Is Milton Friedman a Keynesian?
Wednesday, January 27, 2010 by Roger W. Garrison
[From Dissent on Keynes, edited by Mark Skousen, 1992]
He Isn’t but He Is
There is a story about a young job candidate interviewing for an entry-level position in the geography department of a state university. One senior faculty member, whose opinion of our modern educational system was not especially high, asked the simple question, “Which way does the Mississippi River run?” In ignorance of the biases of this particular geography department and in fear of jeopardizing his employment prospects, the candidate boldly replied, “I can teach it either way.”
When the question “Is Milton Friedman a Keynesian?” was first suggested to me as a topic, I couldn’t help but think of the uncommitted geographer. But in this case, opposing answers can be defended with no loss of academic respectability.
When teaching at the sophomore level to students who are hearing the names “Keynes” and “Friedman” for the first time, I provide the conventional contrast that emerges naturally out of the standard account of the “Keynesian Revolution” and the “Monetarist Counterrevolution.” In the context of this introductory treatment, monetarism is the antithesis of Keynesianism. To claim otherwise would come close to committing academic malpractice. Either a casual survey or a careful study of the writings of Keynes and Friedman reveals many issues on which these two theorists are poles apart.
Yet, one can make the claim that Friedman is a Keynesian and remain in good scholarly company. Both Don Patinkin (in R. Gordon 1974) and Harry Johnson (1971) see Friedman’s monetary theory as an extension of the ideas commonly associated with Keynes. Some of their arguments, however, run counter to those of the Austrian School, which serve as a basis for this chapter.