Milton Friedman (1912-2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the complexity of stabilization policy1. With George Stigler, Friedman was among the intellectual leaders of the Chicago school of economics, a neoclassical school of economic thought associated with the work of the faculty at the University of Chicago that rejected Keynesianism in favor of monetarism until the mid-1970s, when it turned to new classical macroeconomics heavily based on the concept of rational expectations2. Several students and young professors that were recruited or mentored by Friedman at Chicago went on to become leading economists; they include Gary Becker, Robert Fogel and Robert Lucas Jr3.
Friedman's challenges to what he called "naive Keynesian theory"4 began with his interpretation of consumption, which tracks how consumers spend. He introduced a theory which would later become part of mainstream economics and among the first to propagate the theory of consumption smoothing5. During the 1960s, he became the main advocate opposing Keynesian government policies6, and described his approach (along with mainstream economics) as using "Keynesian language and apparatus" yet rejecting its initial conclusions2. He theorized that there existed a natural rate of unemployment and argued that unemployment below this rate would cause inflation to accelerate7. He argued that the Phillips curve was in the long run vertical at the "natural rate" and predicted what would come to be known as stagflation. Friedman promoted a macroeconomic viewpoint known as monetarism and argued that a steady, small expansion of the money supply was the preferred policy, as compared to rapid, and unexpected changes. His ideas concerning monetary policy, taxation, privatization and deregulation influenced government policies, especially during the 1980s. His monetary theory influenced the Federal Reserve's monetary policy in response to the global financial crisis of 2007-20088.
After retiring from the University of Chicago in 1977, and becoming Emeritus professor in economics in 1983, Friedman served as an advisor to Republican U.S. president Ronald Reagan and Conservative British prime minister Margaret Thatcher9. His political philosophy extolled the virtues of a free market economic system with minimal government intervention in social matters. He once stated that his role in eliminating conscription in the United States was his "most important accomplishment"10. In his 1962 book Capitalism and Freedom, Friedman advocated policies such as a volunteer military, freely floating exchange rates, abolition of medical licenses, a negative income tax, school vouchers11 and opposition to the war on drugs and support for drug liberalization policies. His support for school choice led him to found the Friedman Foundation for Educational Choice, later renamed EdChoice.
Friedman's works cover a broad range of economic topics and public policy issues. His books and essays have had global influence, including in former communist states12. A 2011 survey of economists commissioned by the Econ Journal Watch ranked Friedman as the second-most popular economist of the 20th century, following only John Maynard Keynes13. Upon his death, The Economist described him as "the most influential economist of the second half of the 20th century ... possibly of all of it"14.
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"Press release", NobelPrize.org, 14 October 1976, accessed 3 June 2024. ↩︎
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Daniel Yergin and Joseph Stanislaw, The Commanding Heights: The Battle Between Government and the Marketplace That Is Remaking the Modern World (New York: Simon & Schuster, 1998), 148-149. ↩︎
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Johan Van Overtveldt, The Chicago School: How the University of Chicago Assembled the Thinkers Who Revolutionized Economics and Business (Chicago: Agate, 2007), 1. ↩︎
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Milton Friedman, "Interview: On John Maynard Keynes", 1 October 2000, PBS.org, accessed 4 June 2024. ↩︎
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Milton Friedman, A Theory of the Consumption Function (Princeton: Princeton University Press, 1957), 20-37. ↩︎
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Robert L. Formaini, "Milton Friedman: Economist as Public Intellectual", Economic Insights 7, no. 2 (June 2002): 2. ↩︎
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Milton Friedman, "The Role of Monetary Policy", The American Economic Review, LVIII, no. 1 (March 1968): 8-10. ↩︎
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Edward Nelson, "Friedman’s Monetary Economics in Practice", Finance and Economics Discussion Series, 13 April 2011, FederalReserve.gov, accessed 5 June 2024. ↩︎
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Lanny Ebenstein, Milton Friedman: A Biography (New York: Palgrave Macmillan, 2007), 205-211. ↩︎
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Brian Doherty, "Best of Both Worlds: An Interview with Milton Friedman", Reason, June 1995, accessed 6 June 2024. ↩︎
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David R. Henderson (ed.), "Biographies: Friedman, Milton (1912- )", The Fortune Encyclopedia of Economics (New York: Warner Books, 1993), 786. ↩︎
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Milton and Rose D. Friedman, Two Lucky People: Memoirs (Chicago: University of Chicago Press, 1999), 506. ↩︎
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William L. Davis, Bob G. Figgins, David Hedengren and Daniel B. Klein, "Economics Professors' Favorite Economic Thinkers, Journals, and Blogs (along with Party and Policy Views)", Econ Journal Watch 8, no. 2, May 2011, accessed 7 June 2024. ↩︎
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"Milton Friedman, a giant among economists", The Economist, 23 November 2006, accessed 7 June 2024. ↩︎
This article is derived from the English Wikipedia article "Milton Friedman" as of 28 May 2024, which is released under the Creative Commons Attribution-Share-Alike License 3.0.