Becker and Posner debate the possibility of a Milton Friedman Institute at the University of Chicago.  Apparently people are upset about bestowing this honor on someone they disagree with politically.

Part of Posner’s comment, on the effect of honoring Friedman now, when the wisdom of many free-market ideas is being questioned:

I don’t think anyone would quarrel with the idea of an institute devoted to the support of academic research on economic issues, even though many of the issues that economists examine have political implications. The name is the focus of the controversy. Friedman was an advocate of politically controversial policies with which a number of University faculty do not want the University to be associated. When buildings, classrooms, institutes, schools, etc. in universities are named after someone, it is usually a donor. Especially when an institute, which is likely to be a special-purpose organization, is named after a public figure, it is natural to associate the mission of the organization with the name of that figure: the Hoover Institution of Stanford University was named after Herbert Hoover and is indeed conservative, though it is noteworthy that the Institution’s conservative reputation has not extended to Stanford University as a whole, and no more would one expect the University of Chicago to be branded as conservative merely because it contains an institute named after a conservative economist. The University of Chicago is not a conservative institution, though it is not as monolithically liberal as its peer institutions.

The purpose of naming the new institute after Friedman was presumably to encourage fund-raising; one economics professor at the University has been quoted as saying that Friedman’s name would “resonate with the donors.” So a further worry is that most of the donors will be conservatives who support Friedman’s political views (that is to say, his conservative political views, as many of his views were not conservative), and that the new Institute will perhaps unconsciously bias hiring and promotion in favor of economists who support those views. The Institute might (again, whether consciously or unconsciously), it is feared, conceive its mission as being to promote the ideas of the “Chicago School of Economics,” of which Friedman was perhaps the leading (though not the founding), and certainly the most influential, member.

But that is unlikely. Economics is a highly competitive academic field, and piety toward distinguished predecessors is not the path to academic success. It is odd that the opponents of the Friedman naming should think that economists, of all people, would subordinate career motives to loyalty to Friedman’s memory or the “Chicago School” (especially young economists for whom Friedman is just a name). If the religion professor who is leading the movement against the naming is right that “Friedman’s over”–that the current economic crisis has consigned Friedman, along with Greenspan, to the dustbin of economic history–he should have no fear that the new Institute will be biased in favor of Friedman’s views. If a physics institute were named after Albert Einstein, would the institute’s researchers reject quantum theory?

Friedman transformed the economics profession by challenging the conventional wisdom, and he deserves recognition and admiration for that.  New ideas might eventually fall out of favor, but creativity and innovation are the primary sources of significant progress in the academic and scientific worlds, and Friedman was a terrific example of this.

My professors are beginning to speculate about the effect of the Wall Street meltdown on the rest of the economics profession.  Econ professors (and grad students) are paid WAY more than their counterparts in other academic programs, because they have better outside options.  Make that: HAD better outside options.  If we go forward without those sky-high investment banking salaries and CEO compensation packages, academia won’t need to pay economists as much to attract the best and brightest and keep them from leaving for the private sector.

At the same time, if undergrads aren’t as attracted to the econ major (which, at many schools, substitutes for a pre-business major, even though it doesn’t actually teach anything business-related), that department will no longer be among the largest at any university and schools won’t feel as much pressure to have big name economists on their payrolls.  Both factors will decrease the (until now) huge amounts of money thrown at econ departments nationwide.

Everyone’s still trying to wrap their minds around the potential fallout from last week’s events.  Some professors told my classmates and I yesterday that the pressure is on to do well on the academic market because there are no longer any Wall Street jobs to fall back on if we don’t. They were sort of joking, but sort of not.  Academics generally consider themselves practically immune to economic fluctuations–which we probably still are, more or less.  But structural shifts in the economy like what seems to have occurred last week?  Most likely not.