Sunday, January 18, 2015

Samuelson and Friedman.


For some reason, lots of people have been remembering the late Milton Friedman and even other dead twentieth century economists, once famous and now mostly forgotten. Nobody, however, seems to remember Paul Samuelson, usually regarded as Friedman's Keynesian nemesis.

Samuelson (1915-2009), himself, seemed to have had good memory until his death.

This is him reminiscing on Friedman, in June 2009, for The Atlantic's Conor Clarke:
"Friedman had a solid MV = PQ doctrine from which he deviated very little all his life. By the way, he's about as smart a guy as you'll meet. He's as persuasive as you hope not to meet. And to be candid, I should tell you that I stayed on good terms with Milton for more than 60 years. But I didn't do it by telling him exactly everything I thought about him. He was a libertarian to the point of nuttiness. People thought he was joking, but he was against licensing surgeons and so forth".
(Samuelson comments on Ben Bernanke, Greg Mankiw, and others, as well; he also mentions Alan Greenspan and his youthful admiration for Ayn Rand.)

A few months earlier, Samuelson had been considerably less appreciative of Friedman. Samuelson to Nathan Gardels from NPQ (January 2009):
"And today we see how utterly mistaken was the Milton Friedman notion that a market system can regulate itself. We see how silly the Ronald Reagan slogan was that government is the problem, not the solution. This prevailing ideology of the last few decades has now been reversed.
"Everyone understands now, on the contrary, that there can be no solution without government. The Keynesian idea is once again accepted that fiscal policy and deficit spending has a major role to play in guiding a market economy. I wish Friedman were still alive so he could witness how his extremism led to the defeat of his own ideas."
Apparently, 94-year old Samuelson wasn't immune to hostile reactions (like Peter Robinson's for Forbes, in February) following his January interview.

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Does this silence from American Keynesians reflect history's verdict on Samuelson?

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Update:
22-01-2015. Lord Skidelsky, unlike American Keynesians, does remember Paul Samuelson fondly. If the title of his Project Syndicate piece today is anything to go by, it does seem like Samuelson lost to Friedman: "The Fall of the House of Samuelson".

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