What is the secret ingredient that has made the University of Chicago so outstanding? Milton Friedman identified it as “an undeviating emphasis on quality alone” — other nice stuff like balance and diversity are merely by-products from pursuing the single mandate of quality.
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THE 54TH ANNUAL
BOARD OF TRUSTEES’ DINNER FOR THE FACULTY
Remarks by MILTON FRIEDMAN
January 9, 1974
To economists the world over, “Chicago” designates not a city, not even a University, but a “school.” The term is used sometimes as an epithet, sometimes as an accolade, but always with a fairly definite — though by no means single-valued-meaning. In discussions of economic policy, “Chicago stands for belief in the efficacy of the free market as a means of organizing resources, for skepticism about government intervention into economic affairs, and for emphasis on the quantity of money as a key factor in producing inflation. In discussions of economic science, “Chicago” stands for an approach that takes seriously the use of economic theory as a tool for analyzing a startlingly wide range of concrete problems, rather than as an abstract mathematical structure of great beauty but little power; for an approach that insists on the empirical testing of theoretical generalizations and that rejects alike facts without theory and theory without facts.
These denotations of the Chicago school of economics are of long standing. They have prevailed for decades, with only minor though not negligible changes in meaning despite a complete change in the persons regarded as the “leaders” of the school. My personal experience with the Chicago school of economics began more than 40 years ago, as a graduate student, when Frank Knight, Jacob Viner, and Henry Simons were the acknowledged leaders of the Chicago school. Today, the Chicago school has an even broader base than it did then, numbering among its leaders not only some of us at the University but also economists at other institutions, some of whom have never been formally connected with the University. But all are students — direct or indirect — of Knight, Viner, and Simons, and, at a still longer remove, of Adam Smith — who but for the accident of having been born in the wrong century and the wrong country would undoubtedly have been a Distinguished Service Professor at The University of Chicago.
The mixture of irritation and pleasure that I have experienced at being alternately damned and applauded — and always, as I felt, misunderstood — as a member of the Chicago school has led me to become something of a collector of intellectual schools. One impression that I have formed from my casual collection is that The University of Chicago is a particularly fertile breeding ground for “schools” — though it clearly has no monopoly.
Already in 1903, William James greeted a book by John Dewey and several of his associates, Studies in Logical Theory, as “the signal of the birth of a ‘Chicago school’ of pragmatic philosophy.”1 Unfortunately, Dewey resigned his professorship at Chicago shortly thereafter, so that this Chicago school may not have had a long life.
In sociology, Albion Small — the initial head of the Department — laid the basis for the famous Chicago school of sociology led by W.I. Thomas, Robert Park, and Ernest Burgess — a school that reigned from 1920 to perhaps 1950. Morris Janowitz describes the central thrust of the Chicago school of sociology as consisting of emphasis “on empirical data and the need for integrating data into what they believed to be an appropriate theoretical framework”2 — a description that applies equally to one aspect of the Chicago school of economics.
In political science, “the Chicago school… led by Charles E. Merriam and… Harold D. Lasswell,” has been described as “diverse in its interests but united in its aim to explore new methods of studying political and administrative behavior”3 — again a description that could apply to economics and sociology.
Chicago pioneered in the social sciences and fostered active cooperation among them — most concretely by constructing a single social science building to house them all, so it is perhaps not surprising that “schools” should have flourished in the social sciences and should have had much in common. Witness the quotation from Lord Kelvin carved in stone on the Social Science Building: “When you cannot measure, your knowledge is meagre and unsatisfactory” — a quotation which Frank Knight one day contemplated at length and then muttered: “And if you cannot measure it, measure it anyhow. “
However, schools have flourished at Chicago not only in the social sciences, but elsewhere as well.
In English, a Chicago school of criticism was initiated and led by Ronald Crane. In theology, the larger part of a history of The University of Chicago Divinity School by Charles H. Arnold is devoted to tracing the 60-year history of the “Chicago School of Theology.” Members of this audience can, I am sure, add to that list, and I shall appreciate it very much if they do. Indeed, one reason I chose this topic for tonight’s talk is in order to add to my collection in the most painless and efficient way.
There are, of course, Cambridge schools and Oxford schools and Viennese schools and Harvard schools and I have made no exhaustive survey of them all. So I cannot claim to have demonstrated that Chicago is exceptionally fertile as a producer of “schools.” But I shall assume for the present that my impression to that effect is correct and turn to the main question I want to discuss: Why? What has there been about The University of Chicago that has given rise to schools?
When I asked one friend this question, his offhand remark was that perhaps Chicago’s geographical isolation had led people at Chicago to become inbred and to develop homogeneous, if offbeat, views.
This answer, while a very natural one, misconceives the nature of schools and is besides demonstrably wrong as a description of fact. A “school” may be, but need not be, a “cult.” None of the social science schools I have mentioned was a “cult.” All of them were rather pioneer attempts to open up new directions of research and analysis, new ways of looking at phenomena. All of them numbered among their members persons working on a wide variety of topics and holding diverse views. All of them affected the course of scientific research in their disciplines and have been in considerable measure absorbed in those disciplines. Rather than being “crank outsiders” their leaders were recognized and honored by their professional brethren, serving as presidents of their professional associations and editors of professional journals.
But while a “school” need not be a “cult,” neither, to go to the other extreme, is it simply a designation of excellence. To take another example from the social sciences, anthropology has always been an excellent department at Chicago, widely recognized as one of the best in the world. It has had many outstanding and famous members, yet apparently there has never been a Chicago school of anthropology, in the sense of a distinctive approach pursued by a number of leading scholars and propagated by their students.
If Chicago’s geographical location had an effect — as I shall argue later that it did — it was not by encouraging narrowness, homogeneity, and inbreeding. The fact is that none of the departments ever consisted primarily of members of the corresponding schools. In his discussion of the Chicago school of sociology, Morris Janowitz notes that “Albion Small… was eclectic in his interests and tastes,” and that “there was a continual effort to have all aspects of sociology actively represented.” Robert E.L. Faris, in his book on Chicago Sociology, states that “probably the most important factor in the growth at Chicago was the intelligent perception by Small, accepted enthusiastically by his colleagues and successors, of the inhibiting consequences of doctrines, schools of thought, and authoritative leaders. … This openness to influences from other traditions was also reflected in the decision to bring Ogburn to Chicago from Columbia, thus enriching the local sociological content with the research-method emphasis that had been developing at Columbia. In that period [1920s and 1930s] no Chicago-trained sociologist was brought into the department at Columbia or Yale. Brown first appointed a very young instructor from Chicago … in 1931…. Mid-century approached before Harvard ventured to bring in a representative of the Chicago sociology” — and I may add that Harvard has still not ventured to bring in a full-fledged representative of the Chicago school of economics, though it has, in recent years, hired a number of Chicago Ph.D.s.4
In political science, every biographical reference to Charles E. Merriam that I have seen has stressed his eclecticism, his tolerance of diversity, his concern solely for quality. And a political science department that in our days has simultaneously included Hans Morgenthau, David Easton, and Leo Strauss among its leading members can hardly be described as narrow and inbred.
In economics — where I am personally most aware of the charge of narrowness and parochialism — the situation is similar. The first head of the Department of Economics was James Laurence Laughlin — whose portrait hangs in Social Sciences 122 and who was characterized by a historian of the Chicago school of economics as “one of the most conservative economists in the country.” Laughlin was a leading “hard-money” man of his time, vigorously opposing the free-silver movement that reached its climax with William Jennings Bryan’s famous “Cross of Gold” speech in 1896. (Incidentally, to display one of my few bits of local lore, that speech was given, and Bryan subsequently nominated for the Presidency, in the neighborhood of The University of Chicago, roughly at what later became known as “sin corner” — 63rd and Cottage Grove. In 1896, there were open fields there, and the El provided convenient transportation, so the Democratic National Convention was held in large tents pitched for the purpose.) To return to Laughlin, he publicly debated in Chicago with William H. Harvey, whose pamphlet entitled “Coin’s Financial School” provided the most influential intellectual justification for the free-silver movement.
In these ways, Laughlin would be regarded by many as sharing some of the characteristics of the present Chicago school, though I hasten to add that in other respects, he differed drastically. In particular, he was a firm opponent of the quantity theory of money — largely because it had been used by the free-silver advocates to justify their proposals — and as long ago as 1910, he analyzed inflation as arising from the monopolistic practices of trade unions and large enterprises rather than from increases in the quantity of money — a decidedly non-Chicago position.
Despite his own strong views and active participation in political controversy, Laughlin sought out quality and diversity in the men he appointed to the faculty. As A.W. Coats remarks: “Laughlin was, indeed, a rigid thinker, an uncompromising and sometimes unfair polemicist, and an extreme conservative. Nevertheless, during his 24 years at Chicago his department became a leading center and breeding ground of economic heterodoxy. … Laughlin was an unrelenting individualist who genuinely respected the independence of his colleagues, and he was as outspoken in his resistance to Harper’s encroachments upon his departmental independence as he was toward the encroachments of government upon individual freedom.”6
At the very outset, Laughlin brought with him from Cornell to The University of Chicago Thorstein Veblen, whom Laughlin liked “precisely because Veblen was different in his background, in his point of view, and even in his personal characteristics.” Veblen served as the first managing editor of the Journal of Political Economy and remained on the faculty until 1906, even though “Laughlin on occasion had difficulty in getting Veblen’s contract renewed and in securing advances for him.”7 Similarly, one of the students of Robert Hoxie, who joined the faculty in 1906, wrote: “generally speaking, Hoxie and Laughlin were as far apart as West and East, but it speaks worlds for Laughlin’s tolerance that he brought Hoxie to, and kept him in his Department.”8 Laughlin appointed such diverse persons as Wesley C. Mitchell, Alvin Johnson, Walton Hamilton, and John Maurice Clark — all moreover not after they had become famous but when they were in the early stages of their careers. Scientific excellence, not conformity, was clearly his major criterion. Of course, we have never been able to monopolize excellence — each of these four famous scholars served most of their careers at other institutions.
Laughlin’s example has been followed to this day. When I was a student at Chicago, Paul Douglas, hardly a full-fledged member of the Chicago school in the policy sense, was a leading member of the department. The disputes between Douglas and Knight and between Knight and Viner formed an important part of our education. The department included also Harry Alvin Millis, Simeon Leland, and John U. Nef, to mention only some of the outstanding non-Chicago Chicagoans. Subsequently, the department appointed Oskar Lange, a proclaimed Socialist, later Poland’s representative to the U.N., and still later a member of Poland’s Communist government — but also an outstanding economic scholar.
In 1964, during the Johnson-Goldwater presidential elections, my friend and colleague George Stigler remarked that Chicago was one of the few major universities, if not the only one, that without difficulty could staff a highly qualified Council of Economic Advisers for both Johnson and Goldwater. Many another university could have staffed (and did) a Johnson Council. Two or three others could have staffed a Goldwater Council. But only Chicago — and less easily, Columbia — could readily have staffed both.
To cite one other statistic. The American Economic Association awards a John Bates Clark medal every second year to the economist under 40 “adjudged to have made a significant contribution to economic thought and knowledge.” Since its inception, 13 medals have been awarded. Nine of the 13 recipients were either teaching at Chicago when they received the award, or had taught at Chicago before receiving the award. Of the remaining four, two had studied at Chicago, and the remaining two had received offers from Chicago.
Clearly, Chicago has not been an enclave outside the professional mainstream. On the contrary, I believe that no other major university has consistently had so wide a spectrum of views represented on its economic faculty as has Chicago. Chicago is noted for free market and anti-Keynesian views, not because they are the only ones represented at Chicago, but because Chicago is one of the few universities at which they are strongly and effectively represented, albeit, even here, by only a minority of the Department.
Not isolation and uniformity, but tolerance for diversity, stress on scientific quality as the decisive criterion for appointments, and success in identifying and attracting future leaders of their profession — these are the sources of the Chicago proclivity to generate ‘schools.” But what in turn accounts for these characteristics? This is a topic for a specialist in the sociology of knowledge, not for a mere economist. Yet perhaps my personal involvement will excuse my presumption in venturing to suggest a possible answer.
Part of the explanation for Chicago’s proclivity to generate schools was suggested to me by Edward Shils — who is a specialist in the sociology of knowledge. The University of Chicago, he pointed out, was the first major university, with the possible exception of Johns Hopkins, that was not established primarily as either a finishing school for the children of the upper classes, or as a seminary for training clerics. From the very beginning, Chicago was established as a center of learning, devoted to advancing and transmitting knowledge. Harper’s vision led to the assembling at The University of Chicago of an exceptionally able and dedicated faculty — and for our purposes, the critical feature is that they were dedicated not to training gentlemen for gentlemanly pursuits, not to spreading particular religious or ethical or social doctrines, but to the objective pursuit of knowledge — to science in the broadest sense. It is crucial also that Harper chose them not only for their ability but also for their personal force and demonstrated executive ability.
The group of extraordinarily able men could write on a tabula rasa. There was no deadwood to be eliminated, no vested interests to be rooted out, intellectual or personal. The result was to establish from the outset a tradition of which we all remain the beneficiaries, these eight decades later, a tradition of objective scholarship for its own sake, of stress on the intellectual quality of people, with little regard for their personal idiosyncracies or political views, and above all, of tolerance and respect for diversity.
To complete Shils’ explanation, I believe that this tradition was able to flourish and to be successful at The University of Chicago largely because of our geographic location. Had the University been established in or near New York City under precisely the same auspices and the same initial personnel, I believe that the results would have been very different.
I have been led to this view largely by personal experience. In 1964-to the disgust and dismay of most of my academic friends — I served as an economic adviser to Barry Goldwater during his quest for the Presidency. That year also, I was a Visiting Professor at Columbia University. The two together gave me a rare entree into the New York intellectual community. I talked to and argued with groups from academia, from the media, from the financial community, from the foundation world, from you name it. I was appalled at what I found There was an unbelievable degree of intellectual homogeneity, of acceptance of a standard set of views complete with cliché answers to every objection, of smug self-satisfaction at belonging to an in-group. The closest similar experience I have ever had was at Cambridge, England, and even that was a distant second.
The homogeneity and provincialism of the New York intellectual community made them pushovers in discussions about Goldwater’s views. They had cliché answers but only to their self-created strawmen. To exaggerate only slightly, they had never talked to anyone who really believed, and had thought deeply about, views drastically different from their own. As a result, when they heard real arguments instead of caricatures, they had no answers, only amazement that such views could be expressed by someone who had the external characteristics of being a member of the intellectual community, and that such views could be defended with apparent cogency Never have I been more impressed with the advice I once received: “You cannot be sure that you are right unless you understand the arguments against your views better than your opponents do.”
To come back to our present topic, this kind of intellectual homogeneity is destructive of tolerance. It is no accident that in the New York— or more generally, the Eastern — environment, divergent views take the form of cults not schools. One of the great economists of all time, Ludwig von Mises, who recently died at an advanced age, was barely tolerated for years in a peripheral academic position at New York University. He was never accepted as being in the intellectual mainstream, even though he had a far greater influence than all but a handful of the more prestigious professors of economics at Columbia, Yale, Princeton, or Harvard. Mises had disciples but few students because of the overpowering and stultifying intellectual atmosphere of New York.
The great good fortune of our University was that it was not established on the East Coast. If it had been, it would very likely have become like all the other Eastern universities. May Johns Hopkins not be a case in point? A university that was unable to achieve its initial promise except in the area of medicine.
Fortunately, we were established in Chicago, a new, raw city, bursting with energy, far less sophisticated than New York, but for that very reason far more tolerant of diversity, of heterodox ideas. New York looked East, to the Old World. It sought above all to be recognized by that world and therefore imitated it and was hostile to any influences that might cause the Old World to look down its nose at the New.
Chicago, like other cities this side of the Appalachians, looked West, to the frontiers — though needless to say it had its share of mindless fawning on Europe, as witness Colonel McCormick’s love-hate affair with England. But this did not prevent Chicago from being characterized by diversity in every dimension, by a willingness to experiment, to judge people by their performance rather than their origins, to judge ideas by their consequences rather than their antecedents.
To return to my personal experience. I could hold the views I did at Chicago, and even be an adviser to Goldwater, without losing the respect of either town or gown, but rather while still being accepted as a responsible member in good standing of the intellectual community. Had my career been in New York, and had I held the same views, I suspect that that would not have been possible. I would have been regarded as a “kook” and no doubt would have begun to act like one even earlier than I did.
If this amateur exercise in the sociology of knowledge has any validity, it has important implications for our University. First and foremost, if we are to preserve our heritage, we must continue to insist that intellectual quality and intellectual quality alone be the basis of appointments to the faculty — not political or social views, not personal attractiveness or sex or race, not grantsmanship, not even potential contribution to a balanced faculty. Balance and diversity have been and will continue to be valuable by-products of an undeviating emphasis on quality alone. They are not objectives to be sought directly.
Second, as we face severe financial pressure in the coming years, it is well to recall that the schools that developed at Chicago owed far more to a handful of geniuses than to the lavish expenditure of funds. The availability of funds certainly helped. But far more crucial was the success of the faculty in seeking out the young scholars who had within them the capacity to strike out in new directions and the willingness of the administration to back the faculty’s judgment. These remain the key to success in surmounting our present problems. And identification of potential geniuses remains the one element that only the faculty can provide. Trustees, alumni, and other friends of the University can prepare the seedbed for excellence; only we can furnish the seeds.
Milton Friedman is the Paul Snowden Russell Distinguished Service Professor of Economics.
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- International Encyclopedia of the Social Sciences, Vol. 4. p.155.
- Foreword to Robert E. L. Faris, Chicago Sociology, 1920-1932 (Chicago: University of Chicago Press, 1970).
- International Encyclopedia of the Social Sciences, Vol. 8, p. 366.
- Quotations from Faris, op. cit., pp. ix, 128, 130.
- A. W. Coats, “The Origins of the ‘Chicago School(s)’?” Journal of Political Economy, Vol. LXXI (October 1963), pp. 487-493; quotation from p. 489.
- Ibid., p. 491.
- Alfred Bornemann, J. Laurence Laughlin (Washington: American Council on Foreign Affairs, 1940), p. 28.
- Ibid., p. 29.
Source: Remarks by Milton Friedman at the 54th Annual Board of Trustees’ Dinner for the Faculty (January 9, 1974) published in The University of Chicago Record, Vol. 8, No. 1 (February 21, 1974), pp. 3-7. Digital archive of the University of Chicago Library, Campus Publications.
Image Source: Time Magazine, December 19, 1969.