I promised to share my Milton Friedman story and here it is. By the way, I’ve read from a reliable source that “Hong Kong Wrong – What would Cowperthwaite say?” was Milton’s last published economics article. Milton’s love and care of Hong Kong was truly amazing and was deeply felt in Hong Kong based on what I read.
Like Albert Einstein, Milton was a giant that took time to answer letters from the public. In 2001, I wrote a letter to wish Rose and Milton a happy 63rd wedding anniversary. The letter included the following excerpt,
Every time I look at the cover of my copy of Two Lucky People, I always wish that my future wife and I would be as happy as you two are at your age. (Prof. Cheung‘s photo was really well done. :) I have also secretly hope that my life could be one tenth (or even one hundredth) as interesting as fulfilling as yours. :)
I look forward to reading more of your ideas/interviews in the press.
Milton was so kind to take time and wrote a note thanking me for my kind thoughts in his handwriting with his signature. A note that I treasure greatly.
In my 2002 letter, again before Rose and Milton’s wedding anniversary, I wrote a longer letter. This time I wrote Milton to tell him how happy I was when I got his reply the year before, about my MBA studies, and how much I enjoyed the PBS program “Commanding Heights” (with many video clips). Here is an excerpt from my letter about what I learned from the PBS program, [K: emphasis newly added here]
I now realise and appreciate the challenges faced by the Chicago School of Economics in the 1950s till the mid 1970s. It amazed me that Hayek‘s idea was so out of favour that only University of Chicago gave him a job in the US in 1950.
On the human side, quoting Gary Becker, “When I came as a graduate student to Chicago 1951, I was flabbergasted by how stimulating the atmosphere was. I had been a very good student at Princeton. My first day in Friedman’s class he raised a question. I answered. He said, “That’s no answer; that’s just rephrasing the question.” That was the example of how blunt people were.” And quoting Milton yourself, “Nobody was very polite. People were interested in ideas and argument and not in making sure you didn’t ruffle anybody’s feathers.”
It seems such a stimulating environment where ideas and argument comes first! I would love to study in such an environment. Of course, that’s what I say until I am on the receiving end of “That’s no answer; that’s just rephrasing the question.” :) Don’t know if my skin is tough enough.
And then I asked Milton for some advice about gas prices spread. (note: looking at the show date now, I might have been watching a re-run?) And thats where I committed the crime of claiming “market failure” without proper facts and figures to back me up completely. Here is an excerpt, [K: emphasis newly added here]
On a different topic. I have a question about the issue of oligopoly and potential price fixing in the retail of gas in Canada. A survey done by CBC’s TV program “Market Place” found that Canadian gas prices are lot higher than US cities of similar size and geographical area with or without tax. What especially troubled me was that the price spread (difference between the high and low price in a city) at the pump is much higher in the US cities (around 15 cents Canadian) Vs around 3 cents spread in Canadian cities. So shopping around in Canada will save you much less than the US
Now, I know this may and probably will make you angry, but can I say this is a case of market failure where the gas retailers have so much market power thus making the market inefficient? What would you recommend as a solution to this problem? How can consumers induce or force competition? As a consumer, I hate to see Canadians paying much more than US especially when we are comparing “similar” cities.
And then I proposed my “crazy ideas” (thats how I call them) of how to “force/induce competition“. Here is Milton’s kind reply to my crazy ideas (emphasis mine),
I know nothing about the distribution of gas in Canada but before you decide that there is a market failure, find out the reason. You will probably find that government regulation plays a role in keeping down competition in gasoline. I do think that the particular idea you suggest is somewhat crack-brained. Whatever power enables the sellers in a particular market to keep their prices close to one another would not be affected by people knowing that elsewhere that was not the case.
I no longer do very much traveling or speaking so there is no chance that I will be in Banff or Calgary anytime in the near future. I have been there in the past and have enjoyed both places very much. Do keep alive your desire to learn and don’t hesitate to think of crazy ideas.
Milton has taught me important lessons of doing proper research before making any hasty conclusion, respect of others’ views even their ideas may seem “crazy” or “crack-brained” (like mine (smile)), and be willing to stand firm on the truth and what one believes in (no compromise).
Milton was once asked about his view on some public policy in private by a Hong Kong newspaper editor. And then this editor asked Milton if the quotes can be used in a newspaper report. Milton became very serious and told the editor that he would never say something in private that he was not wiling to say in public. To me, that is integrity.
Milton, where ever you are, thank you for your kindness to this total stranger. I will keep alive my desire to learn. And thank you for granting me a license to think of crazy ideas.