Introduction: David Friedman is a law professor, anarcho-capitalist and author of The Machinery of Freedom. He is the son of economists Rose and Milton Friedman and holds an A.B. in chemistry and physics from Harvard University and a Ph.D. in physics from the University of Chicago. In The Machinery of Freedom, he proposed a form of anarcho-capitalism where even law would be produced by the market. He suggests an incrementalist approach to achieving anarcho-capitalism, one that includes gradual privatization of society over time. He is opposed to achieving anarcho-capitalism via violence.

Daily Bell: You are the son of Milton Friedman. In this interview we want to focus on your father as well as yourself. Hopefully, you don't mind. As time goes on he is an increasingly controversial person when seen from the lens of anarcho-capitalism. You are an anarcho-capitalist so in this interview you will hopefully set the record straight from this point of view. OK, let's jump right in. First some questions about you, then your father …

Daily Bell: Tell us what it was like for YOU to grow up with such a famous father.

David D. Friedman: He wasn't particularly famous when I was growing up. I think the first point at which I realized that he had a public reputation was when I was in high school, probably aged 15 or 16. In some context I mentioned to a fellow student that my father was an economist, and his response implied that he of course knew who my father was.

That was at a high school run by the University of Chicago, so the fellow student wasn't a random sample from the population. I think it was only in 1964, when Goldwater ran for president and my father was widely identified as his economic advisor, that he became visible as a public figure outside the academic context. By that time I was most of the way through college.

Daily Bell: Tell us some of your professional background. You decided to become a lawyer. How did you come to that decision?

David D. Friedman: I am a law professor, not a lawyer—I have no degrees in law and have never taken a law course for credit, although I've taught quite a lot of them. I am an academic economist one of whose specialties is the application of economics to law, which is why a law school hired me.

Daily Bell: Give us the rest of your career to date in brief.

David D. Friedman: I originally decided to be a physicist, in part because physics was inherently interesting, in part because I did not want to go through life primarily identified as my father's son. I got a Ph.D. in physics from Chicago and did two years of post-doctoral work in the field at Columbia.

While I was doing those things, I was also writing libertarian columns for a conservative student magazine and, eventually, my first book, The Machinery of Freedom. The head of the Population Council, a private organization involved in population issues, thought it would be interesting to see a discussion of those issues from a pro-free market point of view. I don't think that was his own political position; so far as I could tell he was simply an open-minded person interested in seeing a variety of views. He asked me to write the piece. It ended up as a pamphlet, "Laissez-faire in Population: The Least Bad Solution," which his organization published—you can find a copy on my web page.

I concluded from that experience that I was better at economics than at physics and enjoyed it more. Julius Margolis, who ran a semi-independent center at the University of Pennsylvania, had seen some of my work and offered to find me a post-doctoral position at his center if I wanted to switch fields. I accepted, spent two years as a post-doc at the Fels Center and one year as a lecturer at Penn. During that time I wrote an article on an economic theory of the size and shape of nations, which ended up published in the Journal of Political Economy. From there I went to VPI as an assistant professor of economics − without having any degrees in economics or having taken any economics courses.

Daily Bell: Tell us about your favorite articles and books, the ones you've written.

David D. Friedman: That article is one of them. It started with a puzzle: When the Roman Empire fell, why did it break? Why, in other words, did what had been the empire go from a single superstate, covering a large fraction of Europe, North Africa and the Middle East, to a very large collection of very small polities, with effective power mostly at the level of the barony or equivalent? I came up with a fairly simple theory, in which governments competed for territory on the basis of its value to them, with the pattern that resulted depending on the degree to which a large state could or could not get more out of a territory than a small one, which in turn largely depended on what sorts of things it was practical for a state to tax. It, too, can be found on my web page if readers are interested.

I think my first book, The Machinery of Freedom: Guide to a Radical Capitalism, was probably my most influential, and I'm still happy with it. In addition to providing arguments for a generally libertarian view, it sketched what a society might look like in which that view was taken to its limit, with all useful government functions replaced by private institutions. It also provided a sketch of an economic analysis of such a system, showing what sorts of laws a competitive market for law could be expected to produce, a sketch I have filled out somewhat in later writing.

My next book was a price theory textbook. Unlike most such, it wasn't modeled on successful books in the field with my own modifications, but started more or less from scratch. At some point I described my ideal reader as someone who knew no economics and had an infinite IQ. The most interesting lesson I learned from writing that was how much more there was to a set of ideas I thought I understood than I realized. If someone had asked me in advance how many pages it would take me to explain economics, I would probably have guessed something between 10 and 50. The book ended up a lot longer than that—because it turned out that I had to think through and explain ideas that underlay the ideas I thought I understood.

The book after that, Hidden Order: The Economics of Everyday Life, was a rewrite of the price theory textbook intended for the interested layman rather than the textbook market – it was supposed to be a book from which someone could learn price theory, more or less what is taught in a good microeconomics course, and have fun doing it. At some point in writing that book it occurred to me that, unlike a textbook, nobody would be forced to read it, so if at any point the reader lost interest I would lose him. I accordingly tried to design each chapter with a hook at the beginning, some idea or puzzle that would interest the reader enough so he would want to finish the chapter. It turned out to be my most successful book in terms of sales, and got translated into a number of other languages.

After that I wrote two other books, both coming out of courses I was teaching. Law's Order was a book on the economic analysis of law, in part my explanation of conventional ideas in the field, in part my own contributions. Future Imperfect is an exploration of technological revolutions that might happen over the next few decades and their implications. Versions of both of them can be read from my web page − or, of course, purchased from Amazon.com.

In addition to my non-fiction, I have written two novels. Harald was published by Baen Books, which marketed it as a fantasy. That's somewhat misleading, since there is no magic. What it is really is a historical novel with invented history and geography. The societies and technology are based on real history, but I drew my own map and arranged my invented societies on it. I enjoyed writing it – and concluded, after it was finished, that the personality of my protagonist had been largely (and unconsciously) based on my father. It wasn't terribly successful, however, in part due to real faults – for one thing, I did a poor job of giving different characters different voices. One result was that for my second novel, Salamander, I was unable to find a commercial publisher and so self-published it as a Kindle file on Amazon. Unlike the first, it was a real fantasy, with magic – I think an original version of magic. It started out built around a sort of magical version of the central planning fallacy, the persuasive but mistaken idea that if only some sensible person had control of all of society's resources, wonderful things could be done. But, in my experience, no plot survives contact with the characters, and the book ended up being about a good many other things as well – including two quite different love stories, neither of which was in my original plan.

Also, my wife and I have self-published two books on Amazon, print on demand rather than Kindle, dealing with our hobby of historical recreation, in particular cooking from medieval cookbooks. I have been impressed with how easy and inexpensive self-publishing now is, in both forms.

Daily Bell: Tell us what motivates you.

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David D. Friedman: Part of my motivation is wanting to come up with and think through original and interesting ideas, part wanting to explain them. My fiction was written mainly for the fun of writing it, and in order that other people could read it and, hopefully, discuss it with me. Also, I enjoy arguing with people.

Daily Bell: What are you working on now?

David D. Friedman: My current non-fiction project is a book on legal systems very different from ours, coming out of a course I teach – systems covered include Imperial China, modern gypsies, Periclean Athens and a variety of others. The draft of that is on my web page; comments are welcome. My current fiction project is a sequel to Salamander.

Daily Bell: What do you think you are best known for?

David D. Friedman: Among libertarians, I'm best known for the version of anarcho-capitalism that was presented in my first book. Among economists, probably for my work in the economic analysis of law, and perhaps also for Hidden Order as an entertaining and intuitive presentation of the underlying ideas of the field.

Daily Bell: Does it upset you not to be as famous as your father? Is fame overrated? Does it really matter?

David D. Friedman: That doesn't bother me. It bothers me, a little, that my contributions to our common field have not been as large or important as his, but on the other hand I'm reasonably happy with the life I've lived and what I have accomplished with it.

Daily Bell: Did your father enjoy being famous?

David D. Friedman: Good question. I don't know. It did not seem to bother him. On the other hand, when he got the Nobel Prize he commented that he was prouder of another award he had gotten much earlier, one given to the most productive economist under (I think) 35, because that was much more clearly the opinion of his peers on his work.

Daily Bell: Characterize yourself. You've said you're an anarcho capitalist. What is such a person?

David D. Friedman: Someone whose preferred form of political organization is a society without government but with private property and exchange.

Daily Bell: Do you believe central banking ought to be done away with?

David D. Friedman: In the current sense, yes. I think money ought to be privately produced. A private system of money issuing banks might include one or more institutions, such as clearing houses, that served some of the functions of a central bank.

Daily Bell: Where do you stand on copyright? Does intellectual property exist?

David D. Friedman: I think there are good arguments on both sides of that question.

Daily Bell: Where do you stand on private justice? We believe the world needs to return to private justice – and to get rid of monopoly state justice. Where do you stand on this?

David D. Friedman: The system I sketched in my first book is one in which the defining and enforcing of rights and settling of disputes are done by private agencies, not by governments.

Daily Bell: Was your father a fan of state justice? What did he believe in?

David D. Friedman: He was less interested than I am in radical changes, more interested in ways in which the world as it now exists could be moved in the right direction, so the question didn't really arise.

Daily Bell: How do you agree with your father?

David D. Friedman: I agree with his view of the nature of economics and, I think, with most of his view of moral philosophy.

Daily Bell: How do you disagree?

David D. Friedman: I think the sort of system of private rights enforcement I have described would probably work, in many although not all circumstances, but might not. He thought it might work but probably would not. This is ultimately a question of stability – of whether it would continue to function as I have described or collapse into either violent chaos in one direction or a new state in the other. I don't think either of us believed he could prove his view in any rigorous sense.

Daily Bell: Your father's star has dimmed a bit in libertarian circles. Do you know why?

David D. Friedman: Rothbard attacked him for a variety of reasons, some of which I have discussed elsewhere, and some of Rothbard's followers have been very active in libertarian circles. Quite a long time ago, Rothbard published an article attacking my father in a journal controlled by his followers. I submitted a response, pointing out that Rothbard had misrepresented my father's views, and demonstrating it by quotes from my father's writing that were inconsistent with what Rothbard claimed his position was. The journal refused to publish my response. As best I can tell, the editor's view was that if Murray Rothbard and Milton Friedman disagreed about what Milton Friedman's views were, Rothbard was right.

I can't think of any other reason. In part it depends on what you mean by "libertarian circles" – hard-core libertarians or libertarians more broadly defined. Your comment is more relevant to the former group.

Daily Bell: From our point of view, the main issue dogging him is that he suggested a "steady state" Fed – a Fed that would mechanically pump a certain amount of money into the economy over time. What do you think of this suggestion?

David D. Friedman: If money is produced by government, the policy he proposed may well be the best policy that is simple enough so that there is some hope of getting a central bank to follow it, but that isn't really a subject on which I can claim much expertise.

Daily Bell: What do you think of those who criticize your father and say he was giving "cover" to elitist groups by justifying the continued existence of the Fed? Do you think there is any fairness to it?

David D. Friedman: No. He wasn't justifying its continued existence, he was describing how it might best function.

Daily Bell: Your father maintained that the Fed caused the Depression by tightening the money supply. You agree?

David D. Friedman: That's a considerable oversimplification, but in essence I think it is probably correct. Again, this isn't an area where I have any special expertise.

Daily Bell: Murray Rothbard claimed that the Great Depression was inevitable as a result of Fed stimulation. Your take?

David D. Friedman: I think it is unlikely that it is correct.

Daily Bell: What kind of money do you believe in – competitive money, gold, silver?

David D. Friedman: Privately issued competitive money. I think the ideal way of defining and maintaining its value would be a market basket of commodities but that would be up to the market to determine. You can find an essay of mine on the general subject on the Cato site.

Daily Bell: Apparently, the Fed printed too much paper money illegally in the 1920s. Your father didn't write about this. Did he know about it?

David D. Friedman: I have no idea either whether it is true or whether, if true, he was aware of it.

Daily Bell: FDR then had a bank holiday and confiscated gold so nobody would turn in their dollars for gold and find out there wasn't enough gold. Is this your understanding?

David D. Friedman: No.

Daily Bell: What is YOUR take on the Great Depression and subsequent war?

David D. Friedman: Not my area of expertise.

Daily Bell: Is today a repeat of the 1930s? Is it planned that way, somehow?

David D. Friedman: No and no.

Daily Bell: We think there is a dynastic power elite that runs the world. Do you?

David D. Friedman: No. One chapter of The Machinery of Freedom is on the subject of the nonexistence of the ruling class. Read it.

Daily Bell: Did your father?

David D. Friedman: I doubt it.

Daily Bell: What did your father think of Murray Rothbard?

David D. Friedman: He thought less about Rothbard than Rothbard thought about him. As best I understand the macroeconomic dispute, he thought Rothbard's theory of the Great Depression and related events was inconsistent with the evidence.

Daily Bell: Ludwig von Mises?

David D. Friedman: I think he admired von Mises as an economist but thought his methodological views excessive.

Daily Bell: Would your father agree with GMU that Austrian economics needs to be professionalized?

David D. Friedman: I don't know. I'm not even sure what it means. His view was that looking at economics in terms of such schools was not very useful.

Daily Bell: What did your father think of the Koch Brothers?

David D. Friedman: I have no idea.

Daily Bell: What did your father think of the von Mises Institute?

David D. Friedman: I don't know if he knew anything about it – I don't believe it was very active until quite recently.

Daily Bell: Are you happy or sad about how your famous father is received today?

David D. Friedman: He is viewed in different ways by different people. I am occasionally annoyed by ignorant and/or dishonest attacks on him, ranging from Krugman down to the people who think he was responsible for Pinochet's regime. But on the whole, I think his reputation in his own field, which is what he would most have cared about, is secure.

Daily Bell: How did he get so famous? Did someone in a sense sponsor him?

David D. Friedman: He got to be famous, first, by doing important and original work in economics, and second by arguing articulately and persuasively for what were at the time unpopular views.

Daily Bell: Any books, articles or websites you want to recommend?

David D. Friedman: My website: www.daviddfriedman.com. My blog: daviddfriedman.blogspot.com .

Daily Bell: Thanks so much for answering the tough questions. Good luck!

After Thoughts

We thank David Friedman for putting up with our questions about his famous father. It must be a trial for him, as it is for any son who is a person of achievement, as Friedman is, to have to answer questions about someone else. Obviously, David Friedman is a person of significant achievement within his chosen field and someone who is continuing to burnish his own accomplishments. But the record, as we pointed out to him, is not quite so clear these days when it comes to his distinguished father.

Milton Friedman was certainly a prime exponent of liberty while alive but there are elements of his life philosophy and personal achievement that have become open to question, it seems, over time. His apparent participation in creating the current income tax system in the US (which we didn't ask about) and his perspective on the Federal Reserve are two such issues.

The latter is of the most interest to us theoretically. Throughout the 1970s and the 1980s the debate raged. Had the Fed, by raising rates, precipitated the stock market crash of 1929 and the Great Depression? Friedman said yes and Rothbard basically said no. As we have written not so long ago, Rothbard seems to have won this debate. What Rothbard argued was that central banking monetary stimulation ALWAYS leads to collapse. This isn't theoretical anymore. We've seen it with our own beady eyes. Fed stimulation in the 1990s and the 2000s obviously led to collapse.

Central banking is a disaster-causer. If people could realize that having a tiny group of men fixing the price of money is the proximate cause of misery in the world today, the system would not last another minute. More and more people do realize this, by the way … a hopeful sign.

Mr. Friedman's star has dimmed a tiny bit, in our view. Much of what he wrote and suggested was bold for its day but the freedom conversation is moving on, and what he may have considered nuance looks, perhaps, a bit more like temporizing in the 2000s.

Having written this, we want to thank David Friedman once more for sitting down with us and answering the "tough questions." It is easy to be biting or vituperative so we request that those who wish to grace our pages with feedback please be respectful of David Friedman's courtesy and good will in providing us with an interesting and honest perspective.