Milton Friedman

Milton Friedman was an American economist and leading representative of the Chicago School during the last half of the 20th century. Friedman received the Nobel Prize in 1976, having made significant contributions to several branches of economic theory, while also writing and speaking on public policy issues from a distinctly free-market perspective ... "Milton Friedman was a giant," stated Paul Samuelson upon Friedman's death. "No 20th-century economist had his importance in moving the American economic profession rightward from 1940 to the present."

Milton Friedman was the twentieth century's most prominent advocate of free markets. Born in 1912 to Jewish immigrants in New York City, he attended Rutgers University, where he earned his B.A. at the age of twenty. He went on to earn his M.A. from the University of Chicago in 1933 and his Ph.D. from Columbia University in 1946. In 1951 Friedman received the John Bates Clark Medal honoring economists under age forty for outstanding achievement. In 1976 he was awarded the Nobel Prize in economics ...

It was F.A. Hayek who inspired Friedman to try influencing public policy for liberty, and he excelled as a popularizer. Nobody was a more effective champion of liberty in a debate. He was charming, he was quick, and he displayed an awesome command of the facts. He expressed his views through a Newsweek column which he wrote for 18 years. He produced op-eds for major newspapers, articles for major magazines, and he was interviewed by Playboy.

... not long after we arrived in California, Bob Chitester persuaded us to join him in producing a major television program presenting my economic and social philosophy. The resulting effort, spread over three years, proved the most exciting adventure of our lives. The end result was Free to Choose, ten one-hour programs, each consisting of a half-hour documentary and a half-hour discussion.

In addition to his scientific work, Friedman also wrote extensively on public policy, always with a primary emphasis on the preservation and extension of individual freedom. His most important books in this field are (with Rose D. Friedman) Capitalism and Freedom ... ; Bright Promises, Dismal Performance ... which consists mostly of reprints of columns he wrote for Newsweek from 1966 to 1983; (with Rose D. Friedman) Free to Choose ..., and (with Rose D. Friedman) Tyranny of the Status Quo ...

The late Nobel laureate Milton Friedman agreed in 2001 to lend his name to the prize, which has become the leading international award for acknowledging contributions to the promotion of individual liberty. In a statement at the time he said: "Those of us who were fortunate enough to live and be raised in a reasonably free society tend to underestimate the importance of freedom. We tend to take it for granted. It has made us in the West more complacent, so having a prize emphasizing liberty is extremely important."

Milton Friedman's Free to Choose is a joyous celebration of capitalism. Reading it in college led to C's in my Keynesian economics class but to a clear grasp of the essentials of economics. There is no better primer in economics for the mathematics-challenged person like me. Many of Friedman's prophecies have come true, and many of his prescriptions have been adopted—leading to unprecedented freedom and prosperity. Free to Choose remains the essential economics text.

Economist Milton Friedman, recipient of the 1976 Nobel Prize for Economic Science, was one of the most recognizable and influential proponents of liberty and markets in the 20th century, and leader of the Chicago School of economics.

Milton Friedman (1912-2007) is the author of many books and articles in economics, including A Theory of the Consumption Function, The Optimum Quantity of Money and Other Essays, and (with A. J. Schwartz) A Monetary History of the United States, Monetary Statistics of the United States, and Monetary Trends in the United States and the United Kingdom. Friedman has also written extensively on public policy, always with a primary emphasis on the preservation and extension of individual freedom.

Milton Friedman was not just one of the world's most distinguished economists -- he may have also been America's most famous and influential libertarian. Writing in Liberty magazine (February 2007), Bruce Ramsey made the argument that 'Milton Friedman was not just a figure in the libertarian movement. He was, to Americans generally, a figure emblematic of freedom.'

Milton Friedman. The 91-year-old Nobel Prize-winning economist didn't just co-author Free to Choose, the book that pumped up Arnold Schwarzenegger's mind. He's brought libertarian ideas both to a mass audience and to the elite ranks of policy makers, helped to end the draft and discredit wage and price controls, popularized the privatization of schooling and pensions, and made criticism of the war on drugs respectable.

The actual word capitalism is of comparatively recent origin ... [I]ts first extended use ... came in 1902 in Werner Sombart's Der Moderne Kapitalismus ... [It] was a term of opprobrium, but, as so often happens, it was soon taken up by its targets as a badge of honor ... [I]t is only since the 1960s that capitalism has come to be used by both sides of in the argument in equal measure. One important milestone in this process was the publication in 1962 of Milton Friedman's Capitalism and Freedom, one of the first popular books to employ the term in an unabashedly positive way.

[I]n an amazingly short time a stream of publications began to pour forth [from FEE] ... [In September 1946] came a 22-page pamphlet called Roofs or Ceilings?, an attack on rent control, sent in by two young fellows from the University of Chicago, Milton Friedman and George J. Stigler, both destined to become future recipients of the Nobel prize in economics. FEE distributed 36,000 of these, plus a special condensed version of 500,000 copies for the National Association of Real Estate Boards ... I see no evidence that the Friedman-Stigler pamphlet did anything to slow down rent control.

Milton Friedman was little more than an acolyte to Irving Fisher on the money question ... [T]he Federal Reserve can do no wrong today, because it did wrong from 1929 to 1933, and Milton Friedman exposed this for all to see. What was a great evil of the Federal Reserve during that period, according to Friedman? It did not inflate to offset the contraction of money due to collapsing banks. Friedman hated free market banking. He disparaged the gold standard. He believed in government control over money. At the core of the free market is money. At the core of Friedman's economics was the State.

Economist Milton Friedman calls [Hayek] "the most important social thinker of the 20th century." Hayek's most significant contribution, [Friedman] explains, "was to make clear how our present complex social structure is not the result of the intended actions of individuals but of the unintended consequences of individual interactions over a long period of time, the product of social evolution, not of deliberate planning."

For example, Milton Friedman, in his 1991 Liberty article, "Say 'No' to Intolerance”, wrote,

I have no right to coerce someone else, because I cannot be sure that I am right and he is wrong. If we see someone doing something wrong, someone starting to sin (to use a theological term) let alone just make a simple mistake, how do we justify not initiating coercion? Are we not sinning if we don't stop him? ... How do I justify letting him sin? I believe that the ... answer is, can I be sure he's sinning? Can I be sure that I am right and he is wrong? That I know what sin is?

A filmed debate over monetary and fiscal policy was my introduction to Milton Friedman's brilliance and wit so I soon devoured his book Capitalism and Freedom. I came to realize that the market was a remarkable phenomenon that offered solutions to problems that were only made worse by politics. While Milton will always be my first great economics hero, my views later favored the direction of his son, David, in The Machinery of Freedom ... My most memorable moment came when my dear friend Geo Olsson, introduced JG [The Adventures of Jonathan Gullible] to Milton Friedman, my single greatest inspiration.

"Over the years," Nobel Laureate Milton Friedman remarked, "I have again and again asked fellow believers in a free society how they managed to escape the contagion of their collectivist intellectual environment. No name has been mentioned more often as the source of enlightenment and understanding than Friedrich Hayek's ... I, like the others, owe him a great debt ... his powerful mind ... his lucid and always principled exposition have helped to broaden and deepen my understanding of the meaning and the requisites of a free society."

The same year [Rothbard's] America's Great Depression was published, Princeton University Press published A Monetary History of the United States, 1867-1960 by Milton Friedman and Anna Jacobson Schwartz. They agreed with Rothbard that the stock crash didn't cause the Great Depression. They, too, nailed the federal government as the culprit responsible for the Great Depression, although their approach was very different. Friedman and Schwartz gathered statistics for the money supply, the gross national product and employment, and they looked for correlations among these.

More than anyone else, Milton and Rose Friedman took a compelling case for free markets to the world. Ayn Rand has sold more books, but the Friedmans reached millions who probably never read a good book about freedom--through countless lectures, TV appearances and, of course, their Free to Choose TV series. This son of a Ruthenian clothing merchant and daughter of a Polish door-to-door clothing salesman have influenced economists, political leaders and lay people alike. Smuggled versions of their work helped keep the torch of liberty burning in brutal police states.

As influential as Friedman's academic work was among professional economists, he had as profound an impact on non-economists' thinking about the virtues of free markets and limited government. At a time when popular writing that went against the collectivist grain had few mass outlets, Friedman managed to reach a wide audience with his clear and good natured-style. He accomplished this through many books, a long-running ... column, and his 1980 television series, ... based on his bestselling book ... [H]is legacy and devotion to liberty will inspire freedom lovers for many generations.

Few American economists have wielded as much influence on economic thought and policy as the late Milton Friedman. He was an articulate and ardent advocate of free markets and personal liberty. In 1962, his Capitalism and Freedom ... pointed the way not only to economic but also political freedom ... He was a passionate critic of all versions of socialism and a fervent censor of Keynesian economics which stands as the most influential economic formulation of the 20th century. One of the most prolific writers of his time, Professor Friedman wrote many pertinent economic columns in Newsweek.

John Maynard Keynes was the reigning demi-god among economists when Friedman's career began, and Friedman himself was at first a follower of Keynesian doctrines and liberal politics. Yet no one did more to dismantle both Keynesian economics and liberal welfare-state thinking. As late as the 1950s, those with the prevailing Keynesian orthodoxy were still able to depict Milton Friedman as a fringe figure ... But the intellectual power of his ideas, the fortitude with which he persevered, and the ever more apparent failures of Keynesian analyses and policies, began to change all that ...

Milton was a beacon of light on issues such as the minimum wage law, free trade, and rent control ... Milton's valiant, witty, wise, eloquent and yes, ... inspirational analysis on [the minimum wage] must stand out as an example to us all. Another of the high points of his career, for me, was his "Open Letter" to then drug czar Bill Bennett ... I was amazed and delighted at his pugnaciousness in defense of liberty. He would engage seemingly everyone in debate on libertarian issues: waitresses, cameramen, the person placing the microphone on his lapel. He was tireless, humorous, enthusiastic.

In 1988 ... I attended a Mont Pelerin Society meeting in Indianapolis. At an evening outdoor barbecue, I just happened to bump into Friedman and introduced myself. He spent the next 20 minutes or so talking with me as if he and I were equals. In fact, if I hadn't known differently, I would have never known he was a Nobel Prize winning economist or even that he was a major intellectual force in the world of economics. He displayed absolutely no pretentiousness whatsoever, talked just like an ordinary person, and treated me like I was a very important person.

Milton Friedman ... had advocated a fiat or paper money standard guided by a monetary rule of an annual expansion of the money supply at a fixed rate because he believed that it was less costly than a gold standard ... But by the mid 1980s, Friedman had second thoughts about whether government could be trusted ever to follow the necessary restraint ... [I]n 1986, Friedman coauthored an article with Anna Schwartz ... that asked the question, "Has Government Any Role in Money?" They concluded that in principle it did not need to have one and historically sometimes had none.

In the post-World War II period in the United States, there have been few voices as important for the defense of the free market as that of Milton Friedman. In his 1962 book Capitalism and Freedom, he forcefully challenged the trend towards increasing government control over economic life. [He] eloquently argued that economic liberty was vital for the preservation of both personal and political freedom ... It is not an exaggeration to say that Friedman was a prime mover in significantly changing the focus of postwar macroeconomic theory from the direction given to it by Keynes in the 1930s.

In 1967, Milton Friedman delivered the presidential address at the American Economic Association ... He argued that there was "wide agreement about the major goals of economic policy: high employment, stable prices, and rapid growth" ... Friedman emphasized what he believed an active monetary policy could not succeed in permanently doing. First, [it] could not permanently lower interest rates below the level that the market forces of supply and demand would tend to establish ... Second, [it] could not permanently push unemployment below a market-determined "natural rate."

The most thoroughgoing criticism of this Keynesian conception ... was made by Milton Friedman. In 1956, Friedman edited a collection of essays entitled Studies in the Quantity Theory of Money, for which he wrote the introductory essay, entitled "The Quantity Theory of Money–A Restatement." ... Friedman's conclusion ... was that if the demand for money was far more stable than the Keynesians had assumed, then significant short-run fluctuations in economywide output and employment, as well as price inflations and deflations, had to have their source in changes in the supply of money.

[M]onetary historian and free-market economist Milton Friedman had argued early in his career that negative external effects associated with free banking justified a state monopoly of coin and paper currency ... Later in his career, Friedman reconsidered and endorsed competitive note issue in light of new findings ... that bad results under so-called free banking in the United States were due to poorly conceived regulations, whereas a relatively free market in other countries showed good results. In principle, Friedman supported a well-​managed state fiat money over a gold standard ...

In their Monetary History of the United States, Milton Friedman and Anna Schwartz conclude their summary of the monetary events of the 1920s with this paragraph: "Gold movements were not permitted to affect the total of high-powered money [bank reserves and currency]. They were ... sterilized, inflows being offset by open market sales, outflows by open market purchases." ... "The widespread belief that what goes up must come down, ... have led many to suppose that the United States experienced severe inflation before 1929 ... Nothing could be further from the truth ..." [Emphasis added]

Friedman said that he was tired of trying to define money, that he believed government intervention in money was inevitable, and that therefore, the proper role of an economist was to advocate sensible interventions. He was enthusiastic about the tax-revolt in the United States, and advocated a constitutional amendment which would establish the rules that the monetary authority should follow ... Friedman hoped that it would be possible to convince the public to pressure governments into introducing monetary stability in the face of increasing inflation and destability.

The emerging Chicago School was represented by Milton Friedman, his brother-in-law Aaron Director, Frank H. Knight, and George J. Stigler ... Stigler continues, "I was instrumental, for the only time in my life, in instructing Friedman on monetary affairs. We sought to convert some dollars into francs at the unofficial exchange rate rather than the official rate that greatly overvalued the franc ..." ... Asked to assess the [Mont Pelerin] Society's place in history, Milton Friedman answered, "That is an open-ended question we cannot answer. ... It certainly played a part."

The conference attracted a flock of high-tech executives, research professionals, politicians, and authors — including ... Milton Friedman (Nobel-prize-winning free-market economist) ... Many of [Dan] Fylstra's themes were echoed by Nobel-laureate Milton Friedman, who warned in his speech about "the suicidal impulse of business" and its proclivity to cozy up to the political establishment.

[William F.] Buckley would propose a program of "universal voluntary national service for men and women 18 years of age and older," ... Milton Friedman never went quite that far. But he did tell the New York Times Magazine for May 14, 1967, that in a time of "total war," if military and civilian authorities decreed that "there would be time and reason to expand the armed forces manifold, either universal military training to provide a trained reserve force, or stand-by provisions for conscription could be justified."

Probably the only libertarian whose public visibility is even greater than Ayn Rand is the ubiquitous Milton Friedman, the most respected advocate of capitalism of our time. His 1962 work Capitalism and Freedom is in my view the best statement of his viewpoint. Here you'll see a great mind at work, and appreciate the power of quiet eloquence. And if you ever get the chance, don't pass up an opportunity to witness Milton Friedman's genius is all its glory: the ten hour PBS series Free to Choose.

Milton Friedman [wrote] that the Reagan administration has been "making Smoot-Hawley look positively benign." Of course, the administration sometimes claims that it adopted mild restrictions to head off a rabidly protectionist Congress. But, as Friedman put it,

Poor excuse. The president retains his veto power. While Congress might have overridden some of his vetoes, it would have been clear where the blame lay. As it is, the administration has given members of Congress—of both parties—a free ride. They enjoy the luxury of supporting special interests ... while avoiding the responsibility ...

Milton Friedman, who reviewed this episode in minute detail, remarked: "Bitter experience during the years from 1929 to 1933 had taught banks that it was not enough to keep ... only the minimum amount required by law; legally required reserves could not be drawn on to meet emergency demands without the banks being liable to closure ... Little wonder that the survivors ... felt it necessary to provide their own protection against unexpected demands. Deposits in excess of required legal reserves were essentially uncovered liabilities for which only the excess of high-powered money over required reserves provided an effective reserve."

About 25 years ago, Nobel Laureate Milton Friedman hosted a weekly series on TV titled Free to Choose. In one segment he asked, 'How can inflation be stopped?' Then, with money printing presses shown churning out paper money, he punched the stop button. 'That's how,' he said with emphasis.

In June of 1974 in the little town of South Royalton, Vermont, the modern resurgence of Austrian economics began. ... Even Milton Friedman dropped by for one evening–though Friedman never bought the idea of a unique Austrian economics independent from other schools of neoclassical economics. ... Milton Friedman stated at that South Royalton conference that there was no such thing as Austrian economics–only good economics and bad economics. Well, Friedman was right to an extent. But it turns out that Austrian economics ... provides the foundation for a humanistic, logically sound, and policy-relevant economics.

Milton Friedman ... told the economics profession and the public many things they needed to hear ... He pointed out that economic fine-tuning through inflation would do no good in the long run and a lot of harm by reducing people's buying power ... Friedman was one of the great public intellectuals, teaching noneconomists that nothing could improve individual and social well-being as dramatically as free markets. Through his Newsweek column, which ran from 1966 to 1983, and his 1980 television series, Free to Choose, he clearly explained how economic freedom, competition, and the profit-and-loss system make life better for everyone.

I asked those printers who entertained me that evening how I could help. It turned out that they had a specific request already planned for me. If I could raise $5,000 and channel it to their émigré allies in Paris, they would eventually get the money and be able to translate into Polish and print several thousand copies of Milton and Rose Friedman's classic Free To Choose. Among my most prized possessions is a copy of that book, inscribed by activist Wojciech Modelski with these words: "Thank you, Larry! Without your help it was not be [sic] possible to publish this book."

In a 1955 essay, Milton Friedman first proposed the idea of tax-funded vouchers ... as a way of reducing some of the inequalities and natural inefficiencies of the government schooling monopoly ... [I]n Free to Choose (1979) ... he and Rose Friedman [adopted] the more ambitious goal of the ultimate elimination of state compulsion and provision and funding of education ... By 1995 Milton Friedman claimed that vouchers would have the effect of moving "away from a government system to a private system," but added that if he were wrong about that prediction, he would no longer support them.

Wm. F. Buckley Jr.
... I said, it can reasonably be held that drug-taking is a contagious disease and, accordingly, subject to the conventional restrictions employed to shield the innocent from Typhoid Mary. Some sport was made of my position by libertarians, including Professor Milton Friedman, who asked whether the police might legitimately be summoned if it were established that keeping company with me was a contagious activity ...
Joseph D. McNamara
... Professor Milton Friedman has estimated that as many as 10,000 additional homicides a year are plausibly attributed to the drug war.

It is often said that bad economic policy reflects disagreement among the experts; that if all economists gave the same advice, economic policy would be good. Economists often do disagree, but that has not been true with respect to international trade. Ever since Adam Smith there has been virtual unanimity ... We could say to the rest of the world: We believe in freedom and intend to practice it. We cannot force you to be free. But we can offer full cooperation on equal terms to all ... Buy whatever you can and wish to. In that way cooperation among individuals can be worldwide and free.

In 1972, almost twenty years ago, President Nixon started a war on drugs—the first intensive effort to enforce the prohibition of drugs since the original Harrison Act. In preparation for this talk today, I re-read the column that I published in Newsweek criticizing his action ...
I believe that our chances of success are greater if we recognize that the failure of the war on drugs is part of a much broader problem, that the reason to end the war on drugs is also the reason to end the socialization of medicine, the socialization of schools, and so on down the list.

In Oliver Cromwell's eloquent words, "I beseech you, in the bowels of Christ, think it possible you may be mistaken" about the course you and President Bush urge us to adopt to fight drugs. The path you propose of more police, more jails, use of the military in foreign countries, harsh penalties for drug users ... This plea comes from the bottom of my heart ... A country in which shooting down unidentified planes "on suspicion" can be seriously considered as a drug-war tactic is not the kind of United States that either you or I want to hand on to future generations.

Murray rejects the libertarian approach because it is unacceptable to the American public ... He cannot then imagine himself a Milton Friedman and say, e.g., "Ideally government should play no role in education. But the public will not accept this. Instead, educational vouchers are the closest to the free market that we can in practice attain." Friedman thought that his proposals were realistic; and however much one may disagree with them—would not vouchers lead to more government control, rather than less?—one can grant that he had a case worth presenting.

Milton Friedman needs little introduction. His car-eer as one of the world's preeminent economists and advocates of freedom has won him many accolades, best-selling books, and a Nobel Prize. It has also brought him much satisfaction ... Friedman is used to discussing policy, but except for his assessment of the new Congress's potential, we wandered far afield into reminiscence; assessment of his intellectual development; and his thoughts on the history, significance, and successes of the intellectual movement for freedom that he has served so staunchly.

REGION: ... [W]hat factors were most important to your choice of economics as a profession?
BECKER: ... I decided to go to graduate school, came to Chicago, and by far the biggest influence on me was Milton Friedman. He is known as a monetary economist and so on, but that was not the main influence he had on me. Milton Friedman was, and is—he is still going strong—a great economist, who saw the power of economics as a tool of analysis to discuss real problems. I saw then that my discouragement when a senior at Princeton was misplaced.

KUSKOWSKI: The recent passing away of Milton Friedman presents an opportunity to assess his contribution to the cause of liberty. What is your opinion of him? ...
ROCKWELL: He obviously did great work on many economic questions. But it is a mistake to see him as a libertarian. He was a wage and price controller in wartime. He was an advocate of the withholding tax and the guaranteed national income. His idea of tax-funded subsidies for private schools is a very bad one ... He was pro-war. I could go on, but it's probably best to focus on his contributions, of which there are many.

Milton Friedman [is], of course, the famous former president of the American Economic Association, Nobel Prize winner, wrote best-selling books, Capitalism and Freedom and Free to Choose, the latter of which was turned into a popular television series ... Friedman is very clear, these are the four areas that government should be active in or necessary to carry out ... Friedman believes that ... governments have these responsibilities, but as far as possible, they should use market mechanisms to achieve these ends.