When the Bretton Woods system died in 1971, the initial reaction was to pick a new set of pegs rather than the flexible rates Friedman advocated. The move to flexible rates came only after a period of experimentation. Interestingly, the two major proponents of flexible exchange rates at that time were Friedman on the right and British economist James E. Meade on the left. Both wanted flexible rates to allow greater flexibility to run domestic economic policies, although they had very different ideas about what those policies should be.
Ms. Burns asked, “What would Friedman make of the conservative movement today?” My guess is that he would reject the idea that former president Donald Trump was a conservative. After all, conservatives have respect for existing institutions. Mr. Trump does not.
The writer was a member of the Council of Economic Advisers from 1991 to 1993.
Perhaps significantly, Jennifer Burns did not include that, as the Corporate Finance Institute put it, “Milton Friedman developed the doctrine as a theory of business ethics that states that ‘an entity’s greatest responsibility lies in the satisfaction of the shareholders.’ Therefore, the business should always endeavor to maximize its revenues to increase returns for the shareholders.”
Ms. Burns did write: “Friedman’s ideas about capitalism, limited government and inflation were taken up across the globe, from Santiago to Shanghai. He was present at the decline of New Deal liberalism, the fall of the postwar currency regime of Bretton Woods, the shift to free trade, and the battle against inflation that gripped industrialized nations in the 1970s and ’80s. Friedman’s monetarism became a guiding philosophy of central banks across the world and contributed to decades of low inflation, which persisted through 2020. Across the globe, he was the ultimate symbol of free-market capitalism.”
Contrary to Friedman’s theory of the primary value of profits for shareholders, the turmoil at OpenAI demonstrates that people — employees — provide the primary value in a company.
Leslie Stroh, Morris, N.Y.
Those who knew Milton Friedman, as I did for several decades, knew few things annoyed him more than being labeled a conservative. A self-described libertarian, Friedman viewed liberty as an incredibly important end in itself but also as an essential requirement for maximum economic progress. Conservatism too often acts in just the opposite manner, stifling the dynamics of a true free market.
In 1991, as president of the libertarian Cato Institute, I was approached by California money manager John Pasquesi, a Cato supporter. He suggested we establish a Milton Friedman Prize for Advancing Liberty. I thought it was a terrific idea but warned that it was unlikely Friedman would agree to lend his name to the project. For all his encyclopedic knowledge on subjects ranging from economics to history, Friedman was a humble, modest individual. I never heard him talk down to anyone — a rare attribute in the academy. Still, Mr. Pasquesi and I arranged to have dinner with Friedman and his wife and longtime collaborator, Rose. As I had predicted, Friedman was gracious but cool to the idea.
Things picked up, however, when I pointed out that associating the Friedman Prize for Advancing Liberty with a libertarian organization would make it more difficult to label him a conservative. After a pause, Rose Friedman said, “Milton, you need to do this.” End of meeting. To this day, the Cato Board has been true to its promise.
Edward H. Crane, Falls Church
