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Secretary of Defense Donald H. Rumsfeld
Tribute to Milton Friedman
White House, Washington, D.C., May 9, 2002

Mr. President (George W. Bush), Rose and Milton (Friedman), Minister of Defense of Italy (Antonio) Martino, a student of Milton’s, colleagues and friends, it’s good to see you all.

I am delighted to join in celebrating the life and work of a good friend, and a rare talent—indeed, a talent to be treasured. Last year, I was disappointed to miss the birthday lunch that Ed Feulner hosts every year at some fish house on the road to Bohemian Grove in July. It’s nice of the President to bring us all together for an early celebration here in the EEOB (Eisenhower Executive Office Building).

And Milton, what an impact you have had. Precious few people live long enough to witness the rise and fall of empires. Even fewer can see that their work has had a profound effect on those truly momentous events.

Milton is the embodiment of the truth that "ideas have consequences." Over the course of his career, he has turned down offers of influential posts, in and out of government, preferring to fight the battle of ideas, trusting that reasoned argument could change the course of history. And indeed, as we heard from Gary Becker, Ed Meese and Alan Greenspan, it has changed the course of history.

Of course, we cannot honor Milton without also honoring Rose. I’m told they met in Economics 301 at the University of Chicago… how appropriate. Rose, as has been indicated, has been the intellectual collaborator ever since, to his and our great benefit.

They were creators of the television series, Free to Choose. Several decades ago I had the good fortune to participate on occasion on their television shows. There is something about Milton that when I am around him, and talking to him, I feel smarter. (laughter)… So I felt very fortunate to do that.

More recently, their book, a joint-memoir, Two Lucky People, as Alan has indicated, really should be reversed, because we indeed are the lucky ones and have benefited from that lifetime of collaboration.

I’m told that when Capitalism and Freedom came out in 1963, it was almost ignored by the mainstream press. The ideas were seen as so unorthodox—so unusual—that no major newspaper bothered to do a book review.

What a difference forty years makes. Today, many of those ideas, which seemed outrageous and so unorthodox to some in the 1960s, are now the law of the land, and many of them have been mentioned—airline deregulation has not, trucking deregulation has not, and—heaven forbid—private competition for the Post Office. (laughter)

In fact, for all his books and lectures, I suspect that when it’s all over, maybe that Milton will be best remembered as the "godfather of overnight delivery." (laughter)

As a young Congressman in the 1960s, I used to go to seminars at the University of Chicago. Bob Goldman was the director of the Center for Continuing Education there, He would gather a cluster of geniuses, and then allow a few young pups to come in and learn at their feet. As a then young pup, I was so privileged, and participated on a number of occasions.

I remember well the conference on the "all-volunteer" Army—Milton was so persuasive that I became an early advocate—as a young congressman, introducing legislation, testifying before the House and Senate Armed Services Committees, and then, as a young Cabinet officer in the Nixon Administration working to help achieve the all-volunteer service.

Later, life turned down, and George Shultz came to me and asked me if I would run the wage price controls for the United States of America. (laughter) It was the country’s first peacetime experiment. As I recall, it was not Milton Friedman, but H. L. Mencken who once said, "For every human problem there is a solution that is simple, neat and wrong." Richard Nixon found it. (laughter and applause)

Early on, I figured out that the key to success was not to even try to manage wages and prices. Senator Proxmire’s law, I think written on the back of an envelope, was only a paragraph or two, and it embarrassed the President because inflation was coming along and the President wasn’t stopping it. So he passed a law saying that the President shall have the right to control wages and prices. I put the law on the floor in my office, next to my desk. And then every time the Wage Board, or the Price Commission, or the Health Services Board, or the Rent Board, or the Construction Stabilization Industries Board, any one of those alphabet boards that were spawned by this Economic Stabilization Act—every time they issued a regulation, we stuck it on top. Before too long it started working its way up to the ceiling. As a reminder for everybody for the potential damage we were doing.

He’s not here and I hate to talk behind people’s back, but I think the record should show that Vice President (Richard) Cheney, of course, was part of that operation, (laughter) and I have never once seen it on his resume. (laughter) But he was there.

There was one other thing we did early on was to get agreement that any employee of the wage price controls could be fired within 30 days. The goal was to not allow a permanent bureaucracy to self-perpetuate, and it worked. So we worked and we worked we kept letting out everybody, we kept freeing up all of these categories. We had tiers and we would let this group free at wages and controls, and this group free at price controls, because it was an option or because of something else, or because it was food and the answer to (inaudible) prices is high prices.

And after a while, Milton Friedman called me up and he said, "You have got to stop doing what you are doing." And I said, "Why? Inflation used to be up at around 6 or 7, it’s now down to about 4 or 5. We’re freeing up all kinds of activities. We’re not doing much damage to the economy." He said, "I know, I know that. But you’re not the reason inflation is coming down, and YOU know that!" (laughter) I said "That’s true." And he said the problem is that people are going to think that you’re doing it, and you’re not—you’re letting everybody out and inflation’s coming down and they’re going to learn the wrong lesson. And it’s important he did not quite go as far as to say that I should start damaging the economy, but that was right underneath what he was telling me. (laughter) And of course he was correct.

Of course, the central theme of Milton’s work in public policy has been the defense and promotion of human freedom—and the critical link between political and economic freedom.

"Government," he has told us, "has three primary functions: It should provide for the military defense of the nation. It should enforce contracts between individuals. And it should protect citizens against crimes against themselves or their property." Milton, I’m relieved Defense made the cut. (laughter)

You know, what’s remarkable about this man is that he was making these arguments in the heyday of the Great Society—a time when the Federal government was growing in unprecedented size and scope. Against the rising concentration of federal power, he stood as an often lonesome voice. "If government is to exercise power," he declared, "better in the county than in the state, better in the state than in Washington, D.C. because if I do not like what my local community does, I can move to another community… and if I do not like what my state does, I can move to another. But if I do not like what Washington D.C. imposes, I have few alternatives in this world of jealous nations." I’ve heard President Bush express similar sentiments.

Building a truly great society requires not the power of government, but unleashing the power of human freedom—creating a climate in which millions of individuals can think, speak, create and build.

People behind the Iron Curtain were listening—the dissidents and intellectuals of the captive nations, who were later to become the Presidents and Prime Ministers of free nations.

One such Prime Minister was recounting the steps his country was taking to build a free market society out of the rubble of communism. Dick Armey asked where the government got the ideas for their reforms. The Prime Minister replied: "We read Milton Friedman and F. A. Hayek."

So, yes, he has changed the course of history.

So today, Milton, as we say when we are visiting our troops around the world—the men and women who defend what you have helped to build, "Thank you for what you do for our country." Thank You. (applause)