Born on July 31, 114 years ago, Milton Friedman (1912–2006) was a rare intellectual and teacher whose work continually survives the test of time. Scholarly and open-minded, the free-market economist earned respect from even his adversaries.
Keynesian economist Paul Samuelson described his rival as “about as smart a guy as you’ll meet” and (sneeringly) “as persuasive as you hope not to meet.” Paul Krugman called Friedman “the economist’s economist… a man of intellectual courage who was one of the most important economic thinkers of all time and possibly the most brilliant communicator of economic ideas to the general public that ever lived.”
The Economist called him “the most influential economist of the second half of the twentieth century…and possibly all of it.” And in debates, one opponent said it was best to criticize Friedman when he was not in the room.
Milton Friedman’s major professional mark was in monetary economics. But as a public intellectual, writing popular books and a biweekly Newsweek column, he became conversant in different fields, including energy.
Political Capitalism
Milton Friedman understood how major energy regulation was typically sponsored by some segment of the industry. “Few U.S. industries sing the praises of free enterprise more loudly than the oil industry,” he stated in 1967. “Yet few industries rely so heavily on special government favors.”
Petroleum— along with coal and natural gas—have all been the unfavored fuels, receiving less subsidy and more regulation than its politically correct rivals. Rent-seeking by crony capitalists has centered on wind, solar, ethanol, hydrogen, nuclear, electric vehicles, and carbon-capture.
1970s Energy Crisis
Friedman’s harsh reaction to President Nixon’s wage and price control order of August 1971 is particularly important, for this intervention, not the Arab Embargo, created the oil shortages and a decade of spiraling regulation. The negative effects of this experience were so great that federal price controls on energy have not been part of the debate since.
Friedman explained how a surplus of regulation caused a shortage of oil and gas. He did not buy the “running out of resources” argument, elegantly dressed in Harold Hotelling’s fixity/depletion model, as did so many economists–even those at Resources for the Future.
Regarding that dark decade, Friedman commented: “It is a mark of how far we have gone on the road to serfdom that government allocation and rationing of oil is the automatic response to the oil crisis.”
Climate Change
Near the end of his long career, Friedman weighed in on the global warming debate with a blurb for Thomas Gale Moore’s Climate of Fear: Why We Shouldn’t Worry About Global Warming (Cato Institute, 1999). Friedman opined:
This encyclopedic and even-handed survey of the evidence of global warming is a welcome corrective to the raging hysteria about the alleged dangers of global warming. Moore demonstrates conclusively that global
Conclusion
Friedman’s wisdom and scholarship are a challenge to those who advocate government activism with “green” energy and climate change. He invites a rethinking of the issue for its proponents. In the introduction to his best-seller, Free to Choose, he and his wife Rose wrote:
The only person who can truly persuade you is yourself. You must turn the issues over in your mind at leisure, consider the many arguments, let them simmer, and after a long time turn your preferences into convictions.
Such intellectual rigor is good advice for all of us.
