At the beginning of September 1958, as a graduate student I attended the first U.S.
meeting of the Mont Pelerin Society (MPS). This general meeting was held at the
graduate school of Princeton University. After informal introductions during the first
reception, the chairman of the organizing committee, Jasper Crane, the vice president
of the DuPont Corporation, and his wife invited me, as the youngest attendee, to
sit across the table from them at the opening dinner. The Cranes were anxious that
I be part of the meeting from the beginning. Their actions reflected the kindness
and friendliness that characterizes MPS meetings. Through economists such as
F. A. Harper at the Foundation for Economic Education, I had been auditing
Ludwig von Mises seminar at New York University and had attended lectures by
F. A. Hayek given in honor of Mises. In June 1959, I participated in a political
economy seminar at the University of North CarolinaChapel Hill that featured
Hayek lecturing from the manuscript of the forthcoming Constitution of Liberty,
U.S. economic historian Harrel DeGraff, labor economist Greg Lewis of the
University of Chicago, and James Buchanan of the University of Virginia.
In 1960, I received a postdoctoral fellowship in European economic history at
New York University that included sets of lectures by, among others, Mises, Hayek,
Milton Friedman, Earl Hamilton, and Howard Adelson. I also attended a series
of monetary lectures by Friedman at Fordham University and later when he was
visiting Columbia University.
In The Great Persuasion, Angus Burgin wishes to present a contrast between
the first MPS meeting and members and its later meetings and members. He attributes
a later narrowing focus of the MPS to Friedmans role in the society. As an
eyewitness to the MPSs early years, I am disappointed with Burgins account
of its role in transforming public discourse about the significance of markets
in society. My understanding of this roledeveloped in response to meeting, hearing,
and discussing the ideas of classical liberalism with Mises, Hayek, Friedman,
and othersis significantly different than the authors, which relies only on their
Burgin begins a decade before the formal organization of the MPS. In 1937, the
leading American political analyst, Walter Lippmann, published An Inquiry into the
Principles of the Good Society, in which he challenged the bases of the New Deal.
Lippmann referred to Misess and Hayeks analyses critical of collectivism. A meeting,
the Colloque Walter Lippmann, was held in Paris in August 1938. Participants
included Raymond Aron, Lippmann, Hayek, Mises, Michael Polanyi, Wilhelm
Roepke, Alexander Rustow, and Jacques Rueff. Their common purpose was to challenge
socialism and to defend liberty, but there was confusion as to what characterized
the liberalism they defended. Hayek noted that the core participants represented those
who followed in Misess footsteps, such as himself, Edwin Cannan at the London
School of Economics, and Lionel Robbins. They understood that the crisis of the
1930s was due to the credit expansion by central banks during the 1920s. But others
were confused as to whether the crisis was due to internal inconsistencies in capitalist
economies. Unfortunately, Burgin focuses on those who were confused.
Next Burgin recounts how Robbins built on Canaans original leadership to
create a major economics department at the London School of Economics. Hayek
was appointed a professor in the early 1930s, joining Robbins and Arnold Plant
there. Similarly, Roepke, Mises, and William Rappard formed a center at the
Graduate Institute of International Studies in Geneva. As additional background
to the original May 1947 MPS meeting, Burgin also recounts the development of
the University of Chicago Economics Department, especially the roles played by
Frank Knight, Henry Simons, and Aaron Director (Friedmans brother-in-law). They
faced opposition in the department and in the profession. Burgin neglects the centrality
to Knight and the others of opposition to the dominant institutional school of
economics, an opposition they shared with Misess students. Mises wrote to Hayek
that VeblenHansen ideology dominates public opinion in this country (p. 80).
The great attempt to persuade the public to listen to these intellectuals ideas
(called the Great Persuasion) really got rolling when, after many publishers
rejections, Aaron Director convinced the University of Chicago Press to publish
the U.S. edition of Hayeks The Road to Serfdom (1944). The books immediate
popularity led to invitations to Hayek to travel to the United States on a lecture tour.
At that time, the University of Chicago Law Review published Hayeks essay
The Intellectuals and Socialism, in which Hayek set forth the strategy to change
public opinion. In April 1945, the Readers Digest published a condensation of
The Road to Serfdom in both magazine and book format, thus reaching millions
of readers. In 1946, Leonard Read and F. A. Harper started the Foundation
for Economic Education (several foundation economists attended the first MPS
meeting in May 1947). A positive development was the Republican success in the
November 1946 elections to the U.S. Senate and House of Representatives,
reflecting the publics disenchantment with continued controls on the U.S. economy
after the end of World War II.
Although Burgin notes Directors important influence on Friedman and other
Chicago economists, he devotes surprisingly little space to Directors thinking.
In 1946, Director became the first economist on a law school faculty (at Chicago)
and from his law and economics seminars developed the Journal of Law and Economics.
Burgins lack of interest in Directors contributions may be due to Directors
remaining consistent in his liberalism, whereas others liberalism emerged after a
period of searching. Whether Friedman should be placed in the latter category, as
Burgin does, may be contradicted by Burgins reference to Friedmans highly critical
1946 review of Oskar Langes Price Flexibility and Employment (p. 159). Lange had
taught at Chicago but returned to Communist Poland to head the planning board.
Director attended the first MPS meeting in Switzerland along with Friedman,
Knight, and George Stigler. Burgin fails to mention other notable persons attending
the May 1947 meeting, including Henry Hazlitt and Felix Morley, former president
of Haverford College. Burgin attributes to this first meeting Friedmans desire to
reach a larger readership, as exemplified by his book Capitalism and Freedom (1962), and his examination of the influence of Albert Venn Diceys Lectures on
the Relation between Law and Public Opinion (1905) on Friedmans thinking is
valuable. For Friedman, says Burgin, Diceys book was one of a small collection of
texts that had played a formative role in the development of his approach to social
policy. He read Dicey as a how-to manual for the practice of generating ideological
change, and extensively appropriated the lectures analysis in explanation of his
intended political role. It was necessary to present challenging ideas until a crisis or
circumstances made change necessary. Friedmans role was to develop alternatives to
existing policies, to keep them alive and available until the politically impossible
becomes politically inevitable (pp. 21821).
Burgin feels that there was a move away from the interdisciplinary nature of the
first MPS meeting. To the extent that may be true, he neglects to mention broader
MPS sessions, such as the one that produced the papers contained in the volume
Capitalism and the Historians (1954) edited by Hayek. Similarly, Hayek had drawn
from such sessions the important themes on scientism and positivism in The Counterrevolution of Science (1952).
Burgins concentration on the 1930s and 1940s, when future MPS members
were searching for a coherent philosophy, regrettably does not contribute to
understanding the Great Persuasion. He presumes rather than explicates the
classical liberalism that gained a central importance after the first MPS meeting
in 1947. Ultimately, he seems disappointed that the MPS members gained a
coherent sense of the market economy and the free society.