It baffles me how otherwise intelligent people continue to 
repeat Friedman's canard about Mises's alleged "intolerance," 
and Friedman's uncomprehending characterization of Mises's 
"praxeological" method -- what Mises understood to be the basic 
method used by sensible economic theorists until the early 
twentieth century -- as holy writ. Mises's former colleagues and 
students uniformly describe him as gentle, warm, and extremely 
helpful professionally and personally, even toward those with 
whom he disagreed strongly. (Mises was one of the Rockefeller 
Foundation's main European contacts in the late 1920s and 1930s, 
and worked hard to secure US positions for promising European 
economists, regardless of their views.) Friedman of course 
barely knew Mises and had little acquaintance with Mises's 
scientific writings. Why on earth would we care what Friedman 
thought of Mises?

As for Friedman the philosopher of science: I once heard a story 
(from someone who was present) about a dinner party featuring 
the Friedmans and Karl Popper. At some point the discussion 
turned toward Friedman's 1953 paper and Friedman's 
methodological views more generally. After the Friedmans left, 
Popper turned to the host, and said: "That Milton Friedman . . . 
not very clever, is he?"

Finally, I find it funny that Friedman thinks he helped rescue 
Hayek from intolerance. It wasn't much of a rescue. Here's Hayek 
to Bill Bartley in the mid-1980s: "Friedman has this magnificent 
expository power. He is on most things, general market problems, 
sound. I want him on my side. You know, one of the things I 
often have publicly said is that one of the things I most regret 
is not having returned to a criticism of Keynes's treatise, but 
it is as much true of not having criticized Million's [Essays 
in] Positive Economics, which in a way is quite as dangerous a 
book" (Hayek on Hayek, p. 145).

Peter Klein
University of Missouri


----- Original Message ----- 
From: "Robert Leeson" <[log in to unmask]>
To: <[log in to unmask]>
Sent: Sunday, May 08, 2011 8:17 AM
Subject: Re: [SHOE] RVW -- Diamond on Emmett, ed., _The Elgar 
Companion to the Chicago School of Economics _


> With respect to the reason why the Economics Department at the 
> University of Chicago refused to accept Hayek: Milton Friedman 
> told Bruce Caldwell (2000) “My understanding is that this was 
> because, at that stage, he really wasn’t doing any economics.” 
> (There may also have been some resistance to outside 
> pressure). It appears that the location doubts (which side of 
> the Popperian demarcation line?) post-date Hayek's fifth floor 
> location.
>
> Friedman (in print, at least) concluded that the Austrian 
> business cycle model was dangerous "nonsense" in 1964, after 
> Hayek left Chicago (Monetary Studies of the National Bureau, 
> The National Bureau Enters Its 45th Year, 44th Annual Report, 
> 7-25; Reprinted in Friedman, 1969, The Optimum Quantity of 
> Money and Other Essays, Chicago: Aldine).
>
> In an interview with David Levy, Arnold Harberger (1999) 
> observed “a great difference in focus between Hayek (the 
> Austrians) and Chicago as a whole. I really respect and revere 
> those guys. I am not one of them, but I think I once said that 
> if somebody wants to approach economics as a religion, the 
> Austrian approach is about as good as you can get.”
>
> Friedman also reflected on the “so-called Austrians, or von 
> Misesians … Because their philosophy which admits no role 
> whatsoever for empirical evidence—it’s entirely 
> introspective—leads to an attitude of human intolerance. I 
> think anybody who holds that methodological view either is to 
> begin with, or ultimately becomes, an intolerant human being. 
> And the reason is very simple. If you and I disagree about a 
> proposition, the question is how do we resolve our difference? 
> If we adopt a Misesian methodological point of view, the only 
> way we can resolve our difference is by arguing with one 
> another. I know it from what’s inside me, you know it from 
> what’s inside you, and so you have to persuade me that I’m 
> wrong, or I have to persuade you that I’m right. There is no 
> other appeal. And so ultimately we have to get to fighting … 
> that’s why I think that their praxeological philosophy leads 
> to intolerance. You’ll notice that Mises himself was a highly 
> intolerant person. Ayn Rand was a highly intolerant person. As 
> he’s become older, Popper has become an intolerant person."
>
> Friedman believed that Chicago semi-rescued Hayek from 
> intolerance: "Hayek is a very interesting case, because I 
> think Chicago in particular had a sufficient influence on him 
> so as to move him away and he is not nearly as intolerant as 
> the other von Misesians. Same thing was true of Fritz Machlup, 
> who was another disciple of von Mises, but neither of them 
> were anything like as intolerant as von Mises himself. But 
> this crew of people down at the Mises Institute [at Auburn 
> University] … They’re just as intolerant a bunch as you can 
> find. A coin has two sides. Von Mises’ greatness as an 
> economist, his extraordinary influence on a wide range of 
> followers, the hero-worship he attracted — all these derived 
> from his inflexible honesty, with the “inflexible” element as 
> important as the “honesty” element. But the other side of that 
> coin was intransigence, even dogmatism, that bordered on 
> intolerance for anyone who did not wholly agree with him."
>
> There is also the related issue of the association between the 
> mental illness which afflicted that generation of Austrians 
> and their intolerance (and in some instances hysteria). 
> Economists are not trained to express a professional judgement 
> on such matters. But it was a tragedy that Mises and Henry 
> Simons (a fellow libertarian) were not apparently adequately 
> diagnosed.  Hayek, of course, blamed his own lengthy illness 
> on medical misdiagnosis.
>
> Does the self-appointed role of Defenders of Civilisation 
> legitimise the argumentum ad hominem fallacy that some 
> Austrians embrace (and which should be enough to exclude them 
> from scientific discourse)?  Does it also legitimise the 
> expression of anger and intolerance which - according to 
> Margrit Mises (1984, 36) - had nothing to do Defending 
> Civilisation but was instead caused by mental illness?
>
> Robert Leeson
>
> ----- Original Message -----
> From: "Steve Horwitz" <[log in to unmask]>
> To: [log in to unmask]
> Sent: Sunday, 8 May, 2011 5:53:12 AM
> Subject: Re: [SHOE] RVW -- Diamond on Emmett, ed., _The Elgar 
> Companion to the Chicago School of Economics _
>
>
>
>
> To add to Robert’s point:  Hayek’s appointment at Chicago was 
> to the Committee on Social Thought precisely because the 
> Economics department didn’t wish to hire him, presumably 
> because he was seen as insufficiently “scientific” for them. 
> At least that’s the story.  Whatever the reason, it certainly 
> suggests, aside from the very important differences between 
> Hayek’s approach and that of the Chicago School that can be 
> gleaned from even a cursory look at Hayek’s work, the 
> Chicagoans apparently didn’t consider him one of them.
>
>
>
> Steve Horwitz
>
>
>
>
>
> From: Societies for the History of Economics 
> [mailto:[log in to unmask]] On Behalf Of Robert Nadeau
> Sent: Saturday, May 07, 2011 12:21 PM
> To: [log in to unmask]
> Subject: Re: [SHOE] RVW -- Diamond on Emmett, ed., _The Elgar 
> Companion to the Chicago School of Economics _
>
>
>
> One should not assume, as Prof. Diamond does, that F.A. Hayek 
> was ever a formal member of the Chicago School of Economics.
>
> Robert Nadeau
>
>
> Le 11-05-06 22:38, « Robert Leeson » < [log in to unmask] > 
> a écrit :
>
> The words "more complete, measured, and rigorously developed 
> synthesis" should not be applied to Overtveldt's error-ridden 
> hagiography.
>
> Robert Leeson
>
> ----- Original Message -----
> From: "Bradley R. Turner" < [log in to unmask] >
> To: [log in to unmask]
> Sent: Saturday, 7 May, 2011 8:35:18 AM
> Subject: Re: [SHOE] RVW -- Diamond on Emmett, ed., _The Elgar 
> Companion to the Chicago School of Economics _
>
> For a more complete, measured, and rigorously developed 
> synthesis, see The Chicago School: How the University of 
> Chicago Assembled the Thinkers who Revolutionized Economics 
> and Business (2007), by Johan Van Overtveldt.
>
>
> Friedman, on the cover, describes it as "Thorough and 
> extraordinarily well informed."
>
>
>
> On Fri, May 6, 2011 at 7:17 PM, Humberto Barreto < 
> [log in to unmask] > wrote:
>
>
> ------ EH.NET BOOK REVIEW ------
> Title: The Elgar Companion to the Chicago School of Economics
>
> Published by EH.NET (May 2011)
>
> Ross B. Emmett, editor, /The Elgar Companion to the Chicago 
> School of
> Economics/. Cheltenham, UK: Edward Elgar, 2010. xi + 350 pp. 
> $200
> (hardcover), ISBN: 978-1-84064-874-4
>
> Reviewed for EH.Net by Arthur M. Diamond, Jr., Department of 
> Economics,
> University of Nebraska at Omaha.
>
> The Chicago School of economics has been described in a 
> variety of ways.  In
> the current volume, a useful description is given in the essay 
> of Bruce
> Kaufman who emphasizes “... a deep commitment to rigorous 
> scholarship and
> open academic debate, an uncompromising belief in the 
> usefulness and insight
> of neoclassical price theory, and a normative position that 
> favors and
> promotes economic liberalism and free markets”  (p. 133).
>
> The volume has been edited by Ross Emmett, a Michigan State 
> historian of
> economic thought whose previous research has focused on early 
> Chicago
> economist Frank Knight.  About two-thirds of the volume 
> consists of fifteen
> “Essays on the Chicago School” in Part 1.  The remaining third 
> of the
> volume, in Part 2, consists of nineteen brief profiles of 
> “Some Chicago
> Economists.”
>
> The only essay that attempts any kind of broad overview of the 
> volume is
> Emmett’s four-page introduction.  His essay briefly 
> establishes the
> historical context of the Chicago School and points us toward 
> some of the
> earlier literature in the history of economic thought that 
> discusses the
> Chicago School.  But it does not attempt to summarize the 
> diverse messages
> of the essays of the volume, let alone try to synthesize these 
> messages into
> any overarching conclusions.
>
> Synthesis would have been difficult, if not impossible, 
> because of the
> apparent absence of any consistent criteria for selection of 
> the contents.
> This volume appears to be opportunistic in the sense that the 
> contributors
> often were culled from those who attended conferences with the 
> editor on the
> Chicago School, and the editor has left the contributors 
> considerable leeway
> in the length, content and style of what they have 
> contributed.  Emmett
> openly admits (p. 3) that some important topics have been left 
> out of the
> “Essays” section of the volume.  But he does not identify the 
> most
> glaring omission:  the contributions of George Stigler and his 
> colleagues,
> such as Brozen, Demsetz and Peltzman, to industrial 
> organization and the
> economics of regulation.
>
> Most of the essays adopt a neutral, expository stance, 
> reporting the main
> research contributions of various Chicago scholars on various 
> topics.  Some
> of these essays are written by scholars with some connection 
> to the Chicago
> School, and some simply by scholars with an interest in the 
> history of
> economic thought.  Among the expository essays, economic 
> historians will
> especially appreciate David Mitch’s chronicle of Chicago’s 
> contributions
> to economic history, with some discussion of Earl Hamilton, 
> and special
> attention to Fogel and McCloskey; and Hugh Rockoff’s extensive 
> account of
> the genesis and findings of Friedman and Schwartz’s tour de 
> force in /A
> Monetary History of the United States/.
>
> Some of the other expository essays are fairly detailed 
> accounts of aspects
> of the Chicago School, e.g., Daniel Hammond’s thorough account 
> of Friedman
> and Stigler’s development of Chicago price theory; and Daniel 
> Benjamin’s
> account of the three most important papers by Armen Alchian. 
> Others paint
> with a broader brush, but provide useful overviews of their 
> topics, e.g.,
> Steven Medema’s account of the development of Chicago law and 
> economics; H.
> Spencer Banzhaf’s account of the development of Chicago 
> welfare economics;
> and Gordon Brady’s account of the Chicago School “roots” of 
> the
> Virginia School that was James Buchanan’s early intellectual 
> home.
>
> Parts of Eric Schliesser’s essay are less expository and more 
> tendentious
> -- implying that Milton Friedman was indirectly responsible 
> for the worst
> that Pinochet did in Chile.  When Schliesser’s essay was 
> earlier presented
> to the American Economic Association, Deirdre McCloskey 
> powerfully and
> persuasively defended Friedman.  Part of McCloskey’s defense 
> was her
> report of a Chicago economics faculty meeting she attended, 
> where Friedman
> had successfully argued for turning down funding that had been 
> offered to the
> department from a repressive regime.  But in this volume, 
> Schliesser’s
> critique of Chicago is left unanswered.  The volume would have 
> been better
> if it had included both sides.
>
> Nineteen economists are included in the profiles of the “Some 
> Chicago
> Economists” part of the volume.  The basis for selecting the 
> nineteen is
> not obvious.  If we limit ourselves to economists who fit 
> Kaufman’s
> description of the Chicago School, then it is hard to 
> understand the absence
> of Nobel-Prize-winning Chicago economists Milton Friedman 
> (yes, /Milton
> Friedman/ is absent), Robert Lucas, James Heckman, James 
> Buchanan, Robert
> Mundell, Merton Miller and Robert Fogel.  And if we adopt a 
> broader concept
> of the Chicago School, as Emmett seems to do when he includes 
> Paul Douglas
> among his nineteen, then it is also hard to understand the 
> absence of
> Thorstein Veblen (an early editor of Chicago’s /Journal of 
> Political
> Economy/), and F.A. Hayek.
>
> The profiles that are included often have useful information. 
> But much of
> importance is omitted, sometimes due to the brevity of the 
> profiles, and
> sometimes due to the agendas of the profile authors. The four 
> pages on George
> Stigler, for instance, focus primarily on his biography, who 
> he associated
> with, and a selection of his political views; but give scant 
> attention to his
> wit, his erudition, and his contributions to research, 
> especially in the area
> of the history of economic thought.  And to make matters 
> worse, the
> bibliography to the profile neglects to reference key works 
> that do focus
> mainly on Stigler’s research.  (The Wikipedia entry on Stigler 
> does a
> better job.)
>
> But on the other hand, it was good to see Evelyn Forget’s 
> profile of
> Margaret Reid included in “Some Chicago Economists.”  When I 
> was a
> graduate student at Chicago, Reid had been long retired, but 
> she still
> regularly attended Becker’s workshop, and still pursued her 
> research.  In
> those days, graduate students would spend long hours at the 
> computer center
> with their decks of IBM punch cards, to wait their turn to run 
> their
> regressions on the mainframe.  And it did not entirely escape 
> our attention
> that Margaret Reid was there too, with her deck of cards, 
> waiting her turn.
> Her presence and her persistence taught us something about the 
> values of the
> Chicago School --something that Klamer and Colander would 
> later reconfirm in
> their interviews with graduate students in /The Making of an 
> Economist/.  At
> Chicago, economic research was not just some puzzle-solving 
> game by which you
> earned your living; not something you retired from; economics 
> was a calling
> that mattered.
>
> References:
>
> Friedman, Milton, and Anna Jacobson Schwartz. / A Monetary 
> History of the
> United States, 1867-1960/, NBER Studies in Business Cycles. 
> Princeton:
> Princeton University Press, 1963.
>
> Klamer, Arjo, and David Colander. / The Making of an 
> Economist/.  Boulder,
> CO: Westview Press, 1990.
>
> Arthur M. Diamond Jr. received three graduate degrees from the 
> University of
> Chicago, and was a Post-Doctoral Fellow in economics at the 
> University.  He
> has recently published several papers related to Schumpeter’s 
> process of
> creative destruction and is at work on a book entitled 
> /Openness to Creative
> Destruction/. [log in to unmask] .
>
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> for non-profit educational uses if proper credit is given to 
> the author and
> the list. For other permission, please contact the EH.Net 
> Administrator
> ( [log in to unmask] ). Published by EH.Net (May 2011). All 
> EH.Net reviews
> are archived at http://www.eh.net/BookReview .
>
> Geographic Location: North America
> Subject: History of Economic Thought; Methodology
> Time: 20th Century: Pre WWII, 20th Century: WWII and post-WWII
>