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Milton Friedman is Responsible for Scarcity
Should we be surprised that the Milton Friedman Institute at the University of Chicago is opposed by the likes of Marshall Sahlins? I happily farm it out to Brad DeLong:
Sahlins's claims that it was "the market-industrial system [which] institutes scarcity"... seemed to indicate a total, willful, and culpable ignorance of practically all of the non-market settled agricultural societies of the past ten thousand years.
By the way, guess where these institutes are located?
Posted by Alex Tabarrok on August 19, 2008 at 12:28 PM in Current Affairs, Economics | Permalink
Comments
Sahlins' essay is ludicrous. But over one hundred U of C professors have completely legitimate concerns about the current set up of the proposed Friedman Institute, unrelated to their level of agreement with Friedman's scholarship. The facility makes promises of special "access" to donors of 1 million dollars or more, and says that "The intellectual focus of the institute would reflect the traditions of the Chicago School and typify some of Milton Friedman's most interesting academic work." It does not strike me as academically free and open to explicitly connect all the scholarship of a $200 million institute to one school of thought, no matter how influential the school. The following site contains a link to the current petition signed by many faculty members, which does not call for a closing of the MFI but simply an important re-thinking of its mission statement and funding practices in order to assure academic freedom and integrity.
http://www.stat.uchicago.edu/~amit/MFI/
Posted by: Hannah at Aug 19, 2008 12:36:02 PM
>> "the market-industrial system [which] institutes scarcity".
Wow, that reaches the level of 'scary-ignorant.'
Posted by: Speedmaster at Aug 19, 2008 12:39:00 PM
FWIW, which isn't much I guess, I think theer are reasonable objections to the MFI based on what seems to be a clear ideological predisposition. The issue is not the name. It's the question of whether a research institute intended to explore "economics and society" is intended to look for answers to problems or to find justifications for preconceived favored answers.
What the fact that there are other institutes at U of C named for individuals has to do with this is unclear.
Posted by: Bernard Yomtov at Aug 19, 2008 12:49:14 PM
I'll do the honors: this is Class Warfare, and the kind of thinking that Killed 100 Million People.
Posted by: Dan Tarrant at Aug 19, 2008 12:54:17 PM
what does Sahlins propose the donors do with their money instead? not contribute to academics? give their money to him so he can decide what is best for everyone?
and the conflation of friedman with pinochet is hilarious
Posted by: anon at Aug 19, 2008 1:01:06 PM
The http://www.stat.uchicago.edu/~amit/MFI/ petition includes gems like 'free-market ideological crusade'
and 'state terror, crony capitalism, declining life expectancy, food shortages, etc., that have arisen where he and his disciples implemented those views (Chile, Argentina, the post-Soviet republics, e.g.)'
Funny how China never makes the list.
The critics are conflating their antipathy to Friedman with the set-up issue and shooting themselves in the foot.
Chicago needs an institute to teach its humanities professors the art of rhetoric. Or maybe they should watch a few episodes of 'Free to Choose.'
Posted by: PJ at Aug 19, 2008 1:04:02 PM
Judging by the ineptitude, on so many levels, of the letter signed by one hundred faculty members, as well the better written but still highly ignorant, wrong, and biased article written by Sahlins, I'd say that it is the economics department that has legitimate claim to be embarrassed by its humanities counterparts, not the other way around.
Hopefully Sahlins does better (some?) research in anthropology and in writing his book than he did while composing his left-of-America rant against Friedman and Friedman's massive contributions to economics.
Posted by: happyjuggler0 at Aug 19, 2008 1:25:27 PM
Actually, there are many Kavli Institutes... the original is at UCSB, but now they are Chicago, MIT, Beijing (!), etc...
Posted by: none at Aug 19, 2008 2:18:57 PM
Incidentally, that Enrico Fermi Institute was originally called the Institute for Nuclear Studies. After Fermi died it was the Enrico Fermi Institute for Nuclear Studies, but the bit about Nuclear Studies was dropped in the sixties when it proved too un-PC to study anything that your average plastic garden gnome might associate with nuclear weapons. That might not bode well for the future of the Friedman Institute; I do hope the administration cares less about the feelings of garden gnomes than it did two generations ago.
Posted by: dWj at Aug 19, 2008 2:21:51 PM
"I think theer are reasonable objections to the MFI based on what seems to be a clear ideological predisposition ... the question of whether a research institute intended to explore "economics and society" is intended to look for answers to problems or to find justifications for preconceived favored answers.
What the fact that there are other institutes at U of C named for individuals has to do with this is unclear."
Isn't it likely that that the Fermi, Franke, Kavli and Franck institutes are pushing particular approaches within their respective disciplines? Pushing those approaches at the expense of other approaches? I wonder if any research institute can avoid having some sort of "clear ideological predisposition," or if it did lack one, whether it could really be any good. (Even a "balanced" approach to an issue or a field is an ideological predisposition, isn't it?).
If someone gave $100 million to found a Camille Paglia Institute, to expressly push "non critical theory" appoaches to literary criticism, would that be a bad thing? How about a Paul Samuelson Institute for pushing ideas about the benefits of taxes and the funding of public goods? (I happen to think both of these would be brilliant).
I think Delong is right that this is all about the ideas being promoted, not the principle that idea promotion is bad. The objecters to the MFI object in both ways but use the latter as a sort of fig leaf. Because I think they know the model so many people have in their head of a connection between right-wing foundations and the misfortunate results of Republican electoral success is extremely powerful in its appeal but also untested and non-academic in its nature.
Posted by: anon/portly at Aug 19, 2008 2:31:23 PM
None of you have mentioned the real scandal. U. Chicago doesn't have many free market economists left. The name is to trick donors while conducting business as usual and cross-subsidizing the rest of the university, including Marshall Sahlins.
Posted by: Anon at Aug 19, 2008 2:41:27 PM
Actually, the market does institute scarcity because without scarcity you couldn't sell anything.
Producers in a free market will never produce enough of an item for everybody because if they did there would cease to be a market for it.
This is why a true free market doesn't work and never has.
Posted by: Dan Tarrant at Aug 19, 2008 2:43:53 PM
Isn't it likely that that the Fermi, Franke, Kavli and Franck institutes are pushing particular approaches within their respective disciplines? Pushing those approaches at the expense of other approaches?
Is it likely? Why?
Are there multi-millionaires fiercely devoted to certain approaches to physics or chemistry, convinced that the ideas they hold about the subject should be given priority over others, and thus generously funded? Is there lots of murky ground where policy debates and academic debates overlap, and policies must be chosen in part on the basis of subjective preferences and values rather than just academic ideas?
I think Delong is right that this is all about the ideas being promoted, not the principle that idea promotion is bad.
There is nothing wrong with idea promotion. But people who promote ideas because they are paid to do so are in the advertising business, not the research business.
Posted by: Bernard Yomtov at Aug 19, 2008 2:49:54 PM
The problem with Brad DeLong is that he takes Sahlins out of context and then further cherry-picks and distorts quotes to present something that appears silly to an economist.
It's rather the definition of poor scholarship and he does it to an even greater extent than Sahlins does in his own little rant.
So farming it out to DeLong was a rather bad idea in this specific case, he does a poor job (as much as his blog is enjoyable and he's a fiercely intelligent man).
The issue here is the ability to buy access to the institute and with that shape its policy moving forwards. A donation of 2-4 million to a school shouldn't blatantly allow for your admittance (although we all know it often does) and it certainly cannot allow for your voice to begin to dominate the discourse.
If capital is allowed to directly dictate the nature of study, study will naturally move towards ideas which attract capital. Not because they are inherently intellectually superior, but because they are more suited to present market conditions.
As much a supporter of a free market of ideas as anyone, using actual capital to dictate research is stupid, and you know it.
Posted by: Jim at Aug 19, 2008 3:18:15 PM
"Producers in a free market will never produce enough of an item for everybody because if they did there would cease to be a market for it."
Huh? The software markets seem to be doing fine.
Posted by: q at Aug 19, 2008 3:20:01 PM
"Producers in a free market will never produce enough of an item for everybody because if they did there would cease to be a market for it.
This is why a true free market doesn't work and never has."
@ Dan Tarrant: Aren't you forgetting the impact of prices in your analysis of market failure?
Posted by: Steve at Aug 19, 2008 3:26:53 PM
"The sacrificial reduction of social values to monetary calculations is the essence of Friedman economics, and helps explain its historic taint as the complement of state terror."
Wow. See, here I was thinking that Marxist economics was the most common complement to state terror. But apparently it is the economics of small government, and non-interventionist government that gives the state the most power. Interesting.
Posted by: liberty at Aug 19, 2008 3:31:54 PM
"FWIW, which isn't much I guess, I think theer are reasonable objections to the MFI based on what seems to be a clear ideological predisposition. The issue is not the name. It's the question of whether a research institute intended to explore "economics and society" is intended to look for answers to problems or to find justifications for preconceived favored answers."
True and this same logic should be applied to Women's studies and Feminist theory, Black studies, and the numerous ideological departments and disciplines that the Left has setup in the academy. The Left brought ideology into the academy. Why are they complaining now?
Posted by: assman at Aug 19, 2008 3:33:25 PM
"Producers in a free market will never produce enough of an item for everybody because if they did there would cease to be a market for it.
This is why a true free market doesn't work and never has."
Bullshit. I think everybody in the United States can afford toilet paper and there is enough toilet paper for everybody. I have never heard of a toilet paper shortage and yet last time I checked it was being sold in stores.
Posted by: assman at Aug 19, 2008 3:37:43 PM
@ Dan Tarrant: Aren't you forgetting the impact of prices in your analysis of market failure?
I don't think so...I'm taking into account that stuff has to be priced in such a manner as to make it unaffordable to at least some people. If everybody can buy your product, you need to produce less which will raise the price so that fewer people can buy it (but will pay a higher price). As a producer, you'll bring in more money, spend less and thus make more profit. Hence the instituted scarcity that Sahlins is talking about.
In socialism, scarcity is a problem to be overcome. In capitalism, it's an opportunity to be exploited.
Posted by: Dan Tarrant at Aug 19, 2008 3:45:10 PM
Bullshit. I think everybody in the United States can afford toilet paper and there is enough toilet paper for everybody. I have never heard of a toilet paper shortage and yet last time I checked it was being sold in stores.
That's because we don't have a free market in the United States. We redistribute wealth via taxes so essentially people with money buy toliet paper for people who can't afford it.
Posted by: Dan Tarrant at Aug 19, 2008 3:49:32 PM
Steve, assman, look at Dan Tarrant's link.
Posted by: Tom at Aug 19, 2008 4:02:38 PM
Dan, I don't understand your logic. Are you anti-freemarket and anti-redistributionist? Isn't a socialist economy my nature redistributionist?
Do you feel exploited by the producer every time you purchase an item? If so, I presume that you only buy staple goods.
Posted by: Steve at Aug 19, 2008 4:12:34 PM
This is not just professional jealousy by Sahlins and the other social science profs at U of C. Friedman and other U of C economists applied economic theories and methodologies to topics which until then had been the provinces of anthropology, sociology and political science and the economists usually had better explanations of these phenomena than did the other social scientists.
It isn't just jealousy. In some cases, the profs opposing the Friedman Center are fighting for their professional survival.
chsw
Posted by: chsw at Aug 19, 2008 4:12:45 PM
"using actual capital to dictate research is stupid, and you know it"
Is that what's happening?
Will a Milton Friedman Institute be able to slip one past all the critics? More likely, if any "manipulations" happens at all, it will be to dictate the questions asked.
And I'm not so sure that using capital to dictate research in economics (of all things) would be all that stupid. What the world needs more than anything right now is improved return on capital.
Someone always decides what questions get funded. Yes, there are differences between methods of deciding. Is government funding perfect? And is there a relative shortage of government-decided questions? Are we achieving a good return on capital of our current research portfolio? I think these are good questions. But, not really what this is about.
Here's what they donors get
http://mfi.uchicago.edu/society.shtml
If they are thinking that it is worth the money on a quid pro quo basis, then they really do need some insights into return on capital. It's not, of course. It's exactly the same as almost any other donor situation. The institute gets the money, the school probably collects rent, and the donors provide contacts. So, this can't really be the problem either.
Posted by: Andrew at Aug 19, 2008 4:41:53 PM
