DEPARTMENT OF ECONOMICS
DISCUSSION PAPER SERIES
Friedman’s Lack of influence on British Economic policy
Manor Road Building, Oxford OX1 3UQ
Friedman’s lack of influence on British economic policy. *
James Forder **
Using a range of sources, it is argued that, contrary to common belief, Milton
Friedman had no special influence on British policy in the 1970s and 1980s. The
opposing impression appears to be derived in part from the work of Friedman’s
admirers, but principally from the allegations of Margaret Thatcher’s opponents
who believed they could taint her with his name.
Friedman, monetarism, Thatcherism
In much common estimation, Milton Friedman had an enormous influence on the
policy of the British government during the Premiership of Margaret Thatcher
(1979-‐1990), and the Prime Minister herself was greatly influenced by him.
There were, for example, numerous observations to this effect when Friedman
died in 2006. The New York Times reported, ‘Ronald Reagan and Prime Minister
Margaret Thatcher of Britain were heavily influenced by his views’; 1 CNN that
‘Friedman’s ideas were embraced’ by Reagan and Thatcher; 2 and the University
of Chicago News Office said that Thatcher had been a ‘devoted follower’ of his
ideas. The British press saw his importance in the same kind of way. The BBC
said ‘Known as the high priest of monetarism, his ideas gained popularity in the
1980s when they influenced the policies of Margaret Thatcher and Ronald
Reagan’; 3 the Times that at his pinnacle he had been known as her ‘favourite
economist’; 4 and the Telegraph had it that he was ‘one of the early gurus of
Thatcherism’. 5 And then there was Thatcher herself – she was reported as saying
‘revived the economics of liberty when it had been all but forgotten. He
was an intellectual freedom fighter. Never was there a less dismal
* I am grateful to Edward McPhail for the suggestion that Hayek’s comments on the relation of his
own views to Friedman’s are relevant in what follows; to George Tavlas and others at the History
of Economics Society meeting at Duke, in June 2016, for comments; and to Anne Williamson of
Balliol College for research assistance and a number of insightful comments.
** Balliol College, Oxford
1 16 November, 2006.
4 17 November 2006.
5 17 November 2006.
practitioner of a dismal science. I shall greatly miss my old friend’s lucid
wisdom and mordant humour’. 6
Those were all from just when Friedman died, but certain other commentators
have given a similar impression. Ebenstein (2007, p. 210), made his point
allusively, but it is clear enough what he meant to convey when, referring to
Friedman’s widely viewed television series broadcast in the UK in 1980, he said
Thatcher was one of the ‘avid watchers of Free to Choose in Great Britain’. Klein
(2007, p. 18) made an enormous amount out of Friedman’s influence, at one
‘Finally, after he’s spent decades in the intellectual wilderness, came the
eighties and the rule of Margaret Thatcher (who called Friedman ‘an
intellectual freedom fighter’) and Ronald Reagan … At last there were
political leaders who had the courage to implement unfettered free
markets in the real world’
and later, that the early 1980s saw, ‘Reagan and Thatcher in power and Hayek
and Friedman serving as influential advisers’ (p. 132) Then there is Blundell
(2008, p. 170) who said Friedman had been Thatcher’s ‘great University of
Chicago mentor’, and Meltzer (2011, p. 12) who said he ‘took a major role in
advising the Thatcher government in Great Britain after 1979’.
The picture this creates is of a specific influence from Friedman on Thatcher and
her policy which went beyond any general, worldwide influence Friedman had. It
is the first objective of this paper to argue that no such special influence existed,
and the reports of it are therefore mistaken. And the second is to consider how
the impression arose that Thatcher was more his disciple than other world
leaders of similar general outlook of her time.
2. An outline of events in Britain
Since the election of Thatcher in May 1979 is sometimes seen as the key date in
the monetarist revolution in Britain it perhaps bears emphasis that monetarist
ideas – although not by that name – surfaced at various times in British
policymaking in the post-‐War period. The abandonment of the ‘cheap money’
policy in 1951, like the adoption of the Treasury-‐Federal Reserve ‘Accord’ in the
United States, owed much to concerns over monetary control. Although the
Radcliffe Committee famously came to the conclusion that monetary aggregates
were unimportant, the reason it ever existed was that the issue had been in
question. And in 1957 the Chancellor of the Exchequer, Peter Thorneycroft,
resigned with two other ministers – Enoch Powell and Nigel Birch – in protest at
the Cabinet’s refusal to cut public expenditure sufficiently to allow control of the
money supply. In 1969 the Labour Government’s ‘Letter of Intent’ to the IMF
following the devaluation of the pound in 1967 accepted the need to adopt a
6 The remark was widely quoted in the press and elsewhere, but is published by the Margaret
Thatcher Foundation at http://www.margaretthatcher.org/document/110883.
target for Domestic Credit Expansion. 7 Discussion of the importance of
controlling the money supply then continued throughout the 1970s, with
Johnson, Walters et al. (1972) being one notable instance of its being publicly
advocated to the Conservative government, and in 1976 money supply targets
were once again adopted by a Labour government at the urging of the IMF, and
the publication of Maude, Howe et al. (1977) announced the intention of the
Conservatives to pursue money supply targets if elected.
On becoming leader of the Conservative Party in 1975, Thatcher encouraged Sir
Keith Joseph to continue the searching re-‐examination of Conservative policy he
had already begun. That resulted in a re-‐evaluation of a number of policies, a
general shift towards market-‐based proposals, and in particular acceptance of
the view that inflation would have to be controlled by macroeconomic, rather
than wage, policy. Once Thatcher was Prime Minister, the 1980 Green Paper (i.e.
an Official discussion paper) Monetary Control was published and a debate about
how to control the money supply ensued. The budget of 1981 became notorious
for imposing contractionary policy in a recession, and resulted in a protest
signed by 364 senior economists. 8 The government’s confidence in monetary
targets quickly waned and from about 1985 there was increasing discussion of
the possibility of organizing monetary policy around a fixed exchange rate. Nigel
Lawson, who had become Chancellor of the Exchequer in 1983 became the
principal proponent of this view. Thatcher firmly resisted it so that it was only in
1990, in the last weeks of her premiership, that the pound joined the Exchange
Rate Mechanism of the European Monetary System.
Friedman’s involvement in British affairs was at its most intense in the 1970s
and early 1980s, when he and his views were the subject of literally hundreds of
mentions in the press and Parliament, often as a result of his involvement with
the Institute of Economic Affairs which published five pamphlets authored by
him. In 1976 three things happened. Friedman was awarded the Nobel Memorial
Prize for Economics. Secondly, as a result of protests at that award, his visit the
previous year to Chile came very prominently to British public attention. He was
accused of being close to, or an adviser of the Pinochet regime which had taken
power in a coup which also resulted in the death of President Allende. 9 Friedman
consistently denied such close involvement, but gave his fullest account of his
activities only in his memoires – Friedman and Friedman (1998, ch. 24). There,
he said he had given some lectures on the causes of inflation, two on ‘the fragility
of freedom’, met Pinochet once for 45 minutes, and afterwards written him a
letter of advice, exclusively concerned with economic matters, which, as
Friedman was at pains to emphasize was the kind of advice he gave freely to
7 ‘Domestic credit expansion’ is the growth in the money supply less the balance of payments
deficit. More detail on policy can be found, for example in Dimsdale (1991).
8 The statement is reported in the Times 30 March, 1981 p. 1, and is reproduced in Neild (2014),
and the list of signatories in Booth (2006). The Budget’s historical importance and intentions
were described by Adam Ridley (2014) amongst other contributors to Needham and Hotson
9 Orlando Letelier so impugned Friedman in The Nation, 28 August 1976 before himself being
murdered by agents of the Pinochet regime. The best study of the facts of Friedman’s activities in
English is Montes (2015).
everyone, and that policy had been settled before his visit, so that he had no
practical influence on it.
Thirdly, either side of the announcement of the Nobel Prize in October, Friedman
made a number of broadcasts about the British economy. Some were in the
United States, some in Britain, but were widely reported and carried a doom-laden
message. Specifically drawing a parallel with Chile, he argued that the
British fiscal position was so poor that it was likely to be impossible to finance it
without inflation at such levels as would pose a severe threat to the maintenance
of democracy. In Friedman (1976, p. 9) – a publication following shortly after the
broadcasts – he said that Britain was ‘on the verge of the Allende period in Chile’
and that there was no better than an even chance of British democracy surviving
five years. These suggestions also attracted a good amount of adverse
In 1978, as a result of his connection to the IEA, Freidman met Thatcher over
dinner along with Ralph Harris, the director of the IEA. 10 In early 1980, the
British version of his TV series Free to Choose was broadcast and he paid a visit
to 10, Downing Street. Then in June he gave written evidence to the Treasury and
Civil Service Select Committee on Monetary Control. In 1983, following the
damning criticism of Friedman and Schwartz (1982) by Hendry and Ericsson
(1983) he was again at the centre of controversy as it was suggested that the
work, ostensibly establishing monetarist conclusions about Britain, was so
deeply flawed as to border on the fraudulent. Friedman was 71 in that year, and
thereafter much less was heard from him, although in Friedman and Pringle
(2002, p. 20) he said that if he were British he would be against joining the Euro.
3. Evidence of Friedman’s lack of influence
The question of Friedman’s influence can be assessed by considering a number
Clearly, the policy of the Conservative government was broadly in line
Friedman’s views. It favoured marketization of various sorts, including most
notably the privatization of certain state-‐owned enterprises; it eschewed
incomes policy, but pursued the reform of trade union law; abolished foreign
exchange control; Thatcher favoured a floating exchange rate; and most
importantly the government proposed to focus counter-‐inflation policy on
control of the money supply.
An investigation of policy at a more detailed level, though, suggests Friedman
had no specific influence on it. There is a little discussion of privatization in
Friedman (1962) but the only state-‐owned British firm mentioned was the BBC
and the Thatcher government never showed any interest in privatizing that. The
question of incomes policy was long debated in Britain, and Friedman’s principal
comments on their futility (or costs) were years before Thatcher was elected –
10 Cockett (1994, p. 173), citing interviews and documents in the Hoover Institution archives.
Friedman (1966) – and there is no sign of that or anything else he wrote having
influenced the government. Trade union reform was pursued vigorously through
a number of Acts of Parliament. Friedman had no reason to oppose that, but if
anything tended to downplay its importance. That is apparent in a contemporary
British discussion, for example, in his remarks in The Listener where he said, ‘In
my opinion the trade union problem in Britain is almost entirely concentrated in
the nationalised industries in the public sector. If Mrs Thatcher or successive
governments are successful in reducing the size of the public sector, I think you
will simultaneously, without very great difficulty, reduce the trade union
problem that you face’. 11
As with incomes policy, Friedman’s most notable contribution on floating
exchange rates was long before Thatcher came to power – Friedman
(1953/1966). He himself – for example in Friedman and Friedman (1998) – said
his arguments had no influence on policymaking, but rather, floating was
adopted when there was no alternative. That describes the British decision to
float in 1972 very well. He made no contribution to the British debate about the
EMS, and is not even mentioned in Thompson (1996).
The matter of the abolition of exchange control has more potential to show
Friedman’s influence since he apparently urged the policy on Thatcher at their
dinner in 1978. Harris reported their conversation in Erickson (2001, p. 55-‐6)
saying that the ‘key point’ in their discussion came when Friedman insisted that
the removal of exchange controls was essential, Thatcher expressed the fear that
this would result in a fall in the pound, and Friedman argued that the pound
would in fact be strengthened by the renewed confidence the policy would bring.
Any suggestion that Friedman’s advice played a role in the quick abolition of
exchange controls, however, needs to be considered in the light of other points. It
was Geoffrey Howe who was responsible for the decision and in Howe (1994, p.
140-‐143), he described their abolition as a ‘long cherished’ ambition; said
Thatcher was hard to persuade; and that Miller and Wood (1979) was an
influential argument; but made no mention of Friedman. Thatcher’s hesitation
over the matter is confirmed by the archival research of Ikemoto (2016), who
also revealed that Howe and Lawson – both advocates of abolition – thought it
would bring a short term benefit in reducing the value of the pound – not at all
what one would take from Friedman.
That leaves the matter of monetary policy – surely in any case the most likely
place for Friedman to have a significant influence. Here, though, the details of
what happened most clearly reveal Friedman’s lack of influence. When Monetary
Control was published in 1980, Friedman described it as ‘incompetent’, and said
that if it had been written by a student, he would have failed it. 12 In his evidence
to the Treasury and Civil Service Committee, he repeated that sentiment in
rather clear terms, saying,
11 12 March 1981, p. 331.
12 The Times, 20 October 1980, p. 19.
‘I could hardly believe my eyes when I read, in the first paragraph of the
summary chapter, “The principal means of controlling the growth of the
money supply must be fiscal policy – both public expenditure and tax
policy – and interest rates”. Only a Rip Van Winkle, who had not read any
of the flood of literature during the past decade and more on the money
supply process, could possibly have written that sentence. Direct control
of the monetary base is an alternative …’
Friedman (1980, p. 57)
He also asserted (p. 56) that ‘There is no necessary relation between the size of
the PSBR and monetary growth’. Nevertheless, the government followed the
approach of Green Paper and adopted a target for £M3, along with, a ‘Medium
Term Financial Strategy’ which emphasized the role of fiscal policy in the overall
plan. Clearly, Friedman had no hand in forming the policy, and his view about the
discussion document was rejected (or ignored).
Friedman’s accounts of his involvement
Considering Friedman’s own accounts of his influence, it again becomes difficult
to see he had any significant role. Perhaps the most striking point is how little he
said about his involvement in British affairs. Friedman and Friedman (1998) is a
book of over 600 pages. A large proportion of it – perhaps a third, all told –
concerns his various foreign travels. There are whole chapters on his on his stay
in Paris in 1950, his sabbatical year in Britain in 1953-‐4 and other trips he took
in that year, and one on his visits to each of India, Chile, Israel, and China,
another one on a round-‐the-‐world trip in 1962; and yet another one mainly
concerning visits to a South Africa, Australia, Japan, and other countries. But
there is nothing of his connection to the IEA, nor, except for one concerned with
planning Free to Choose, mention of trips to Britain in the 1970s.
Similarly Friedman shows no general inclination to be shy of advertising his
meetings with political leaders but more attention is given to Malcolm Fraser,
Zhao Ziyang and Chief Buthelezi than to Thatcher. The 1978 dinner with
Thatcher is unmentioned, and the meeting at Downing Street in 1980 merits just
one paragraph. Otherwise there are only scattered references to her or British
affairs more generally. That single paragraph says (p. 566),
‘During our visit to London in February 1980 to film the discussions for
the British version of Free to Choose, Margaret Thatcher invited us to
meet with her and some of her ministers at 10 Downing Street. The
meeting generated an interesting and spirited discussion, especially after
Mrs. Thatcher left, asking me to instruct some of the “wets” in her cabinet.
As on earlier and later meetings with Mrs. Thatcher, it was impossible not
to be impressed with her intellect, character, and force of personality.’
Here, Friedman is surely trying to give an impression of closeness to Thatcher,
but further investigation does not bear that out. First, the visit was far from
being seen as welcome even by the Thatcherites: ‘The occasion had its
complications’ as the historical commentary on the Margaret Thatcher
Foundation website says. 13 Lawson wrote a memo for Thatcher obviously
intended to help her steer a diplomatic course by identifying aspects of policy
which Friedman had approved, and those he had disapproved. 14 It advised her
on which points to ‘stress’ in the discussion, and as to how she might be able to
‘reassure’ him. Nowhere is there an indication that the Prime Minister should
seek or welcome advice from Friedman and it is in fact rather plain that the
objective was to prevent damaging commentary by Friedman in the press. In
other words, he was not at all taken to be a key ally of the government.
The visit was also reported in the press, and Thatcher was asked questions about
it in Parliament, so more information is available. In addition to Friedman, his
wife, and Thatcher, there were five members of the government present: Howe,
Lawson, John Biffen, Patrick Jenkin, and Ian Gilmour. Thatcher did leave the
meeting – indeed she was there only ‘right at the beginning’, 15 no doubt because
she was preparing her speech for the following day when there was to be a vote
of No Confidence in the government.
The expression ‘wet’ to describe Conservatives who either rejected monetarism
or favoured a markedly more moderate policy was only just coming into use.
Gilmour was to emerge as the leading wet, but as of 1980, none of the others
present could be put in that group. In any case, although the term may have
become a badge of pride, it was initially intended as an insult. It seems most
unlikely that Thatcher used it in front of a visiting luminary and his wife to
describe any member of her government, least of all one who was present, the
day before a No Confidence motion.
Friedman and Friedman (1998) contains no discussion of any other meetings
although there is a photograph in which the Friedmans and Thatcher appear
with the physicist Edward Teller at the Hoover Institution in 1995 – five years
after Thatcher lost power. That photograph – uniquely in the book – is ill-composed.
Freidman’s head is turned three-‐quarters away from the camera,
while Thatcher and Teller are apparently in conversation, and Rose Friedman
peers into the picture from the background. Setting this alongside Friedman’s
photographs in the Oval Office with Nixon, and a carefully posed one with
Reagan from 1982, it is apparent that he had no comparable record of any
meeting with Thatcher. This photograph must have been used because the
Friedmans wished to display a connection with Thatcher, but had none that was
The only earlier meeting appears to have been the dinner in 1978. In the
recollection of Harris (2001, p. 56), the original arrangement was for Friedman
to meet Joseph, and it was only when he was unable to attend that Thatcher was
substituted. In any case, Friedman’s immediate verdict was rather measured
14 Lawson memo for Thatcher, Christ Church Oxford, Lawson MSS, Lawson 1 (1980).
15 HC Deb 28 February 1980 vol 979 col 1562. She gave in effect the same answer to a different
question at HC Deb 28 February 1980 vol 979 col 1561.
since he wrote to Harris that she was ‘attractive and interesting’, but, rather than
finding it ‘impossible not to be impressed with her intellect, character, and force
of personality’, he wrote, ‘Whether she really has the capacities that Britain so
badly needs at this time, I must confess, seems to me still a very open question’. 16
So, although even in Friedman and Friedman (1998), he claims little connection
to Thatcher or her government, it seems that even what he does say is an
exaggeration. He was no special friend of Thatcher, helping to persuade her
ministers of anything, and his ‘earlier and later meetings’ with her – exactly one
of each, it seems – are not nearly so significant as might seem to be suggested.
Apart from that implication – if there is one – of his being close to Thatcher, he
seems never to have claimed a role in forming her policy. He wrote about her
twice in his regular Newsweek column. Once he discussed her policy, approving
some aspects and disapproving an increase in VAT, but gave no hint that he had
any influence on it, and once he contrasted it favourably with the policy of
Mitterrand in France. 17 In numerous interviews in the British press he often
commented on policy, but does not seem anywhere to have claimed influence in
More than that, though, it is striking how ill-‐informed Friedman was about the
government and its policy. In Friedman and Friedman (1998, p. 464) the authors
said that one of the strengths of the Thatcher government was that it had come
to Office with a ‘detailed’ plan of action. For someone who thought monetary
policy so important, and had been so critical of Monetary Control, produced the
year after the election, that verges on the absurd, but there is more that could be
said to confirm the government was rather ill-‐prepared for Office. 18 Even more
surprising though, is an observation in connection with the televised discussions
of the British version of Free to Choose. In Friedman and Friedman (1998, pp.
499-‐500) he said he had no list of participants in these discussions, but
remembered that ‘at least one minister in the Conservative government and one
former minister of the prior Labour government’ had taken part. Indeed, in one
of them the then-‐current Chancellor of the Exchequer, Howe, discussed
Friedman’s views with his Labour predecessor, Denis Healey, who had been
Chancellor form 1974-‐1979 (and was therefore presiding over the supposed
fiscal collapse Friedman predicted in 1976). 19 Howe was also one of those he met
on his visit to Downing Street, and Lawson who was at that meeting also
appeared on another programme.
Even though the book was written some years after the events described, not
knowing the name of Thatcher’s first Chancellor the Exchequer is a fairly sure
sign of not having had any significant involvement in policy. But in any case,
16 Letter from Friedman to Harris, 4 December 1978. Thatcher Foundation Archive, document
17 9 July 1979, p. 56; 4 July 1983, p. 51.
18 The discussion of early decisions in Thatcher (1993, p. 38-‐45) makes it clear that the
immediate abolition of price controls, the tax changes announced in the budget that year, and the
issue of Civil Service pay were all under discussion in the government after the election.
19 The Guardian, 22 March 1980, p. 14 (television listing).
Friedman and Friedman (1984, p. 5) also showed how little they knew – in this
case, only a couple of years after the events. They asserted that as a general rule,
new governments had six months to implement radical policy but after that
became essentially powerless. It was not a well-‐argued point, but they felt they
could illustrate it with the claim that,
‘In her first months in office, Mrs Thatcher succeeded in ending forty years of
foreign exchange control, reducing the top income tax rate from 90 to 60
percent, denationalizing trucking, and adopting a ‘medium term financial
strategy’ to reduce monetary growth. Since then, these changes continue to
have there effects, but there have been no further major moves.’
Actually, the top rate of tax was reduced from 83%, the MTFS was introduced in
March 1980 – almost a year after the election. As to further moves in the first
Parliament, British Aerospace, Cable and Wireless, Amersham International,
Britoil, and Associated British Ports were all privatized; the Housing Act, 1980
was outside the six month window but was arguably one of the most far-reaching
moves of the government in giving council house tenants the right to
buy their homes. Most of all, though, the crucial and formative 1981 budget was
nearly two years after the election. Friedman was simply ignorant of even basic
matters of the policy on which he is supposed to have had so much influence.
Conservative Party responses to Friedman
We might also consider what leading figures in the Conservative Party said – or
did not say – about Friedman. One case arises over the plan to broadcast
Galbraith’s The age of uncertainty on the BBC in 1977. Joseph feared it would
have a significant impact on public opinion and wrote to William Whitelaw, then
Shadow Home Secretary, with copies to Thatcher and Howe, saying that
Galbraith was a persuasive performer who had expressed support for the
(Labour) Government in 1976, and that he was ‘about the most dangerous
intellectual opponent that we have on the economic front’. He urged Whitelaw to
protest to the BBC with a view either to having the series cancelled, or having
another one produced presenting alternative views. Joseph wrote that there was
‘one man who in my view is capable of demolishing Galbraith’. 20 That man,
though, was not Friedman, but Frank McFadzean, then Chairman of Shell and
about to become Chairman of British Airways.
Howe replied suggesting ‘a series of talks from Hayek or Friedman’. 21 But then
Joseph wrote to Whitelaw again – this time with copies to Thatcher, Howe, and
four others. He noted that Friedman had just given a lecture for the IEA
criticizing Galbraith, and welcomed that, but said that even if the whole lecture
were broadcast it would not balance Galbraith’s 13 episodes. So Joseph again
sought a balancing series by ‘someone acceptable to us’, 22 and again said
McFadzean was his first choice, but thought Peter Bauer an alternative, and in a
20 Joseph to Whitelaw, 17 March 1976 http://www.margaretthatcher.org/document/111226
21 Howe to Joseph, 22 March 1976 http://www.margaretthatcher.org/document/110039
22 Joseph to Whitelaw 10 Sept 1976 http://www.margaretthatcher.org/document/111238
Friedman’s lecture was published as Friedman (1977).
hand-‐written addendum, suggested five other names, but still Friedman went
In the end, nothing happened until Friedman’s Free to Choose. In retrospect, that
has been seen as providing balance, but it owed nothing to Joseph’s concerns – it
was made for American television and later shown in many other countries, of
which Britain was merely one. 23 What is interesting is that while Joseph was
engaged in rethinking Conservative policy, Friedman did not feature on his list of
possible speakers even after Howe suggested him. Nor, indeed, did any work by
him feature on the ‘reading list’ of 29 items Joseph instructed Civil Servants in his
Department to read when he came into Office. 24 So, despite occasional hints to
the contrary, such as Kavanagh (1987, p. 114), Friedman was not a significant
influence on that rethinking.
In 1,650 pages of the two volumes of Thatcher’s memoirs, there are a total of six
mentions of Friedman. In Thatcher (1995) there are only two of any
consequence at all. One says that in relation to the view that high levels of public
expenditure were beneficial, she wrote, p. 567,
Before I ever read a page of Milton Friedman or Alan Walters, I just knew
that these assertions could not be true. Thrift was a virtue and profligacy
Broadly speaking that is borne out by a speech she gave in 1968 advocating the
view that the government should control the money supply, and very much
emphasized the importance of recognizing the limitation of total resources
available to it. 25 The second (p. 596) cited Friedman’s views on floating exchange
rates, but only for the purpose of rebutting Lawson’s view. In Thatcher (1993) –
the volume covering her period in Office – she said that like Hayek he was a great
expositor of free market economics (p. 618); that he said monetary lags could be
long and variable, (p. 710 n); and that Gorbachev was attracted to his views. (p.
804). In other words, she takes nothing from him.
Concerning Thatcher there is also one particular incident, the reports of which
warrant comment themselves. Michael Foot, the leader of the Opposition
challenged Thatcher in Parliament to name ‘any of those economists who agree
with her’. Thatcher replied ‘I could name many … Suppose we start with Alan
Walters and go on with Professor Patrick Minford’. 26
It is surely interesting that she did not name Friedman. More interesting, though,
is that Booth (2006, p. 12), observing that the story might be apocryphal, said
(incorrectly) that she had been specifically asked to name ‘two’ economists and
23 Friedman and Friedman (1998, p. 499) say it was shown in more than a dozen countries.
24 The list was published in The Economist, presumably as the result of a leak, on 19 May 1979,
and then by Bosanquet (1981), who commented that ‘with additions from Hayek and Friedman’
it would make a useful summary of the thinking of the ‘New Right’. (p. 325)
25 ‘What’s wrong with politics’ a speech to the Conservative Political Centre, 11 October. Thatcher
Foundation Archive document 101632.
26 Hansard HC Deb 09 March 1982 vol 12 col 718-‐9.
added that when she returning to Downing Street, a civil servant said it was
fortunate she had not been asked to name three. Then, Blundell (2010), like
Booth, an IEA man, had Thatcher herself later saying ‘Thank goodness he didn’t
ask for three!’ The story was not altogether apocryphal of course, but its point
was to emphasize the heroic isolation of the monetarists, and it simply would not
have been funny if ‘and Friedman’ had been an answer. There is truth in jest, and
unintentional as it may be here to reveal that truth it is clear that Friedman could
not be named even as a supporter of Thatcher’s policy – much less as its
Similarly, none of the leading Thatcherites in the government seem to have given
any indication of Friedman playing a significant role in policy design, or even of
being a significant inspiration. Friedman’s name only appears in Howe (1994)
when, discussing a meeting with Arthur Burns, it is pointed out that Friedman
had been his student. (p. 111) Lawson (1992), who knew much more economics
than Thatcher or Howe, mentioned him twice – once to say Thatcher did not in
practice agree with him about floating exchange rates (p. 468) and once in
connection with the consumption function. (p. 632) In Ridley (1991), the
memoirs of one of the most loyal Thatcherites, there is no index entry for
Friedman, although there are nine for ‘monetarism’, three covering multiple
pages. Biffen (1988) did not mention him at all. Jenkin has not written memoirs
and nor did Joseph, but he did write to the Economist saying, that although he
had a high regard for Friedman, ‘the evolution of my views owes little to him’. 27
Friedman in the British press
One thing that may create the impression of Friedman having a great influence
on policy is the frequency with which his views are mentioned in the British
press. Certainly there are hundreds of such references with a large number being
collected by Nelson (2009) – even though he takes his story only up to 1979.
Parsons (1989) – in a study of the power of the financial press – actually has a
chapter entitled ‘How Friedman came to Britain’.
As Nelson puts his argument, though, it is about ‘Friedman’s influence on UK
economic discussion’ (p. 1) rather than policy. So it is – Nelson puts it beyond
doubt that Friedman’s name was often used in press discussions of policy.
Certainly, a general sense of Friedman pushing thinking in the direction of
controlling inflation by macroeconomic policy and favouring market solutions
comes through, but Nelson shows no real intent to demonstrate a closer effect on
policy than that.
As to Parsons, in the chapter in question he was principally concerned with
analysing the journalism of Samuel Brittan at the Financial Times and Peter Jay,
and to a lesser extent, Tim Congdon, at the Times. It is an oddity of the work that
The Economist received much less attention, although page for page it made
more reference to Friedman than the others. In any case, despite the chapter
title, the matter he pursues is much more the presentation in the press of the
27 28 September 1974 p. 4.
view that inflation needed to be controlled by macroeconomic and particularly
monetary policy, rather than anything more specifically Friedmanite. Except for
a discussion of attention attracted by Free to Choose, the substance of the chapter
is to show that the views of Brittan, Jay, Congdon, and a few others were
influential – and hence that the financial press is powerful. Nowhere in the
chapter is there a close analysis of Friedman’s views, nor of his influence on
policy or public opinion, and for large sections of the chapter he goes
Two other points of interest emerge from a closer inspection of press reports
about Friedman. One is that his views were discussed in detail only very
occasionally. Indeed, of the three figures on whom Parsons focussed, only Brittan
spelt out Friedman’s views in detail for his readers and for the most part he did
that rather early on. He drew on Friedman (1968) in three long and detailed
discussions of macroeconomic control in 1968 and 1969, 28 and more precisely
on the question of the money supply in four more in 1969. 29 A bit later, he said
that Friedman (1975) was ‘perhaps the most important economic pamphlet to
be published in the UK for several decades’ and described Friedman’s story of
the acceptance and breakdown of the Phillips curve. 30 In 1976, he wrote a long
‘open letter’ in the form of an article, mainly questioning Friedman’s views on
the relation of public expenditure to inflation, and the paper subsequently
published an ‘open reply’ from Friedman. That combination clearly focussed
attention on the specifics of Friedman’s view. But all these are only a small
number of articles.
At the Times, Jay never came close to a detailed exposition of Friedman’s views
and in any case he had his own analysis of the British problem, with only partial
resemblance to Friedman’s. 31 So when Jay, writing in The Listener declared
‘Friedmanism’ to be ‘a central – perhaps the central – issue in British domestic
political debate’ (p. 561) it must be that it was the general sense of
‘Friedmanism’ he had in mind. 32 All that entailed was the recognition of the
importance of setting macroeconomic policy to control inflation and recognizing
the power of the market as an allocative mechanism. Congdon mentioned
Friedman much less often than either of the others. He was much more
significant, having left journalism, as an advocate of monetarism, and in due
course a Thatcherite in his own right.
It was probably Jay, too, who wrote the Times leader comparing the views of
Friedman and Hayek on the question of how quickly the government should seek
to reduce inflation. 33 Earlier in the year Hayek had himself three times
contrasted his own view that it should be done as quickly as possible with the
28 25 October 1968, 23 January and 10 April 1969.
29 15 May, 8 July, p. 16, 10 July, and 21 October.
30 20 June 1975, p. 8. In Forder (2010) I argued that Friedman’s story was made up; Brittan
showed no appreciation of that, but his attitude to it is considered more fully in Forder (2014, p.
31 The distinction between the views is considered Forder (2014, p. 151-‐153), and an example of
Jay’s other presentations of his ideas would be Jay (1976).
32 1 May, 1980
33 31 July 1980, p. 15.
gradualist view of Friedman, which he said was the one being followed by the
government. 34 The Times then described the unexpected, and presumptively
unintended, severity of the recession that was developing as amounting to
‘Intent, Friedman; Result, Hayek’, as the headline writer put it. Again, the names
are used to characterize the policy, rather than strictly to attribute their
authorship to those named.
There were, in addition, of course, occasional other articles by Friedman, some
letters from him which sometimes made specific points clearly. There were also
some longer discussions in the Economist – although some of those were more
concerned with criticizing his ideas than advocating them. Still, though, all these
make up a small portion of the mentions of Friedman.
The second point of interest, though, is that the association of Friedman’s name
with generally pro-‐market and anti-‐inflationist views does come through very
clearly and that the readers of the papers in question were expected to
appreciate that connection. One could guess this just from the frequency with
which it was said that he was the leader of the Chicago School, or that he was a
leading advocate of the view that control of the money supply was essential to
good policy. 35
Even more than that, there are plenty of cases where the mere mention of his
name is expected to evoke certain reactions in the reader. So, the Economist,
assuming the reader’s erudition whilst reviewing one of Friedman’s books said,
‘As one would expect, the result is both excellent and somewhat idiosyncratic.
Friedmaniacs will recognise many of Professor Friedman’s own ideas’. 36
Similarly, when the Financial Times reported American research showing the
quantity of money to be more important than ‘most economists, except perhaps
Milton Friedman, would have guessed’, 37 it was not reporting anything about
Friedman. On the contrary, the stylistic flourish takes all its life from the
presumption that the reader already knows about him. The same thing is surely
true of both Pym (1984), and the Financial Times’ quotation from it, saying of
Thatcher’s 1983 election victory, ‘My belief remains that it owed more to General
Galtieri and Michael Foot than it did to Milton Friedman’. 38 The names of Galtieri
and Foot would certainly have been familiar to readers, and the interesting thing
is ‘Milton Friedman’ ranked with them.
If a single example is to establish Friedman’s celebrity standing, though, it is
perhaps one from 1990. Then, the distillers of Knockando advertised their 14
year old whiskey by reminding the readers that in 1976, Mohammed Ali retired
34 In letters, 5 March 1980, p. 17, and 13 June 1980, p. 15 and a column on 27 March, p. 16.
35 The data on which this claim is based is a substantial, mainly electronic, search of The Financial
Times, the Times, the Economist, and the Observer, and such other articles as came to my
attention. An attempt further to document it would result in a gigantic list of articles containing a
single sentence on him, and a smaller but still extensive list of those containing two.
36 26 Jan, 1963 p. 328.
37 9 Sept 1969, p. 25.
38 18 June 1984. Pym was a left-‐wing Conservative – ‘a wet’ – sharply promoted in Thatcher’s
government when Galtieri’s Argentina invaded the Falklands, then sacked immediately after the
election, when Labour, ineffectively led by Michael Foot, were crushed.
from boxing, Gary Gilmore had called for his own execution, and Milton
Friedman forecast the end of British democracy. 39 Their aim, no doubt, was to
emphasize how long a period 14 years is, but they were paying for the
advertising, and so it is clear they expected Friedman’s name to be recognized,
even after that elapse of time.
Beyond this celebrity status, however, there is also the point that a number of
references to Friedman were hostile, and some were insulting. Peter Jenkins, in
the wake of one of Friedman’s comments about Britain’s financial position in
1976, called him the ‘Nobel economist and prize political fool’, 40 then ‘the
Chicago charlatan’, 41 and then a Guardian editorial very possibly written by
Jenkins, said, that like a jack-‐in-‐the-‐box,
‘if you put that cantankerous old bigot, Professor Milton Friedman, on
America television and invite him to talk about Britain, he will reel off the
doom and gloom with unflagging enthusiasm until he is put back in the
Later – during the Conservative government – it also came to public attention
that Friedman was widely disparaged in the academic community. Neild (2014)
– one of the organizers of the March 1981 statement by 364 economists –
recorded that amongst the signatories, three important attitudes were that
‘monetarism was theoretically incoherent, that unemployment was already
shamefully high and that Friedman was behaving as a charlatan’ (p. 4) In all the
discussion of the statement itself, and other issues around Friedman, the last of
those surely came through to public recognition to some extent. The same sort of
thing came up again when Hendry and Ericsson (1983) said that Friedman and
Schwartz (1982) was deeply flawed. That was widely reported, but the Guardian
put the matter in the most extreme terms, saying Friedman had ‘effectively been
accused of distorting evidence for his theories in a devastating critique to be
published by the Bank of England’. 43
So, we can see Friedman as having broadly well-‐known views, but also being an
easy target, at least for the intellectual left, and even being something of a hate-figure
for them, and of there being a degree of academic support for that sort of
v. Friedman in Parliamentary debate
Further insight arises from considering mentions of Friedman in Parliamentary
debate. Starting in 1968, there are something over 500 mentions of him before
the end of Thatcher’s premiership. 44 Something like 330 of them are by Labour
39 Financial Times, 27 November 1990, p. 20.
40 Peter Jenkins, 3 November 1976, p. 12.
41 Peter Jenkins, 9 December 1976 p. 14.
42 30 Nov 1976, p. 14.
43 15 December 1983, p. 1.
44 The online version of Hansard at http://hansard.millbanksystems.com was used by Anne
Williamson to compile a complete catalogue of these mentions.
members, to only 130 by Conservatives. Of the 20 Members who mentioned him
most often – accounting for about 230 of the mentions – only three were
Conservatives – Biffen, Terence Higgins, and Peter Hordern. In addition Ralph
Harris is one of the 17 – although basically a Conservative supporter he sat as a
crossbencher (i.e. independent) in the House of Lords. Mentions of Friedman are
also concentrated in years when he or his views were particularly newsworthy.
There is a little peak in 1969, at the time of IMF letter of intent, then another in
1976 and 1977; and a much larger one in 1980 and 1981 – those two years have
157 and 58 mentions, respectively.
Before 1976 there is a reasonable spread of views about him. One Labour
member – Robert Cant – mentioned him several times while arguing the
importance of monetary targeting; 45 another, Joel Barnett, cited him for an
estimate of time spent filling in tax returns, 46 and he also acknowledged an
influence of Friedman on the Government’s monetary policy after devaluation. 47
On the other hand, in that period, the Government was also mocked for its
adherence to Friedman’s views by Ridley, 48 and sometimes criticised for failure
to follow Friedmanism properly – for instance by Conservatives Jock Bruce-‐
Gardyne and Michael Alison. 49 But Robert Boothby – also a Conservative –
criticised them for adopting Friedman’s views rather than Keynes’. 50
In the mid-‐1970s, when Friedman started to advocate indexation, he was also
quoted by its supporters, including Liberal John Pardoe, 51 and Conservatives
Howe, 52 and Geoffrey Pattie, 53 although he was also criticised over it by
Higgins. 54 The publication of Friedman (1975) was noted for example by Healey,
who saw it as supporting his policy; 55 Conservative education reformer Rhodes
Boyson mentioned him in connection with his advocacy of education vouchers; 56
Ridley cited Friedman for the view that public provision of services is twice as
expensive as private provision; 57 and Peter Hordern, a Conservative, opposed
incomes policy, citing Friedman. 58
At the time of his remarks about the British fiscal position, and the publicity
around his visit to Chile, things started to change. The remarks about fiscal policy
were approved once or twice by lesser figures but Dennis Healey, the Chancellor
the Exchequer said the picture ‘ignorantly presented by Professor Milton
45 HC Deb 11 May 1971 vol 817 col 273, HC Deb 27 March 1972 vol 834 cols 116-‐117.
46 HC Deb 12 May 1970 vol 801 col 1102.
47 HC Deb 17 November 1969 vol 791 col 924.
48 HC Deb 09 July 1969 vol 786 col 1493.
49 HC Deb 03 November 1969 vol 790 col 703; and HC Deb 17 November 1969 vol 791 col 968,
50 HL Deb 28 May 1970 vol 310 col 1217.
51 HC Deb 14 November 1974 vol 881 col 649, and HC Deb 20 May 1975 vol 892 col 1279-‐1280;
HC Deb 03 November 1976 vol 918 col 1412.
52 HC Deb 10 April 1974 vol 872 col 575.
53 HC Deb 17 December 1974 vol 883 col 1467.
54 HC Deb 20 May 1974 vol 874 col 83.
55 HC Deb 01 July 1975 vol 894 col 1194.
56 HC Deb 21 July 1976 vol 915 col 1899.
57 HC Deb 11 October 1976 vol 917 col 137.
58 HC Deb 30 November 1976 vol 921 col 809.
Friedman and fatuously echoed by the Conservative Party bears no relation to
the facts’. 59 And he was joined by one of his Conservative predecessors, Reginald
Maudling, who said Friedman was ‘dancing on the grave of Britain with all the
uninhibited freedom of the truly ignorant’. 60 Similarly, in relation to Chile, there
was an occasional attempt to defend, or partly defend Friedman, such as by Peter
Lloyd who blamed the country’s problems on Allende, 61 but Eric Heffer, a Labour
left-‐winger, attacked Conservative policy, linked Friedman to it, and pointed to
his involvement in Chile. 62 After that, Heffer had derogatory things to say about
Friedman several more times, always linking him to the Conservative party, and
quite often also working in a gratuitous mention of Chile. One such was when he
described the ‘nonsensical rubbish we are getting from people like Milton
Friedman who advised the Chilean junta’. 63 Jeremy Bray (Labour) referred to
Friedman having taken on ‘the job of advising the Chilean dictators’, 64 while
drawing adverse conclusions for monetarism.
After 1979 Labour mentions of him had a clear intent to associate the
government’s policy with him, and thereby damn it. John Garrett said that a
question from Healey had ‘neatly skewered the Chancellor, the Chief Secretary
and Professor Friedman in the most succulent kebab’ and ‘showed that the
Budget was economic nonsense’. 65 George Robertson described one proposal as
‘the Government's philosophical apocalypse—the point at which the dog-‐eared
thoughts of Professor Milton Friedman clash with the realities of industrial life
and the Government find themselves in what can only be described as an
economic black hole’. 66 A more insulting version came when Lord Bruce accused
Joseph of having ‘séances’ with Friedman, 67 and Eric Varley said ‘Even Professor
Milton Friedman, the author of the book of spells on which the Prime Minister
relies for mixing her potions, tells her that she has now got it wrong’. 68 Or a little
later, Brian Sedgemore said, ‘The real guru behind these housing benefit cuts is
not the Secretary of State for Social Services, but Professor Milton Friedman, the
man who has provided the theoretical base for the Government's economic
policies’, 69 and then after the press reports on Hendry and Ericsson (1983),
‘Professor Milton Friedman stands to economic theory rather in the same way as
Professor Burt used to stand to theories of intelligence—a fraud and a cheat’. 70
The intention to associate Friedman with the government is of course equally
clear when their policy was rhetorically said to be inconsistent with his views,
such as when John Horam, later to be a Conservative but a Labour member at the
time, noted that Friedman thought the monetary targets too tight; 71 or Healey
59 HC Deb 30 November 1976 vol 921 col 715.
60 HC Deb 30 November 1976 vol 921 col 742.
61 HC Deb 19 January 1990 vol 165 col 800.
62 HC Deb 17 February 1976 vol 905 cols 1157-‐1158.
63 For example, HC Deb 09 June 1976 vol 912 col 35.
64 HC Deb 03 May 1976 vol 910 col 897.
65 HC Deb 09 July 1979 vol 970 col 42.
66 HC Deb 06 February 1980 vol 978 col 609.
67 HL Deb 14 May 1980 vol 409 col 271.
68 HC Deb 14 July 1980 vol 988 col 1081.
69 HC Deb 19 December 1983 vol 51 col 199.
70 HC Deb 19 December 1983 vol 51 col 199.
71 HC Deb 27 March 1980 vol 981 col 1777-‐8.
cited him for the view that there was no predictable relationship between the
PSBR and the growth of the money supply. 72 Similarly, Denzel Davis said it was
well understood that budget deficits should rise in a recession, adding ‘Even
Professor Friedman agrees’. 73
Perhaps of yet greater significance, though, is the kind of thing that
Conservatives said about him. It is very rare that any remark presents Friedman
as being associated with the Government. Lord Swynnerton did so, but only as a
aside. 74 More often, his influence is denied. Powell, 75 Nicholas Budgen, 76 and
Thorneycroft, 77 all said they had learned their monetarism without Friedman.
Howe referred to ‘Friedmanism’ for the purpose of saying it did not describe the
attitude of prioritizing inflation control, noting that Keynes had supported that. 78
James Prior declined to say whether he regarded his policy as Friedmanism. 79
In a similar way he was sometimes mentioned for the purpose of saying his
views were irrelevant or unimportant. Fraser mentioned him along with Marx to
say he had nothing to say about defence policy; 80 Boothby said he had been
wrong about the price of gold; 81 Rhodes James mentioned him to say that
arguing about his ideas was not important to the debate in question. 82 Norman
St. John-‐Stevas, who was far from an ignorant man, being the editor of the
complete works of Bagehot, declared ‘I am not familiar with the works of Mr.
Milton Friedman’. 83 A mention of him came from Peter Bauer, but what he said
‘“We must make it a prime object of deliberate State policy that the
standard of value…should be kept stable”. Who wrote that? Friedman?
Hayek? Walters? Genghis Khan? It was Keynes’. 84
Others, even on the Conservative side, indicated that Friedman’s views should be
rejected. Nicholas Scott expressed a fear that Friedman’s ideas were influencing
too much government policy. 85 Jenkin foresaw indexation leading to 100%
inflation and said Friedman had not recommended that. 86 Lord Alport expressed
scepticism about the benefits that could follow Friedmanite policy. 87 Nicholas
Winterton said his advice was limited since he had never run a business. 88
72 HC Deb 08 May 1980 vol 984 col 570.
73 HC Deb 17 July 1980 vol 988 col 1849.
74 HL Deb 29 June 1983 vol 443 col 331.
75 HC Deb 13 March 1978 vol 946 col 171.
76 HC Deb 05 July 1978 vol 953 col 555.
77 HL Deb 02 November 1978 vol 396 col 33.
78 HC Deb 28 February 1980 vol 979 col 1695.
79 HC Deb 05 March 1980 vol 980 col 510.
80 HC Deb 01 February 1980 vol 977 col 1737.
81 HL Deb 13 February 1980 vol 405 col 224.
82 HC Deb 05 March 1980 vol 980 col 545-‐6.
83 HC Deb 30 October 1980 vol 991 col 703.
84 HC Deb 10 April 1984 vol 58 col 304.
85 HC Deb 05 March 1980 vol 980 col 517.
86 HC Deb 18 March 1980 vol 981 col 315.
87 HL Deb 02 April 1980 vol 407 col 1421-‐2.
88 HC Deb 29 October 1980 vol 991 cols 526-‐527.
Even beyond that, though, there were prominent Conservatives who were
overtly hostile to Friedman. Before they were elected, Peter Walker, who was to
be in Thatcher’s government from 1979-‐1990 said that Friedman’s views on
unemployment could be shown to be false by taking a taxi ride around Chicago. 89
That was itself something that was frequently quoted by Labour members later
on. Geoffrey Rippon, who had been in the Cabinet of the previous Conservative
Government named Friedman as a purveyor of bad advice while arguing ‘In the
real world, uninhabited as it is by economists and statisticians, the crude axe of
monetarism hits the very people that it should not hit’. 90 Christopher Patten who
was later to be in Thatcher’s Cabinet, and then Chairman of the Conservative
Party said, ‘The truth is that our economic failures in the West are doing more to
undermine our security than the KGB has ever done. I suspect that history will
judge that in that sense we have more to fear from Milton Friedman than from
Yuri Andropov’. 91 Stephen Dorrell who joined the Cabinet only after Thatcher’s
resignation, but was first elected in 1979, said that he did not regard himself as a
Friedmanite and had not found Free to Choose instructive or enjoyable. 92
The general pattern, then, is that before 1976 Friedman was sometimes cited by
those who found something in his views to approve, but afterwards that is rare.
After 1979, when the Labour Party ceased to be responsible for anti-‐inflationary
policy, their interventions were unremittingly hostile to him, and consistently
sought to associate him with the government. Conservative comments, on the
other hand, tended to see nothing much of value in his work, almost never to
adopt him as an authority supporting their view, and sometimes to disparage
him almost as much as the Labour members did.
There are plenty more remarks consistent with this picture which could be
quoted. Where there are exceptions to this picture, and particularly the later part
of it, they are few, and generally from lesser figures, or themselves equivocal.
After 1980 – most remarkably – there is only one member of Parliament who
consistently makes remarks which are favourable to Friedman. That is Ralph
Harris, his friend from the IEA, who continues to cite him as authority, or a
source of wisdom in general much longer than anyone else. Otherwise, Friedman
was often insulted, and when his name is used, more often than not, it was to
deride others’ policy.
A further consideration of the existing literature
Although, as noted, a number of Friedman’s obituaries referred to his supposed
influence over Thatcher, and some other authors echoed this, it should also be
noted that plenty of serious scholarship of the Thatcher period gives little or no
attention to him. Kavanagh and Seldon (1989) merely say that Thatcher accepted
89 HC Deb 09 February 1978 vol 943 col 1717.
90 HC Deb 21 November 1980 vol 994 col 156.
91 HC Deb 21 December 1982 vol 34 col 884.
92 HC Deb 31 March 1980 vol 982 col 134.
his view that growth in the money supply rather than trade unions cause
inflation. Young (1989, p. 407) discussing the ‘use’ Thatcher made of
intellectuals, identified as the key economists, Walters, Harris, John Sparrow, and
Gordon Pepper, saying ‘around these close advisers was ranged a constellation of
sympathetic irregulars, from Milton Friedman and Arthur Laffer in America to a
variety of Swiss bankers who came and went. Behind them all loomed the
contentious but revered figure of Hayek’. In Riddell (1989, p. 18) he is mentioned
once for support for monetary base control. Evans (1999) mentioned him once
to say Thatcher had heard of him (p. 53). In Pugliese (2003) there are 32
chapters by different authors and a total of one mention of Friedman where he
was listed between Popper and Hayek as advocating ‘free-‐market capitalist
philosophy’. (p. 257) Campbell (2000) mentioned Friedman to say that he, Hayek
and Alfred Sherman influenced Thatcher more that Edward Norman or Roger
Scruton (p. 372); citing an interview with Harris that at a lunch at the IEA
Thatcher ‘hung on every word’ Friedman said, and later wrote to Harris to say
that she agreed with him on the importance of abolishing exchange controls; and
thirdly that Friedman was her ‘private adviser’. The first of those was merely a
florid way of saying Thatcher was more interested in economics than social
thought. The second depends on Harris’ memory and is surely in fact a report of
the dinner in 1978; and the third was in the narrow context of a discussion of
exchange control. Campbell (2003/2008) said nothing that might be construed
as suggesting Friedman had an influence on Thatcher directly. Finally, in Moore
(2013) – the first volume of the authorized biography of Thatcher – Friedman
was mentioned seven times in over 600 pages, but apart from presenting
versions of accounts of his dinner with her in 1978, the meeting in 1980, and
giving evidence to the Treasury and Civil Service Committee, the author comes
no closer to making him an adviser than to say that Thatcher read some of what
he wrote, underlining parts of it – and even that was said only in the course of
saying she read a great deal. (p. 343) In Moore (2015), the second volume, also
over 600 pages, he is mentioned twice – once he is listed with others as an
inspiration of some of Thatcher’s supporters (p. 424) and once in a description of
a vulgar, anti-‐Thatcher play. (p. 641)
Even amongst the obituaries, the picture is not uniform. The Economist said
Thatcher was probably more influenced by Hayek than Friedman; 93 Samuel
Brittan wrote the obituary for the Financial Times, and said, ‘Friedman's direct
influence on Margaret Thatcher was much less than often supposed’. 94
Similarly, serious discussions of Friedman’s influence or the rise of the New
Right say next to nothing about Thatcher. Burgin (2012) is a book on the political
influence of the Mont Pèlerin Society and its members, there is a chapter – 34
pages out of 226 – on Friedman, but in the whole book Thatcher appears in one
footnote, where she is reported expressing support for the views of Hayek.
Yergin and Stanislaw (1998) have several discussions of each of them, but draw
no particular link between the two. Stedman Jones (2012, p. 162) 162 says Bauer
was Thatcher’s favourite economist and makes nothing of any relationship
between Friedman and Thatcher.
93 The Economist Online Extra: http://www.economist.com/node/8313925.
94 Financial Times, 17 November 2006, p. 13.
On the other hand, there are two groups of works which present a different
story. One consists of the admirers of Friedman. Ebenstein (2007) – already
quoted – is a laudatory biography. He made the claim about Thatcher being an
avid viewer of Free to Choose, but gave no source, and no one else seems to
confirm that. Ruger (2013) is a more balanced work, but still an admiring one. He
relied on a single authority for the claims that Hayek provided Thatcherism with
‘vision’ and Friedman with ‘concrete ideas for change’ (p. 180), but specified
none of them, and presented no further evidence. Butler (1985) is about
Friedman’s ideas, and contains a chronology with the entry: ‘1979: Prime
minister Margaret Thatcher starts implementing Friedman-‐style monetarist
policies in the UK’. Meltzer (2011) is clearly in this group. These authors, of
course, stand along side Ralph Harris who several times made as much as he
could out of Friedman’s one dinner with Thatcher.
The second group are certain of Thatcher’s ideological opponents. Like the
Labour members of Parliament, they often associated Friedman with her. Klein
(2007) is an example of one. Although the book is not specifically on Thatcher,
the author treats her very much as a leader of the worldwide movement she
discusses, and of which she is thoroughly contemptuous. Another is Gilmour
(1992) – the leading wet – these memoires have more to say about Friedman
than Thatcher, Howe, and Lawson combined. He said, for example, that the
governments of various countries adopted monetarism ‘but none of them
became such fundamentalist devotees of the Friedmanite scriptures’ (p. 11)
Milton Friedman said in 1980 that our manufacturing industry should be
allowed to fall to bits, and once again the Thatcherites had swallowed his
doctrine whole.’ (p. 59) of various ideas he identified as Friedman’s that ‘the
Thatcherites accepted them as indubitable laws.’ (p. 14) Prior remained in the
government longer, despite being known to be doubtful about much of the
policy. The two mentions of Friedman in Prior (1986) are to say that whilst be
basically agreed with the objectives of Thatcher and Joseph what began to ‘stick
in the gullet’ was their growing belief that ‘the only thing that really mattered
was control of the money supply and that Professors Milton Friedman and
Hayek, as the high priests of monetarism, stood above all others as our prophets
and gurus’ (p. 104), and that Thatcher’s policy was ‘simplistic’ being based on
her own instincts ‘laid over with a veneer from Hayek and Friedman.’ (p. 109)
That, perhaps, leaves one thing needing explanation – the remark attributed to
Thatcher herself when Friedman died in 2006. It was in fact a statement released
on her behalf by the Margaret Thatcher Foundation and she cannot have written
it. Carol Thatcher (2008) said that in the summer of 2000 her mother confused
Bosnia and the Falklands (p. 257). She started asking the same questions more
than once, which she had never done before. ‘On bad days, she could hardly
remember the beginning of a sentence by the time she got to the end.’ (p 260).
She tells of the day in March 2004 when terrorists killed nearly 200 people in
Madrid. Carol explained the story to her, but later that day she remembered
nothing. Her husband, whom she had married in 1951 died in 2004 and her
daughter recorded, (p. 264), ‘Losing Dad was truly awful for Mum, not least
because her dementia meant she kept forgetting he was dead, and I had to keep
on giving her the bad news over and over again’. But Friedman died two years
later. So the statement attributed to Thatcher was presumably written by a staff
member of the Foundation who had simply absorbed the story of their close
relationship, and knew no better than to report and embellish it to say what it
seemed Thatcher might have said.
Friedman’s general influence in not in question. But there is simply no trace of
any specific influence on Thatcher. To a degree, confusion may have arisen from
the contrast made between Hayek’s call for shock therapy – which was
ostensibly rejected by the government – and Friedman’s ‘gradualist’ view.
Perhaps, Hayek’s suggestion in 1980 that it was Friedman’s policy that was being
followed was taken more literally than it should have been. But the truth is that
Friedman knew practically nothing even of what policy was, and objected, in
rather extreme terms to parts he did appreciate. Nowhere is there a record of his
influencing her, and neither Thatcher nor her supporters in the government say
he did. The fact that Thatcher and Friedman had a meeting at Downing Street
might appear to suggest otherwise, but the circumstances around it make it clear
that it was a difficulty, not a help, for the government. Some authors – pis aller,
one must feel – make the most they can of their dinner together in 1978, but
there is no sign of that having any significance in the development of
Friedman’s role in Britain might be compared with that in Israel, recently
analysed by Schiffman, Young, and Zelekha (2016). It seems his influence on
policy there has also been exaggerated, but he was genuinely asked to serve as
an adviser to Begin, which is more than happened in Britain. Or his relationship
with Thatcher might be compared to that with Pinochet. He had one meeting
with each while they were in power. Pinochet met him for longer, and unlike
Thatcher appears to have seen the meeting as an opportunity to receive advice,
and certainly asked for further advice in writing. Yet in that case, it is Friedman
who is so much at pains to deny an influential role.
Rather, what emerges is that, before the obituaries started to be written, some of
Friedman’s followers seem to have been anxious to believe that he had a closer
influence than he did; and that Thatcher’s opponents feel that she can be damned
with his name. The former group, clearly enough, are anxious to find instances of
Friedman’s insight bearing fruit. The greatness of the man is properly
established only in public affairs.
The latter group regarded Friedman as toxic. And indeed, in the British context
that seems to be a good judgment. After 1976, hardly anyone in Britain had a
good word to say about him, many reviled him, and some academics developed a
very low opinion of him. It can hardly be that this was caused by the award of the
Nobel Prize, so it almost must be a consequence of a combination of perceptions
of his involvement in Chile and his remarks about Britain. When Thatcher was
elected just three years later, ideas – true or false – about what he had done,
combined with his fame to offer a very convenient means of seeming to poison
Thatcher as well. In due course, the story of Friedman’s close association with
the policy of the Thatcher government was to spread far – to Christopher Patten,
Ian Gilmour, and even the Thatcher Foundation – but it began with Eric Heffer
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