M.McFaul : Hi, I am Mike MacFaul from the Hoover Institution. We are sitting at the Hoover Institution of Stanford University with Milton and Rose
Friedman. They wish that they were with you in London for this momentous occasion, but can not be there. Instead however, we thought we could spend a bit of time chatting about the first
meeting of the Mont Pelerin Society and what it was like to create this organization.
M.Friedman : That was certainly a momentous occasion. Very memorable. It's hard now to realize looking back some more than fifty years how different the
situation was in the world than it is now. Everyone in the world, all of the emphasis was on central planning, on collectivism. There was a few of us who believed in freedom, and free markets,
and minimum government, who were regarded as nuts over on an extreme fringe of the intellectual scene.
M.Friedman : In so far as I personally was concerned, add to that that this was my first trip overseas, my first trip out of the United States, and an
occasion to meet people whom I had known by name, who were famous, who were renowned economists, political scientists; so that it was a very memorable meeting indeed.
M.Friedman : And it was a remarkable collection. You have to give Friedrich von Hayek full credit for having the idea of organizing the Society and for
being able to make the physical arrangements to do so. Lionel Robbins was there from England... Mises was not there-- yes! Mises was there, Frank Knight from the United States... you can name
any of the names, I think there were 35 or 40 people at the first meeting.
R.Friedman : One woman.
M.Friedman : That's right, one woman from England.
M.McFaul : And it wasn't you, Rose...
R.Friedman : No it was not, I wasn't invited.
M.Friedman : It was not a family gathering. The woman who was there... was there on her own right, not as a spouse.
M.McFaul : Exactly...
M.Friedman : So far as I can recall there were no spouses there, except perhaps, from some of the people from Switzerland that were there. At any rate,
we met for three or four... for about a week, I guess. We had a day or two off for excursions of various kinds.
M.Friedman : But in the main, we met in the morning, in the afternoon, and in the evening, and considered what we regarded as the major issues in
respect to social organization and maintaining and developing a free society and decided to organize a Society which has grown and prospered ever since.
M.McFaul : And over the years, are there particular moments, or conferences or debates that stand out in your mind, that you would like to share with
the folks meeting tonight?
M.Friedman : Well the first one is certainly the one that stands out clearest in my mind, but there were some other memorable meetings. There was a
memorable meeting in, I guess it was in St. Moritz in 1972?
R.Friedman : That was later you know?
M.Friedman : Yes.
R.Friedman : I went to that one.
M.Friedman : Yes you went.
M.McFaul : No one would miss St. Moritz.
M.Friedman : And that was a memorable meeting because of an episode that occurred there, connected with the assassination of the Israelis at the 1972
Olympics, and that led to quite a discussion. And there were other meetings that were memorable. One which I recall very clearly in Venezuela, another one in Chile...
M.Friedman : One of the great things about the Society is that it has enabled so many of us to get to know people in other countries of the world who
think along the same lines. And some of the most important influence of the Mont Pelerin Society has been in countries other than the leading countries.
M.Friedman : For example, in Guatemala, where some of the members of the Mont Pelerin Society organized a private university, Francisco Marroquín
University, which has become one of the leading universities in Latin America, entirely based on the principles of the Mont Pelerin Society, on free markets and private property. And it's had a
very important influence in Latin America.
M.McFaul : Well, it sounds like you answered my next question... but when you first met, you were a bunch of outsiders you said, with unpopular views.
Today it doesnt seem that way.
M.Friedman : No it isnt that way.
M.McFaul : Can you describe for us the way you look back on the role that the Society has played?
M.Friedman : Well there's no doubt in my mind about the role that the Society has played. It was a major factor in maintaining a steady stream of
influence on ideas. It enabled people who were isolated in their own countries, once a year to at least, to get together with people who felt the same way they did; to be in a situation in
which they could discuss issues, without worrying that somebody was trying to stick a knife on their back.
M.Friedman : And it's almost impossible for a person all by himself to maintain and develop his ideas, he can become stuck; but the influence in the
Society was to broaden the views of people and to give them more ammunition, to encourage them in promoting their ideas.
M.Friedman : Now that the ideas of the world have changed, it would be wrong to attribute that to the Mont Pelerin Society. It was not. The ideas have
changed because of the evidence of facts, they have changed because bigger and bigger government did not mean better and better government, but rather meant a great waste of resources,
increasing red tape, inflexibility.
M.Friedman : It has changed because the experiment of communist China, the experiment of communist Russia, showed that the arguments we were making
against collectivism had some merit. And it changed most dramatically because of the fall of the Berlin Wall and the collapse of the Soviet Union. But at the same time, the role that the
Society played was in providing an alternative set of ideas.
M.Friedman : Those same events would have happened with or without the Society, but it is not at all clear that the outcome on the intellectual climate
of opinion would have been the same, because when you are in a crisis you only pick up those ideas that are lying around to be picked up. That's the only time when you can develop new ideas,
and I think that's the role that the Society has played.
M.McFaul : In turns of filling that vacuum, when the moment came...
M.Friedman : That is right.
M.McFaul : So it sounds that you would say freedom, that there's much more freedom in the world today...
Milton F. : Oh, yes, more!.
M.McFaul : ...than it was when you first met.
Milton F. : Now go slowly here, 'cause that requires a more sophisticated answer. Taking the world as a whole, there is no question there is more
freedom, but that is because of the fall of the Soviet Union, and because of the changes that have been occurring in China. Those are so large that they dominate.
M.Friedman : But if you go back to the countries that we were concerned within the 1940s and 50s, it's not nearly so clear. In everyone of those
countries, government today spends a larger fraction of the nation's income than they did in 1950. From 1950 to 80, in almost everyone of those countries, in the United States, in Britain, in
France, in Germany, you had what I would call galloping socialism. Governments spending was increasing at a rapid rate out of the income. And then, from about 1980, 78 in Great Britain with
Thatcher, 80 in the United States with Reagan: new shifting into creeping socialism, you still are creeping...
M.Friedman : Government spending is still increasing as a fraction of income, but at a much slower basis, and hopefully we will come into a period of
declining socialism. We are not there yet.
M.Friedman : So in the area of the economy, we are less free than we were then. On the other hand, there have been other changes. There have been social
changes, there has been deregulation, there has been privatization of enterprises, which has introduced a greater degree of freedom. So I find it very hard to make a flat statement for the
advanced countries, but for the world as a whole, there's not question at all.
M.McFaul : It sounds like the Society should return to its focus on the advanced countries-- I mean, what you said that we've gone from galloping to
creeping, and now it sounds like you would like to see it rollback.
M.Friedman : Absolutely.
M.McFaul : What are the things that need to happen to begin that process?
M.Friedman : There is no question of what needs to happen.
M.McFaul : I didnt think there was, but I am sure they would like to hear it from you.
M.Friedman : You need to have-- and some of it is going on-- note the extent to which worldwide the top marginal income tax rate is going down, sharply.
Worldwide there has been this kind of privatization and deregulation. Those are all of it good. What you've had is a change in the character of government intervention, from strict economic
intervention, intervention in the form of controlling prices and wages, which still is there but to a lesser extent.
M.Friedman : It's gone on to social intervention, to intervention about... to social intervention and to redistribution... aid to disabled... to the
enormous concern about pollution. Those are the kind of regulations you have now. What needs to happen is that you need to have a wider recognition that government, as Reagan was one to say, is
a problem and not a solution and you need to have laws repealed. Repeal a law a day and you will be in good shape.
M.McFaul : And would you say as the attention in Washington and in this country has turned to the end of the Cold War, and now thinking about the
Islamic world and the new frontier of promoting liberty there; I'm wondering if you've had some thoughts on that, as we think about, obviously they're big states and big governments there, does
the Society have something to contribute to that new frontier?
M.Friedman : I dont believe the Society has much to contribute in that area. Individual members of the society obviously do. Our membership encompasses
able people in all fields, but in general, of course, war has been the enemy of freedom, and so there's a reason to be concerned a great deal... I have a great deal of concern about what the
possibility of the war on terrorism may mean for human freedom.
M.Friedman : Before we finish I'd like to say that I'm very sorry not to be with my fellow members in London, and I trust that they will have a very
interesting and vigorous and extended meeting with lots of differences of opinion and lots of arguments.
M.McFaul : Rose, would you like to add anything?
R.Friedman : I dont think there's very much to add to this. We're sorry not to be there, but not sorry about not to be making the trip over.
M.McFaul : Thank you very much.
The creation of the Mont Pelerin Society
The first meeting
Other memorable meetings
The role of the Mont Pelerin Society
Influence of ideas: Universidad Francisco Marroquín in Guatemala
Exchange of ideas
Development of new ideas
Is there more freedom in today's world?
Should the Society focus on the advanced countries?
What can the Society contribute to the Islamic world?
In this interview, Milton Friedman, who was awarded the 1976 Nobel Prize in Economics, describes the values, objectives, and beginnings of the Mont Pelerin Society. He explains what it was like to create a society dedicated to classical liberalism in a world where the prevailing economic views leaned towards central planning and collectivism. Since it was founded in 1947, this organization has grown and prospered; offering its members from around the world opportunities to exchange and discuss their ideas. Friedman also comments on the significant role Universidad Francisco Marroquín has played in promoting the ideals of free-market economics and the importance of protecting private property. This interview was conducted by Hoover Institution and presented at the Mont Pelerin Society meeting in London in 2002.
Interview with Rose and Milton Friedman Rose and Milton Friedman
Hoover Institution October 15, 2002
Digitized by New Media - UFM. Guatemala, 2002 Synopsis: Diana Pishquí; synopsis reviser: Jennifer Keller
This work is licensed under a Creative Commons 3.0 License Este trabajo ha sido registrado con una licencia Creative Commons 3.0
Milton and Rose Friedman
Milton Friedman (1912–2006) was a prominent American economist, defender of the free market, and opponent of Keynesian economics. In 1976, he received the Nobel Prize in economics for his achievements in consumption analysis, monetary history and theory. Rose D. Friedman (1910–2009) was an economic researcher who collaborated with several institutions, including the Committee on National Resources, the Bureau of Home Economics, and the National Bureau of Economic Research.
Milton and Rose Friedman co-wrote several books: Free to Choose, Tyranny of the Status Quo, and their memoirs, entitled Two Lucky People.