Jason Furman's Reviews > Samuelson Friedman: The Battle Over the Free Market

I listened to this as an audiobook which is about the right way to read it—if you read it at all. There was a lot that was interesting but even more that did not work for me and may not work for anyone. I liked Nicholas Wapshott’s Keynes Hayek: The Clash that Defined Modern Economics somewhat more but that book also had shortcomings.

This book uses the dueling Newsweek columns by Paul Samuelson and Milton Friedman to shape a narrative about their debate over the free market. It begins with short biographies of the beginnings of their careers, their similarities and differences, and the ways they crossed paths at Chicago that was mostly new and interesting to me. It then described their debates primarily over macroeconomic issues, particularly the role of fiscal policy, monetarism, the causes and solutions to inflation, most of which is not actually about the “free market” which is more of a microeconomic issue.

The pairing provided some narrative interest and it was nice to read (or, in my case, hear) some of the kind letters that Paul Samuelson wrote to Friedman and his wife Rose over the years, picturing a 70-year long friendship, debate, respect, and irritation.

But the pairing is an imperfect way to tell the story. For starters the book is primarily about the two economists’ impact on the public debate not their academic work. As such, Friedman looms much larger than Samuelson who devoted a larger fraction of his career to a much more impressive and lasting set of academic contributions. The book does not pretend to be an intellectual history but it is somewhat problematic that it writes out just about everyone else (James Tobin?) who was part of developing the ideas and participating in the debate.

The last third of the book is borderline dreadful, a potted history of economic events in the 1990s, 2000s, the financial crisis and COVID that neither Samuelson nor Friedman had much to directly to do with, most of which were presented in a relatively conventional and shallow manner in service of Wapshott’s thesis which he makes clear in the concluding chapter where he writes, that Friedman “ Laid the foundations for the election of President Trump. Could there have been a President Trump without Friedman? Perhaps. But Friedman’s long libertarian march helped pave the way.”

That argument conveniently blames Friedman for everything Wapshott does not like. But what if part of the 2016 election was voters frustrated by immigration, whatever Friedman’s views they were not influential on that topic. Or if 2016 was in part a reaction to the unpopularity of the Affordable Care Act, which could sort of be blamed on Samuelson (at least if you had to pick one of the two men to credit for it).

More generally, Wapshott appears to miss all the ways Friedman was vindicated, to name just one the idea of floating exchange rates untethered to anything was a kooky one in the 1950s and now is not even remarkable for advanced economies and the trend in policy advice to emerging economies too. Other ideas like occupational licensing were echoed by the Obama and Biden administrations. Or now the fully refundable child tax credit which is basically like Friedman’s negative income tax.

Moreover, Wapshott’s superficial potted history acts as if Friedman’s small government ideas won the day and have been strangling government ever since. While we do not have the government (or level of taxes) that I want, it is the case that the government keeps increasing its role in healthcare, mostly increasing it in anti-poverty programs, college financing, and a range of other areas—including regulations. If anything the trend seems to be against Friedman.

The above was all quite negative but half of the book is reasonably good, the half the sticks closer to the two men, their lives, their direct impact, and humanizes them and their interactions, providing the political and intellectual context for their ideas. It is just a shame that it came bundled with everything else it did that you could get anywhere and did not particularly need the framing of these two intellectual giants.