The One True Republic of Letters

Good writing is associated with both Milton Friedman and John Galbraith and in the aftermath of the death of Galbraith in his 90s, this short essay by Professor Jim Heskett deserves a wide readership. It is an excellent example of how to explain fairly complex ideas to non-economists (and, indeed some economists) without diluting their power with concessions to brutal simplicity.

It also reminds us that the quartet mentioned, of Galbraith, Friedman, Keynes and Smith were each in their own way great explicators of their ideas on how their economies worked. If they wanted to gain and keep the attention of the people who made decisions about the degree of interference in the economy, for good and ill, they had to write clearly (preferably with ‘perspicuity’, as Smith advised his students in his lectures on Rhetoric and Belles Lettres in Edinburgh and Glasgow between 1749-63).

Whatever stance you take on the different policy issues represented by Galbraith and Friedman, I was struck by the anecdotal reference that the “Friedman's occasionally vacationed with the Galbraith's at the latter's Vermont farm, according to biographer Richard Parker” (in John Kenneth Galbraith: His Life, His Politics, His Economics (New York: Farrar, Straus, and Giroux, 2005).

As a student I attended a lecture given by Milton Friedman in the late 60s at the University of Strathclyde at the height of controversy about his advocacy of economic policies to deal with inflation and he opened with his greetings to fellow citizens of the ‘Republic of Letters – the one true republic’. I think this defused the tension a great deal, enough at least to guarantee him a hearing from an audience containing among it what can only be described as a ‘hostile ’ minority from the largely leftwing faculty. It was the first time I heard the Republic of Letters invoked, though I have heard it many times since, the notion of the Galbraith’s and the Friedman’s vacationing together in peace and harmony as members of that Republic is a great example of the mutual respect that great minds show towards candidate members of the Republic learning to learn and not to hurl abuse in place of understanding.

Jim Heskett writes:

“With the death of John Kenneth Galbraith on April 29, it is perhaps appropriate to reflect about the influence of two economists, Galbraith and Milton Friedman, described by Time magazine in 1975 as the modern world's most important economists along with Alfred [sic]Keynes and Adam Smith. There were remarkable similarities between them. Both strongly influenced government policy. Both wrote prolifically, and for a broader audience than just theoretical economists. Both, of course, lived to see the age of ninety and then some. And despite their sharply contrasting views of political economics (Friedman regarded Galbraith as a socialist), the Friedman's occasionally vacationed with the Galbraith's at the latter's Vermont farm, according to biographer Richard Parker.

Galbraith, in his book The Affluent Society, argued for the importance of fiscal policy in influencing the allocation of resources between rich and poor. This was to be done through the maintenance of a progressive tax system to insure that the wealthy provided their proportionate share of funding to enable government to channel funds to such endeavors as the environment, support for the poor, and the development of the arts. The objective was to create a society that would provide a better standard of living for all.

Friedman, on the other hand, in a book Free to Choose, advocated a minimalist role for government, relying instead on lower tax rates to provide the wherewithal for Americans to decide for themselves how they wished to live and spend their increased take-home pay. In another work coauthored with Anna Jacobson Schwartz, The Monetary History of the United States, he had earlier argued, however, for a significant government role in managing monetary policy to guard against the booms and busts that characterized the early part of the twentieth century. According to this thesis, by regulating the supply of money, governments could have an immediate and important impact on such things as interest rates, inflation, and general economic prosperity. “

From: “Who Will Cast a Longer Shadow on the 21st Century: Friedman or Galbraith? by Professor Jim Heskett.

I wonder how many in that audience have since changed their minds of the certainties they held about inflation, Keynesian macro-economics and the perfidious intentions of Milton Friedman?

[Read Professor Heskett’s article Harvard Business School: Working Knowledge (‘for business leaders’), 1 May:

http://workingknowledge.hbs.edu/item.jhtml?id=5316&t=heskett&oid=5316&rid=-1&hid=-1&aid=-1