Book Review: Samuelson Friedman - Clash of the Titans

I greatly enjoyed Nicholas Wapshott's book Samuelson Friedman.  One would not think a book about two economists would be a page turning entertainer.  But given the wit and vigor of these two seminal figures in economics and the writer's journalistic and editorial skill, the book is that.  The writing is lucid and propulsive.

The book traces the arc of these two men who shaped twentieth century economics not just in lecture halls and policy rooms, but in the pages of Newsweek, at kitchen tables, and in the minds of voters. The theme of the book is timeless: how ideas, when attached to personalities, become movements. It is a dual biography, a policy history, and a philosophical dialogue all in one.  There are memorable lines. Samuelson’s description of Friedman as someone who “can spell banana but does not know when to stop” is both funny and pointed; and my favorite keepsake from the book. Friedman’s defense of market forces is equally quotable. And former Secretary of State George Shultz’s remark that “everyone wants to argue with Milton, especially when he is not there” captures his uncanny ability to stir debate long after he has left the room and people's unwillingness to take him head on.

Wapshott’s choice to open with lineage is telling. Paul Samuelson's story begins with a connection to the Astor family and the eventual landing place of Newsweek. Milton Friedman has a different starting point. From the outset, the author shows us the tensions of class, access, and expectation. Samuelson is the establishment’s master, the architect of Keynesian macroeconomic synthesis, the author of Economics, the original and bestselling textbook that introduced generations to Keynesian economics and concepts such as multiplier effects and fiscal levers. Friedman is the outsider turned oracle, skeptical of government, vigorous in logic, a man who could explain inflation with surgical brevity. Together, they created a rare duet: combative but civil, opposed but intertwined.

The heart of the book lies in their 18-year alternating column run at Newsweek. This was no side gig. It was where America saw economic policy unfold in real time. And in those pages, in the book's telling, we see a style difference. Samuelson is nuanced, rigorous, even academic in tone. Friedman is sharp, witty, and uncompromising. Samuelson is guided by the pragmatic principle that government must do what markets cannot. Friedman is driven by the belief that the best government is the least government.  And this I did not know: the ending of their columns for Newsweek. It was abrupt and unceremonious end after nearly two decades, that upset the owner and got the editor fired!

But the book is not all wit and theory. There is telling human elements as well. Samuelson was denied a Harvard faculty post due to anti-semitism. He then moved across Cambridge, and transformed MIT into a world-class economics department. Friedman was instrumental in shaping wartime fiscal policy and later became the intellectual godfather of modern libertarianism. Their Nobel Prize moments come with both showing affection and grace to each other.  But not without some barbs included from Friedman's wife Rose, who was an academic peer to both of them in economics. Their disagreements carry respect, even admiration. In an affecting anecdote, when Time magazine misquoted Friedman as saying “we are all Keynesians now,” Samuelson rose to his defense, not because he agreed, but because he believed in fairness.

Chapter by chapter, the book brings us to the high points of macroeconomic history. The inflation battles. The Phillips Curve debates. The monetarist uprising. The fiscal interventions of Kennedy. The shock therapy of Thatcher. The quantitative easing of Bernanke. The COVID stimulus checks. Each moment brings one man’s ideas into the foreground and tucks the other’s into the shadows; only for the pendulum to swing back again.

Several moments linger. Friedman’s brief brush with Chile under Pinochet, and the backlash that followed. Samuelson’s sardonic dismissal of Alan Greenspan’s Ayn Rand-ian roots.  "You can take the boy out of the cult, but not the cult out of the boy," he quipped. 

There is an extended treatment of inflation in the book using the analogy of surface tension; the idea that what economists really track is not the rise in prices, but the rate at which they rise. It reminded me of Friedman’s insistence on distinguishing causes from effects. Inflation is not just prices going up. It is the result of something deeper: money supply, velocity, perception.

The most telling insights came not only from their theories, but also from the way they both navigated truth. Samuelson once said that no paper of his written ten years ago still fully represented his views. That humility, that willingness to adapt, was refreshing to read. Friedman, too, brought rigor, clarity, and a refusal to be misrepresented. Even when misquoted, he clarified not to apologize, but to assert the accuracy and meaning of what he originally said.

Wapshott does not choose side, but clarifies the stakes with excellent anecdotes and quotes. What makes the book compelling is its refusal to crown a winner. Samuelson may have dominated the classroom, but Friedman captured the airwaves. Samuelson revised his textbook in light of new evidence from the Friedman side of the argument. Friedman stood firm even as criticism mounted. Samuelson’s influence surged after the 2008 financial crisis. Friedman’s worldview reemerged with every push for deregulation and tax cuts. Back and forth their influence waxed and waned for 65 years.  A century actually, if one takes into account their predecessors, Keynes and Hayek, who had their own version of the Clash of the Titans.

I was discussing this book with my son Rahul, who is an economics major, in contrast to my own Finance and Strategy background.  We concluded that he leans monetarist and I lean Keynesian.  But unlike these two giants, we keep both the peace because we are both ardent fans of the NFL Philadelphia Eagles!

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SIDEBAR:

Karl Popper

Early in Samuelson Friedman, we glimpse a gathering at the Mont Pelerin Society, founded by Hayek to rally defenders of classical liberalism. Milton Friedman crossed paths with philosophers including Karl Popper. Popper’s presence is brief in the book.  It is an interesting connection to western scientific thought on which economics is also built.

Popper’s central thesis is this: that a theory is scientific, only if it can be falsified. That is, truth in any serious inquiry is not something proved beyond doubt, but something provisionally held until a better idea comes along.

This is illustrated by my favorite joke:

Two friends drive past a farm. One says, “Look at that meadow! It has white sheep.”

The other replies,“That’s true; but only from our view on this side of the farm.”

However, this view ran into a bit of a kerfuffle.  The book Wittgenstein’s Poker, dramatizes a famous purported clash between Popper and Wittgenstein. When I read it many years a go, I felt that the author was enamored by and appeared to lean in Wittgenstein’s favor, portraying Popper as rigid or pompous.  While I am not philosopher, I felt at the time that the depiction of Popper in the book was a bit unfair and one-sided. 

However, Popper's view of falsifiability reverberates throughout the intellectual careers of both Samuelson and Friedman, in the background. For Samuelson, the resonance is clear. He famously said that no academic paper of his from ten years prior still fully represented his current views. In that humility, we see Popper’s shadow: an allegiance not to final answers, but to models that evolve with time and evidence. His revisions to his Economics textbook, incorporating monetary ideas and rethinking once-settled positions, were not acts of defeat, but of intellectual strength.

Friedman’s relationship to Popper is more complex. He too believed in clear reasoning and testable claims. But his public presence and rhetorical confidence gave the impression of settled truths, rather than provisional ones. His critics, sometimes mistook clarity for rigidity. Yet Friedman, too, engaged the world in Popperian terms: not with dogma, but with arguments he believed could stand scrutiny. When Time magazine misquoted him, he corrected them, not to retreat, but to clarify.

That idea that belief systems feed back into outcomes echoes throughout the Samuelson–Friedman rivalry. Keynesian stimulus can work if people believe it will. Market discipline can restore order, if people act accordingly. Both schools operate not just on logic, but on the perception of logic. 

Economics, at this level it seems to me, is Popperian. It says that we begin with rules. Then we test them. And then, we let experience revise our beliefs.