time, in 2006, was basically, ‘I was mostly a failure. Most of these ideas we’ve made no progress on. We’ve made no progress on agricultural price supports, corporate subsidies, Social Security, more personal responsibility. Vouchers are only an occasional experiment. The public school system remains very strong,’ and so on and so on. I’m curious about your–having been in the trenches with Milton, what are your thoughts on that? I have something of a pessimistic, quixotic feeling as well, that despite our best efforts–
Robert Chitester: Oh, I totally agree–
Russ Roberts: we’ve had very little impact.
Robert Chitester: I agree with Milton’s assessment; and it’s a huge frustration to me as I close out my career that somehow the movement has not been able to marshal better arguments for any, and all of those. To me, they are still solidly useful ideas in terms of how to deal with very critical public policy issues.
The only thing that I can report in terms of–and in this instance it’s not a direct correlation–but in the broader sense of why did the collapse of the Soviet Union, why the initial liberalization of China in terms of the economy, why in spite of all that, if you look at the size of governments around the world, they have grown exponentially since the Berlin Wall came down?
And our ability to stop the growth of government seems to be close to zero. It just keeps going on and on and on. And, I, in discussing this with Milton, I said, ‘The only answer I can come up with in terms of why is that the case and it is this egalitarian streak in human beings.’
Russ Roberts: Very powerful.
Robert Chitester: It is powerful. And we did a public TV special called Work and Happiness. And, in the initial development of it, I held the position that, ‘Well, we’re going to look at welfare. So, we should look at the value and importance of private welfare.’ And, that that was a better way to go at the problem.
Phil Harvey, who was very involved in it–and, he wrote a book related to it–he disagreed with that. And he persuaded me, changed my whole perspective. And, why it took me so long to come to this conclusion: that if you have a free society in which people are electing their government, you will have a government safety net, period. That I think human nature is such that the temptation to use the power to tax, the power to be able to take away money in order to provide that safety net–it will be a temptation to great for the populace to ignore.
And, therefore our goal should always be focusing on–and this is pragmatic kind of approach that Milton would take–on structuring that welfare program to reduce the amount, to ensure the maximum return, the maximum achievement of your goal, which is to bail people out when they need it, but have a structure in which they can get out quickly.
And, it’s that emergency support they need when the world is collapsed around them–but you don’t structure it. And, as you know, as economists know, my gosh, the effective tax on somebody who leaves welfare and takes a minimum wage job is, what? 120% or something. You can’t expect people to make that kind of sacrifice.
Russ Roberts: Well, it’s funny you mentioned that because one of the things I didn’t mention in Milton’s list of policy preferences, of course which I should have, is the negative income tax, which is his idea that we would eliminate the complex welfare systems that implicitly tax effort and have that effect you’re talking about; and replace it with a single program. And, of course, that idea is now on the table as the so-called Universal Basic Income. Just one more idea of Milton’s that’s in the mainstream.
Robert Chitester: That’s right.
Russ Roberts: Let me give you a different–I’m going to give you a more optimistic take on the freedom movement. Of course, one idea for why we failed isn’t the egalitarian streak. It’s that: We’re just wrong. We’re just wrong about how the world works. We can’t persuade people about it because we’re not right. The facts aren’t on our side, and so on out.
I’m going to–with all my epistemological humility, I want to reject that, at least for the purposes of this conversation and propose a different aspect of the problem. Which is that: there’s an enormous difference between the Soviet Union and, say, a Sweden. Sometimes they both get called Socialists. It’s a fundamental abuse of the word, or at least it’s not a very helpful use the word. Because in one of them, the means of production, the allocation of workers, the salaries of people, the allocation–who got to live where–was totally controlled by a centralized state that was fundamentally corrupt and was corrupt–whether it was because it was socialist or communist doesn’t matter. It was corrupt because it had no competition. And, inevitably brought out the worst in people, which Hayek warned us about in The Road to Serfdom, in the chapter “Who Rises to the Top”.
It’s just a natural problem. And, so, I think it is–by looking at the size of government as a measure of the success of Friedman and others, maybe we’re making a fundamental error. What’s happened–and I’m prompted to this partly by your earlier remark that Chicago won the Cold War, or Milton won the Cold War; and I’d throw Hayek as well, and von Mises, and the socialist calculation debate–that they won the intellectual argument about whether markets work better than top-down allocation of all resources. And, then they won the practical argument because the people of the Soviet Union didn’t live so well. And, Milton would have emphasized that. In that 2006 interview, he said, ‘Oh, I didn’t persuade people that inflation is caused by money. New Zealand did because when they stopped printing it, inflation went down.’
So, he was very much a pragmatist in that way. [More to come, 55:45]
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