The Atlas Society Asks Jennifer Burns Transcript

Jennifer Burns is an Associate Professor of History, a research fellow at the Hoover Institution, and the leading independent expert on Ayn Rand and the American conservative movement. She is the author of the biography Goddess of the Market: Ayn Rand and the American Right and joined our CEO Jennifer Grossman on February 14, 2024, to discuss her latest book,  Milton Friedman: The Last Conservative, which traces Milton Friedman's life and his key role in creating a new economic vision and a modern American conservatism. Watch the entire video HERE or check the transcript below. 

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JAG: Jennifer Anju Grossman

JB: Jennifer Burns

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JAG: Hello, everyone, and welcome to the 192nd episode of The Atlas Society Asks. My name is Jennifer Anju Grossman. My friends call me JAG. I'm the CEO of The Atlas Society. We are the leading nonprofit introducing the ideas of Ayn Rand to young people in fun, creative ways. Music videos, graphic novels, animated videos, and, of course, events. Today, we are joined by Jennifer Burns. Before I even begin to introduce our guest, I'm going to remind you, you can type your questions into the comment stream. Whether you're watching us on Zoom, Instagram, Twitter, Facebook, LinkedIn, or YouTube, we will get to as many of them as we can. But again, I warn you, this is a long-awaited guest, and I have many questions of my own. So our guest, Jennifer Burns, is an associate professor of history at Stanford University and a research fellow at the Hoover Institution as a leading independent expert on the American conservative movement and author of the extremely important biography, Goddess of the Market: Ayn Rand and the American Right. I've read it three times. So, as you might imagine, I have long been wanting to discuss the biography. But for the past few years, Jennifer's been deep into researching and writing her very latest biography, Milton Friedman: The Last Conservative, which explores his evolution as a globally recognized proponent of a new monetary and free market approach to economics with some fascinating new takes on his unique collaboration with several unsung female economists. Jennifer, thank you for joining us.

JB: Yes, it's great to be here. Thanks for having me.

JAG: So, you've carved out some distinctive territory as a historian of intellectual history with a focus on American conservatism. Looking back to your childhood or formative years, can you identify any aspects or influences that may have helped set the stage for your later trajectory?

So, there was this sort of cognitive dissonance, because I knew that the ideas in my household were actually very important and very influential throughout much of the country, in the world, yet they weren't being discussed or taught in school.

JB: Yes, that's a good question. I grew up in a household full of readers. We had books everywhere, and my father in particular, was more of a political conservative. So, I grew up reading some of the classics of conservative thought and magazines and ideas. Then I would go to school, and as school became more historical and we started studying these things, I found these ideas were nowhere to be found, and they were considered sort of forbidden and don't mention, don't talk about them. So, there was this sort of cognitive dissonance, because I knew that the ideas in my household were actually very important and very influential throughout much of the country, in the world, yet they weren't being discussed or taught in school. I think as time went on, I wanted to take what I was learning in my education and apply it to a broader set of ideas and influences and maybe bridging that gap has become sort of my metier, I would say.

JAG: So, after graduating from Harvard, almost ten years after I was there, you went on to the University of California at Berkeley to pursue your Ph.D. in history. Do I understand you wrote a Ph.D. dissertation on Ayn Rand? Wow. Tell us about that. Had you read Rand previously, or did you think, here's a controversial, influential thinker. Let's check it out.

Ayn Rand was at that time a figure that everybody acknowledged was important, but nobody really knew why. So, the fact that I said I'm going to answer that question I think was very persuasive to people.

JB: I had definitely read Rand before. I started with The Fountainhead, which I both enjoyed as a story and found frustrating because I knew that the writer was doing something I didn't understand, and I knew it was a reference to historical figures, and they were sort of messages, and I wasn't quite able to put it together. This was when I was 17 or 18. Similarly, I looked at some of Rand's philosophy. So I had a passing familiarity. But what I really had was a lingering sense of “I don't understand this, and I'm sort of curious about it.” I had also worked at Harvard Business School, so I was familiar with more of a business mentality, business mindframe. I think that all came together at a moment in graduate school when historians were starting to say, wait a second, we've done all this research into the history of liberal ideas and liberal institutions, radical leftist politics, labor unions, communism, socialism. We just have oodles and oodles of books on those. But actually, the country is voting in a very different direction. Why don't we know anything about that? So, my curiosity about Rand sort of resurfaced in this moment of:  “What do we need to think about? What do we need to understand in American politics that we haven't so far?” That was really when I came back to Rand, and I looked at all the books on her, and, you know, there's really room for a historical book here from someone who's pretty much an outsider, which I was. So, that's how I started and Berkeley has this great reputation as a bastion of liberal politics, and maybe today of groupthink, and maybe it is that way today. I haven't been there for a while, but when I was there, it was really just a big research university where there was actually plenty of room to pursue what you were interested in as long as you could convince people of its importance. Ayn Rand was at that time a figure that everybody acknowledged was important, but nobody really knew why. So, the fact that I said I'm going to answer that question I think was very persuasive to people.

JAG: Now, in both your biography of Rand and that of Friedman, you gained access to archival materials that in some cases, had never been fully explored. How important is the prospect of conquering that virgin territory, if you will, in your choice of subjects?

JB: It's critical for a graduate student and critical for starting out, and that's how we want to advance. The frontier of knowledge is to go where someone hasn't gone before. I was so fortunate that in the kinds of ups and downs of Ayn Rand's legacy and the historical archive that's been created to reflect her influence and her life, I came at a moment when that was really available to me, and I just had really good timing. Part of it was that I was looking at her as a political figure and the impact of her political ideas. So that was huge. With Friedman, the archive has always been there. Not always, but it's a long-standing, professionally managed archive. Plenty of people have been in it. They tended to go in for one question and come out. So I was really the first to say, let me use this archive to tackle the whole thing. That hasn't become my calling card, but having spent almost a decade on that book, I don't know that it's going to continue to be my calling card. I might be more interested in synthesis at this stage than original research, but it is thrilling to feel like you can answer the question for yourself and you can really see material that other people haven't seen. For me, the research process is marinating in all this information and then slowly finding shapes coming out of that material and then developing and shaping it into a story that other people can appreciate, because I know other people don't have that time to be in the raw material.

JAG: So, tell us a little bit about the process of gaining permission to explore the archives of Ayn Rand. Did you gain that for your dissertation, or did you have a dissertation and then you were able to present it? Was it fairly straightforward or was it more involved?

JB: It was actually really straightforward in a way that I'm very grateful for, and in keeping with, Rand's legacy of free thought. I had written a seminar paper that was based on published writing by and about Rand, and my advisor  and I thought it was very promising, but we needed an archive. I had a newsletter that said there was an archive opening from the Ayn Rand Institute. So we simply sent them a letter. This was before email really had caught on, a nice formal letter saying I would like to come and see the archive. Then I got a response back that said, “great, tell us the date”. So, down I went and spent a summer there, completely immersed every day for three months. Then I made many return forays to follow up on things. It was really neat. It was a really great research experience.

JAG: You talk about getting into the Friedman archives, and that people had gone in for one answer or the other. Did you get a sense that anybody had ever gone through the entire Ayn Rand archives? In that process, did you come across anything that people had not seen before?

I was able to look at the originals of the published letters and diaries and see that those had been sort of edited and smoothed out in ways that were not typical for the editions of the letters of a thinker.

JB: There were other researchers in there, episodically, and I feel like I saw a lot of material that people hadn't seen. Mostly, I was interested in how Americans were responding to her. There was some great material on Russia that other people—Russian language material—that people had translated. So I was able to see some of the translations. I think the biggest revelation that really caught the attention of the Objectivist community was I was able to look at the originals of the published letters and diaries and see that those had been sort of edited and smoothed out in ways that were not typical for the editions of the letters of a thinker. Like more traditionally, you would indicate with footnotes when there was more context or if things were changed. So I was able to compare the originals, compare the published book and develop some ideas about what changes had been made and why, to present a version of Ayn Rand that was more consistent with her later thought, but didn't really show her development over time. That's the appendix to my book. That really was, I think, a bombshell for some in the community. I have to say, though, that as I was working in the archive, the people organizing the archive were well aware of that and felt like that was a legacy of an earlier moment of preserving Rand's memory. They were now trying to do it differently. So I think that was from a different era. But then, of course, that book is still out there and circulating, and the originals aren't quite the same. You're not getting the unexpurgated originals. They've been somewhat edited.

JAG: But to me, always one of the most interesting aspects of Ayn Rand, as an artist, as a thinker, but primarily as an artist, is her evolution stylistically and the evolution of her thought. I think that's one of the fantastic things that you do so well in Goddess of the Market, how you chart Rand's political ideology evolving over time, particularly with regard to the tension between elitism and populism. What were some of the influences or experiences that contributed to this?

She saw very clearly that the so-called superior or well-educated were often falling into a set of ideas and ideologies she thought were really wrong. So, that moved her to thinking there's a wisdom of the crowd, or there's a more populous wisdom.

JB: I think the biggest moment is coming from Russia to the United States and feeling like she had found the promised land, but then also realizing she didn't fully understand. So, getting a better understanding of American history and politics, in which she was really educated quite a bit by her friend Isabel Patterson. Then the second stage of that was the feeling that the ideas that had disfigured her home country of Russia were also circulating in some form in the United States. So, I think she was trying to get her hands around that. Then I think also the tension with idealism and populism is really that Rand is an idealist philosopher. She wants to project what should be, what we should strive towards, and if you're not careful, that can turn into the veneration of the superior. Yet at the same time, I think she saw very clearly that the so-called superior or well-educated were often falling into a set of ideas and ideologies she thought were really wrong. So, that moved her to thinking there's a wisdom of the crowd, or there's a more populous wisdom. I don't think she ever really resolved that. I tried to just trace that through the book rather than say, there's an answer to it. I think it's just something she lived with and you see in her work in different ways.

JAG: Yes. Particularly when you chart her early forays into politics and the experience of seeing that she was resonating with the people; the crowds she was addressing were understanding and sometimes a lot more sympathetic than the elites or even some of the businessmen that she was addressing. That gave her a clue. Maybe finding a more popular way of communicating could be more effective than trying to work within the system. One of the episodes you recount in both of your biographies is FEE's publication of “Roofs or Ceilings?,” co-authored by Milton Friedman and George Stigler. Can you tell us a little bit about that occasion and how it led to this collision between Rand, Friedman, and Leonard Read and what it reveals about the different strains of thought on the Right at the time?

JB: Yes, it's such an interesting moment. The basic background is there had been rent control during the war, and there's now a debate as the war is over about should rent control be continued or not. At the same time, the free-market lobby or pro-business lobby is also getting organized. In particular, the Foundation for Economic Education is founded and they really feel they want to present a pure case for capitalism. They don't want to present both sides. They want to present one side and push it forward. So, Leonard Read, the founder of this organization, has read The Fountainhead. He loves Ayn Rand. He loves the book. He meets with her. They have this real meeting of the minds. Rand understands that they have an arrangement where Read will check with Rand and use her as a sounding board to make sure their organization stays pure, because he's really worried that it's going to compromise. So then, at the same time, he's looking to make FEE relevant. He's approached by Milton Friedman and George Stigler, who've written an analysis of rent control and an argument for taking rent controls away. They're economists, and they decide to use this language of efficiency to make this argument. They feel like this is going to be a pretty difficult argument to make. So they really couch it in all this careful language. Rent control isn't just going to benefit landlords, it's going to benefit all of us.

Rand becomes outraged because Friedman and Stigler are using only an efficiency argument. She really feels you need to make the moral case for capitalism.... So... you have this brilliant moment where Ayn Rand is calling Milton Friedman a communist.

The Foundation for Economic Education is this older strain of just business capitalism that doesn't want to compromise at all. They don't have the same ethical framework as Rand, but they do have this idea of purity. But, they also want to hire and publish and support new people. They feel like Friedman and Stigler are university economists, they make this argument. They actually edit some of Friedman and Stigler's argument, and particularly they take away the egalitarian way that Stigler and Friedman have framed rent control, and then they go ahead and publish it. Two things happen. First of all, Milton Friedman and George Stigler are like, wait a second. We did not give you permission to edit the pamphlet. They are livid. Letters go back and forth, telegrams are very angry. Then Ayn Rand asks, what is this pamphlet? Even though Read has pulled out the egalitarian stuff, Rand becomes outraged because Friedman and Stigler are using only an efficiency argument. She really feels you need to make the moral case for capitalism. Even more, she then goes another step further and says, if they're using the efficiency argument, they must be doing that because they're trying to undermine the moral argument. They're not just choosing not to do it. So she thinks it's propaganda; you have this brilliant moment where Ayn Rand is calling Milton Friedman a communist.

Everybody hates everybody after this. Ayn Rand is very angry with Leonard Read. Leonard Read hangs his head, and it's unclear what the nature of the arrangement was, but he sort of led Rand to believe she was going to have more of a role in the shaping of FEE than he actually gave her. So she felt betrayed, and that would never heal. Then Stigler and Friedman also hated Leonard Read, who they thought was really duplicitous and not a good guy. Eventually, they would make up and become friendly again. But for me, what this says is that in the post-WWI era, we've had the great crisis of the Great Depression. Then there's been the New Deal, World War II, and the advocates of market capitalism don't have a shared language or a shared philosophy. They feel like the New Deal was a mistake, but they don't know how to make that argument in the contemporary moment applied to contemporary policies. Rand has this one very clear vision, and not a lot of people have bought into that at that point. She is someone who believes so strongly in her own vision that she doesn't work collaboratively very well. So it'll take a while for that vision to be worked out. As I describe in the book, Rand will never be fully part of the vision, but she's always adjacent to it. She's always there with this very powerful argument for capitalism that will often propel people into these broader conversations.

JAG: So, turning now to your biography, Milton Friedman: The Last ConservatIve. Friedman's time pursuing his Ph.D. at the University of Chicago, and the interactions he had with other passionate young critics of the New Deal almost reminded me of the fictional backstory of John Galt, Francisco D’Anconia, and Ragnar Danneskjold at Patrick Henry University in Atlas Shrugged. So tell us a little bit about the legendary “room seven” and the relationships that it fostered.

JB: Yes, I think that's a good connection. I think it speaks to the universalism of the experience of young people getting an education and finding comrades-in-arms and good friends and intellectual partners. So, Friedman went in 1932 to the University of Chicago graduate program in Economics. Over his time there, he fell in with a group of other students, and they had taken over a storeroom in the basement of the Social Sciences building. It was number seven, which is why I call it “room seven.” They were supposed to be doing some sort of work-study jobs. One of them had a work-study job, that’s how they got a key to this room, and they made it into their little hangout, and they would go down and they would talk and they would argue. What's remarkable is, well, first of all, together, they crafted a different approach to understanding the Great Depression and to understanding economics that was distinctive from what was being taught at, say, Harvard or, say, University of Wisconsin. So, a distinctive Chicago take. Then the people in this room became Milton Freeman's lifelong friends. One was George Stigler, who went on to write that pamphlet with him, and who ended up eventually on the Chicago faculty and was also just a lifelong, best friend of his. One was Aaron Director, whose sister, Rose Director, he married, and who also became a lifelong friend. One was Paul Samuelson, who did not actually stay with the group and took a different direction to becoming a prominent Keynesian theorist. One was Henry Simons. He was a towering figure for Milton Friedman. As I describe in the book, he tragically commits suicide in 1946. So, he's still a ghost around for a couple of years before they move on. I've really tried to show how these ideas came together in sort of an alternative political and intellectual culture that also had a lot to do with friendship.

JAG: Why did Friedman, relatively early on in his career, switch from pioneering research into statistics to the study of money, inflation and currency regimes? How did this prove prescient in later years?

JB: Yes, that's interesting. I think it does go back to room seven and the question of the Great Depression. Friedman trained as a mathematical economist at a time when the discipline in the 1930s was just becoming more mathematical. Historians have traced this, and if you graph the number of equations per economics article, they just go up over the course of the 20th century. It's really in the postwar that it accelerates, but it's starting in the 1930s. So, Friedman will actually train at Columbia with some of the pioneers in this technique. Then over time, he just comes to think it's not really that helpful, that these really abstract mathematical models which are used to predict how economies will react, he feels they're not being tested against experience enough. I describe in great detail that he has an experience in wartime where he's able to use these same mathematical techniques to design some new metals, some new alloys. He finds that if the equation seems to work, what you build from the equation might not actually work. In other words, there's a gap between theory, and the real world. So he's got this dissatisfaction. 

He's someone who's really interested in these big questions, like these big questions about capitalism. Why did the Great Depression happen? The Keynesian synthesis is coming together around him, and he's really not buying it.

He's heading back to Chicago. It's strange because as he gets back to Chicago, all of a sudden he starts teaching monetary economics, which was not why he was hired. He was hired to teach mathematical economics. He just takes a detour. I think it's because he's someone who's really interested in these big questions, like these big questions about capitalism. Why did the Great Depression happen? The Keynesian synthesis is coming together around him, and he's really not buying it. I think looking at money and banking is a way to shift to a different set of explanations for what's important in the economy. So, shift he does. It's really interesting because as that happens, he goes from being considered one of the hotshots in his field to being considered close to a crank. Like he's sort of fallen off the edge of his field and become obsessed with money, and he isn't doing interesting research. That will go on for some time until he and Anna Schwartz will publish their great masterpiece, A Monetary History of the United States. Suddenly, everybody's uh-oh, now we have to pay attention. But he does have this wilderness experience that's really important to his overall development.

JAG: So, we're going to get to questions because we have dozens that have been pouring through from across the platforms. But for those watching today, I do have it on good authority our viewers are today running the gamut from professors of economics to people who might not know the difference between the Phillips curve and a Phillips screwdriver. So for the absolute novices in our audience, maybe we can start with some historical basics, like what was the dominant consensus with regards to things like growth and inflation during Friedman's early years, and what were some of the fundamental differences with his emerging approach? Letting people know what is Keynesianism and how does his view change from what was being presented?

JB: It really starts with the Great Depression, which stretches from roughly 1929, through the 1930s until the outbreak of war in 1941. So it's a ten-year depression. It has a lot of features that no one's seen before. Extremely hot unemployment, what we now call a double-dip recession, which no one had seen before. There's a whole bunch of explanations bandied about. But one of the most popular is that we're entering a new historical phase. We're entering a mature capitalist economy. Therefore the traditional engines of growth, like the conquering of the frontier or the movement to new places, the development of new industries, these are no longer working. To replace them, the federal government needs to use its taxing and spending powers to stimulate the economy and keep the economy on an even-growth path. So this, in a nutshell, is the Keynesian interpretation, and it takes the focus. First of all, it puts the federal government in a much more active role of managing the economy than ever before. 

That had really come about because of the political crisis of the Great Depression, that Roosevelt had assumed this responsibility, and then nobody else was going to say, well, we don't take it anymore. So there's all this legislation that really puts the federal budget in the center. At the same time, because of all the war debt, the Federal Reserve system, which had been created only in 1916, was finally launched. So it's barely 15 years old when the Depression hits. The Federal Reserve has a relationship with the Treasury Department, where it's basically taking orders from the Treasury Department. What the Treasury Department wants is low interest rates and steady interest rates so that it can sell its war debt and then it can retire its war debt without too much of a cost. So we come into the postwar era, and most economists think the budget, the federal budget, and the taxing and spending powers of the federal government are where the action is, and money and banking and monetary policy aren't really relevant. They think it's not relevant because it didn't make a difference in the Great Depression. 

People think money isn't that important. You can actually see this if you look at the economics textbooks during this time period. The mentions of money in banking drop off significantly, and the mentions of federal budget and taxation go right up. This is what people are thinking about.

Also, they're noticing a fact, which is that the Federal Reserve is not really independent. It's like an adjunct of the Treasury Department. Now, over the course of the 1950s, that will change. There's a new relationship that's developed, but there's a hangover of this subservience. So the Fed really isn't doing much. There also is not inflation in any meaningful way. There's a burst of inflation after the war—World War II—and there's a little bit of one after Korea, but mostly it's steady prices. So there's not a lot of thought given to the fact that during the Great Depression, we have transitioned off the classical gold standard to a modified gold standard. So we have sort of a half-fiat currency. This is going to set up the conditions where the Federal Reserve and its monetary policy can really be hugely influential. People think money isn't that important. You can actually see this if you look at the economics textbooks during this time period. The mentions of money in banking drop off significantly, and the mentions of federal budget and taxation go right up. This is what people are thinking about. This is a moment where it seems weird for Friedman to be thinking about money.

Were you to accept Friedman and Schwartz's interpretation, we actually don't need such a big, active government. It sets up a totally different political economy from the Keynesian political economy.

What happens with Friedman, though? We have to really put him together with Anna Schwartz, who's one of these brilliant women that he partners with, who's a historian, an economic historian, and she really helps broaden Friedman's mind and almost make him into a historian. So they start this historical project looking at money since the era of the known government, the effect to create, the attempt to create a confederate currency all the way to the present day. What this historical vision gives them is an understanding that inflation and deflation are very real historical issues. They might not be happening in the five-year period that we all can remember and think about, but they're still important and they're still out there. So they really get almost an x-ray vision into what's happening. The simplest way to summarize their conclusion is money matters. By this they mean the physical amount of circulating medium in the economy really matters, and that the Federal Reserve indirectly controls this through interest rates and in other ways—it manages the banking system. Therefore they conclude, looking at the Great Depression, the Federal Reserve really mismanaged that and it should have created more liquidity. They argue, if it had done that, the Great Depression wouldn't have been so bad. Then they make a series of more interventions like what's happening right now. This is just completely different from the interpretation. It also means, were you to accept Friedman and Schwartz's interpretation, we actually don't need such a big, active government. It sets up a totally different political economy from the Keynesian political economy.

JAG: Wow, that is an amazing encapsulation. I'm going to put a bookmark about Anna Schwartz because I want to return to what I think is a major contribution of your biography. Also, something very unique about Friedman at the time was the way that he welcomed collaboration and supported female academic economists. But I'm going to get a riot if I don't get to some of these questions from the audience. Timing is perfect because we're about halfway through the hour, so let's try to tackle a few of these. Candice Morena on Facebook (she's always first in with questions) asks, as a professor of history, do you think the way history is taught is different now than when you were in college? You've had pretty good luck with your institution, so you might not have noticed some of the differences.

JB: Yes, I'm trying to think. It's a bit of a tricky question because I know the most about how I teach, which is probably really influenced by how I was taught. I think maybe what has changed is we have to work harder than ever to convince students that history is relevant, because students are under a lot of pressure to take a series of courses that leads to a clear career path. There's a lot of pre-professional pressure. So, it's not immediately clear why you would study history. What would you do with that degree? That's one thing. We're just in a different climate of  fighting for attention. Some people are trying to make history more relevant or more exciting or tie it more into current political concerns. I think it's hard as a professor just to fight against the general zeitgeist. But in history, when I joined, there was a big shift. The shift to social history happened. We were really in the cultural history moment, and we're a little bit shifting now to more interest in what's called history of capitalism or political economy. So there are more classes looking now at classical economic thinkers like Smith and Marx, and now I teach one of those classes. There's more classes trying to get students to think about economic change over time. I think this is all really good and important. Part of the reason it's happened is because economists aren't doing that anymore. They're doing very quantitative studies and very narrow studies, and they're not engaging with their students on these big questions. So, I do get a lot of economics majors who want to know more of the history and want to think more about these bigger questions of meaning and purpose that aren't being addressed in those classes.

JAG: On Instagram, Jake Kellogg asks, what do you think is the biggest difference between conservatives during the time of Friedman and today?

The movement, organized conservatism, in the way they reacted so negatively to Ayn Rand because she did not bring them any cultural respectability. She was a woman with a Russian accent with no fancy degree. They loved Milton Friedman because he was known, a spectacled University of Chicago professor who was very well spoken and very responsible. They really gravitated towards that.

JB: I think the biggest difference is that there's no Soviet Union to bring people together and focus the mind on a common enemy. I think conservatives also, in Friedman's day, very much wanted intellectual respectability. You can see that if we're talking about the movement, organized conservatism, in the way they reacted so negatively to Ayn Rand because she did not bring them any cultural respectability. She was a woman with a Russian accent with no fancy degree. They loved Milton Friedman because he was known, a spectacled University of Chicago professor who was very well spoken and very responsible. They really gravitated towards that. So it seems to me that many conservatives today or people who are calling themselves conservatives have more of a rebel impulse and more of a disdain for the establishment, whereas a lot of the conservatives in the mid-20th century really wanted to join and become that establishment. To the extent they succeeded, then there's a new generation saying, no, we want a pox on your house. We want to do something different. So, I think there's somewhat of a natural ebb and flow in that process.

JAG: My Modern Galt asks on Instagram: outside of conservative circles, how frequently is Milton Friedman brought up when it comes to economics? So I guess, really, how far have his ideas and arguments been accepted and incorporated by the former Keynesian left?

JB: Yes, I think it's hard to recognize how many of his ideas have been absorbed into the bloodstream for conservatives or even for non-conservatives, ordinary people, people who don't think they have any particular political slant. One would be just thinking about how important we consider money. You hear all about the Fed, you hear all about interest rates, and there's obviously historical events that have put that in the center. But Friedman was one of the first to say, this is really one of the engines, the hidden engines of economic growth that we have to pay attention to now. There was a chorus of Friedmanite-inspired voices saying, let's be careful with this pandemic stimulus. I think not quite enough. But he's not out there for the younger generation as much. But there's still a lot of people who remember Free to Choose, and there's a lot of people who—it was interesting in the 1980s when Paul Volcker did his historic tightening of interest rates that's been discussed in the news quite a bit recently—understood how powerful Milton Friedman's ideas were, and he was using some of them to help explain his policies. So I think some of Friedman's dictums, like inflation, are always everywhere. Monetary phenomena have really filtered into a lot of our consciousness. I would now say within the field of economics, there's not many who deny Federal Reserve policy as one of the major things that we have to look at for the macroeconomy. I think his ideas, now in a diluted form, have been quite persuasive across the field.

JAG: All right, I'm going to take one more then I want to get to one of the hot topics in your Friedman biography, which again, is the role of female economists in his work. But let's take this question from Philip G on Zoom, which is, what would Friedman say about crypto and Bitcoin? I understand if maybe you're not comfortable speculating on that. Perhaps you can also talk about his thoughts regarding the gold standard and whether or not it was a good thing or a bad thing to move away from having a constant, measurable standard of the dollar.

For most of his life, Friedman argued against the gold standard. . . . He just thought it didn't make sense to tie your monetary system to a mineral that you might suddenly discover more of or you might run out of.

JB: Yes, I'll start with the gold standard piece. So, for most of his life, Friedman argued against the gold standard. He was constantly confronting Austrian economists with whom he agreed on many things, but not about the gold standard, and just argue, argue, argue. So from the beginning, he really believed the gold standard was too rigid and you needed more flexibility, such as you got with a modified gold standard or pure-fiat currency. That said, he had a famous idea that the Federal Reserve should be run by a rule and it should grow the money supply by a fixed rule that was transparent and everybody knew. In some ways, that rule was an attempt to recreate the stability of the gold standard, although it would have growth built in. He just thought it didn't make sense to tie your monetary system to a mineral that you might suddenly discover more of or you might run out of. So, he felt like the rule was the best of both worlds. Now, there is some writing towards the end of his career. There's a book called Money Mischief, and there's an essay in which Friedman says, you know, it's true, we've only had fiat currency for a little bit, is it really going to work? I don't know. So it seems like he's a little bit thinking that over. Now, on the question of cryptocurrency, I think we can think about this through the lens of competing currencies, which was an idea that F.A. Hayek promoted. Friedman basically said, sure, it's fine, have competing currencies, but it's not really going to work, because people don't want competing currencies. They want a central-reserve currency. Over time, if you just let people do what they want, eventually they're going to converge on one. I think he would argue that's sort of what we've seen in the global system. Even Bretton Woods was not designed to have any particular currency at the center. Very quickly, the dollar became the currency at the center, and the dollar is still the reserve currency for the world. So, I think he felt like that's how things work, because people want stability, interchangeability. They want all that. So the crypto dream to him was just a dream that wasn't really going to reflect how monetary dynamics work in the world.

JAG: You've introduced us to Anna Schwartz. Would love to learn a bit more about that relationship, but she's actually one of many female economists critical to every stage in his career. Perhaps you can introduce us to these thinkers and tell us a little bit about the collaboration that they were able to achieve with Friedman.

JB: Yes, this was a big surprise. I wasn't really looking for women in this story. I thought I was writing about Milton Friedman. Pretty soon I realized there were all these other women in the picture and that he was a very collaborative thinker. I think part of his genius was a genius for collaboration and for coming into a project that was maybe halfway or three quarters of the way done and then just reshaping it. You saw him do this with Simon Kuznetz in his doctoral dissertation. But it turned out that most of the people available for collaboration that he found were women, and they were not being appreciated or acknowledged in the broader economics profession. The most famous of these is Anna Schwartz. Anna Schwartz was one of the few women who pursued professional economics. She was working at the National Bureau of Economic Research when Friedman was partnered with her on the money project. As I described before, she really helped open up his mind to this more historical approach. I talk about it in the book. She wrote this whole book with him. They worked together hand-in-glove for years. He trusted her with all aspects of the project. She really contributed. She wasn't just like the research assistant. She was really a full contributor. She helped him make it bigger and broader. 

Then he finds out at the end of the project that Columbia won't give her a graduate degree. They say, you haven't done anything that's worthy of a graduate degree. He becomes so enraged that he calls them up and basically insists they give her a graduate degree, which they do. But that shows you how even though these colleagues of hers have seen her work for ten years, they can't recognize it when they see it in front of their faces. Likewise, his wife—Rose Director—Rose Friedman helps with his popular work, which is Capitalism and Freedom. She's also a co-author on Free To Choose, a book published in the 1980s. But what I discovered is she has this really critical role in his 1957 book, A Theory of the Consumption Function. Her best friend was another female economist named Dorothy Brady, who's pretty much been lost to history.

I don't want to say he was totally free of prejudice or like a modern feminist or had modern ideas. He definitely didn't. But when he sat down with a woman economist, he saw the economist first and the woman second.  And that was very unusual for his time.

Dorothy Brady and Rose Friedman wrote an early paper. They had some suggestive ideas about the Keynesian synthesis that was coming together and the Keynesian theory of consumption. So they wrote this paper and then they're still corresponding, and Friedman jumps into the correspondence. Then Dorothy Brady ends up coming to visit them in the summer, and she brings a colleague of hers, Margaret Reid. They get into this multi-year conversation about consumption. Eventually this was something I discovered that people didn't know. Friedman was hoping that Dorothy Brady and Margaret Reid would be hired at Chicago because there was a job opening. So, in part of the effort to get them hired, he wrote up this theory that they had jointly developed. Then Margaret Reid did get hired, and now he has theory written up, and then he goes a little further and eventually turns into this book. But he calls it in the introduction a joint product. He said, “My hand held the pen, but this is a joint product.” But now he's in the Nobel citation. These women are lost to history. So, it was really fascinating and satisfying to find these people and reconstruct what they had to offer. Then to try to think of the more complicated question, like, why was Friedman able to see what others couldn't see? I think there was a way. I don't want to say he was totally free of prejudice or like a modern feminist or had modern ideas. He definitely didn't. But when he sat down with a woman economist, he saw the economist first and the woman second.  And that was very unusual for his time.

JAG: Well, anyway, it goes back to Ayn Rand and her ideas about selfishness and self-interest and one could look at these collaborations from two different perspectives. One is that he's just very generous and charitable and wants to give opportunities to the underdog. The other is that it's, if this is a resource, no one else is using it, so it is in my rational self-interest to do this collaboration. It'll help them, but it'll help me just as much.

JB: Yes, definitely it was rational self-interest.

JAG: He could see value when he recognized it. So, the story of these marginalized female economists and the fact that other than Friedman's willingness and open-minded desire to collaborate with them, more frequently male chauvinism was the order of the day. What about another form of prejudice and exclusion, anti-Semitism? Was this something that Friedman either experienced or observed either professionally or socially?

JB: Yes, he definitely did. There's a couple of ways that's important. He experienced it in its most overt form that we know about when he took a job at the University of Wisconsin in the early years of World War II, when there was quite a lot of isolationist sentiment and he was pro-intervention, so he felt very out of step with his colleagues. He only spent a year there. There's sort of a mini-controversy about it. He was very unpopular for many different reasons. Probably him being Jewish was an element of that. I also learned he didn't reflect on this, but he grew up in Rahway, New Jersey, and the New Jersey of his childhood was a hotbed of Ku Klux Klan activity that was, at that time, really specifically directed against Jews, more so than African Americans. Jews and Catholics were a big target, so he doesn't reflect on that. But that may have been in the background of his childhood. 

He's always aware that in Jewish history, economic regulation has been used to keep Jews down...So, when he thinks about government regulation, often he's applying these lessons of Jewish history to that in a way that's unusual.

What's really important are two things. One is he's always aware that in Jewish history, economic regulation has been used to keep Jews down, basically. So it's been used to say, like in the Russian empire, you have to register and you can only do the certain following occupations. He's very familiar with the history of Jewish exile, where you're expelled, and in that case, you need to have portable capital. So, when he thinks about government regulation, often he's applying these lessons of Jewish history to that in a way that's unusual. When he looks at the American Medical Association, he considers it a cartel and also an anti-Semitic cartel because they actually pass an English language requirement right at the moment that many refugee, German-speaking Jewish doctors are coming to the United States. That's a pretty clear-cut example of prejudice that he's very, very keen to see. The other thing is that he lives through a very remarkable diminution in overt anti-Semitism in the postwar years. Because of World War II and the battle against Hitler, the casual anti-Semitism that was not considered problematic in the prewar years really disappears in the postwar years. So there's a real effort. Universities, for example, were very reluctant to hire Jewish professors, and that barrier just disappears in the postwar era. So, he has this experience of seeing prejudice fall away, and that will really inform how he thinks about civil rights for African Americans and make him too optimistic that prejudice against black people will just disappear the way he felt prejudice against Jewish people had disappeared.

JAG: Tell us a little bit about Friedman's role in helping end the military draft. Of course, in Goddess of the Market, you also talk about Rand's opposition to the draft. But what about Friedman?

JB: Yes, it's interesting. They came at it for different reasons and both, I think, made an impact. Friedman ends up being part of a variety of different professors who argue against the draft. I think there's a couple of roles he plays. One is he's able to talk about it in economic terms. This language of efficiency that was problematic for Rand around rent control, turns out to be really helpful around the military-draft issue, especially because a lot of the military is saying this is just unaffordable. So, Friedman's main argument that he pushes forward, and some of his students do this work as well, is that you're only calculating how much it costs to pay, say, a volunteer, but you're not calculating what we're paying right now, which is you're taking a large segment of the population out of the workforce in their most productive years, 18 plus, and you're taking them out of education, taking them out of the workforce, and then, of course, in Vietnam, returning them in often, very bad shape. So that's a cost. He does the economist thing of saying this is a hidden cost. Once you factor in the hidden cost, it actually is not that outrageous to try to pay people for their service.

He also has the libertarian argument that this is just unjust and unfair. But I think in terms of the debate, it's most important that he's, again, a very respectable Republican economist. He's not a radical, he's not really anti-war, he's not a protester. He has this dispassionate, rational analysis. That's really helpful because it's ultimately Nixon who's able to push this forward and Nixon is comforted by the presence of people like Friedman in making this argument.

JAG: So, we've got just about ten minutes left and we're not going to get to covering everything, which is why, again, folks, I want to recommend both of these books, particularly terrific audio versions with different female narrators, both really excellent, but again, just charting the evolution of Milton Friedman's priorities from fighting central planning to fighting redistribution. Did this challenge some of his previous egalitarian tendencies?

JB: Yes, I think it did. One thing I try to show is that we think of Friedman as quite the libertarian, which of course he is, and that's another word we could apply to him. But he also has, especially in the early part of his career, he does have a role for government in his thought, particularly in emergencies, particularly in creating a stable banking system, central banking. In the beginning part of his career he's really fighting central planning. This idea that whether it's through Keynesian management or more ownership of the means of production or market socialism, in which there's a mix of state companies and private companies, he's really arguing against that. But eventually he doesn't have to argue because those economies become so sluggish over time that they defeat themselves. So then, he starts to worry about redistribution and about high taxation so that we can move money from the prosperous to the not so prosperous, even though he's also pretty consistently an advocate of a universal basic income because he does want a basic floor under which no one can fall. He thinks that's ethically appropriate and also appropriate with a free, doesn't-interfere-with-a-free, society. But over time he gets a little more strong in his anti-government argumentation. But he's always really thinking, not necessarily about the people who might be benefiting from redistribution, he's not really mad about that or angry or doesn't feel like that's unjust. What he feels is problematic is the giant infrastructure of the state that's developed to do that redistribution.

JAG: Bureaucracy.

JB: Yes, the bureaucracy. So for him, the idea of the universal basic income or guaranteed income is that you wouldn't need the bureaucracy. You could just run it through the tax system or some other way. Then he also becomes increasingly focused on education because he's starting towards the end of his life to really worry about globalization. He's sort of seeing, what we see now is that for the lower-skilled American worker to be competing in a global marketplace is challenging, that you can be undercut on price and performance. So he starts advocating for educational reform, which to him is more privatization, as much privatization as possible, because he thinks only if you have competing schools do you have good education, that in a state monopoly you don't have good education.

JAG: Your book covers a bit about the emergence of supply-side economics out of The Chicago School and having personally benefited from mentoring by Jude Waniski and Robert Mundell, both before they passed away, I'm curious about how Friedman viewed these developments.

JB: Yes, so that was towards the end of his time at Chicago. I don't know a ton. He wasn't around Chicago as much when those figures were there. So his verdict on supply-side economics was somewhat mixed. He did not buy the gold standard piece that often comes with supply-side economics. He thought some of its claims were overblown, that, sure, there were some places where lowering taxes would increase productivity, but he was skeptical you could do that for the economy as a whole. He wanted a little more, I think, subtlety in how it was applied. At the same time, he said, You know what? I'm going to be for it, because it's shifting attention to where it needs to be shifted to, which is back to the private-sector initiative. Then also, he felt towards the end of his life, it's actually good to cut taxes, because that's the only thing that's really going to inhibit the growth of the federal government. So I would say he made his peace with supply-side economics, but it wasn't his creed by any stretch.

JAG: All right, next to last question. With the resurgent popularity of socialism on the left and rising populism and nationalism on the right, is Milton Friedman still relevant anymore? I guess we could ask the same question about Ayn Rand.

It's really astonishing to see how the people who are supposed to be the most informed about economic policy were just saying, inflation is from the olden days. We don't need to worry about that. It's temporary, it's transitory, and then we end up with 9% inflation.

JB: Yes, I mean, it's interesting. I thought a lot about this, more so with Friedman, and I think the inflation we've experienced is really the number one reason to say, yes, Friedman is still relevant, that there are some perennial truths of economic life that he uncovered. It's really astonishing to see how the people who are supposed to be the most informed about economic policy were just saying, inflation is from the olden days. We don't need to worry about that. It's temporary, it's transitory, and then we end up with 9% inflation. So, I think more of a dose of Friedman would maybe have forestalled that. Then both Friedman and Rand, I think, are important if we think of them in a classical-liberal tradition, in terms of focusing on individual rights, limited government, the ethical value of freedom and of individualism. I feel like that's actually more relevant today than it ever has been, because we see rising illiberal movements in this country on both the right and the left, and in other countries on both the right and the left. So, I do feel like these ideals are perennial, and these are two of the most powerful spokespeople for them. They do need to be constantly circulated in the bloodstream. They're like antibodies against some very dangerous social diseases that can otherwise break out.

JAG: What is next for you, Jennifer? How can we follow your work? I'm wondering if you've got something percolating, and maybe just thinking of the process of your first book, the second book, things that you might be eager to explore or ways that you're going to maybe change up your approach when you tackle your next subject.

JB: I'm on Twitter. I'm not super active, but I do tend to post what I'm doing there. So that's one way. I have a website, jenniferburns.org, that if I have anything major going on, I will refresh. At this point, I'm letting the fields lie fallow a bit. I do think I probably don't want to write another large biography, and I've thought a lot of my books have been thinking about how ideas from these big conservative thinkers circulate out into the broader public. So I thought a little bit about is there a story to think about on the other side of that? Some of my classes, my intellectual history classes, touch on the history of postmodern ideas. So I may play around with some of that and just think about new directions. But I don't have any commitments, although I do want to start writing smaller, shorter pieces. So stay tuned to my Twitter and I'll post those out when they do come.

JAG: Fabulous. Well, thank you, Jennifer. This has been, again, as I said, long awaited but well worth the wait. I want to highly recommend to everyone Goddess of the Market: Ayn Rand and the American Right, and Milton Friedman, the Last Conservative. Again, really great audio version. So, check them out. You won't regret it.

JB: Thanks so much for having me, and thanks everyone out there for listening.

JAG: Thanks, everyone, for wonderful questions. Of course, as I mentioned at the beginning, The Atlas Society is a nonprofit organization. So if you enjoyed this interview or any of our other programming, please consider making a tax deductible donation@atlassociety.org. Be sure to tune in next week when Dr. Helen Smith joins us on The Atlas Society Asks to talk about her book, Men On Strike: Why Men Are Boycotting Marriage, Fatherhood and the American Dream. I'll see you then.

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