Reading the letter written by Wesley Clair Mitchell, the Director of Research at the NBER, to Arthur Burns in which Mitchell offers discouraging words regarding an appointment at NBER for Milton Friedman in 1945, it is interesting to see how Milton Friedman and his wife report on the controversy that very clearly influenced Mitchell’s personal opinion of Milton Friedman. What is not yet clear is whether Arthur Burns ultimately made an offer to Friedman or whether it was perhaps the timely offer arranged by George Stigler for Milton Friedman to teach at the University of Minnesota that made a NBER appointment a moot point.
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The Friedmans Remember
The publication of the NBER book by Simon Kuznets and Milton Friedman Incomes from Independent Professional Practice (1945) was delayed four years in part because of the new demands for statistical and economic analyses due to World War II. In Milton Friedman’s judgment the delay was caused “mostly by a controversy about one part of the manuscript” that attributed half the observed excess average income of physicians over dentists to “the difference in ease of entry, produced at least in part by the success of the American Medical Association in limiting entry into medicine.” (pp. 71-72) A member of the special reading committee of directors appointed to evaluate the manuscript, C. Reinhold Noyes, did not agree and wrote “I suggest that the subject of freedom of entry is a hot poker and be dropped.” Friedman described how he and Kuznets wrote eighty pages worth of memos in response to this and other criticisms of Noyes. In his account of the controversy, Milton Friedman has nothing but praise for Wesley Clair Mitchell: “Three years of back and forth discussion followed, with Wesley Mitchell…supporting the scientific freedom of bureau authors…In later years I came to appreciate how rare is the combination of toughness and diplomacy that Mitchell demonstrated in defense of our scientific freedom.” (pp. 74-76)
Rose Friedman wrote about her worries about her husband’s job prospects after World War II ended.
“Presumably he could have gone back to the Treasury but that was the last thing he wanted to do. A government career was never Milton’s choice. He could always return to the National Bureau, but I knew that too was not Milton’s preference. An academic career was what he wanted. By early September, when we moved back to our apartment in Manhattan, Milton had received no offer for the fall. As an inveterate worrier always fearing the worst, I was not happy. I remember very well a visit from the Burnses and Arthur’s attempt, while Milton was temporarily out of the room to reassure me by telling me that Milton was very gifted and would make it to the top and that I had no reason to be concerned.” (p. 147)
Source: Milton and Rose D. Friedman, Two Lucky People: Memoirs (Chicago, 1998).
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Letter from Wesley Clair Mitchell to Arthur Burns
Huckleberry Rocks
Greensboro, Vermont
August 27 1945
Dear Arthur
Milton offers a problem that is painful indeed, but we ought to face it squarely. You know how highly I value Simon’s [Kuznets] judgment as well as your own. Both of you have longer + more intimate acquaintance with M. than have I. I am sure both of you try to be objective about him. So do I. That we differ must be due to the unlike weights we attach to qualities we agree, or admit, he possesses.
We agree about his acute mind, about his thorough training in mathematical statistics + mathematical economics, about his creative powers at least in the first of these fields and probably in the second, about his personal likeability, + about his honesty of intention. We must admit that he has fooled himself, unwittingly, + thereby fooled all three of us who were so predisposed to accept his findings. Do you remember that first paper in which M. argued that the incomes of physicians run substantially higher than those of dentists, + the criticisms Fred Mills made of the averages on which M. rested his conclusion? Simon was annoyed by Mills; you were annoyed by him; I was a little annoyed; but Mills was right in large part. Then came the second + graver case brought out by Noyes’ rather brutal attack which enlisted my sympathies as well as yours + Simon’s warmly on Milton’s side. M. drew up a table that seemed to settle the critical issue in his favor. It was made from data he had collected + studied. We knew nothing about these materials in detail. Simon accepted the results. You accepted them. I accepted them with pleasure. Noyes’ second set of criticisms forced a more searching examination. I put in more than a month of careful study + concluded that M. had misused his data in several ways + reached an indefensible conclusion. The best thing about that sad affair was that M. frankly admitted his errors.
I think Milton’s troubles arose from accepting a conclusion about the monopolistic practice of the medical societies, feeling sure that restriction of entry must tend to increase the incomes of medical practitioners, + so accepting at face value any statistical evidence that pointed in the direction he knew to be right. We are all of us subject to this type of error. We examine far more critically evidence that appears to run counter to our hypotheses than evidence that supports them. But M. seems to me worse than most of us on this respect.
Another weakness that I think hurts Milton is lack of interest in and appreciation of non-rational factors that influence, + sometimes dominate, economic behavior. They cannot be handled effectively by the calculus of economic theory concerned with what it is to the interest of men to do. Milton’s clever appraisal of the effect of the higher costs of medical than of dental education is a brilliant specimen of this sort of theorizing. Of course he knows his argument is most unrealistic + says so. Under pressure of criticisms he stressed his qualifications still further. What does such an analysis really add to our knowledge of how men choose their occupations? Can’t the simple bits of truth in the proposition that high costs of training limit the number who enter a profession be put better in simpler form? Why work out an accountant’s estimate in detail when you have to add that few men are able to do such work correctly; that still fewer possess the concrete evidence needed to give the estimate some air of reality; that a man clever enough to do the job + possessed of the factual data would realize that conditions might well change by the time he or his son was ready to set up in practice, + that no one should suppose that choices are really made in this way?
I wish I could share your intuitive faith that M. “has more to contribute to economic science than any man of his generation.” If only we could find the man of whom this remark is true + draw him into the National Bureau, I should be happy indeed! Whoever he may be, he has more insight into human nature than Milton has been blessed with.
Nor do I think you would be wise in taking on a man whom you would have to follow through all the details of his work to make sure that his deficiencies, genuine or problematical, would never again embarrass us. As director of research, you need colleagues who know a great deal more than you will have time to learn about the materials they are severally handling. The kind of watching M. needs is not critical examination of his statistical methods + general reasoning, but detailed study of his data + the way he uses them. That is a time consuming job. None of us did that for M. until far too late. I must accept primary responsibility for this error of omission. I don’t want to see you put in a position where your conscience will force you to spend weeks in making good the guarantee you suggest.
You know that I am grieved to write as I do. To me it seems that you are letting admiration for Milton’s technical proficiencies + personal liking warp your judgment. Loyalty to the aims we both cherish requires me to be candid, though at cost to your feelings as well as mine. If you can produce genuine evidence that my present opinions are wrong, I shall be glad. In the meantime, please do your best to give proper weight to my misgivings.
[…]
Ever yours
[signed]
Wesley C. Mitchell
Source: Arthur F. Burns Papers at the Economists’ Papers Archives. Duke University, David M. Rubenstein Library. Box 2, Folder “Correspondence: Wesley Clair Mitchell 1911-1945”.
Image Source: Columbia 250 Website: Arthur F. Burns, Milton Friedman. Foundation for the Study of Cycles Website: Wesley Clair Mitchell.