WSJ encomium for Milton Friedman.

Semi-related: What We Learn When We Learn About Economics.

Excerpt: The simple models have an explanatory power that is thrilling. Once you’ve grasped the aggregate supply/aggregate demand model, you understand why stimulating demand may lead, in the short run, to growth, but will also produce inflation. But the content of that understanding turns out to be a bit thin. Inflation happens because, well, that’s where the lines intersect. “A little economics can be a dangerous thing,” a friend working on her Ph.D in public policy at the [University of Chicago] told me. “An intro econ course is necessarily going to be superficial. You deal with highly stylized models that are robbed of context, that take place in a world unmediated by norms and institutions. Much of the most interesting work in economics right now calls into question the Econ 101 assumptions of rationality, individualism, maximizing behavior, etc. But, of course, if you don’t go any further than Econ 101, you won’t know that the textbook models are not the way the world really works, and that there are tons of empirical studies out there that demonstrate this."

I took Econ 101 from this guy, who was brilliant and funny and taught me the word "widget" and, yes, drew a bunch of stylized models that made the world seem simpler than he knew it to be. The key was to take the models and use them in the real world, not to accept the models as holy writ.

Comments

[Lex]

I remember asking my 101 prof whether there had ever been any sizable market in U.S. history that truly approached the model of a free market. I still remember his answer:

"Uh ... well ... maybe ... the bituminous-coal mining industry ... back in the 1930s ... maybe."

[David Boyd]

Such a shame that Milton Friedman died so ill-informed probably never having had the benefit of reading this blog.

[Bubba]

"Such a shame that Milton Friedman died so ill-informed probably never having had the benefit of reading this blog."

LOL!

That's one of the best lines I've ever read on this blog, David.

[Ed Cone]

Actually, Milton used to drop by all the time, and he wrote several guest posts back in February of 2002.

Seriously, not really sure what you're saying here, DB -- that Friedman's work is not open to question or advancement? That models do in fact provide a wholly accurate view of the real world? That Econ 101 is all one needs to understand economics?

[David Boyd]

Jus' sayin' that it's funny juxtaposition to have a post on Friedman's death combined with an economics primer seemingly designed to question the reasonableness of Friedman's devotion to free markets.

Yeah, the world's a complicated place. Like he didn't know.