Financial crisis haunts Milton Friedman's legacy

By Andrew Stern

CHICAGO (Reuters) - U.S. economist Milton Friedman, the champion of unfettered markets, is under siege for theories that some blame for unleashing the global financial crisis.

His legacy is even being questioned on the leafy University of Chicago campus that he once called home.

Some faculty and students are up in arms over the recent opening of the Milton Friedman Institute, a multidisciplinary research outpost attracting million-dollar donations from corporations and the wealthy.

They argue the institute, which will occupy a former divinity school building, is a totem to the late Friedman who they call a dinosaur of economic thought. Friedman won the Nobel Prize for economics in 1976 and died in 2006.

"The university is massively reinvesting in a reputation and a paradigm at precisely the moment its bankruptcy is becoming clear to everyone else," Bruce Lincoln, a religion professor and leader of the opposition to the institute, said in an interview.

Lincoln is joining other faculty at a rare closed-door meeting on Wednesday to hear the university's president, Robert Zimmer, extol the virtues of the institute.

Zimmer is expected to pledge that it is named in honour of Friedman's pursuit of empirical data, not his conservative views, and will follow scholarship wherever it leads.

Philip Reny, chairman of the university's economics department that is home to numerous other Nobel winners, said the controversy over the institute is much ado about nothing.