Well, not quite. Although the above is exactly what faculty opposing MFI, CORES, led the campus to believe would happen, it can’t be further from the truth.  In fact, the first (as far as we can tell) guest lecture hosted by MFI centers on synergies between the behavioral sciences and economics by one of the most important scholars in the field.  This intersection of social sciences is exactly where economics seems to be headed, and the MFI can only help the University of Chicago in its interdisciplinary efforts by bringing scholars like Fehr to campus.

Ernst Fehr, University of Zurich, presents:  ”Social Preferences – A Foundation of Cooperation, Competition, and Incentives”

Thursday, May 7:  3:30 pm – 5:00 pm
Classics 110,  1010 East 59th Street, Chicago, IL 60637

This lecture examines how the consideration of social preferences affects economic outcomes.  For a long time, the behavioral sciences – including economics – have largely neglected people’s social motives. However, evidence suggests that a substantial number of people exhibit social preferences, which means they are not solely motivated by material self-interest but also care positively or negatively about the material payoffs to other persons.  Evidence will be presented indicating that economists fail to understand fundamental economic questions when they disregard social preferences.  In particular, when social preferences are ignored, it is not possible to adequately understand  (i) the effects of competition on market outcomes, (ii) the forces governing cooperation and collective action, (iii) the effects and the determinants of material incentives, (iv) which contracts and property rights arrangements are optimal, and (v) important forces shaping social norms and market failures.

Heckman [MFI supporter] also approached what should probably be called the Friedman myth, for instance as articulated by Amit and Rothenberg [MFI detractors]. This is the myth that Friedman was an authoritarian liberal. Sahlins made a classic anthropological observation that symbols are indeed false — and that their falsehood is irrelevant. So the Friedman myth may be a myth, a false story, but it is still subjectively true for the people who believe it.

The post goes on to discuss Friedman’s legacy as relates to his association with authoritarian regimes, noting that:

Assuming for the sake of argument that Friedman was not culpable as an abettor of oppressive government, what is the response to the symbolic-mythical argument? The latter argument is that inasmuch as Friedman is a symbol of authoritarian liberalism, and this has bad associations for many, many people in the world, is this itself a strong or decisive argument for not naming the Institute after him? It seems to me that the answer is No: If there is a myth that you think is wrong, and you (i.e. the University) do not have yourself to fear repercussions of opposing that myth, then you should oppose that myth. By taking the name of the Milton Friedman Institute, the University can say, we do not support the further propagation of this basically wrong story about one of our highly acclaimed scholars.

Check it out here.

Goals of MFI:

The Milton Friedman Institute will serve two important functions. First, it will preserve and indeed significantly enhance Chicago’s economics programs by supporting the research of some of its best faculty and help us to compete in recruiting top scholars of various vintages. Second, the Friedman Institute will encourage interaction across some of the best and most exciting areas of research related to economics.

On naming the institute after Friedman:

Milton Friedman joined the Economics faculty in 1946 and remained closely associated with the University throughout his life. He received every honor an economist can be awarded…. There was no point in his career when he was not regarded as one of a handful of scientific leaders in his field. To portray him as anything else misses completely his intellectual stature among economists, including economists like Paul Samuelson who differed with him on various issues. Describing Friedman’s contributions as merely “technical” completely misses their ambition and influence on the discipline of economics. It is most appropriate that Friedman be honored by the University.

Why should markets be a concentration at the MFI?

Market economies are pervasive. As a consequence, economics as a discipline studies the role of markets in the allocation of resources and uses markets as an analytical tool. In assessing empirical and policy implications, we develop and use models that typically, but not always, include markets; and we consider the incentives of individuals, groups and institutions as they interact. …

Dismissing our research ambitions as the naïve and uncritical embracement of free market ideology misses the point, and it reflects simplistic and uninformed criticism of economic research that is currently done on campus. We are proud of our openness and are only too happy to compare it to that of other departments and disciplines on campus.

I encourage you to read the entire statement (PDF).

The Friedman Institute will increase the scale at which Chicago economics will operate, giving us a better chance of competing with the other top schools for faculty and students. The Friedman Institute will help us compete in the marketplace for ideas.

And what economist — Chicago or otherwise — could argue with that?

Read Levitt’s full commentary here.

The Institute is named for Milton Friedman, AM’33, who taught at Chicago for a significant portion of his academic career and is considered by many to be the leading economist of the 20th century.  It will provide resources for University faculty and visiting scholars to engage in research endeavors that cross and transcend traditional academic boundaries. “We see Friedman Institute as a means to encourage interaction across some of the best and most exciting areas of research in economics and related disciplines,” said Lars Hansen…. “It will give us a way to continue to learn about the best new research in a variety of areas and to seek cross-fertilization among important subfield of economics.”

The new issue is not online yet, but when it is, it will be here.

Although his thesis appeals to some scholars and media outlets, it is as false as any claim can be.  To say that we have been living in a laissez-faire system, as Sanders claims, is to ignore everything relevant about our current regulatory system.  Today Cato Unbound published economics professor Lawrence H. White’s discussion of “What really happened.” An excerpt:

The actual causes of our financial troubles were unusual monetary policy moves and novel federal regulatory interventions. Regulatory distortions intensified in the 1990s. Poorly chosen public policies distorted interest rates and asset prices, diverted loanable funds into the wrong investments, and twisted normally robust financial institutions into unsustainable positions.

We can group most of the unfortunate policies under two main headings: (1) Federal Reserve credit expansion that provided the means for unsustainable mortgage financing, and (2) mandates and subsidies to write riskier mortgages. The enumeration of regrettable policies here is by no means exhaustive.

Professor White’s article is a summary of a more thorough briefing paper on the economic crisis, which we encourage everyone to read before believing Sanders’ bilge wholesale.

*It should also be noted that Sanders holds a BS in a non-economic field and does not hold a higher degree in that area (or any other area).

• Divesting from Milton Friedman
• U. Of Chicago faculty members oppose Milton Friedman Institute
• University of Chicago Faculty Members Threaten Academic Freedom of Milton Friedman Institute on Grounds of Academic Freedom

Excerpt from Posner:

Economics is a highly competitive academic field, and piety toward distinguished predecessors is not the path to academic success. It is odd that the opponents of the Friedman naming should think that economists, of all people, would subordinate career motives to loyalty to Friedman’s memory or the “Chicago School” (especially young economists for whom Friedman is just a name). If the religion professor who is leading the movement against the naming is right that “Friedman’s over”–that the current economic crisis has consigned Friedman, along with Greenspan, to the dustbin of economic history–he should have no fear that the new Institute will be biased in favor of Friedman’s views. If a physics institute were named after Albert Einstein, would the institute’s researchers reject quantum theory?

Excerpt From Becker:

A university names an Institute after a former professor because of 1) his contributions to the university, 2) his contributions to scholarship or science, and 3) his intellectual honesty and character. On all three grounds I believe Milton Friedman eminently deserves having this Institute bear his name.

…

His main direct contribution to the University of Chicago was as an absolutely superb teacher, by far the best teacher I ever had. He opened my eyes and that of other students, including Eugene Fama, James Heckman, Robert Lucas, and Lester Telser, and George Tolley, all faculty members at the University of Chicago, to how to use economic analysis to understand the real economic world. Both in the classroom, and as a supervisor of doctoral dissertations, he was a blunt and trenchant critic of shoddy analysis, both theoretical and empirical. I along with others took a lashing from him when he thought we did some analysis badly. The effectiveness of his teaching alone could merit having an Institute in his name at our university.

Many honors have recognized his enormous contributions to economic science. Equally important is that these have endured. A simple measure of that endurance is the large number of citations to his scientific work that still appear in the top economic journals. Only one or two other economists of his generation share this distinctive measure of longer run impact of their scientific work.

(emphasis is mine in both excerpts)

• George J. Stiger Center (Stigler was a leader the Chicago School of Economics)
• School of Social Service Administration
• Center for Gender Studies
• Center for the Study of Race, Politics, and Culture
• Disciples Divinity House
  
• Becker Center on Chicago Price Theory

The point of this list is to illustrate the risk of bias (we’re not claiming any of these institues are biased) in nearly any center on the University of Chicago campus named after a topic or person.  As CORES is not railing against the existence of any of the above centers, I feel we can safely dismiss their concern, based on name & topic alone, that MFI would promote a political agenda.