June 19, 2008

The missing points on the Milton Friedman Institute

Maybe there's something wrong with me, but I think the collective faculty letter criticizing the creation of the University of Chicago's Milton Friedman Institute is both correct and beside the point. The faculty point out that the investment of $200 million in this new entity will privilege a certain view of markets associated with Friedman, a point that seems to be without too much controversy. But they talk about it in terms of "the interests of equity and balance" and ask the university "to provide roughly equivalent resources for critical scholarly work that seeks out alternatives to recent economic, social, and political developments."

The point could be sharpened by talking about the academic losses involved in the massive investment in a single perspective: Isn't behavioral economics one of the most exciting fields in economics and one that will be entirely ignored by the Milton Friedman Institute? To put the issue in standard neoclassical language, the opportunity cost of building the Milton Friedman Institute is the investment not going into building up the university's economics research in other areas, including behavioral economics, public economics, and so forth. To me, it seems like a deliberate institutional risk to put so much of one's resources into a single academic approach to any field.

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Posted in Academic freedom on June 19, 2008 6:41 PM |