The other towering bookend of 20th century economics passed away this week. There must be something in the life of an economist that fosters “the long run”. Milton Friedman was 94. When John Kenneth Gailbraith died last April, he was 97.
I will leave it to others to chronicle Mr. Friedman’s staggering contribution to the literature and thought of the modern functioning marketplace. I have long contended that he underestimated the importance of the psychological aspect of the market and its interactions with people and governments and the consequences when public confidence in the workings of capitalism in a democracy is withdrawn. Were it not for the interventions of governments, whose intellectual champions were Keynes and Galbraith, it is widely believed that the free market would have collapsed entirely under the weight of the Great Depression and the rising tide of public outrage that was then shaping the political landscape. It remains a mystery to me why John Galbraith was never awarded the Nobel Prize for his work, if not the prodigiousness of his writings, in modern economics. Fortunately, the Nobel committee did not make that mistake with Mr. Friedman.
As for Mr. Friedman’s view that corporate social responsibility was “fundamentally subversive”: I think we have seen its absence in the boardroom, on Wall Street and in the environment on so many occasions and long enough to conclude that it is impossible for these giant institutions that shape the lives of countless millions to exist without being governed by the most evolved sense of social responsibility as to their conduct, which, at the very least, is to ensure that they do no harm. In any event, Mr. Friedman surely could not have failed to be impressed by the marketing potential that comes from companies attaching themselves to “good deeds” and popular social causes, which for many is what corporate social responsibility has been relegated to and through which shareholders often receive substantial rewards in company earnings and stock appreciation.
There are few on the scene today who begin to approach the passion, personality and authenticity of voice that were the hallmarks of these intellectual titans. It was good to have been a contemporary of a time when they both enlivened their profession and the lives of the people who occasionally glimpsed into it.