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Milton Friedman

Milton Friedman (/ˈfrdmən/ (listen); July 31, 1912 – November 16, 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 policy.[6] With George Stigler and others, 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 expectations.[7] Several students, young professors and academics who were recruited or mentored by Friedman at Chicago went on to become leading economists, including Gary Becker,[8] Robert Fogel,[9] Thomas Sowell[10] and Robert Lucas Jr.[11]

Milton Friedman
Friedman in 2004
Born(1912-07-31)July 31, 1912
DiedNovember 16, 2006(2006-11-16) (aged 94)
Political partyRepublican[1]
Spouse
(m. 1936)
Children
Institution
School or
tradition
Chicago School; Classical Liberalism
Alma mater
Doctoral
advisor
Simon Kuznets
Doctoral
students
Phillip Cagan
Harry Markowitz
Lester G. Telser[2]
David I. Meiselman
Neil Wallace
Miguel Sidrauski
Edgar L. Feige
Other notable studentsThomas Sowell
Influences
Contributions
Awards
Information at IDEAS / RePEc
Signature

Friedman's challenges to what he called "naive Keynesian theory"[12] began with his interpretation of consumption, which tracks how consumers spend. He introduced a theory which would later become part of the mainstream and among the first to propagate the theory of consumption smoothing.[6][13] During the 1960s, he became the main advocate opposing Keynesian government policies,[14] and described his approach (along with mainstream economics) as using "Keynesian language and apparatus" yet rejecting its initial conclusions.[15] He theorized that there existed a natural rate of unemployment and argued that unemployment below this rate would cause inflation to accelerate.[a][16] 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.[17] 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.[18] 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 2007–2008.[19]

After retiring from the University of Chicago in 1977, and becoming Emeritus professor in economics in 1983,[20] Friedman was an advisor to Republican President Ronald Reagan and Conservative British Prime Minister Margaret Thatcher.[21] 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 proudest achievement.[18] 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 vouchers[22] 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.[23][24]

Friedman's works cover a broad range of economic topics and public policy issues.[20] His books and essays have had global influence, including in former communist states.[25][26][27][28] A 2011 survey of economists commissioned by the EJW ranked Friedman as the second-most popular economist of the 20th century, following only John Maynard Keynes.[29] 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".[30]

Early life

 
Jenő Saul Friedman, Milton Friedman's father

Friedman was born in Brooklyn, New York on July 31, 1912. His parents, Sára Ethel (née Landau) and Jenő Saul Friedman, were Jewish working-class immigrants from Beregszász in Carpathian Ruthenia, Kingdom of Hungary (now Berehove in Ukraine).[31][32] They emigrated to America in their early teens.[31] They both worked as dry goods merchants. Friedman was their fourth child and only son, as well as the youngest of the children. [33] Shortly after his birth, the family relocated to Rahway, New Jersey.[34]

Friedman's family experienced financial troubles, and financial uncertainty caused stability of income to be low. Friedman described his family's situation in the following manner:

The family income was small and highly uncertain; financial crisis was a constant companion. Yet there was always enough to eat, and the family atmosphere was warm and supportive.

— Milton Friedman, [31]
 
Milton Friedman and future wife Rose Friedman in 1935

Friedman's father, Jenő Saul Friedman, died during Friedman's senior year of high school, leaving Friedman and two older sisters to care for his mother, Sára Ethel Friedman.[31]

In his early teens, Friedman was injured in a car accident, which scarred his upper lip.[35][36] A talented student and an avid reader, Friedman graduated from Rahway High School in 1928, just before his 16th birthday.[33][37][38] Although no family members had gone to university before Milton, Friedman was awarded a competitive scholarship to Rutgers University (then a private university receiving limited support from the State of New Jersey, e.g., for such scholarships).[33] Friedman was expected to finance the cost of university himself.[31] He graduated from Rutgers in 1932.[39]

Friedman initially intended to become an actuary or mathematician, however, the state of the economy, which was at this point in a deep depression, convinced him to become an economist.[33][34] He was offered two scholarships to do graduate work, one in mathematics at Brown University and the other in economics at the University of Chicago, where he would later teach.[40][41] Friedman chose the latter, earning a Master of Arts degree in 1933. He was strongly influenced by Jacob Viner, Frank Knight, and Henry Simons. Friedman met his future wife, economist Rose Director, while at the University of Chicago.[42]

During the 1933–1934 academic year, he had a fellowship at Columbia University, where he studied statistics with statistician and economist Harold Hotelling. He was back in Chicago for the 1934–1935 academic year, working as a research assistant for Henry Schultz, who was then working on Theory and Measurement of Demand.[43]

During the aforementioned 1934–35 academic year, Friedman formed what would later prove to be lifetime friendships with George Stigler and W. Allen Wallis, both of whom taught with Friedman at the University of Chicago.[44] Milton Friedman was also influenced by two lifelong friends, Arthur Burns and Homer Johnson. They helped Milton Friedman better understand the depth of economic thinking.[45]

Public service

Friedman was unable to find academic employment, so in 1935 he followed his friend W. Allen Wallis to Washington, D.C., where Franklin D. Roosevelt's New Deal was "a lifesaver" for many young economists.[46] At this stage, Friedman said he and his wife "regarded the job-creation programs such as the WPA, CCC, and PWA appropriate responses to the critical situation", but not "the price- and wage-fixing measures of the National Recovery Administration and the Agricultural Adjustment Administration".[47] Foreshadowing his later ideas, he believed price controls interfered with an essential signaling mechanism to help resources be used where they were most valued. Indeed, Friedman later concluded that all government intervention associated with the New Deal was "the wrong cure for the wrong disease", arguing the Federal Reserve was to blame, and that they should have expanded the money supply in reaction to what he later described in A Monetary History of the United States as "The Great Contraction".[48] Later, Friedman and his colleague Anna Schwartz wrote A Monetary History of the United States, 1867–1960, which argued that the Great Depression was caused by a severe monetary contraction due to banking crises and poor policy on the part of the Federal Reserve.[49] Robert J. Shiller describes the book as the "most influential account" of the Great Depression.[50]

 
The NBER, where Friedman worked, starting in 1937

During 1935, he began working for the National Resources Planning Board,[51] which was then working on a large consumer budget survey. Ideas from this project later became a part of his Theory of the Consumption Function, a book which first described consumption smoothing and the Permanent Income Hypothesis. Friedman began employment with the National Bureau of Economic Research during the autumn of 1937 to assist Simon Kuznets in his work on professional income. This work resulted in their jointly authored publication Incomes from Independent Professional Practice, which introduced the concepts of permanent and transitory income, a major component of the Permanent Income Hypothesis that Friedman worked out in greater detail in the 1950s. The book hypothesizes that professional licensing artificially restricts the supply of services and raises prices.[52]

Incomes from Independent Professional Practice remained quite controversial within the economics community because of Friedman's hypothesis that barriers to entry, which were exercised and enforced by the American Medical Association, led to higher than average wages for physicians, compared to other professional groups.[20][52] Barriers to entry are a fixed cost which must be incurred regardless of any outside factors such as work experience, or other factors of human capital.[53]

During 1940, Friedman was appointed as an assistant professor teaching Economics at the University of Wisconsin–Madison, but encountered anti semitism in the Economics department and returned to government service.[54][55] From 1941 to 1943 Friedman worked on wartime tax policy for the federal government, as an advisor to senior officials of the United States Department of the Treasury. As a Treasury spokesman during 1942, he advocated a Keynesian policy of taxation. He helped to invent the payroll withholding tax system, since the federal government needed money to fund the war.[56] He later said, "I have no apologies for it, but I really wish we hadn't found it necessary and I wish there were some way of abolishing withholding now."[57] In Milton and Rose Friedman's jointly written memoir, he wrote, "Rose has repeatedly chided me over the years about the role that I played in making possible the current overgrown government we both criticize so strongly."[56]

Academic career

Early years

In 1940, Friedman accepted a position at the University of Wisconsin–Madison, but left because of differences with faculty regarding United States involvement in World War II. Friedman believed the United States should enter the war.[58] In 1943, Friedman joined the Division of War Research at Columbia University (headed by W. Allen Wallis and Harold Hotelling), where he spent the rest of World War II working as a mathematical statistician, focusing on problems of weapons design, military tactics, and metallurgical experiments.[58][59]

In 1945, Friedman submitted Incomes from Independent Professional Practice (co-authored with Kuznets and completed during 1940) to Columbia as his doctoral dissertation. The university awarded him a PhD in 1946.[60][41] Friedman spent the 1945–1946 academic year teaching at the University of Minnesota (where his friend George Stigler was employed). On February 12, 1945, his only son, David D. Friedman, who would later follow in his father's footsteps as an economist was born.[61]

University of Chicago

 
The University of Chicago, where Friedman taught

In 1946, Friedman accepted an offer to teach economic theory at the University of Chicago (a position opened by departure of his former professor Jacob Viner to Princeton University). Friedman would work for the University of Chicago for the next 30 years.[41] There he contributed to the establishment of an intellectual community that produced a number of Nobel Memorial Prize winners, known collectively as the Chicago school of economics.[34]

At the time, Arthur F. Burns, who was then the head of the National Bureau of Economic Research, and later chairman of the Federal Reserve, asked Friedman to rejoin the Bureau's staff.[62] He accepted the invitation, and assumed responsibility for the Bureau's inquiry into the role of money in the business cycle. As a result, he initiated the "Workshop in Money and Banking" (the "Chicago Workshop"), which promoted a revival of monetary studies. During the latter half of the 1940s, Friedman began a collaboration with Anna Schwartz, an economic historian at the Bureau, that would ultimately result in the 1963 publication of a book co-authored by Friedman and Schwartz, A Monetary History of the United States, 1867–1960.[18][34]

University of Cambridge

Friedman spent the 1954–1955 academic year as a Fulbright Visiting Fellow at Gonville and Caius College, Cambridge. At the time, the Cambridge economics faculty was divided into a Keynesian majority (including Joan Robinson and Richard Kahn) and an anti-Keynesian minority (headed by Dennis Robertson). Friedman speculated he was invited to the fellowship because his views were unacceptable to both of the Cambridge factions. Later his weekly columns for Newsweek magazine (1966–84) were well read and increasingly influential among political and business people,[63] and helped earn the magazine a Gerald Loeb Special Award in 1968.[64] From 1968 to 1978, he and Paul Samuelson participated in the Economics Cassette Series, a biweekly subscription series where the economist would discuss the days' issues for about a half-hour at a time.[65][66]

A Theory of the Consumption Function

One of Milton Friedman's most popular works, A Theory of the Consumption Function, challenged traditional Keynesian viewpoints about the household. This work was originally published in 1957 by Princeton University Press, and it reanalyzed the relationship displayed "between aggregate consumption or aggregate savings and aggregate income".[13]

Friedman's counterpart Keynes believed people would modify their household consumption expenditures to relate to their existing income levels.[67] Friedman's research introduced the term "permanent income" to the world, which was the average of a household's expected income over several years, and he also developed the permanent income hypothesis. Friedman thought income consisted of several components, namely transitory and permanent. He established the formula   in order to calculate income, with p representing the permanent component, and t representing the transitory component.[68] Milton Friedman's research changed how economists interpreted the consumption function, and his work pushed the idea that current income was not the only factor affecting people's adjustment household consumption expenditures.[69] Instead, expected income levels also affected how households would change their consumption expenditures. Friedman's contributions strongly influenced research on consumer behavior, and he further defined how to predict consumption smoothing, which contradicts Keynes' marginal propensity to consume. Although this work presented many controversial points of view which differed from existing viewpoints established by Keynes, A Theory of the Consumption Function helped Friedman gain respect in the field of economics. His work on the Permanent Income Hypothesis is among the many contributions which were listed as reasons for his Sveriges-Riskbank Prize in Economic Sciences.[6] His work was later expanded on by Christopher D. Carroll, especially in regards to the absence of liquidity constraints.[70][71]

The Permanent Income Hypothesis faces some criticism, mainly from Keynesian economists. The primary criticism of the hypothesis is based on a lack of liquidity constraints.[72][73]

Capitalism and Freedom

His book Capitalism and Freedom, inspired by a series of lectures he gave at Wabash College,[74] brought him national and international attention outside academia.[75] It was published in 1962 by the University of Chicago Press and consists of essays that used non-mathematical economic models to explore issues of public policy.[76] It sold over 400,000 copies in the first eighteen years and more than half a million since 1962.[77] Capitalism and Freedom was translated into eighteen languages.[78] Friedman talks about the need to move to a classically liberal society, that free markets would help nations and individuals in the long-run and fix the efficiency problems currently faced by the United States and other major countries of the 1950s and 1960s. He goes through the chapters specifying an issue in each respective chapter from the role of government and money supply to social welfare programs to a special chapter on occupational licensure. Friedman concludes Capitalism and Freedom with his "classical liberal" stance that government should stay out of matters that do not need and should only involve itself when absolutely necessary for the survival of its people and the country. He recounts how the best of a country's abilities come from its free markets while its failures come from government intervention.[79]

Post-retirement

In 1977, at the age of 65, Friedman retired from the University of Chicago after teaching there for 30 years. He and his wife moved to San Francisco, where he became a visiting scholar at the Federal Reserve Bank of San Francisco. From 1977 on, he was affiliated with the Hoover Institution at Stanford University.[80]

During 1977, Friedman was approached by Bob Chitester and the Free to Choose Network. They asked him to create a television program presenting his economic and social philosophy.[81][82][83]

Friedman and his wife Rose worked on this project for the next three years, and during 1980, the ten-part series, titled Free to Choose, was broadcast by the Public Broadcasting Service (PBS). The companion book to the series (co-authored by Milton and his wife, Rose Friedman), also titled Free To Choose, was the bestselling nonfiction book of 1980.[84]

Friedman served as an unofficial adviser to Ronald Reagan during his 1980 presidential campaign, and then served on the President's Economic Policy Advisory Board for the rest of the Reagan Administration. Ebenstein says Friedman was "the 'guru' of the Reagan administration".[21] In 1988 he received the National Medal of Science and Reagan honored him with the Presidential Medal of Freedom.[85]

Friedman is known now as one of the most influential economists of the 20th century.[86][87] Throughout the 1980s and 1990s, Friedman continued to write editorials and appear on television. He made several visits to Eastern Europe and to China, where he also advised governments. He was also for many years a Trustee of the Philadelphia Society.[88][89][90]

Personal life

 
Milton Friedman with his wife Rose

Friedman had two children, David and Jan.[91] He first met his wife, Rose Friedman (née Director), at the University of Chicago in 1932, and wed six years later, in 1938.[42][92]

Friedman was noticeably shorter than some of his colleagues; he measured 5 feet 0 inches (1.52 m), and has been described as an "Elfin Libertarian" by Binyamin Appelbaum.[93][94][95]

Rose Friedman, when asked about Friedman's successes, said that "I have never had the desire to compete with Milton professionally (perhaps because I was smart enough to recognize I couldn't). On the other hand, he has always made me feel that his achievement is my achievement."[96][97][98]

During the 1960s, Friedman built, and subsequently maintained a cottage in Fairlee, Vermont.[99] Friedman also had an apartment in Russian Hill, San Francisco, where he lived from 1977 until his death.[100]

Religious views

External video
  Presentation by Milton and Rose Friedman on Two Lucky People: Memoirs, August 14, 1998, C-SPAN

According to a 2007 article in Commentary magazine, his "parents were moderately observant Jews, but Friedman, after an intense burst of childhood piety, rejected religion altogether".[101] He described himself as an agnostic.[102] Friedman wrote extensively of his life and experiences, especially in 1998 in his memoirs with his wife, Rose, titled Two Lucky People. In this book, Rose Friedman describes how she and Milton Friedman raised their two children, Janet and David, with a Christmas Tree in the home. "Orthodox Jews of course, do not celebrate Christmas. However, just as, when I was a child, my mother had permitted me to have a Christmas tree one year when my friend had one, she not only tolerated our having a Christmas tree, she even strung popcorn to hang on it."[103]

Death

Friedman died of heart failure at the age of 94 years in San Francisco on November 16, 2006.[104] He was still a working economist performing original economic research; his last column was published in The Wall Street Journal the day after his death.[105] He was survived by his wife, Rose Friedman (who would die on August 18, 2009) and their two children, David D. Friedman, known for The Machinery of Freedom, as well as his unique anarcho-capitalism from a Chicago School perspective, and attorney and bridge player Jan Martel.[91]

Scholarly contributions

Economics

Friedman was best known for reviving interest in the money supply as a determinant of the nominal value of output, that is, the quantity theory of money.[106] Monetarism is the set of views associated with modern quantity theory. Its origins can be traced back to the 16th-century School of Salamanca or even further; however, Friedman's contribution is largely responsible for its modern popularization. He co-authored, with Anna Schwartz, A Monetary History of the United States, 1867–1960 (1963), which was an examination of the role of the money supply and economic activity in the U.S. history.[107]

Friedman was the main proponent of the monetarist school of economics. He maintained that there is a close and stable association between inflation and the money supply, mainly that inflation could be avoided with proper regulation of the monetary base's growth rate. He famously used the analogy of "dropping money out of a helicopter", in order to avoid dealing with money injection mechanisms and other factors that would overcomplicate his models.[108]

Friedman's arguments were designed to counter the popular concept of cost-push inflation, that the increased general price level at the time was the result of increases in the price of oil, or increases in wages; as he wrote:

Inflation is always and everywhere a monetary phenomenon.

— Milton Friedman, 1963.[109]

Friedman rejected the use of fiscal policy as a tool of demand management; and he held that the government's role in the guidance of the economy should be restricted severely. Friedman wrote extensively on the Great Depression, and he termed the 1929–1933 period the Great Contraction. He argued that the Depression had been caused by an ordinary financial shock the duration and seriousness of which were greatly increased by the subsequent contraction of the money supply caused by the misguided policies of the directors of the Federal Reserve.[110][111]

The Fed was largely responsible for converting what might have been a garden-variety recession, although perhaps a fairly severe one, into a major catastrophe. Instead of using its powers to offset the depression, it presided over a decline in the quantity of money by one-third from 1929 to 1933 ... Far from the depression being a failure of the free-enterprise system, it was a tragic failure of government.

— Milton Friedman, Two Lucky People, 233[112]

This theory was put forth in A Monetary History of the United States, and the chapter on the Great Depression was then published as a stand-alone book entitled The Great Contraction, 1929–1933. Both books are still in print from the Princeton University Press, and some editions include as an appendix a speech at a University of Chicago event honoring Friedman[113] in which Ben Bernanke made this statement:

Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression, you're right. We did it. We're very sorry. But thanks to you, we won't do it again.[111][113]

Friedman also argued for the removal of government intervention in currency markets, thereby spawning an enormous literature on the subject, as well as promoting the practice of freely floating exchange rates. His close friend George Stigler explained, "As is customary in science, he did not win a full victory, in part because research was directed along different lines by the theory of rational expectations, a newer approach developed by Robert Lucas, also at the University of Chicago."[114] The relationship between Friedman and Lucas, or new classical macroeconomics as a whole, was highly complex. The Friedmanian Phillips curve was an interesting starting point for Lucas, but he soon realized that the solution provided by Friedman was not quite satisfactory. Lucas elaborated a new approach in which rational expectations were presumed instead of the Friedmanian adaptive expectations. Due to this reformulation, the story in which the theory of the new classical Phillips curve was embedded radically changed. This modification, however, had a significant effect on Friedman's own approach, so, as a result, the theory of the Friedmanian Phillips curve also changed.[115] Moreover, new classical adherent Neil Wallace, who was a graduate student at the University of Chicago between 1960 and 1963, regarded Friedman's theoretical courses as a mess, highlighting the strained relationship between monetarism and new classical schools.[116]

Friedman was also known for his work on the consumption function, the permanent income hypothesis (1957), which Friedman himself referred to as his best scientific work.[117] This work contended that utility-maximizing consumers would spend a proportional amount of what they perceived to be their permanent income. Permanent Income refers to such factors like human capital. Windfall gains would mostly be saved because of the law of diminishing marginal utility.[13]

Friedman's essay "The Methodology of Positive Economics" (1953) provided the epistemological pattern for his own subsequent research and to a degree that of the Chicago School. There he argued that economics as science should be free of value judgments for it to be objective. Moreover, a useful economic theory should be judged not by its descriptive realism but by its simplicity and fruitfulness as an engine of prediction. That is, students should measure the accuracy of its predictions, rather than the 'soundness of its assumptions'. His argument was part of an ongoing debate among such statisticians as Jerzy Neyman, Leonard Savage, and Ronald Fisher.[118]

While being an advocate of the free market, Friedman believed that the government had two crucial roles. In an interview with Phil Donahue, Friedman argued that "the two basic functions of a government are to protect the nation against foreign enemy, and to protect citizens against its fellows".[119] He also admitted that although privatization of national defense could reduce the overall cost, he has not yet thought of a way to make this privatization possible.[119]

Rejection and subsequent evolution of the Philips Curve

 
Long-Run Phillips Curve (NAIRU)

Other important contributions include his critique of the Phillips curve and the concept of the natural rate of unemployment (1968). This critique associated his name, together with that of Edmund Phelps, with the insight that a government that brings about greater inflation cannot permanently reduce unemployment by doing so. Unemployment may be temporarily lower, if the inflation is a surprise, but in the long run unemployment will be determined by the frictions and imperfections of the labor market. If the conditions are not met and inflation is expected, the "long run" effects will replace the "short term" effects.[120][121]

Through his critique, the Philips curve evolved from a strict model emphasizing the connection between inflation and unemployment as being absolute, to a model which emphasized short term unemployment reductions and long term employment stagnations.[120]

Friedman's revised and updated Phillips Curve also changed as a result of Robert Lucas's idea of Rational Expectations, replacing the adaptive expectations Friedman used.[116]

Statistics

One of his most famous contributions to statistics is sequential sampling.[122] Friedman did statistical work at the Division of War Research at Columbia, where he and his colleagues came up with the technique.[123] It became, in the words of The New Palgrave Dictionary of Economics, "the standard analysis of quality control inspection". The dictionary adds, "Like many of Friedman's contributions, in retrospect it seems remarkably simple and obvious to apply basic economic ideas to quality control; that, however, is a measure of his genius."[122][124]

Public policy positions

Federal Reserve and monetary policy

Although Friedman concluded the government does have a role in the monetary system[125] he was critical of the Federal Reserve due to its poor performance and felt it should be abolished.[126][127][128] He was opposed to Federal Reserve policies, even during the so-called 'Volcker shock' that was labeled 'monetarist'.[129] Friedman believed the Federal Reserve System should ultimately be replaced with a computer program.[130] He favored a system that would automatically buy and sell securities in response to changes in the money supply.[131]

The proposal to constantly grow the money supply at a certain predetermined amount every year has become known as Friedman's k-percent rule.[132] There is debate about the effectiveness of a theoretical money supply targeting regime.[133][134] The Fed's inability to meet its money supply targets from 1978–1982 led some to conclude it is not a feasible alternative to more conventional inflation and interest rate targeting.[135] Towards the end of his life, Friedman expressed doubt about the validity of targeting the quantity of money. To date, most countries have adopted inflation targeting instead of the k-percent rule.[136]

Idealistically, Friedman actually favored the principles of the 1930s Chicago plan, which would have ended fractional reserve banking and, thus, private money creation. It would force banks to have 100% reserves backing deposits, and instead place money creation powers solely in the hands of the US Government. This would make targeting money growth more possible, as endogenous money created by fractional reserve lending would no longer be a major issue.[132]

Friedman was a strong advocate for floating exchange rates throughout the entire Bretton-Woods period (1944–1971). He argued that a flexible exchange rate would make external adjustment possible and allow countries to avoid balance of payments crises. He saw fixed exchange rates as an undesirable form of government intervention. The case was articulated in an influential 1953 paper, "The Case for Flexible Exchange Rates", at a time when most commentators regarded the possibility of floating exchange rates as an unrealistic policy proposal.[137][138]

Foreign policy

 
Friedman with Richard Nixon and George Shultz in 1971

While Walter Oi is credited with establishing the economic basis for a volunteer military, Friedman was a proponent, and was credited with ending the draft,[18] stating that the draft was "inconsistent with a free society".[139][140]

In Capitalism and Freedom, he argued conscription is inequitable and arbitrary, preventing young men from shaping their lives as they see fit.[141] During the Nixon administration he headed the committee to research a conversion to paid/volunteer armed force. He would later state his role in eliminating the conscription in the United States was his proudest accomplishment.[18] Friedman did, however, believe the introduction of a system of universal military training as a reserve in cases of war-time could be justified.[141] He still opposed its implementation in the United States, describing it as a "monstrosity".[142]

Biographer Lanny Ebenstein noted a drift over time in Friedman's views from an interventionist to a more cautious foreign policy.[143] He supported US involvement in the Second World War and initially supported a hard-line against Communism, but moderated over time.[143] However, Friedman did state in a 1995 interview that he was an anti-interventionist.[144] He opposed the Gulf War and the Iraq War. In a spring 2006 interview, Friedman said the US's stature in the world had been eroded by the Iraq War, but that it might be improved if Iraq were to become a peaceful and independent country.[145][143]

Libertarianism and the Republican Party

 
Friedman receiving the Presidential Medal of Freedom from Ronald Reagan in 1988

Friedman was an economic advisor and speech writer in Barry Goldwater's failed presidential campaign in 1964. He was an advisor to California governor Ronald Reagan, and was active in Reagan's presidential campaigns.[146] He served as a member of President Reagan's Economic Policy Advisory Board starting in 1981. In 1988, he received the Presidential Medal of Freedom and the National Medal of Science.[147]

In a 1995 interview with Reason magazine, Friedman criticized Murray Rothbard and Ayn Rand as "cult builders" and "dogmatists", citing this as justification for not joining the U.S. Libertarian Party. Friedman stated that he was a member of the Republican Party, "not because they have any principles, but because that's the way I am the most useful and have most influence." He described his philosophy as "clearly libertarian", though distanced himself from "zero-government" libertarianism, which he called "infeasible", citing the lack of historical examples of that philosophy succeeding.[1]

His citation for the Presidential Medal of Freedom reads: "He has used a brilliant mind to advance a moral vision: the vision of a society where men and women are free, free to choose, but where government is not as free to override their decisions. That vision has changed America, and it is changing the world. All of us owe a tremendous debt to this man’s towering intellect and his devotion to liberty."[148]

Governmental involvement in the economy

In a 1962 essay that builds on arguments made by A. V. Dicey, Friedman argued that a "free society" would constitute a desirable but unstable equilibrium, due to an asymmetry between the visible benefits and the hidden harms of government intervention; he uses tariffs as an example of a policy that brings noticeable financial benefits to a visible group, but causes worse harms to a diffuse group of workers and consumers.[1][149]

Friedman was supportive of the state provision of some public goods that private businesses are not considered as being able to provide. However, he argued that many of the services performed by government could be performed better by the private sector. Above all, if some public goods are provided by the state, he believed that they should not be a legal monopoly where private competition is prohibited; for example, he wrote:

There is no way to justify our present public monopoly of the post office. It may be argued that the carrying of mail is a technical monopoly and that a government monopoly is the least of evils. Along these lines, one could perhaps justify a government post office, but not the present law, which makes it illegal for anybody else to carry the mail. If the delivery of mail is a technical monopoly, no one else will be able to succeed in competition with the government. If it is not, there is no reason why the government should be engaged in it. The only way to find out is to leave other people free to enter.

— Milton Friedman, [150]

In 1962, Friedman criticized Social Security in his book Capitalism and Freedom, arguing that it had created welfare dependency. However, in the penultimate chapter of the same book, Friedman argued that while capitalism had greatly reduced the extent of poverty in absolute terms, "poverty is in part a relative matter, [and] even in [wealthy Western] countries, there are clearly many people living under conditions that the rest of us label as poverty." Friedman also noted that while private charity could be one recourse for alleviating poverty and cited late 19th century Britain and the United States as exemplary periods of extensive private charity and eleemosynary activity, he made the following point:[151]

It can be argued that private charity is insufficient because the benefits from it accrue to people other than those who make the gifts – ... a neighborhood effect. I am distressed by the sight of poverty; I am benefited by its alleviation; but I am benefited equally whether I or someone else pays for its alleviation; the benefits of other people's charity therefore partly accrue to me. To put it differently, we might all of us be willing to contribute to the relief of poverty, provided everyone else did. We might not be willing to contribute the same amount without such assurance. In small communities, public pressure can suffice to realize the proviso even with private charity. In the large impersonal communities that are increasingly coming to dominate our society, it is much more difficult for it to do so. Suppose one accepts, as I do, this line of reasoning as justifying governmental action to alleviate poverty; to set, as it were, a floor under the standard of life of every person in the community. [While there are questions of how much should be spent and how, the] arrangement that recommends itself on purely mechanical grounds is a negative income tax. ... The advantages of this arrangement are clear. It is directed specifically at the problem of poverty. It gives help in the form most useful to the individual, namely, cash. It is general and could be substituted for the host of special measures now in effect. It makes explicit the cost borne by society. It operates outside the market. Like any other measures to alleviate poverty, it reduces the incentives of those helped to help themselves, but it does not eliminate that incentive entirely, as a system of supplementing incomes up to some fixed minimum would. An extra dollar earned always means more money available for expenditure.

Friedman argued further that other advantages of the negative income tax were that it could fit directly into the tax system, would be less costly, and would reduce the administrative burden of implementing a social safety net.[152] Friedman reiterated these arguments 18 years later in Free to Choose, with the additional proviso that such a reform would only be satisfactory if it replaced the current system of welfare programs rather than augment it.[153] According to economist Robert H. Frank, writing in The New York Times, Friedman's views in this regard were grounded in a belief that while "market forces ... accomplish wonderful things", they "cannot ensure a distribution of income that enables all citizens to meet basic economic needs".[154] Friedman also criticized urban renewal programs in the United States due to their racially discriminatory and economically regressive effects.[155]

In 1979, Friedman expressed support for environmental taxes in general in an interview on The Phil Donahue Show, saying "the best way to [deal with pollution] is to impose a tax on the cost of the pollutants emitted by a car and make an incentive for car manufacturers and for consumers to keep down the amount of pollution."[156] In Free to Choose, Friedman reiterated his support for environmental taxes as compared with increased environmental regulation, stating "The preservation of the environment and the avoidance of undue pollution are real problems and they are problems concerning which the government has an important role to play. … Most economists agree that a far better way to control pollution than the present method of specific regulation and supervision is to introduce market discipline by imposing effluent charges."[157][158]

In his 1955 article "The Role of Government in Education",[159] Friedman proposed supplementing publicly operated schools with privately run but publicly funded schools through a system of school vouchers.[160] Reforms similar to those proposed in the article were implemented in, for example, Chile in 1981 and Sweden in 1992.[161] In 1996, Friedman, together with his wife, founded the Friedman Foundation for Educational Choice to advocate school choice and vouchers. In 2016, the Friedman Foundation changed its name to EdChoice to honor the Friedmans' desire to have the educational choice movement live on without their names attached to it after their deaths.[23]

Michael Walker of the Fraser Institute and Friedman hosted a series of conferences from 1986 to 1994. The goal was to create a clear definition of economic freedom and a method for measuring it. Eventually this resulted in the first report on worldwide economic freedom, Economic Freedom in the World. This annual report has since provided data for numerous peer-reviewed studies and has influenced policy in several nations.[162]

With sixteen other distinguished economists he opposed the Copyright Term Extension Act, and signed on to an amicus brief filed in Eldred v. Ashcroft.[163] Friedman jokingly described it as a "no-brainer".[164]

Friedman argued for stronger basic legal (constitutional) protection of economic rights and freedoms to further promote industrial-commercial growth and prosperity and buttress democracy and freedom and the rule of law generally in society.[165]

Social issues

Friedman also supported libertarian policies such as legalization of drugs and prostitution. During 2005, Friedman and more than 500 other economists advocated discussions regarding the economic benefits of the legalization of marijuana.[166]

Friedman was also a supporter of gay rights.[167] He never specifically supported same-sex marriage, instead saying "I do not believe there should be any discrimination against gays."[168]

Friedman favored immigration, saying "legal and illegal immigration has a very positive impact on the U.S. economy".[169] However, he suggested that immigrants ought not to have access to the welfare system.[169] Friedman stated that immigration from Mexico had been a "good thing", in particular illegal immigration.[169] Friedman argued that illegal immigration was a boon because they "take jobs that most residents of this country are unwilling to take, they provide employers with workers of a kind they cannot get" and they do not use welfare.[169] In Free to Choose, Friedman wrote:[153]

No arbitrary obstacles should prevent people from achieving those positions for which their talents fit them and which their values lead them to seek. Not birth, nationality, color, religion, sex, nor any other irrelevant characteristic should determine the opportunities that are open to a person – only his abilities.

Friedman also famously argued that the welfare state must end before immigration, or more specifically, before open borders, because immigrants might have an incentive to come directly because of welfare payments.[170] Economist Bryan Caplan has disputed this assertion, arguing that welfare is generally distributed not among immigrants, but instead retirees, through Social Security.[171]

Friedman was against public housing as he believed it was also a form of welfare. He believed the one of the main arguments that politicians have for public housing is that regular low income housing was too expensive due to the imposed higher cost of a fire and police department.[77] He believed that it would only increase taxes and not benefit low income people in the long run. Friedman was an advocate for direct cash instead of public housing believing that the people would be better off that way. He argued that liberals would never agree with this idea due to them not trusting their own citizens.[172] He also stated that regression has already happened with more land being left vacant due to slow construction. Friedman argued that public housing instead encourages juvenile delinquency.[173][174]

Friedman was also against minimum wage laws, he saw them as a clear case as one can find that the precise opposite is happening when this was attempted. Minimum wage laws would increase unemployment in his eyes and that employers would not hire back workers that were already there for less pay.[172] In his view, this would leave low income people worse off because the voters for minimum wage laws would then become the victims of unemployment. He believed that these ideas of new minimum wage laws came from Northern factories and Unions, in an attempt to reduce competition from the South.[175][176]

Honors, recognition and legacy

 
Friedman in 1976

George H. Nash, a leading historian of American conservatism, says that by "the end of the 1960s he was probably the most highly regarded and influential conservative scholar in the country, and one of the few with an international reputation".[177] In 1971, Friedman received the Golden Plate Award of the American Academy of Achievement.[178][179] Friedman allowed the libertarian Cato Institute to use his name for its biennial Milton Friedman Prize for Advancing Liberty beginning in 2001. A Friedman Prize was given to the late British economist Peter Bauer in 2002, Peruvian economist Hernando de Soto in 2004, Mart Laar, former Estonian Prime Minister in 2006 and a young Venezuelan student Yon Goicoechea in 2008. His wife Rose, sister of Aaron Director, with whom he initiated the Friedman Foundation for Educational Choice, served on the international selection committee.[180][181]

Friedman was also a recipient of the Nobel Memorial Prize in Economics.[6]

Upon Friedman's death, Harvard President Lawrence Summers called him "The Great Liberator", saying "any honest Democrat will admit that we are now all Friedmanites." He said Friedman's great popular contribution was "in convincing people of the importance of allowing free markets to operate".[182]

Stephen Moore, a member of the editorial forward of The Wall Street Journal, said in 2013: "Quoting the most-revered champion of free-market economics since Adam Smith has become a little like quoting the Bible." He adds, "There are sometimes multiple and conflicting interpretations."[183]

Although post-Keynesian economist J. K. Galbraith was a prominent critic of Friedman and his ideology, he observed that "The age of John Maynard Keynes gave way to the age of Milton Friedman."[101]

1976 Nobel Memorial Prize in Economic Sciences

Friedman won the Nobel Memorial Prize in Economic Sciences, the sole recipient for 1976, "for his achievements in the fields of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilization policy".[6] His appointment was controversial, mainly for his association with military dictator Augusto Pinochet. Some economists, such as Institutional economist and 1974 Nobel Prize winner Gunnar Myrdal, criticized Friedman, and Myrdal's own 1974 Nobel Prize partner Friedrich Hayek, for being reactionaries. Myrdal's criticism caused some economists to oppose the Sveriges Riksbank Prize in Economics Sciences in Memory of Alfred Nobel itself.[184][185]

Hong Kong

Friedman once said: "If you want to see capitalism in action, go to Hong Kong."[186] He wrote in 1990 that the Hong Kong economy was perhaps the best example of a free market economy.[187]

One month before his death, he wrote "Hong Kong Wrong – What would Cowperthwaite say?" in The Wall Street Journal, criticizing Donald Tsang, Chief Executive of Hong Kong, for abandoning "positive non interventionism".[188] Tsang later said he was merely changing the slogan to "big market, small government", where small government is defined as less than 20% of GDP. In a debate between Tsang and his rival Alan Leong before the 2007 Hong Kong Chief Executive election, Leong introduced the topic and jokingly accused Tsang of angering Friedman to death (Friedman had died only a year prior).[189]

Chile

During 1975, two years after the military coup that brought military dictator Augusto Pinochet to power and ended the government of Salvador Allende, the economy of Chile experienced a severe crisis.[190] Friedman and Arnold Harberger accepted an invitation of a private Chilean foundation to visit Chile and speak on principles of economic freedom.[191] He spent seven days in Chile giving a series of lectures at the Pontifical Catholic University of Chile and the University of Chile. One of the lectures was entitled "The Fragility of Freedom" and according to Friedman, "dealt with precisely the threat to freedom from a centralized military government."[192]

In a letter to Pinochet of April 21, 1975, Friedman considered the "key economic problems of Chile are clearly ... inflation and the promotion of a healthy social market economy".[193] He stated that "There is only one way to end inflation: by drastically reducing the rate of increase of the quantity of money" and that "cutting government spending is by far and away the most desirable way to reduce the fiscal deficit, because it ... strengthens the private sector thereby laying the foundations for healthy economic growth".[193] As to how rapidly inflation should be ended, Friedman felt that "for Chile where inflation is raging at 10–20% a month ... gradualism is not feasible. It would involve so painful an operation over so long a period that the patient would not survive." Choosing "a brief period of higher unemployment" was the lesser evil.. and that "the experience of Germany, ... of Brazil ..., of the post-war adjustment in the U.S. ... all argue for shock treatment". In the letter Friedman recommended to deliver the shock approach with "a package to eliminate the surprise and to relieve acute distress" and "for definiteness let me sketch the contents of a package proposal ... to be taken as illustrative" although his knowledge of Chile was "too limited to enable [him] to be precise or comprehensive". He listed a "sample proposal" of 8 monetary and fiscal measures including "the removal of as many as obstacles as possible that now hinder the private market. For example, suspend ... the present law against discharging employees". He closed, stating "Such a shock program could end inflation in months". His letter suggested that cutting spending to reduce the fiscal deficit would result in less transitional unemployment than raising taxes.[194][195][196]

Sergio de Castro, a Chilean Chicago School graduate, became the nation's Minister of Finance in 1975.[196] During his six-year tenure, foreign investment increased, restrictions were placed on striking and labor unions, and GDP rose yearly.[197] A foreign exchange program was created between the Catholic University of Chile and the University of Chicago. Many other Chicago School alumni were appointed government posts during and after Pinochet's dictatorship; others taught its economic doctrine at Chilean universities. They became known as the Chicago Boys.[198]

Friedman defended his activity in Chile on the grounds that, in his opinion, the adoption of free market policies not only improved the economic situation of Chile but also contributed to the amelioration of Pinochet's rule and to the eventual transition to a democratic government during 1990. That idea is included in Capitalism and Freedom, in which he declared that economic freedom is not only desirable in itself but is also a necessary condition for political freedom. In his 1980 documentary Free to Choose, he said the following: "Chile is not a politically free system, and I do not condone the system. But the people there are freer than the people in Communist societies because government plays a smaller role. ... The conditions of the people in the past few years has been getting better and not worse. They would be still better to get rid of the junta and to be able to have a free democratic system."[199][200] In 1984, Friedman stated that he has "never refrained from criticizing the political system in Chile".[192] In 1991 he said: "I have nothing good to say about the political regime that Pinochet imposed. It was a terrible political regime. The real miracle of Chile is not how well it has done economically; the real miracle of Chile is that a military junta was willing to go against its principles and support a free market regime designed by principled believers in a free market. ... In Chile, the drive for political freedom, that was generated by economic freedom and the resulting economic success, ultimately resulted in a referendum that introduced political democracy. Now, at long last, Chile has all three things: political freedom, human freedom and economic freedom. Chile will continue to be an interesting experiment to watch to see whether it can keep all three or whether, now that it has political freedom, that political freedom will tend to be used to destroy or reduce economic freedom."[201] He stressed that the lectures he gave in Chile were the same lectures he later gave in China and other socialist states.[202] He further stated "I do not consider it as evil for an economist to render technical economic advice to the Chilean Government, any more than I would regard it as evil for a physician to give technical medical advice to the Chilean Government to help end a medical plague."[203]

During the 2000 PBS documentary The Commanding Heights (based on the book), Friedman continued to argue that "free markets would undermine [Pinochet's] political centralization and political control",[204][205] and that criticism over his role in Chile missed his main contention that freer markets resulted in freer people, and that Chile's unfree economy had caused Pinochet's rise. Friedman advocated for free markets which undermined "political centralization and political control".[206]

Because of his involvement with the government of Chile, which was a dictatorship at the time of his visit, there were international protests, spanning from Sweden to America when Friedman was awarded the Nobel Memorial Prize in 1976. Friedman was accused of supporting the military dictatorship in Chile because of the relation of economists of the University of Chicago to Pinochet, and a seven-day trip[207] he took to Chile during March 1975 (less than two years after the coup that ended with the death of President Salvador Allende). Friedman answered that he was never an advisor to the dictatorship, but only gave some lectures and seminars on inflation, and met with officials, including Augusto Pinochet the head of the military dictatorship, while in Chile.

After a 1991 speech on drug legalization, Friedman answered a question on his involvement with the Pinochet regime, saying that he was never an advisor to Pinochet (also mentioned in his 1984 Iceland interview), but that a group University of Chicago students were involved in Chile's economic reforms. Friedman credited these reforms with high levels of economic growth and with the establishment of democracy that has subsequently occurred in Chile. In October 1988, after returning from a lecture tour of China during which he had met with Zhao Ziyang, General Secretary of the Chinese Communist Party, Friedman wrote to The Stanford Daily asking if he should anticipate a similar "avalanche of protests for having been willing to give advice to so evil a government? And if not, why not?"

Iceland

Friedman visited Iceland during the autumn of 1984, met with important Icelanders and gave a lecture at the University of Iceland on the "tyranny of the status quo". He participated in a lively television debate on August 31, 1984, with socialist intellectuals, including Ólafur Ragnar Grímsson, who later became President of Iceland.[208] When they complained that a fee was charged for attending his lecture at the university and that, hitherto, lectures by visiting scholars had been free-of-charge, Friedman replied that previous lectures had not been free-of-charge in a meaningful sense: lectures always have related costs. What mattered was whether attendees or non-attendees covered those costs. Friedman thought that it was fairer that only those who attended paid. In this discussion Friedman also stated that he did not receive any money for delivering that lecture.[209]

Estonia

Although Friedman never visited Estonia, his book Free to Choose influenced Estonia's then 32-year-old prime minister, Mart Laar, who has claimed that it was the only book on economics he had read before taking office. Laar's reforms are often credited with responsibility for transforming Estonia from an impoverished Soviet republic to the "Baltic Tiger". A prime element of Laar's program was introduction of the flat tax.[210] Laar won the 2006 Milton Friedman Prize for Advancing Liberty, awarded by the Cato Institute.[211]

United Kingdom

After 1950 Friedman was frequently invited to lecture in Britain, and by the 1970s his ideas had gained widespread attention in conservative circles. For example, he was a regular speaker at the Institute of Economic Affairs (IEA), a libertarian think tank. Conservative politician Margaret Thatcher closely followed IEA programs and ideas, and met Friedman there in 1978. He also strongly influenced Keith Joseph, who became Thatcher's senior advisor on economic affairs, as well as Alan Walters and Patrick Minford, two other key advisers. Major newspapers, including the Daily Telegraph, The Times, and The Financial Times all promulgated Friedman's monetarist ideas to British decision-makers. Friedman's ideas strongly influenced Thatcher and her allies when she became Prime Minister in 1979.[212][213] Galbraith strongly criticised the "workability of the Friedmanite formula" for which, he said, "Britain has volunteered to be the guinea pig".[214]

United States

After his death a number of obituaries and articles were written in Friedman's honor, citing him as one of the most important and influential economists of the post-war era.[215][216][217][218] Milton Friedman's somewhat controversial legacy[219][220] in America remains strong within the conservative movement.[221] However, some journalists and economists like Noah Smith and Scott Sumner have argued Friedman's academic legacy has been buried under his political philosophy and misinterpreted by modern conservatives.[222][223][224][225]

Criticism of published works

Econometrician David Hendry criticized part of Friedman's and Anna Schwartz's 1982 Monetary Trends.[226] When asked about it during an interview with Icelandic TV in 1984,[227] Friedman said that the criticism referred to a different problem from that which he and Schwartz had tackled, and hence was irrelevant,[228] and pointed out the lack of consequential peer review amongst econometricians on Hendry's work.[229] In 2006, Hendry said that Friedman was guilty of "serious errors" of misunderstanding that meant "the t-ratios he reported for UK money demand were overstated by nearly 100 per cent", and said that, in a paper published in 1991 with Neil Ericsson,[230] he had refuted "almost every empirical claim ... made about UK money demand" by Friedman and Schwartz.[231] A 2004 paper updated and confirmed the validity of the Hendry–Ericsson findings through 2000.[232] Some commentators believe that Friedman was not open enough, in their view, to the possibility of market inefficiencies.[233] Economist Noah Smith argues that while Friedman made many important contributions to economic theory not all of his ideas relating to macroeconomics have entirely held up over the years and that too few people are willing to challenge them.[135][234]

Political scientist C. B. Macpherson disagreed with Friedman's historical assessment of economic freedom leading to political freedom, suggesting that political freedom actually gave way to economic freedom for property-owning elites. He also challenged the notion that markets efficiently allocated resources and rejected Friedman's definition of liberty.[235] Friedman's positivist methodological approach to economics has also been critiqued and debated.[236][237][238] Finnish economist Uskali Mäki argued some of his assumptions were unrealistic and vague.[239][240]

Friedman has been criticized by some prominent Austrian economists, including Murray Rothbard and Walter Block. Block called Friedman a "socialist", and was critical of his support for a central banking system, saying "First and foremost, this economist supported the Federal Reserve System all throughout his professional life. That organization of course does not own the money stock, but controls it. Friedman was an inveterate hater of the gold standard, denigrating its advocates as 'gold bugs'."[241] Rothbard criticized Friedman's conclusion that the Great Depression happened as a result of a deflationary spiral, arguing that this is inconsistent with the data, because during the period described by Friedman as "The Great Contraction", the money supply increased.[242]

Although the book was described by the Cato Institute as among the greatest economics books in the 20th century, and A Monetary History of the United States is widely considered to be among the most influential economics books ever made,[243][244] it has endured criticisms for its conclusion that the Federal Reserve was to blame for the Great Depression. Some economists, including noted Friedman critic Peter Temin, have raised questions about the legitimacy of Friedman's claims about whether or not monetary quantity levels were endogenous rather than exogenously determined, as A Monetary History of the United States posits.[245] Nobel-prize winning economist Paul Krugman argued that the 2008 recession proved that, during a recession, a central bank cannot control broad money (M3 money, as defined by the OECD[246]), and even if it can, the money supply does not bear a direct or proven relationship with GDP. According to Krugman, this was true in the 1930s, and the claim that the Federal Reserve could have avoided the Great Depression by reacting to what Friedman called The Great Contraction is "highly dubious".[247][248]

James Tobin questioned the importance of velocity of money, and how informative this measure of the frequency of transactions is to understanding the various fluctuations observed in A Monetary History of the United States.[249]

Economic historian Barry Eichengreen argued that because of the gold standard, which was at this point in time the chief monetary system of the world, the Federal Reserve's hands were tied. This was because, in order to retain the credibility of the gold standard, the Federal Reserve could not undertake actions like dramatically expanding the money supply as proposed by Friedman and Schwartz.[242]

Lawrence Mishel, distinguished fellow of the Economic Policy Institute, argues that wages have been kept low in the United States because of the Friedman doctrine, namely the adoption of corporate practices and economic policies (or the blocking of reforms) at the behest of business and the wealthy elite, which resulted in the systematic disempowerment of workers.[250] He argues that the lack of worker power caused wage suppression, increased wage inequality, and exacerbated racial disparities. Notably, mechanisms such as excessive unemployment, globalization, eroded labor standards (and their lack of enforcement), weakened collective bargaining, and corporate structure changes that disadvantage workers, all collectively functioned to keep wages low.[250] From 1980 to 2020, while economy-wide productivity rose almost 70 percent, hourly compensation for typical workers increased less than 12 percent, whilst the earnings of the top 1 percent and 0.1 percent increased 158 percent and 341 percent, respectively.[250]

Selected bibliography

  • A Theory of the Consumption Function (1957) ISBN 1614278121.
  • A Program for Monetary Stability (Fordham University Press, 1960) 110 pp. online version ISBN 0823203719
  • Capitalism and Freedom (1962), highly influential series of essays that established Friedman's position on major issues of public policy ()
  • A Monetary History of the United States, 1867–1960, with Anna J. Schwartz, 1963; part 3 reprinted as The Great Contraction
  • "The Role of Monetary Policy", American Economic Review, Vol. 58, No. 1 (Mar. 1968), pp. 1–17 JSTOR presidential address to American Economics Association
  • "Inflation and Unemployment: Nobel Lecture", 1977, Journal of Political Economy. Vol. 85, pp. 451–472. JSTOR
  • Free to Choose: A Personal Statement, with Rose Friedman, (1980), highly influential restatement of policy views
  • The Essence of Friedman, essays edited by Kurt R. Leube, (1987) (ISBN 0817986626)
  • Two Lucky People: Memoirs (with Rose Friedman) ISBN 0226264149 (1998) excerpt and text search
  • Milton Friedman on Economics: Selected Papers by Milton Friedman, edited by Gary S. Becker (2008)

See also

Notes

  1. ^ Among macroeconomists, the "natural" rate has been increasingly replaced by James Tobin's NAIRU, the non-accelerating inflation rate of unemployment, which is seen as having fewer normative connotations.

References

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Sources

Further reading

  • "Symposium: Why Is There No Milton Friedman Today?". Econ Journal Watch. 10 (2). May 2013.
  • Jones, Daniel Stedman. Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics (2nd ed. 2014)
  • McCloskey, Deirdre (Winter 2003). "Other Things Equal: Milton". Eastern Economic Journal. 29 (1): 143–146. JSTOR 40326463.
  • Steelman, Aaron (2008). "Friedman, Milton (1912–2006)". In Hamowy, Ronald (ed.). The Encyclopedia of Libertarianism. Thousand Oaks, CA: Sage; Cato Institute. pp. 195–197. doi:10.4135/9781412965811.n118. ISBN 978-1412965804. LCCN 2008009151. OCLC 750831024.
  • Wood, John Cunningham, and Ronald N. Wood, ed. (1990), Milton Friedman: Critical Assessments, v. 3. Routledge.

External links

Videos
  • Appearances on C-SPAN
    • Booknotes interview with Friedman on the 50th Anniversary Edition of F.A. Hayek's Road to Serfdom, November 20, 1994.
    • In Depth interview with Friedman, September 3, 2000
  • A film clip "The Open Mind – Living Within Our Means (1975)" is available at the Internet Archive
  • A film clip "The Open Mind – A Nobel Laureate on the American Economy (1977)" is available at the Internet Archive
  • Milton Friedman on Charlie Rose
  • Free To Choose on YouTube
  • Milton Friedman, Commanding Heights, PBS, October 1, 2000, interview, profile and video
  • "Free To Choose" (1980), a PBS TV series by Milton Friedman
  • at the Cato Institute
  • Free to Choose Network

milton, friedman, listen, july, 1912, november, 2006, american, economist, statistician, received, 1976, nobel, memorial, prize, economic, sciences, research, consumption, analysis, monetary, history, theory, complexity, stabilization, policy, with, george, st. Milton Friedman ˈ f r iː d m en listen July 31 1912 November 16 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 policy 6 With George Stigler and others 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 expectations 7 Several students young professors and academics who were recruited or mentored by Friedman at Chicago went on to become leading economists including Gary Becker 8 Robert Fogel 9 Thomas Sowell 10 and Robert Lucas Jr 11 Milton FriedmanFriedman in 2004Born 1912 07 31 July 31 1912Brooklyn New York City U S DiedNovember 16 2006 2006 11 16 aged 94 San Francisco California U S Political partyRepublican 1 SpouseRose Friedman m 1936 wbr ChildrenDavid D FriedmanJan MartelInstitutionNational Resources Planning Board 1935 1937 National Bureau of Economic Research 1937 1940 Columbia University 1937 1941 1943 1945 1964 1965 University of Wisconsin Madison 1940 U S Department of the Treasury 1941 1943 University of Chicago 1946 1977 University of Cambridge 1954 1955 Hoover Institution Stanford University 1977 2006 School ortraditionChicago School Classical LiberalismAlma materRutgers University BA University of Chicago MA Columbia University PhD DoctoraladvisorSimon KuznetsDoctoralstudentsPhillip CaganHarry MarkowitzLester G Telser 2 David I MeiselmanNeil WallaceMiguel SidrauskiEdgar L FeigeOther notable studentsThomas SowellInfluencesSmithKnightKuznetsVinerHotellingBurnsHayekH JonesH C SimonsStiglerSchultzGeorgeContributionsPrice theory Monetarism Applied macroeconomics Floating exchange rates Permanent income hypothesis Helicopter money Volunteer military Natural rate of unemployment Friedman test K percent ruleAwardsMember of the American Philosophical Society 1957 3 Member of the National Academy of Sciences 1973 National Medal of Science 1988 Presidential Medal of Freedom 1988 Nobel Memorial Prize in Economic Sciences 1976 John Bates Clark Medal 1951 Information at IDEAS RePEcSignatureFriedman s challenges to what he called naive Keynesian theory 12 began with his interpretation of consumption which tracks how consumers spend He introduced a theory which would later become part of the mainstream and among the first to propagate the theory of consumption smoothing 6 13 During the 1960s he became the main advocate opposing Keynesian government policies 14 and described his approach along with mainstream economics as using Keynesian language and apparatus yet rejecting its initial conclusions 15 He theorized that there existed a natural rate of unemployment and argued that unemployment below this rate would cause inflation to accelerate a 16 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 17 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 18 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 2008 19 After retiring from the University of Chicago in 1977 and becoming Emeritus professor in economics in 1983 20 Friedman was an advisor to Republican President Ronald Reagan and Conservative British Prime Minister Margaret Thatcher 21 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 proudest achievement 18 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 vouchers 22 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 23 24 Friedman s works cover a broad range of economic topics and public policy issues 20 His books and essays have had global influence including in former communist states 25 26 27 28 A 2011 survey of economists commissioned by the EJW ranked Friedman as the second most popular economist of the 20th century following only John Maynard Keynes 29 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 30 Contents 1 Early life 2 Public service 3 Academic career 3 1 Early years 3 2 University of Chicago 3 3 University of Cambridge 3 3 1 A Theory of the Consumption Function 3 3 2 Capitalism and Freedom 4 Post retirement 5 Personal life 5 1 Religious views 5 2 Death 6 Scholarly contributions 6 1 Economics 6 2 Rejection and subsequent evolution of the Philips Curve 6 3 Statistics 7 Public policy positions 7 1 Federal Reserve and monetary policy 7 2 Foreign policy 7 3 Libertarianism and the Republican Party 7 4 Governmental involvement in the economy 7 5 Social issues 8 Honors recognition and legacy 8 1 1976 Nobel Memorial Prize in Economic Sciences 8 2 Hong Kong 8 3 Chile 8 4 Iceland 8 5 Estonia 8 6 United Kingdom 8 7 United States 8 8 Criticism of published works 9 Selected bibliography 10 See also 11 Notes 12 References 12 1 Sources 13 Further reading 14 External linksEarly life Edit Jeno Saul Friedman Milton Friedman s father Friedman was born in Brooklyn New York on July 31 1912 His parents Sara Ethel nee Landau and Jeno Saul Friedman were Jewish working class immigrants from Beregszasz in Carpathian Ruthenia Kingdom of Hungary now Berehove in Ukraine 31 32 They emigrated to America in their early teens 31 They both worked as dry goods merchants Friedman was their fourth child and only son as well as the youngest of the children 33 Shortly after his birth the family relocated to Rahway New Jersey 34 Friedman s family experienced financial troubles and financial uncertainty caused stability of income to be low Friedman described his family s situation in the following manner The family income was small and highly uncertain financial crisis was a constant companion Yet there was always enough to eat and the family atmosphere was warm and supportive Milton Friedman 31 Milton Friedman and future wife Rose Friedman in 1935Friedman s father Jeno Saul Friedman died during Friedman s senior year of high school leaving Friedman and two older sisters to care for his mother Sara Ethel Friedman 31 In his early teens Friedman was injured in a car accident which scarred his upper lip 35 36 A talented student and an avid reader Friedman graduated from Rahway High School in 1928 just before his 16th birthday 33 37 38 Although no family members had gone to university before Milton Friedman was awarded a competitive scholarship to Rutgers University then a private university receiving limited support from the State of New Jersey e g for such scholarships 33 Friedman was expected to finance the cost of university himself 31 He graduated from Rutgers in 1932 39 Friedman initially intended to become an actuary or mathematician however the state of the economy which was at this point in a deep depression convinced him to become an economist 33 34 He was offered two scholarships to do graduate work one in mathematics at Brown University and the other in economics at the University of Chicago where he would later teach 40 41 Friedman chose the latter earning a Master of Arts degree in 1933 He was strongly influenced by Jacob Viner Frank Knight and Henry Simons Friedman met his future wife economist Rose Director while at the University of Chicago 42 During the 1933 1934 academic year he had a fellowship at Columbia University where he studied statistics with statistician and economist Harold Hotelling He was back in Chicago for the 1934 1935 academic year working as a research assistant for Henry Schultz who was then working on Theory and Measurement of Demand 43 During the aforementioned 1934 35 academic year Friedman formed what would later prove to be lifetime friendships with George Stigler and W Allen Wallis both of whom taught with Friedman at the University of Chicago 44 Milton Friedman was also influenced by two lifelong friends Arthur Burns and Homer Johnson They helped Milton Friedman better understand the depth of economic thinking 45 Public service EditFriedman was unable to find academic employment so in 1935 he followed his friend W Allen Wallis to Washington D C where Franklin D Roosevelt s New Deal was a lifesaver for many young economists 46 At this stage Friedman said he and his wife regarded the job creation programs such as the WPA CCC and PWA appropriate responses to the critical situation but not the price and wage fixing measures of the National Recovery Administration and the Agricultural Adjustment Administration 47 Foreshadowing his later ideas he believed price controls interfered with an essential signaling mechanism to help resources be used where they were most valued Indeed Friedman later concluded that all government intervention associated with the New Deal was the wrong cure for the wrong disease arguing the Federal Reserve was to blame and that they should have expanded the money supply in reaction to what he later described in A Monetary History of the United States as The Great Contraction 48 Later Friedman and his colleague Anna Schwartz wrote A Monetary History of the United States 1867 1960 which argued that the Great Depression was caused by a severe monetary contraction due to banking crises and poor policy on the part of the Federal Reserve 49 Robert J Shiller describes the book as the most influential account of the Great Depression 50 The NBER where Friedman worked starting in 1937 During 1935 he began working for the National Resources Planning Board 51 which was then working on a large consumer budget survey Ideas from this project later became a part of his Theory of the Consumption Function a book which first described consumption smoothing and the Permanent Income Hypothesis Friedman began employment with the National Bureau of Economic Research during the autumn of 1937 to assist Simon Kuznets in his work on professional income This work resulted in their jointly authored publication Incomes from Independent Professional Practice which introduced the concepts of permanent and transitory income a major component of the Permanent Income Hypothesis that Friedman worked out in greater detail in the 1950s The book hypothesizes that professional licensing artificially restricts the supply of services and raises prices 52 Incomes from Independent Professional Practice remained quite controversial within the economics community because of Friedman s hypothesis that barriers to entry which were exercised and enforced by the American Medical Association led to higher than average wages for physicians compared to other professional groups 20 52 Barriers to entry are a fixed cost which must be incurred regardless of any outside factors such as work experience or other factors of human capital 53 During 1940 Friedman was appointed as an assistant professor teaching Economics at the University of Wisconsin Madison but encountered anti semitism in the Economics department and returned to government service 54 55 From 1941 to 1943 Friedman worked on wartime tax policy for the federal government as an advisor to senior officials of the United States Department of the Treasury As a Treasury spokesman during 1942 he advocated a Keynesian policy of taxation He helped to invent the payroll withholding tax system since the federal government needed money to fund the war 56 He later said I have no apologies for it but I really wish we hadn t found it necessary and I wish there were some way of abolishing withholding now 57 In Milton and Rose Friedman s jointly written memoir he wrote Rose has repeatedly chided me over the years about the role that I played in making possible the current overgrown government we both criticize so strongly 56 Academic career EditEarly years Edit In 1940 Friedman accepted a position at the University of Wisconsin Madison but left because of differences with faculty regarding United States involvement in World War II Friedman believed the United States should enter the war 58 In 1943 Friedman joined the Division of War Research at Columbia University headed by W Allen Wallis and Harold Hotelling where he spent the rest of World War II working as a mathematical statistician focusing on problems of weapons design military tactics and metallurgical experiments 58 59 In 1945 Friedman submitted Incomes from Independent Professional Practice co authored with Kuznets and completed during 1940 to Columbia as his doctoral dissertation The university awarded him a PhD in 1946 60 41 Friedman spent the 1945 1946 academic year teaching at the University of Minnesota where his friend George Stigler was employed On February 12 1945 his only son David D Friedman who would later follow in his father s footsteps as an economist was born 61 University of Chicago Edit The University of Chicago where Friedman taught In 1946 Friedman accepted an offer to teach economic theory at the University of Chicago a position opened by departure of his former professor Jacob Viner to Princeton University Friedman would work for the University of Chicago for the next 30 years 41 There he contributed to the establishment of an intellectual community that produced a number of Nobel Memorial Prize winners known collectively as the Chicago school of economics 34 At the time Arthur F Burns who was then the head of the National Bureau of Economic Research and later chairman of the Federal Reserve asked Friedman to rejoin the Bureau s staff 62 He accepted the invitation and assumed responsibility for the Bureau s inquiry into the role of money in the business cycle As a result he initiated the Workshop in Money and Banking the Chicago Workshop which promoted a revival of monetary studies During the latter half of the 1940s Friedman began a collaboration with Anna Schwartz an economic historian at the Bureau that would ultimately result in the 1963 publication of a book co authored by Friedman and Schwartz A Monetary History of the United States 1867 1960 18 34 University of Cambridge Edit Friedman spent the 1954 1955 academic year as a Fulbright Visiting Fellow at Gonville and Caius College Cambridge At the time the Cambridge economics faculty was divided into a Keynesian majority including Joan Robinson and Richard Kahn and an anti Keynesian minority headed by Dennis Robertson Friedman speculated he was invited to the fellowship because his views were unacceptable to both of the Cambridge factions Later his weekly columns for Newsweek magazine 1966 84 were well read and increasingly influential among political and business people 63 and helped earn the magazine a Gerald Loeb Special Award in 1968 64 From 1968 to 1978 he and Paul Samuelson participated in the Economics Cassette Series a biweekly subscription series where the economist would discuss the days issues for about a half hour at a time 65 66 A Theory of the Consumption Function Edit One of Milton Friedman s most popular works A Theory of the Consumption Function challenged traditional Keynesian viewpoints about the household This work was originally published in 1957 by Princeton University Press and it reanalyzed the relationship displayed between aggregate consumption or aggregate savings and aggregate income 13 Friedman s counterpart Keynes believed people would modify their household consumption expenditures to relate to their existing income levels 67 Friedman s research introduced the term permanent income to the world which was the average of a household s expected income over several years and he also developed the permanent income hypothesis Friedman thought income consisted of several components namely transitory and permanent He established the formula y y p y t displaystyle y y p y t in order to calculate income with p representing the permanent component and t representing the transitory component 68 Milton Friedman s research changed how economists interpreted the consumption function and his work pushed the idea that current income was not the only factor affecting people s adjustment household consumption expenditures 69 Instead expected income levels also affected how households would change their consumption expenditures Friedman s contributions strongly influenced research on consumer behavior and he further defined how to predict consumption smoothing which contradicts Keynes marginal propensity to consume Although this work presented many controversial points of view which differed from existing viewpoints established by Keynes A Theory of the Consumption Function helped Friedman gain respect in the field of economics His work on the Permanent Income Hypothesis is among the many contributions which were listed as reasons for his Sveriges Riskbank Prize in Economic Sciences 6 His work was later expanded on by Christopher D Carroll especially in regards to the absence of liquidity constraints 70 71 The Permanent Income Hypothesis faces some criticism mainly from Keynesian economists The primary criticism of the hypothesis is based on a lack of liquidity constraints 72 73 Capitalism and Freedom Edit His book Capitalism and Freedom inspired by a series of lectures he gave at Wabash College 74 brought him national and international attention outside academia 75 It was published in 1962 by the University of Chicago Press and consists of essays that used non mathematical economic models to explore issues of public policy 76 It sold over 400 000 copies in the first eighteen years and more than half a million since 1962 77 Capitalism and Freedom was translated into eighteen languages 78 Friedman talks about the need to move to a classically liberal society that free markets would help nations and individuals in the long run and fix the efficiency problems currently faced by the United States and other major countries of the 1950s and 1960s He goes through the chapters specifying an issue in each respective chapter from the role of government and money supply to social welfare programs to a special chapter on occupational licensure Friedman concludes Capitalism and Freedom with his classical liberal stance that government should stay out of matters that do not need and should only involve itself when absolutely necessary for the survival of its people and the country He recounts how the best of a country s abilities come from its free markets while its failures come from government intervention 79 Post retirement EditIn 1977 at the age of 65 Friedman retired from the University of Chicago after teaching there for 30 years He and his wife moved to San Francisco where he became a visiting scholar at the Federal Reserve Bank of San Francisco From 1977 on he was affiliated with the Hoover Institution at Stanford University 80 source source source source source source source source An example of a Free to Choose Network public lecture I Pencil During 1977 Friedman was approached by Bob Chitester and the Free to Choose Network They asked him to create a television program presenting his economic and social philosophy 81 82 83 Friedman and his wife Rose worked on this project for the next three years and during 1980 the ten part series titled Free to Choose was broadcast by the Public Broadcasting Service PBS The companion book to the series co authored by Milton and his wife Rose Friedman also titled Free To Choose was the bestselling nonfiction book of 1980 84 Friedman served as an unofficial adviser to Ronald Reagan during his 1980 presidential campaign and then served on the President s Economic Policy Advisory Board for the rest of the Reagan Administration Ebenstein says Friedman was the guru of the Reagan administration 21 In 1988 he received the National Medal of Science and Reagan honored him with the Presidential Medal of Freedom 85 Friedman is known now as one of the most influential economists of the 20th century 86 87 Throughout the 1980s and 1990s Friedman continued to write editorials and appear on television He made several visits to Eastern Europe and to China where he also advised governments He was also for many years a Trustee of the Philadelphia Society 88 89 90 Personal life Edit Milton Friedman with his wife Rose Friedman had two children David and Jan 91 He first met his wife Rose Friedman nee Director at the University of Chicago in 1932 and wed six years later in 1938 42 92 Friedman was noticeably shorter than some of his colleagues he measured 5 feet 0 inches 1 52 m and has been described as an Elfin Libertarian by Binyamin Appelbaum 93 94 95 Rose Friedman when asked about Friedman s successes said that I have never had the desire to compete with Milton professionally perhaps because I was smart enough to recognize I couldn t On the other hand he has always made me feel that his achievement is my achievement 96 97 98 During the 1960s Friedman built and subsequently maintained a cottage in Fairlee Vermont 99 Friedman also had an apartment in Russian Hill San Francisco where he lived from 1977 until his death 100 Religious views Edit External video Presentation by Milton and Rose Friedman on Two Lucky People Memoirs August 14 1998 C SPANAccording to a 2007 article in Commentary magazine his parents were moderately observant Jews but Friedman after an intense burst of childhood piety rejected religion altogether 101 He described himself as an agnostic 102 Friedman wrote extensively of his life and experiences especially in 1998 in his memoirs with his wife Rose titled Two Lucky People In this book Rose Friedman describes how she and Milton Friedman raised their two children Janet and David with a Christmas Tree in the home Orthodox Jews of course do not celebrate Christmas However just as when I was a child my mother had permitted me to have a Christmas tree one year when my friend had one she not only tolerated our having a Christmas tree she even strung popcorn to hang on it 103 Death Edit Friedman died of heart failure at the age of 94 years in San Francisco on November 16 2006 104 He was still a working economist performing original economic research his last column was published in The Wall Street Journal the day after his death 105 He was survived by his wife Rose Friedman who would die on August 18 2009 and their two children David D Friedman known for The Machinery of Freedom as well as his unique anarcho capitalism from a Chicago School perspective and attorney and bridge player Jan Martel 91 Scholarly contributions EditSee also Friedman Savage utility function Friedman rule Friedman s k percent rule Friedman test and Great Contraction Economics Edit Friedman was best known for reviving interest in the money supply as a determinant of the nominal value of output that is the quantity theory of money 106 Monetarism is the set of views associated with modern quantity theory Its origins can be traced back to the 16th century School of Salamanca or even further however Friedman s contribution is largely responsible for its modern popularization He co authored with Anna Schwartz A Monetary History of the United States 1867 1960 1963 which was an examination of the role of the money supply and economic activity in the U S history 107 Friedman was the main proponent of the monetarist school of economics He maintained that there is a close and stable association between inflation and the money supply mainly that inflation could be avoided with proper regulation of the monetary base s growth rate He famously used the analogy of dropping money out of a helicopter in order to avoid dealing with money injection mechanisms and other factors that would overcomplicate his models 108 Friedman s arguments were designed to counter the popular concept of cost push inflation that the increased general price level at the time was the result of increases in the price of oil or increases in wages as he wrote Inflation is always and everywhere a monetary phenomenon Milton Friedman 1963 109 Friedman rejected the use of fiscal policy as a tool of demand management and he held that the government s role in the guidance of the economy should be restricted severely Friedman wrote extensively on the Great Depression and he termed the 1929 1933 period the Great Contraction He argued that the Depression had been caused by an ordinary financial shock the duration and seriousness of which were greatly increased by the subsequent contraction of the money supply caused by the misguided policies of the directors of the Federal Reserve 110 111 The Fed was largely responsible for converting what might have been a garden variety recession although perhaps a fairly severe one into a major catastrophe Instead of using its powers to offset the depression it presided over a decline in the quantity of money by one third from 1929 to 1933 Far from the depression being a failure of the free enterprise system it was a tragic failure of government Milton Friedman Two Lucky People 233 112 This theory was put forth in A Monetary History of the United States and the chapter on the Great Depression was then published as a stand alone book entitled The Great Contraction 1929 1933 Both books are still in print from the Princeton University Press and some editions include as an appendix a speech at a University of Chicago event honoring Friedman 113 in which Ben Bernanke made this statement Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve I would like to say to Milton and Anna Regarding the Great Depression you re right We did it We re very sorry But thanks to you we won t do it again 111 113 Friedman also argued for the removal of government intervention in currency markets thereby spawning an enormous literature on the subject as well as promoting the practice of freely floating exchange rates His close friend George Stigler explained As is customary in science he did not win a full victory in part because research was directed along different lines by the theory of rational expectations a newer approach developed by Robert Lucas also at the University of Chicago 114 The relationship between Friedman and Lucas or new classical macroeconomics as a whole was highly complex The Friedmanian Phillips curve was an interesting starting point for Lucas but he soon realized that the solution provided by Friedman was not quite satisfactory Lucas elaborated a new approach in which rational expectations were presumed instead of the Friedmanian adaptive expectations Due to this reformulation the story in which the theory of the new classical Phillips curve was embedded radically changed This modification however had a significant effect on Friedman s own approach so as a result the theory of the Friedmanian Phillips curve also changed 115 Moreover new classical adherent Neil Wallace who was a graduate student at the University of Chicago between 1960 and 1963 regarded Friedman s theoretical courses as a mess highlighting the strained relationship between monetarism and new classical schools 116 Friedman was also known for his work on the consumption function the permanent income hypothesis 1957 which Friedman himself referred to as his best scientific work 117 This work contended that utility maximizing consumers would spend a proportional amount of what they perceived to be their permanent income Permanent Income refers to such factors like human capital Windfall gains would mostly be saved because of the law of diminishing marginal utility 13 Friedman s essay The Methodology of Positive Economics 1953 provided the epistemological pattern for his own subsequent research and to a degree that of the Chicago School There he argued that economics as science should be free of value judgments for it to be objective Moreover a useful economic theory should be judged not by its descriptive realism but by its simplicity and fruitfulness as an engine of prediction That is students should measure the accuracy of its predictions rather than the soundness of its assumptions His argument was part of an ongoing debate among such statisticians as Jerzy Neyman Leonard Savage and Ronald Fisher 118 While being an advocate of the free market Friedman believed that the government had two crucial roles In an interview with Phil Donahue Friedman argued that the two basic functions of a government are to protect the nation against foreign enemy and to protect citizens against its fellows 119 He also admitted that although privatization of national defense could reduce the overall cost he has not yet thought of a way to make this privatization possible 119 Rejection and subsequent evolution of the Philips Curve Edit Long Run Phillips Curve NAIRU Other important contributions include his critique of the Phillips curve and the concept of the natural rate of unemployment 1968 This critique associated his name together with that of Edmund Phelps with the insight that a government that brings about greater inflation cannot permanently reduce unemployment by doing so Unemployment may be temporarily lower if the inflation is a surprise but in the long run unemployment will be determined by the frictions and imperfections of the labor market If the conditions are not met and inflation is expected the long run effects will replace the short term effects 120 121 Through his critique the Philips curve evolved from a strict model emphasizing the connection between inflation and unemployment as being absolute to a model which emphasized short term unemployment reductions and long term employment stagnations 120 Friedman s revised and updated Phillips Curve also changed as a result of Robert Lucas s idea of Rational Expectations replacing the adaptive expectations Friedman used 116 Statistics Edit One of his most famous contributions to statistics is sequential sampling 122 Friedman did statistical work at the Division of War Research at Columbia where he and his colleagues came up with the technique 123 It became in the words of The New Palgrave Dictionary of Economics the standard analysis of quality control inspection The dictionary adds Like many of Friedman s contributions in retrospect it seems remarkably simple and obvious to apply basic economic ideas to quality control that however is a measure of his genius 122 124 Public policy positions EditFederal Reserve and monetary policy Edit Former Chair of the Federal Reserve Paul Volcker Although Friedman concluded the government does have a role in the monetary system 125 he was critical of the Federal Reserve due to its poor performance and felt it should be abolished 126 127 128 He was opposed to Federal Reserve policies even during the so called Volcker shock that was labeled monetarist 129 Friedman believed the Federal Reserve System should ultimately be replaced with a computer program 130 He favored a system that would automatically buy and sell securities in response to changes in the money supply 131 The proposal to constantly grow the money supply at a certain predetermined amount every year has become known as Friedman s k percent rule 132 There is debate about the effectiveness of a theoretical money supply targeting regime 133 134 The Fed s inability to meet its money supply targets from 1978 1982 led some to conclude it is not a feasible alternative to more conventional inflation and interest rate targeting 135 Towards the end of his life Friedman expressed doubt about the validity of targeting the quantity of money To date most countries have adopted inflation targeting instead of the k percent rule 136 Idealistically Friedman actually favored the principles of the 1930s Chicago plan which would have ended fractional reserve banking and thus private money creation It would force banks to have 100 reserves backing deposits and instead place money creation powers solely in the hands of the US Government This would make targeting money growth more possible as endogenous money created by fractional reserve lending would no longer be a major issue 132 Friedman was a strong advocate for floating exchange rates throughout the entire Bretton Woods period 1944 1971 He argued that a flexible exchange rate would make external adjustment possible and allow countries to avoid balance of payments crises He saw fixed exchange rates as an undesirable form of government intervention The case was articulated in an influential 1953 paper The Case for Flexible Exchange Rates at a time when most commentators regarded the possibility of floating exchange rates as an unrealistic policy proposal 137 138 Foreign policy Edit Friedman with Richard Nixon and George Shultz in 1971 While Walter Oi is credited with establishing the economic basis for a volunteer military Friedman was a proponent and was credited with ending the draft 18 stating that the draft was inconsistent with a free society 139 140 In Capitalism and Freedom he argued conscription is inequitable and arbitrary preventing young men from shaping their lives as they see fit 141 During the Nixon administration he headed the committee to research a conversion to paid volunteer armed force He would later state his role in eliminating the conscription in the United States was his proudest accomplishment 18 Friedman did however believe the introduction of a system of universal military training as a reserve in cases of war time could be justified 141 He still opposed its implementation in the United States describing it as a monstrosity 142 Biographer Lanny Ebenstein noted a drift over time in Friedman s views from an interventionist to a more cautious foreign policy 143 He supported US involvement in the Second World War and initially supported a hard line against Communism but moderated over time 143 However Friedman did state in a 1995 interview that he was an anti interventionist 144 He opposed the Gulf War and the Iraq War In a spring 2006 interview Friedman said the US s stature in the world had been eroded by the Iraq War but that it might be improved if Iraq were to become a peaceful and independent country 145 143 Libertarianism and the Republican Party Edit Friedman receiving the Presidential Medal of Freedom from Ronald Reagan in 1988 Friedman was an economic advisor and speech writer in Barry Goldwater s failed presidential campaign in 1964 He was an advisor to California governor Ronald Reagan and was active in Reagan s presidential campaigns 146 He served as a member of President Reagan s Economic Policy Advisory Board starting in 1981 In 1988 he received the Presidential Medal of Freedom and the National Medal of Science 147 In a 1995 interview with Reason magazine Friedman criticized Murray Rothbard and Ayn Rand as cult builders and dogmatists citing this as justification for not joining the U S Libertarian Party Friedman stated that he was a member of the Republican Party not because they have any principles but because that s the way I am the most useful and have most influence He described his philosophy as clearly libertarian though distanced himself from zero government libertarianism which he called infeasible citing the lack of historical examples of that philosophy succeeding 1 His citation for the Presidential Medal of Freedom reads He has used a brilliant mind to advance a moral vision the vision of a society where men and women are free free to choose but where government is not as free to override their decisions That vision has changed America and it is changing the world All of us owe a tremendous debt to this man s towering intellect and his devotion to liberty 148 Governmental involvement in the economy Edit In a 1962 essay that builds on arguments made by A V Dicey Friedman argued that a free society would constitute a desirable but unstable equilibrium due to an asymmetry between the visible benefits and the hidden harms of government intervention he uses tariffs as an example of a policy that brings noticeable financial benefits to a visible group but causes worse harms to a diffuse group of workers and consumers 1 149 Friedman was supportive of the state provision of some public goods that private businesses are not considered as being able to provide However he argued that many of the services performed by government could be performed better by the private sector Above all if some public goods are provided by the state he believed that they should not be a legal monopoly where private competition is prohibited for example he wrote There is no way to justify our present public monopoly of the post office It may be argued that the carrying of mail is a technical monopoly and that a government monopoly is the least of evils Along these lines one could perhaps justify a government post office but not the present law which makes it illegal for anybody else to carry the mail If the delivery of mail is a technical monopoly no one else will be able to succeed in competition with the government If it is not there is no reason why the government should be engaged in it The only way to find out is to leave other people free to enter Milton Friedman 150 In 1962 Friedman criticized Social Security in his book Capitalism and Freedom arguing that it had created welfare dependency However in the penultimate chapter of the same book Friedman argued that while capitalism had greatly reduced the extent of poverty in absolute terms poverty is in part a relative matter and even in wealthy Western countries there are clearly many people living under conditions that the rest of us label as poverty Friedman also noted that while private charity could be one recourse for alleviating poverty and cited late 19th century Britain and the United States as exemplary periods of extensive private charity and eleemosynary activity he made the following point 151 It can be argued that private charity is insufficient because the benefits from it accrue to people other than those who make the gifts a neighborhood effect I am distressed by the sight of poverty I am benefited by its alleviation but I am benefited equally whether I or someone else pays for its alleviation the benefits of other people s charity therefore partly accrue to me To put it differently we might all of us be willing to contribute to the relief of poverty provided everyone else did We might not be willing to contribute the same amount without such assurance In small communities public pressure can suffice to realize the proviso even with private charity In the large impersonal communities that are increasingly coming to dominate our society it is much more difficult for it to do so Suppose one accepts as I do this line of reasoning as justifying governmental action to alleviate poverty to set as it were a floor under the standard of life of every person in the community While there are questions of how much should be spent and how the arrangement that recommends itself on purely mechanical grounds is a negative income tax The advantages of this arrangement are clear It is directed specifically at the problem of poverty It gives help in the form most useful to the individual namely cash It is general and could be substituted for the host of special measures now in effect It makes explicit the cost borne by society It operates outside the market Like any other measures to alleviate poverty it reduces the incentives of those helped to help themselves but it does not eliminate that incentive entirely as a system of supplementing incomes up to some fixed minimum would An extra dollar earned always means more money available for expenditure Friedman argued further that other advantages of the negative income tax were that it could fit directly into the tax system would be less costly and would reduce the administrative burden of implementing a social safety net 152 Friedman reiterated these arguments 18 years later in Free to Choose with the additional proviso that such a reform would only be satisfactory if it replaced the current system of welfare programs rather than augment it 153 According to economist Robert H Frank writing in The New York Times Friedman s views in this regard were grounded in a belief that while market forces accomplish wonderful things they cannot ensure a distribution of income that enables all citizens to meet basic economic needs 154 Friedman also criticized urban renewal programs in the United States due to their racially discriminatory and economically regressive effects 155 In 1979 Friedman expressed support for environmental taxes in general in an interview on The Phil Donahue Show saying the best way to deal with pollution is to impose a tax on the cost of the pollutants emitted by a car and make an incentive for car manufacturers and for consumers to keep down the amount of pollution 156 In Free to Choose Friedman reiterated his support for environmental taxes as compared with increased environmental regulation stating The preservation of the environment and the avoidance of undue pollution are real problems and they are problems concerning which the government has an important role to play Most economists agree that a far better way to control pollution than the present method of specific regulation and supervision is to introduce market discipline by imposing effluent charges 157 158 In his 1955 article The Role of Government in Education 159 Friedman proposed supplementing publicly operated schools with privately run but publicly funded schools through a system of school vouchers 160 Reforms similar to those proposed in the article were implemented in for example Chile in 1981 and Sweden in 1992 161 In 1996 Friedman together with his wife founded the Friedman Foundation for Educational Choice to advocate school choice and vouchers In 2016 the Friedman Foundation changed its name to EdChoice to honor the Friedmans desire to have the educational choice movement live on without their names attached to it after their deaths 23 Michael Walker of the Fraser Institute and Friedman hosted a series of conferences from 1986 to 1994 The goal was to create a clear definition of economic freedom and a method for measuring it Eventually this resulted in the first report on worldwide economic freedom Economic Freedom in the World This annual report has since provided data for numerous peer reviewed studies and has influenced policy in several nations 162 With sixteen other distinguished economists he opposed the Copyright Term Extension Act and signed on to an amicus brief filed in Eldred v Ashcroft 163 Friedman jokingly described it as a no brainer 164 Friedman argued for stronger basic legal constitutional protection of economic rights and freedoms to further promote industrial commercial growth and prosperity and buttress democracy and freedom and the rule of law generally in society 165 Social issues Edit Friedman also supported libertarian policies such as legalization of drugs and prostitution During 2005 Friedman and more than 500 other economists advocated discussions regarding the economic benefits of the legalization of marijuana 166 Friedman was also a supporter of gay rights 167 He never specifically supported same sex marriage instead saying I do not believe there should be any discrimination against gays 168 Friedman favored immigration saying legal and illegal immigration has a very positive impact on the U S economy 169 However he suggested that immigrants ought not to have access to the welfare system 169 Friedman stated that immigration from Mexico had been a good thing in particular illegal immigration 169 Friedman argued that illegal immigration was a boon because they take jobs that most residents of this country are unwilling to take they provide employers with workers of a kind they cannot get and they do not use welfare 169 In Free to Choose Friedman wrote 153 No arbitrary obstacles should prevent people from achieving those positions for which their talents fit them and which their values lead them to seek Not birth nationality color religion sex nor any other irrelevant characteristic should determine the opportunities that are open to a person only his abilities Friedman also famously argued that the welfare state must end before immigration or more specifically before open borders because immigrants might have an incentive to come directly because of welfare payments 170 Economist Bryan Caplan has disputed this assertion arguing that welfare is generally distributed not among immigrants but instead retirees through Social Security 171 Friedman was against public housing as he believed it was also a form of welfare He believed the one of the main arguments that politicians have for public housing is that regular low income housing was too expensive due to the imposed higher cost of a fire and police department 77 He believed that it would only increase taxes and not benefit low income people in the long run Friedman was an advocate for direct cash instead of public housing believing that the people would be better off that way He argued that liberals would never agree with this idea due to them not trusting their own citizens 172 He also stated that regression has already happened with more land being left vacant due to slow construction Friedman argued that public housing instead encourages juvenile delinquency 173 174 Friedman was also against minimum wage laws he saw them as a clear case as one can find that the precise opposite is happening when this was attempted Minimum wage laws would increase unemployment in his eyes and that employers would not hire back workers that were already there for less pay 172 In his view this would leave low income people worse off because the voters for minimum wage laws would then become the victims of unemployment He believed that these ideas of new minimum wage laws came from Northern factories and Unions in an attempt to reduce competition from the South 175 176 Honors recognition and legacy Edit Friedman in 1976 George H Nash a leading historian of American conservatism says that by the end of the 1960s he was probably the most highly regarded and influential conservative scholar in the country and one of the few with an international reputation 177 In 1971 Friedman received the Golden Plate Award of the American Academy of Achievement 178 179 Friedman allowed the libertarian Cato Institute to use his name for its biennial Milton Friedman Prize for Advancing Liberty beginning in 2001 A Friedman Prize was given to the late British economist Peter Bauer in 2002 Peruvian economist Hernando de Soto in 2004 Mart Laar former Estonian Prime Minister in 2006 and a young Venezuelan student Yon Goicoechea in 2008 His wife Rose sister of Aaron Director with whom he initiated the Friedman Foundation for Educational Choice served on the international selection committee 180 181 Friedman was also a recipient of the Nobel Memorial Prize in Economics 6 Upon Friedman s death Harvard President Lawrence Summers called him The Great Liberator saying any honest Democrat will admit that we are now all Friedmanites He said Friedman s great popular contribution was in convincing people of the importance of allowing free markets to operate 182 Stephen Moore a member of the editorial forward of The Wall Street Journal said in 2013 Quoting the most revered champion of free market economics since Adam Smith has become a little like quoting the Bible He adds There are sometimes multiple and conflicting interpretations 183 Although post Keynesian economist J K Galbraith was a prominent critic of Friedman and his ideology he observed that The age of John Maynard Keynes gave way to the age of Milton Friedman 101 1976 Nobel Memorial Prize in Economic Sciences Edit Friedman won the Nobel Memorial Prize in Economic Sciences the sole recipient for 1976 for his achievements in the fields of consumption analysis monetary history and theory and for his demonstration of the complexity of stabilization policy 6 His appointment was controversial mainly for his association with military dictator Augusto Pinochet Some economists such as Institutional economist and 1974 Nobel Prize winner Gunnar Myrdal criticized Friedman and Myrdal s own 1974 Nobel Prize partner Friedrich Hayek for being reactionaries Myrdal s criticism caused some economists to oppose the Sveriges Riksbank Prize in Economics Sciences in Memory of Alfred Nobel itself 184 185 Hong Kong Edit Friedman once said If you want to see capitalism in action go to Hong Kong 186 He wrote in 1990 that the Hong Kong economy was perhaps the best example of a free market economy 187 One month before his death he wrote Hong Kong Wrong What would Cowperthwaite say in The Wall Street Journal criticizing Donald Tsang Chief Executive of Hong Kong for abandoning positive non interventionism 188 Tsang later said he was merely changing the slogan to big market small government where small government is defined as less than 20 of GDP In a debate between Tsang and his rival Alan Leong before the 2007 Hong Kong Chief Executive election Leong introduced the topic and jokingly accused Tsang of angering Friedman to death Friedman had died only a year prior 189 Chile Edit Main articles Miracle of Chile and Chicago Boys During 1975 two years after the military coup that brought military dictator Augusto Pinochet to power and ended the government of Salvador Allende the economy of Chile experienced a severe crisis 190 Friedman and Arnold Harberger accepted an invitation of a private Chilean foundation to visit Chile and speak on principles of economic freedom 191 He spent seven days in Chile giving a series of lectures at the Pontifical Catholic University of Chile and the University of Chile One of the lectures was entitled The Fragility of Freedom and according to Friedman dealt with precisely the threat to freedom from a centralized military government 192 In a letter to Pinochet of April 21 1975 Friedman considered the key economic problems of Chile are clearly inflation and the promotion of a healthy social market economy 193 He stated that There is only one way to end inflation by drastically reducing the rate of increase of the quantity of money and that cutting government spending is by far and away the most desirable way to reduce the fiscal deficit because it strengthens the private sector thereby laying the foundations for healthy economic growth 193 As to how rapidly inflation should be ended Friedman felt that for Chile where inflation is raging at 10 20 a month gradualism is not feasible It would involve so painful an operation over so long a period that the patient would not survive Choosing a brief period of higher unemployment was the lesser evil and that the experience of Germany of Brazil of the post war adjustment in the U S all argue for shock treatment In the letter Friedman recommended to deliver the shock approach with a package to eliminate the surprise and to relieve acute distress and for definiteness let me sketch the contents of a package proposal to be taken as illustrative although his knowledge of Chile was too limited to enable him to be precise or comprehensive He listed a sample proposal of 8 monetary and fiscal measures including the removal of as many as obstacles as possible that now hinder the private market For example suspend the present law against discharging employees He closed stating Such a shock program could end inflation in months His letter suggested that cutting spending to reduce the fiscal deficit would result in less transitional unemployment than raising taxes 194 195 196 Sergio de Castro a Chilean Chicago School graduate became the nation s Minister of Finance in 1975 196 During his six year tenure foreign investment increased restrictions were placed on striking and labor unions and GDP rose yearly 197 A foreign exchange program was created between the Catholic University of Chile and the University of Chicago Many other Chicago School alumni were appointed government posts during and after Pinochet s dictatorship others taught its economic doctrine at Chilean universities They became known as the Chicago Boys 198 Friedman defended his activity in Chile on the grounds that in his opinion the adoption of free market policies not only improved the economic situation of Chile but also contributed to the amelioration of Pinochet s rule and to the eventual transition to a democratic government during 1990 That idea is included in Capitalism and Freedom in which he declared that economic freedom is not only desirable in itself but is also a necessary condition for political freedom In his 1980 documentary Free to Choose he said the following Chile is not a politically free system and I do not condone the system But the people there are freer than the people in Communist societies because government plays a smaller role The conditions of the people in the past few years has been getting better and not worse They would be still better to get rid of the junta and to be able to have a free democratic system 199 200 In 1984 Friedman stated that he has never refrained from criticizing the political system in Chile 192 In 1991 he said I have nothing good to say about the political regime that Pinochet imposed It was a terrible political regime The real miracle of Chile is not how well it has done economically the real miracle of Chile is that a military junta was willing to go against its principles and support a free market regime designed by principled believers in a free market In Chile the drive for political freedom that was generated by economic freedom and the resulting economic success ultimately resulted in a referendum that introduced political democracy Now at long last Chile has all three things political freedom human freedom and economic freedom Chile will continue to be an interesting experiment to watch to see whether it can keep all three or whether now that it has political freedom that political freedom will tend to be used to destroy or reduce economic freedom 201 He stressed that the lectures he gave in Chile were the same lectures he later gave in China and other socialist states 202 He further stated I do not consider it as evil for an economist to render technical economic advice to the Chilean Government any more than I would regard it as evil for a physician to give technical medical advice to the Chilean Government to help end a medical plague 203 During the 2000 PBS documentary The Commanding Heights based on the book Friedman continued to argue that free markets would undermine Pinochet s political centralization and political control 204 205 and that criticism over his role in Chile missed his main contention that freer markets resulted in freer people and that Chile s unfree economy had caused Pinochet s rise Friedman advocated for free markets which undermined political centralization and political control 206 Because of his involvement with the government of Chile which was a dictatorship at the time of his visit there were international protests spanning from Sweden to America when Friedman was awarded the Nobel Memorial Prize in 1976 Friedman was accused of supporting the military dictatorship in Chile because of the relation of economists of the University of Chicago to Pinochet and a seven day trip 207 he took to Chile during March 1975 less than two years after the coup that ended with the death of President Salvador Allende Friedman answered that he was never an advisor to the dictatorship but only gave some lectures and seminars on inflation and met with officials including Augusto Pinochet the head of the military dictatorship while in Chile After a 1991 speech on drug legalization Friedman answered a question on his involvement with the Pinochet regime saying that he was never an advisor to Pinochet also mentioned in his 1984 Iceland interview but that a group University of Chicago students were involved in Chile s economic reforms Friedman credited these reforms with high levels of economic growth and with the establishment of democracy that has subsequently occurred in Chile In October 1988 after returning from a lecture tour of China during which he had met with Zhao Ziyang General Secretary of the Chinese Communist Party Friedman wrote to The Stanford Daily asking if he should anticipate a similar avalanche of protests for having been willing to give advice to so evil a government And if not why not Iceland Edit Friedman visited Iceland during the autumn of 1984 met with important Icelanders and gave a lecture at the University of Iceland on the tyranny of the status quo He participated in a lively television debate on August 31 1984 with socialist intellectuals including olafur Ragnar Grimsson who later became President of Iceland 208 When they complained that a fee was charged for attending his lecture at the university and that hitherto lectures by visiting scholars had been free of charge Friedman replied that previous lectures had not been free of charge in a meaningful sense lectures always have related costs What mattered was whether attendees or non attendees covered those costs Friedman thought that it was fairer that only those who attended paid In this discussion Friedman also stated that he did not receive any money for delivering that lecture 209 Estonia Edit Although Friedman never visited Estonia his book Free to Choose influenced Estonia s then 32 year old prime minister Mart Laar who has claimed that it was the only book on economics he had read before taking office Laar s reforms are often credited with responsibility for transforming Estonia from an impoverished Soviet republic to the Baltic Tiger A prime element of Laar s program was introduction of the flat tax 210 Laar won the 2006 Milton Friedman Prize for Advancing Liberty awarded by the Cato Institute 211 United Kingdom Edit After 1950 Friedman was frequently invited to lecture in Britain and by the 1970s his ideas had gained widespread attention in conservative circles For example he was a regular speaker at the Institute of Economic Affairs IEA a libertarian think tank Conservative politician Margaret Thatcher closely followed IEA programs and ideas and met Friedman there in 1978 He also strongly influenced Keith Joseph who became Thatcher s senior advisor on economic affairs as well as Alan Walters and Patrick Minford two other key advisers Major newspapers including the Daily Telegraph The Times and The Financial Times all promulgated Friedman s monetarist ideas to British decision makers Friedman s ideas strongly influenced Thatcher and her allies when she became Prime Minister in 1979 212 213 Galbraith strongly criticised the workability of the Friedmanite formula for which he said Britain has volunteered to be the guinea pig 214 United States Edit After his death a number of obituaries and articles were written in Friedman s honor citing him as one of the most important and influential economists of the post war era 215 216 217 218 Milton Friedman s somewhat controversial legacy 219 220 in America remains strong within the conservative movement 221 However some journalists and economists like Noah Smith and Scott Sumner have argued Friedman s academic legacy has been buried under his political philosophy and misinterpreted by modern conservatives 222 223 224 225 Criticism of published works Edit See also Friedman doctrine Criticism Econometrician David Hendry criticized part of Friedman s and Anna Schwartz s 1982 Monetary Trends 226 When asked about it during an interview with Icelandic TV in 1984 227 Friedman said that the criticism referred to a different problem from that which he and Schwartz had tackled and hence was irrelevant 228 and pointed out the lack of consequential peer review amongst econometricians on Hendry s work 229 In 2006 Hendry said that Friedman was guilty of serious errors of misunderstanding that meant the t ratios he reported for UK money demand were overstated by nearly 100 per cent and said that in a paper published in 1991 with Neil Ericsson 230 he had refuted almost every empirical claim made about UK money demand by Friedman and Schwartz 231 A 2004 paper updated and confirmed the validity of the Hendry Ericsson findings through 2000 232 Some commentators believe that Friedman was not open enough in their view to the possibility of market inefficiencies 233 Economist Noah Smith argues that while Friedman made many important contributions to economic theory not all of his ideas relating to macroeconomics have entirely held up over the years and that too few people are willing to challenge them 135 234 Political scientist C B Macpherson disagreed with Friedman s historical assessment of economic freedom leading to political freedom suggesting that political freedom actually gave way to economic freedom for property owning elites He also challenged the notion that markets efficiently allocated resources and rejected Friedman s definition of liberty 235 Friedman s positivist methodological approach to economics has also been critiqued and debated 236 237 238 Finnish economist Uskali Maki argued some of his assumptions were unrealistic and vague 239 240 Friedman has been criticized by some prominent Austrian economists including Murray Rothbard and Walter Block Block called Friedman a socialist and was critical of his support for a central banking system saying First and foremost this economist supported the Federal Reserve System all throughout his professional life That organization of course does not own the money stock but controls it Friedman was an inveterate hater of the gold standard denigrating its advocates as gold bugs 241 Rothbard criticized Friedman s conclusion that the Great Depression happened as a result of a deflationary spiral arguing that this is inconsistent with the data because during the period described by Friedman as The Great Contraction the money supply increased 242 Although the book was described by the Cato Institute as among the greatest economics books in the 20th century and A Monetary History of the United States is widely considered to be among the most influential economics books ever made 243 244 it has endured criticisms for its conclusion that the Federal Reserve was to blame for the Great Depression Some economists including noted Friedman critic Peter Temin have raised questions about the legitimacy of Friedman s claims about whether or not monetary quantity levels were endogenous rather than exogenously determined as A Monetary History of the United States posits 245 Nobel prize winning economist Paul Krugman argued that the 2008 recession proved that during a recession a central bank cannot control broad money M3 money as defined by the OECD 246 and even if it can the money supply does not bear a direct or proven relationship with GDP According to Krugman this was true in the 1930s and the claim that the Federal Reserve could have avoided the Great Depression by reacting to what Friedman called The Great Contraction is highly dubious 247 248 James Tobin questioned the importance of velocity of money and how informative this measure of the frequency of transactions is to understanding the various fluctuations observed in A Monetary History of the United States 249 Economic historian Barry Eichengreen argued that because of the gold standard which was at this point in time the chief monetary system of the world the Federal Reserve s hands were tied This was because in order to retain the credibility of the gold standard the Federal Reserve could not undertake actions like dramatically expanding the money supply as proposed by Friedman and Schwartz 242 Lawrence Mishel distinguished fellow of the Economic Policy Institute argues that wages have been kept low in the United States because of the Friedman doctrine namely the adoption of corporate practices and economic policies or the blocking of reforms at the behest of business and the wealthy elite which resulted in the systematic disempowerment of workers 250 He argues that the lack of worker power caused wage suppression increased wage inequality and exacerbated racial disparities Notably mechanisms such as excessive unemployment globalization eroded labor standards and their lack of enforcement weakened collective bargaining and corporate structure changes that disadvantage workers all collectively functioned to keep wages low 250 From 1980 to 2020 while economy wide productivity rose almost 70 percent hourly compensation for typical workers increased less than 12 percent whilst the earnings of the top 1 percent and 0 1 percent increased 158 percent and 341 percent respectively 250 Selected bibliography EditMain article Milton Friedman bibliography A Theory of the Consumption Function 1957 ISBN 1614278121 A Program for Monetary Stability Fordham University Press 1960 110 pp online version ISBN 0823203719 Capitalism and Freedom 1962 highly influential series of essays that established Friedman s position on major issues of public policy excerpts A Monetary History of the United States 1867 1960 with Anna J Schwartz 1963 part 3 reprinted as The Great Contraction The Role of Monetary Policy American Economic Review Vol 58 No 1 Mar 1968 pp 1 17 JSTOR presidential address to American Economics Association Inflation and Unemployment Nobel Lecture 1977 Journal of Political Economy Vol 85 pp 451 472 JSTOR Free to Choose A Personal Statement with Rose Friedman 1980 highly influential restatement of policy views The Essence of Friedman essays edited by Kurt R Leube 1987 ISBN 0817986626 Two Lucky People Memoirs with Rose Friedman ISBN 0226264149 1998 excerpt and text search Milton Friedman on Economics Selected Papers by Milton Friedman edited by Gary S Becker 2008 See also Edit Business portal Conservatism portal Economics portal Liberalism portal Libertarianism portal Politics portalBob Chitester Capitalism and Freedom Causes of the Great Depression Free to Choose Friedrich Hayek Friedman doctrine George Stigler Great Contraction History of economic thought List of economists List of Jewish Nobel laureates List of Presidential Medal of Freedom recipients Ludwig von Mises Monetary fiscal debate We are all Keynesians now Notes Edit Among macroeconomists the natural rate has been increasingly replaced by James Tobin s NAIRU the non accelerating inflation rate of unemployment which is seen as having fewer normative connotations References Edit a b c Doherty Brian June 1995 Best of Both Worlds An Interview with Milton Friedman Reason Retrieved March 29 2023 Ebenstein Lanny 2007 Milton Friedman A Biography St Martin s Publishing Group p 89 ISBN 978 0230604094 APS Member History Charles Moore 2013 Margaret Thatcher The Authorized Biography Volume One Not For Turning Penguin pp 576 577 ISBN 978 1846146497 Ebenstein Lanny 2007 Milton Friedman A Biography St Martin s Publishing Group p 208 ISBN 978 0230604094 a b c d e The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1976 Nobel Prize 1976 Archived from the original on April 12 2008 Retrieved February 20 2008 The Chicago School Commanding Heights PBS Retrieved May 17 2021 Our Legacy Becker Friedman Institute Retrieved May 17 2021 Chicago Remembers Milton Friedman Sanderson Allen 2012 University of Chicago 1 Sowell Thomas 2001 A Personal Odyssey Simon and Schuster p 320 ISBN 0743215087 Van Overtveldt Johan 2009 The Chicago School How the University of Chicago Assembled the Thinkers Who Revolutionized Economics and Business Agate Publishing p 8 ISBN 978 1572846494 Milton Friedman Commanding Heights PBS October 1 2000 Archived from the original on September 8 2011 Retrieved September 19 2011 a b c Friedman Milton 2018 A Theory of the Consumption Function Princeton University Press pp 20 37 ISBN 978 0691188485 Milton Friedman Economist as Public Intellectual Archived May 29 2009 at the Wayback Machine Dallasfed org April 1 2016 Retrieved on September 6 2017 Mark Skousen 2009 The Making of Modern Economics The Lives and Ideas of the Great Thinkers M E Sharpe p 407 ISBN 978 0765622273 Friedman Milton 1968 The Role of Monetary Policy Essential Readings in Economics pp 215 231 ISBN 978 0333594520 Krugman Paul R 1995 Peddling prosperity economic sense and nonsense in the age of diminished expectations New York W W Norton p 43 ISBN 978 0393312928 a b c d e Doherty Brian June 1 1995 Best of Both Worlds Reason Magazine Archived from the original on October 11 2014 Retrieved October 24 2009 Edward Nelson April 13 2011 Friedman s Monetary Economics in Practice Archived December 31 2014 at the Wayback Machine in important respects the overall monetary and financial policy response to the crisis can be viewed as Friedman s monetary economics in practice Friedman s recommendations for responding to a financial crisis largely lined up with the principal financial and monetary policy measures taken since 2007 Review in Journal of Economic Literature December 2012 50 4 pp 1106 1109 a b c Caldwell Bruce Milton Friedman Encyclopedia Britannica Archived from the original on August 2 2017 Retrieved August 2 2017 a b Ebenstein Lanny 2007 Milton Friedman A Biography St Martin s Publishing Group p 208 ISBN 978 0230604094 Milton Friedman 1912 2006 Archived January 3 2007 at the Wayback Machine Econlib org Retrieved on September 6 2017 a b Maureen Sullivan July 30 2016 Milton Friedman s Name Disappears From Foundation But His School Choice Beliefs Live On Forbes Archived from the original on September 21 2016 Retrieved September 14 2016 Friedman Foundation changes name to focus on benefits of educational choice Atlas Network Retrieved May 23 2021 Capitalism and Friedman editorial The Wall Street Journal November 17 2006 Vaclav Klaus January 29 2007 Remarks at Milton Friedman Memorial Service Archived from the original on July 2 2007 Retrieved August 22 2008 Johan Norberg October 2008 Defaming Milton Friedman Naomi Klein s disastrous yet popular polemic against the great free market economist Archived April 11 2010 at the Wayback Machine Reason Magazine Washington D C Friedman 1999 p 506 William L Davis Bob Figgins David Hedengren and Daniel B Klein May 2011 Economic Professors Favorite Economic Thinkers Journals and Blogs Archived December 18 2011 at the Wayback Machine Econ Journal Watch 8 2 pp 126 146 Milton Friedman a giant among economists The Economist November 23 2006 Archived from the original on February 17 2008 Retrieved February 20 2008 a b c d e The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1976 NobelPrize org Retrieved May 13 2021 Ebenstein Lanny 2007 Milton Friedman A Biography St Martin s Publishing Group ISBN 978 0230604094 a b c d Milton Friedman Ph D Academy of Achievement Retrieved May 13 2021 a b c d Doherty Brian 2007 The Life and Times of Milton Friedman Reason com Reason Foundation Ebenstein Lanny 2007 Milton Friedman A Biography St Martin s Publishing Group p 10 ISBN 978 0230604094 Milton Friedman Rose Friedman Two Lucky People Memoirs Chicago 1998 p 22 Eamonn Butler 2011 Ch 1 Milton Friedman Harriman Economic Essentials Ebenstein Lanny 2007 Milton Friedman A Biography St Martin s Publishing Group pp 5 12 ISBN 978 0230604094 Milton Friedman Rutgers Alumni Retrieved May 10 2021 Milton Friedman and his start in economics Young America s Foundation August 2006 Archived from the original on February 23 2013 Retrieved March 12 2012 a b c Harms William November 16 2006 Professor Emeritus Milton Friedman dies at 94 www news uchicago edu Retrieved March 7 2019 a b Nov 8 conference to honor University of Chicago economist Milton Friedman on the occasion of his 90th birthday www news uchicago edu Retrieved February 3 2021 Chicago Theory and Measurement of Demand Henry Schultz 1934 Economics in the Rear View Mirror January 23 2016 Retrieved May 16 2021 Ebenstein Lanny 2007 Milton Friedman A Biography St Martin s Publishing Group pp 13 30 ISBN 978 0230604094 Milton Friedman EconLib Mark Feeney November 16 2006 Nobel laureate economist Milton Friedman dies at 94 The Boston Globe Archived from the original on March 30 2007 Retrieved February 20 2008 Friedman 1999 p 59 Right from the Start What Milton Friedman can teach progressives PDF J Bradford DeLong Archived PDF from the original on February 16 2008 Retrieved February 20 2008 Bernanke 2004 p 7 Shiller Robert J 2017 Narrative Economics American Economic Review 107 4 967 1004 doi 10 1257 aer 107 4 967 ISSN 0002 8282 Daniel J Hammond Claire H Hammond eds 2006 Making Chicago Price Theory Friedman Stigler Correspondence 1945 1957 Routledge p xiii ISBN 1135994293 a b Incomes from Independent Professional Practice 1945 Milton Friedman Simon Kuznets Mankiw Gregory 1997 Principles of Economics Harcourt pp 216 219 ISBN 0030270871 Friedman 1999 p 42 Friedman 1999 pp 84 85 a b Milton Friedman Rose D Friedman 1999 Two Lucky People Memoirs University of Chicago Press pp 122 123 ISBN 978 0226264158 Brian Doherty June 1995 Best of Both Worlds Reason com Reason Foundation Archived from the original on July 9 2010 Retrieved July 28 2010 a b Milton Friedman Biography and Interview American Academy of Achievement www achievement org American Academy of Achievement Philip Mirowski 2002 Machine Dreams Economics Becomes a Cyborg Science Cambridge University Press pp 202 203 ISBN 978 0521775267 Milton Friedman c250 columbia edu Retrieved March 7 2019 Block Walter E 2011 David Friedman and Libertarianism A Critique Libertarian Papers 3 1 via HeinOnline NBER Mitchell to Burns about Friedman 1945 Economics in the Rear View Mirror July 22 2017 Retrieved May 17 2021 Cato Letter from Washington National Review September 19 1980 Vol 32 Issue 19 p 1119 Devaney James J May 22 1968 Playboy Monitor Honored Hartford Courant Vol CXXXI no 143 final ed p 36 Retrieved March 20 2019 via Newspapers com Rose and Milton Friedman stanford edu Inventory of the Paul A Samuelson Papers 1933 2010 and undated Finding Aids Rubenstein Library Archived January 12 2013 at the Wayback Machine Library duke edu Retrieved on September 6 2017 What Is Keynesian Economics Back to Basics Compilation Book IMF Finance amp Development magazine www imf org Retrieved May 10 2021 A Theory of Consumption Function 1957 Friedman Milton Princeton University Press p 22 Carlin Wendy Soskice David W 2014 Macroeconomics Institutions instability and the financial system US Oxford University Press pp 20 29 A Theory of Consumption Function With and Without Liquidity Constraints Christopher D Carroll 2001 Journal of Economic Perspectives Vol 15 No 3 pp 23 45 doi 10 1257 jep 15 3 23 Carroll Christopher D 1997 Buffer Stock Saving and the Life Cycle Permanent Income Hypothesis Quarterly Journal of Economics 112 1 1 55 Beznoska Martin Ochmann Richard 2012 Liquidity Constraints and the Permanent Income Hypothesis Pseudo Panel Estimation with German Consumption Survey Data EconStar Stafford Frank P July 1974 Permanent income wealth and consumption A critique of the permanent income theory the life cycle hypothesis and related theories Journal of Econometrics pp 195 196 Schnetzer Amanda 2016 Reading Friedman in 2016 Capitalism Freedom and the China Challenge George W Bush Institute Retrieved October 29 2020 Sorkin Andrew Ross September 11 2020 A Free Market Manifesto That Changed the World Reconsidered The New York Times ISSN 0362 4331 Retrieved May 10 2021 Ebenstein Lanny 2007 Milton Friedman A Biography St Martin s Publishing Group pp 135 146 ISBN 978 0230604094 a b 1982 edition preface of Capitalism and freedom p xi of the 2002 edition Friedman Milton February 15 2009 Capitalism and Freedom University of Chicago Press ISBN 978 0226264189 Archived from the original on May 23 2021 Retrieved May 23 2021 Milton Friedman Rose D Friedman 1962 Capitalism and Freedom Fortieth Anniversary Edition U of Chicago Press ISBN 978 0226264189 Milton Friedman Hoover Institution Retrieved May 23 2021 Boaz David May 10 2021 Bob Chitester RIP www cato org Retrieved May 20 2021 Hawkins Marjory May 10 2021 Free To Choose Network Founder amp Chairman Bob Chitester Dies GlobeNewswire News Room Press release Retrieved May 20 2021 Free To Choose Network Tribute to Our Founder Bob Chitester freetochoosenetwork org 2021 Retrieved May 20 2021 Friedman Milton Friedman Rose 1990 Free to Choose A Personal Statement Houghton Mifflin Harcourt ISBN 978 0547539751 Bush George W 2002 President Honors Milton Friedman for Lifetime Achievements georgewbush whitehouse archives gov Retrieved May 10 2021 Milton Friedman An enduring legacy The Economist November 17 2006 Archived from the original on February 17 2008 Retrieved February 20 2008 Patricia Sullivan November 17 2006 Economist Touted Laissez Faire Policy The Washington Post Archived from the original on July 26 2008 Retrieved February 20 2008 Milton Friedman Biography Cato Institute Archived May 2 2012 at the Wayback Machine Cato org November 16 2006 Retrieved on 2017 09 06 Trustees Archived from the original on August 27 2013 Milton Friedman phillysoc org a b David D Friedman on his Famous Father Anarcho Capitalism and Free Market Solutions The Daily Bell April 8 2012 Retrieved May 10 2021 Weber Bruce August 19 2009 Rose Friedman Economist and Collaborator Dies at 98 The New York Times ISSN 0362 4331 Retrieved May 18 2021 Milton Friedman An Elfin Libertarian Giant Hoover Institution Retrieved May 18 2021 A heavyweight champ at five foot two The Economist November 23 2006 ISSN 0013 0613 Retrieved May 18 2021 How the Cold War led the CIA to promote human capital theory Peter Fleming Aeon Essays Aeon Retrieved May 18 2021 Chen Vivien Lou August 20 2009 Rose Friedman economist promoted freedom at 97 Boston com Retrieved May 20 2021 Rose Friedman Economist Partner of Husband Milton Dies at 97 Bloomberg com November 5 2013 Archived from the original on November 5 2013 Retrieved May 20 2021 Bresnahan Timothy 1998 99 Two Lucky People Memoirs The Independent Review The Independent Review Vol 3 Num 3 via Independent Institute Hannan Dan November 11 2019 Milton Friedman s arguments will never age Washington Examiner Retrieved May 22 2021 Abate Tom February 12 2006 PROFILE Decades don t douse Milton Friedman s fire Retired economist still champions free market theory SFGATE Retrieved May 22 2021 a b Lanny Ebenstein May 2007 Milton Friedman Commentary p 286 David Asman November 16 2006 Your World Interview With Economist Milton Friedman Fox News Archived from the original on February 6 2011 Retrieved August 2 2011 Friedman Milton Friedman Rose 1999 Two Lucky People Paperback ed Chicago amp London The University of Chicago Press p 129 ISBN 0226264157 Jim Christie November 16 2006 Free market economist Milton Friedman dead at 94 Reuters Archived from the original on April 10 2008 Retrieved February 20 2008 Peter Robinson October 17 2008 What Would Milton Friedman Say Forbes Archived from the original on October 27 2014 Retrieved December 13 2014 Hamilton Earl J 1965 American Treasure and the Price Revolution in Spain 1501 1650 New York Octagon pp 301 302 Harrod Roy Review of A Monetary History of the United States Chicago Unbound 32 Friedman Milton 1969 Optimum Quantity of Money Aldine Publishing Company p 4 ISBN 978 0333107799 Friedman Milton Inflation Causes and Consequences p 24 New York Asia Publishing House Friedman Schwartz 2008 The Great Contraction 1929 1933 Princeton University Press a b FRB Speech FederalReserve gov Remarks by Governor Ben S Bernanke At the Conference to Honor Milton Friedman University of Chicago Nov 8 2002 Milton Friedman End The Fed Themoneymasters com Archived from the original on June 15 2014 Retrieved April 22 2014 a b Milton Friedman Anna Jacobson Schwartz National Bureau of Economic Research 2008 B Bernanke s speech to M Friedman The Great Contraction 1929 1933 Princeton University Press p 247 ISBN 978 0691137940 Milton Friedman 1969 Memoirs of an Unregulated Economist Aldine Publishing Company p 4 Peter Galbacs 2015 The Theory of New Classical Macroeconomics A Positive Critique Contributions to Economics Heidelberg New York Dordrecht London Springer doi 10 1007 978 3 319 17578 2 ISBN 978 3319175782 a b Kevin Hoover Warren Young 2011 Rational Expectations Retrospect and Prospect PDF Durham Center for the History of Political Economy at Duke University Archived PDF from the original on March 4 2016 Retrieved December 15 2015 Charlie Rose Show Nobel Laureates December 26 2005 David Teira Milton Friedman the Statistical Methodologist History of Political Economy 2007 39 3 pp 511 527 a b Friedman s on the Military Industrial Complex www youtube com Archived from the original on December 11 2021 Retrieved January 8 2021 a b Chang Roberto 1997 Is Low Unemployment Inflationary Economic Review Federal Reserve Bank of Atlanta pp 4 13 Landsburg Steven November 5 2019 Milton Friedman Essential Scholars Fraser Institute Retrieved May 10 2021 a b Sequential Analysis New Palgrave Dictionary of Economics 2nd edition Keir Armstrong Friedman Milton 1912 2006 carleton ca Retrieved May 21 2021 Doherty Brian The Life and Times of Milton Friedman Remembering the 20th century s most influential libertarian Archived February 24 2007 at the Wayback Machine Reason com Retrieved on September 6 2017 Friedman M amp Schwartz A J 1986 Has government any role in money Journal of Monetary Economics 17 1 37 62 Milton Friedman Abolish The Fed Archived June 11 2015 at the Wayback Machine Youtube There in no institution in the US that has such a high public standing and such a poor record of performance It s done more harm than good Milton Friedman Abolish The Fed Archived June 11 2015 at the Wayback Machine Youtube I have long been in favor of abolishing it My first preference would be to abolish the Federal Reserve on YouTube Reichart Alexandre amp Abdelkader Slifi 2016 The Influence of Monetarism on Federal Reserve Policy during the 1980s Cahiers d economie Politique Papers in Political Economy 1 pp 107 150 Archived December 3 2016 at the Wayback Machine Mr Market Hoover Institution January 30 1999 Archived from the original on September 23 2018 Retrieved September 22 2018 Friedman M 1996 The Counter Revolution in Monetary Theory In Explorations in Economic Liberalism pp 3 21 Palgrave Macmillan London It is precisely this leeway this looseness in the relation this lack of a mechanical one to one correspondence between changes in money and in income that is the primary reason why I have long favored for the USA a quasi automatic monetary policy under which the quantity of money would grow at a steady rate of 4 or 5 per cent per year month in month out a b Salter Alexander William 2014 An Introduction to Monetary Policy Rules Mercatus Working Paper George Mason University Marimon R amp Sunder S 1995 December Does a constant money growth rule help stabilize inflation experimental evidence In Carnegie Rochester Conference Series on Public Policy Vol 43 pp 111 156 North Holland Evans G W amp Honkapohja S 2003 Friedman s money supply rule vs optimal interest rate policy Scottish Journal of Political Economy 50 5 550 566 a b Smith Noah July 30 2016 Noahpinion How are Milton Friedman s ideas holding up Noahpinion Archived from the original on September 23 2018 Retrieved September 22 2018 Simon London Lunch with the FT Milton Friedman Financial Times 7 June 2003 The use of quantity of money as a target has not been a success I m not sure I would as of today push it as hard as I once did Ruger William 2013 Milton Friedman Bloomsbury Publishing US pp 72 ISBN 978 1623566173 Atish R Ghosh Mahvash S Qureshi and Charalambos G Tsangarides 2014 Friedman Redux External Adjustment and Exchange Rate Flexibility Archived April 13 2015 at the Wayback Machine International Monetary Fund IMF Working Paper Milton Friedman 1991 The War on Drugs America s Drug Forum Archived from the original on October 29 2009 Retrieved August 4 2009 Bernard Rostker 2006 I Want You The Evolution of the All Volunteer Force Rand Corporation p 4 ISBN 978 0833038951 a b Friedman Milton 1962 Capitalism and Freedom University Of Chicago Press p 36 ISBN 0226264211 Friedman Milton 1982 National Service the Draft and Volunteers A debate featuring Milton Friedman In Registration and the Draft Proceedings of the Hoover Rochester Conference on the All Volunteer Force PDF Hoover Institution Archived from the original PDF on October 21 2020 Retrieved October 24 2019 a b c Ebenstein Lanny 2007 Milton Friedman A Biography St Martin s Publishing Group pp 231 232 ISBN 978 0230604094 Matt Barganier Milton Friedman RIP Antiwar com Blog Archived September 22 2016 at the Wayback Machine Antiwar com November 16 2006 Retrieved on 2017 09 06 Ebenstein Lanny 2007 Milton Friedman A Biography St Martin s Publishing Group p 243 ISBN 978 0230604094 Van Horn Robert Mirowski Philip Stapleford Thomas A 2011 Building Chicago Economics New Perspectives on the History of America s Most Powerful Economics Program Cambridge UP pp 49 50 ISBN 978 1139501712 Terrell Ellen Wilson Angela 2009 Milton Friedman A Resource Guide Library of Congress AvenueChicago The University of ChicagoEdward H Levi Hall5801 South Ellis Us Illinois 60637773 702 1234 Contact Presidential Medal of Freedom The University of Chicago Retrieved May 20 2021 Friedman Milton April 2017 Milton Friedman on Freedom Selections from The Collected Works of Milton Friedman Hoover Institution Press pp chapter 4 ISBN 978 0 8179 2034 0 Retrieved March 29 2023 Friedman Milton amp Rose D Capitalism and Freedom University of Chicago Press 1982 p 29 Friedman Milton 2002 1962 Capitalism and Freedom 40th anniversary ed Chicago University of Chicago Press pp 182 189 ISBN 978 0226264219 Friedman Milton 2002 1962 Capitalism and Freedom 40th anniversary ed Chicago University of Chicago Press pp 190 195 ISBN 978 0226264219 a b Friedman Milton Friedman Rose 1990 1980 Free to Choose A Personal Statement 1st Harvest ed New York Harcourt pp 119 124 ISBN 978 0156334600 Frank Robert H November 23 2006 The Other Milton Friedman A Conservative With a Social Welfare Program The New York Times Archived from the original on July 1 2017 Retrieved February 22 2017 Friedman Milton Friedman Rose 1990 1980 Free to Choose A Personal Statement 1st Harvest ed New York Harcourt pp 111 112 ISBN 978 0156334600 McMahon Jeff October 12 2014 What Would Milton Friedman Do About Climate Change Tax Carbon Forbes Retrieved March 20 2016 Friedman Milton Friedman Rose 1990 1980 Free to Choose A Personal Statement 1st Harvest ed New York Harcourt pp 213 218 ISBN 978 0156334600 Alston Richard M Kearl J R Vaughan Michael B May 1992 Is There a Consensus Among Economists in the 1990s PDF The American Economic Review 82 2 203 209 JSTOR 2117401 Milton Friedman 1955 Robert A Solo ed The Role of Government in Education as printed in the book Economics and the Public Interest PDF Rutgers University Press pp 123 144 Archived PDF from the original on May 10 2017 Retrieved February 12 2017 Ross Leonard Zeckhauser Richard December 1970 Review Education Vouchers The Yale Law Journal The Yale Law Journal Company Inc 80 2 451 461 doi 10 2307 795126 JSTOR 795126 Carnoy Martin August 1998 National Voucher Plans in Chile and Sweden Did Privatization Reforms Make for Better Education Comparative Education Review University of Chicago Press 42 3 309 337 doi 10 1086 447510 JSTOR 1189163 S2CID 145007866 Economic Freedom of the World project Fraser Institute Archived from the original on March 5 2016 Retrieved February 16 2016 In the Supreme Court of the United States PDF Harvard Law School Archived from the original PDF on April 2 2015 Retrieved February 20 2008 Lawrence Lessig November 19 2006 only if the word no brainer appears in it somewhere RIP Milton Friedman Lessig Blog Lessig org Archived from the original on April 2 2015 Retrieved April 2 2013 A New British Bill of Rights The Case For ISR Online Guide Archived from the original on March 4 2016 Retrieved February 16 2016 An open letter prohibitioncosts org Prohibition Costs Archived from the original on October 31 2012 Retrieved November 9 2012 Milton Friedman ldp org Liberal Democratic Party Australia 2009 Archived from the original on April 10 2013 Retrieved February 19 2013 Ebenstein Lanny 2007 Milton Friedman A Biography St Martin s Publishing Group p 228 ISBN 978 0230604094 a b c d Dalmia Shikha July 19 2018 The weaponization of Milton Friedman The Week Archived from the original on July 19 2018 Retrieved July 19 2018 Friedman Milton Kowalczyk Henryk 2006 A Letter to Mr Friedman PDF freedomofmigration com Mangu Ward Katherine 2019 Bryan Caplan says Milton Friedman is wrong about Open Borders Reason Magazine Reason Foundation a b Fredman Milton Capitalism and Freedom pp 179 181 Peterson Jonathan December 14 1986 The Captain of Capitalism Even as Milton Friedman s Theories Have Gone Out of Vogue in Washington His Ideas Have Come to Shape the Way Nations Manage Their Money Los Angeles Times Retrieved January 11 2022 The Negro in America miltonfriedman hoover org Retrieved January 11 2022 Milton Friedman in a 1966 Newsweek op ed the minimum wage law is a monument to the power of superficial thinking American Enterprise Institute AEI December 5 2016 Retrieved January 11 2022 Minimum Wage Rates miltonfriedman hoover org Retrieved January 11 2022 Ebenstein Lanny 2007 Milton Friedman A Biography St Martin s Publishing Group p 260 ISBN 978 0230604094 Golden Plate Awardees of the American Academy of Achievement www achievement org American Academy of Achievement Milton Friedman Biography and Interview American Academy of Achievement Selection Committee Announced for the 2008 Milton Friedman Prize for Advancing Liberty Cato Institute September 5 2007 Archived from the original on January 5 2014 Retrieved January 4 2014 Milton Friedman Prize page Cato Institute Archived from the original on January 20 2014 Retrieved January 5 2014 Larry Summers November 19 2006 The Great Liberator The New York Times Archived from the original on March 28 2017 Retrieved February 22 2017 Moore Stephen May 30 2013 What Would Milton Friedman Say The Wall Street Journal p A13 Silk Leonard March 31 1977 Nobel Award in Economics Should Prize Be Abolished The New York Times ISSN 0362 4331 Retrieved May 16 2021 Dopfer Kurt 1988 In Memoriam Gunnar Myrdal s Contribution to Institutional Economics Journal of Economic Issues 22 1 227 231 doi 10 1080 00213624 1988 11504742 ISSN 0021 3624 JSTOR 4225966 Waldemar Ingdahl March 22 2007 Real Virtuality The American Archived from the original on October 3 2014 Retrieved February 20 2008 Milton Friedman and Rose Friedman 1990 Free to Choose A Personal Statement Harvest Books p 34 ISBN 978 0156334600 Friedman Milton October 6 2006 Dr Milton Friedman Opinion Journal Archived from the original on October 6 2006 Retrieved February 20 2008 Chan Carrie 16 March 2007 Genuine Tsang turns aggressive Archived from the original on 11 March 2008 Richards Donald 1997 The Political Economy of the Chilean Miracle Latin American Research Review 32 1 139 159 doi 10 1017 S0023879100037705 JSTOR 2504050 S2CID 252743251 Letter from Arnold Harberger to Stig Ramel as reprinted in The Wall Street Journal October 12 1976 and in Two Lucky People Memoirs By Milton Friedman Rose D Friedman Appendix A pp 598 599 Accessible at books google com a b Milton Friedman August 31 1984 Iceland Television Debate Flash Video Television production Reykjavik Icelandic State Television Event occurs at 009 48 00 Archived from the original on April 23 2016 Retrieved June 27 2010 a b Two Lucky People Memoirs By Milton Friedman Rose D Friedman Appendix A pp 591 593 Letter from Friedman to Pinochet April 21 1975 Edwards Sebastian Montes Leonidas 2020 Milton Friedman in Chile Shock Therapy Economic Freedom and Exchange Rates Journal of the History of Economic Thought 42 105 132 doi 10 1017 S1053837219000397 S2CID 214507780 via Cambridge University Press Economist s View The Rivals Samuelson and Friedman economistsview typepad com Retrieved May 21 2021 a b Opazo Tania January 12 2016 The Boys Who Completely Transformed Chile s Economy Slate Magazine Retrieved May 21 2021 William Ray Mask II May 2013 The Great Chilean Recovery Assigning Responsibility For The Chilean Miracle s Thesis California State University Fresno hdl 10211 3 105425 Chile and the Chicago Boys The Hoover Institution Stanford University Archived from the original on August 10 2012 Retrieved June 20 2014 Free to Choose Vol 5 Archived from the original on February 9 2008 Retrieved February 20 2008 Frances Fox Piven vs Milton Friedman Thomas Sowell Archived October 16 2014 at the Wayback Machine debate 1980 YouTube The Smith Center Milton Friedman s lecture Archived September 22 2013 at the Wayback Machine Economic Freedom Human Freedom Political Freedom by Milton Friedman delivered November 1 1991 Friedman 1999 pp 600 601 Newsweek of June 14 1976 Interview with Jeffery Sachs on the Miracle of Chile PBS Archived from the original on February 22 2008 Retrieved February 20 2008 Commanding Heights Milton Friedman PBS Archived from the original on December 28 2008 Retrieved December 29 2008 Milton Friedman interview PBS Archived from the original on January 9 2011 Retrieved February 20 2008 Doherty Brian December 15 2006 The Economist and the Dictator Reason com Reason Magazine Retrieved October 8 2021 Friedman Milton Grimsson olafur Ragnar Milton Friedman on Icelandic State Television in 1984 Gratulatoria Tabula Arnason Ragnar The Libertarian Alliance RNH rnh is Retrieved May 16 2021 Stolberg Sharyl 2006 In Estonia Bush Finds a Tax Actually to His Liking The New York Times Retrieved May 25 2021 Mart Laar Cato Institute Archived from the original on May 15 2006 Retrieved February 20 2008 Lyons John F 2013 America in the British Imagination 1945 to the Present Palgrave Macmillan p 102 ISBN 978 1137376800 Subroto Roy amp John Clarke eds 2005 Margaret Thatcher s Revolution How it Happened and What it Meant Continuum ISBN 0826484840 Galbraith J K October 8 1980 A Fair Trial of the Friedman Formula The Washington Post An enduring legacy The Economist November 17 2006 Archived from the original on September 26 2018 Retrieved September 25 2018 Noble Holcomb B November 16 2006 Milton Friedman Free Markets Theorist Dies at 94 The New York Times Archived from the original on September 26 2018 Retrieved September 25 2018 Norton Justin M November 17 2006 Economist Milton Friedman Dies at 94 The Washington Post ISSN 0190 8286 Archived from the original on November 27 2015 Retrieved September 25 2018 We Are Live at Salon with an Obituary for Milton Friedman Grasping Reality with at Least Three Hands Archived from the original on September 26 2018 Retrieved September 25 2018 Adams Richard November 16 2006 Milton Friedman a study in failure The Guardian Archived from the original on September 26 2018 Retrieved September 25 2018 Goldstein Evan August 1 2008 Milton Friedman s Controversial Legacy The Chronicle of Higher Education Archived from the original on September 26 2018 Retrieved September 25 2018 Wapshott Nicholas 2012 Milton Friedman s legacy He is the economist conservatives love but don t understand Pittsburgh Post Gazette Archived from the original on September 26 2018 Retrieved September 25 2018 Kristula Green Noah July 31 2012 Milton Friedman s Unfinished Legacy The Daily Beast Retrieved September 25 2018 Smith Noah August 14 2013 Noahpinion The cruel trick played by history on Milton Friedman Noahpinion Archived from the original on September 26 2018 Retrieved September 25 2018 TheMoneyIllusion Milton Friedman vs the conservatives www themoneyillusion com Archived from the original on September 26 2018 Retrieved September 25 2018 O Brien Matthew March 13 2012 What GOP Economists Don t Understand About Milton Friedman The Atlantic Archived from the original on September 26 2018 Retrieved September 25 2018 David F Hendry Neil R Ericsson October 1983 Assertion without Empirical Basis An Econometric Appraisal of Monetary Trends in the United Kingdom by Milton Friedman and Anna Schwartz in Monetary Trends in the United Kingdom Bank of England Panel of Academic Consultants Panel Paper No 22 pp 45 101 See also Federal Reserve International Finance Discussion Paper No 270 Archived November 3 2013 at the Wayback Machine December 1985 which is a revised and shortened version of Hendry Ericsson 1983 M Friedman Iceland TV 1984 YouTube Archived from the original on March 13 2016 Retrieved February 16 2016 van Steven Moore CMA August 31 1984 Milton Friedman Iceland 2 of 8 YouTube Archived from the original on May 12 2014 Retrieved April 22 2014 J Daniel Hammond 2005 Theory and Measurement Causality Issues in Milton Friedman s Monetary Economics Cambridge U P pp 193 199 ISBN 978 0521022644 Hendry David F Ericsson Neil R July 1989 An Econometric Analysis of UK Money Demand in Monetary Trends in the United States and the United Kingdom by Milton Friedman and Anna J Schwartz PDF International Finance Discussion Papers 355 Federal Reserve Archived PDF from the original on November 3 2013 Retrieved August 2 2013 Hendry David F April 25 2013 Friedman s t ratios were overstated by nearly 100 Financial Times Archived from the original on October 30 2013 Retrieved May 1 2013 Escribano Alvaro 2004 Nonlinear error correction The case of money demand in the United Kingdom 1878 2000 PDF Macroeconomic Dynamics 8 1 76 116 doi 10 1017 S1365100503030013 hdl 10016 2573 S2CID 154353317 Archived PDF from the original on November 3 2013 Retrieved August 1 2013 Escribano s approach had already been recognized by Friedman Schwartz Hendry et al p 14 of the pdf as yielding significant improvements over previous money demand equations Colander D 1995 Is Milton Friedman an artist or a scientist Journal of Economic Methodology 2 1 105 122 Smith Noah January 12 2017 Milton Friedman s Cherished Theory Is Laid to Rest www bloomberg com Archived from the original on September 26 2018 Retrieved September 25 2018 Macpherson Crawford 1968 Elegant Tombstones A Note on Friedman s Freedom Canadian Journal of Political Science Revue canadienne de science politique Canadian Political Science Association 1 1 95 106 doi 10 1017 S0008423900035241 JSTOR 3231697 S2CID 154470384 via JSTOR Caldwell Bruce J 1980 A Critique of Friedman s Methodological Instrumentalism Southern Economic Journal 47 2 366 374 doi 10 2307 1057529 ISSN 0038 4038 JSTOR 1057529 Hill Lewis E 1968 A Critique of Positive Economics The American Journal of Economics and Sociology 27 3 259 266 doi 10 1111 j 1536 7150 1968 tb01047 x ISSN 0002 9246 JSTOR 3485086 Ng Yew Kwang 2016 Are unrealistic Assumptions Simplifications Acceptable Some Methodological Issues in Economics Pacific Economic Review 21 2 180 201 Maki Uskali 2009 3 Unrealistic assumptions and unnecessary confusions rereading and rewriting F53 as a realist statement Cambridge University Press pp 90 116 doi 10 1017 CBO9780511581427 005 Maki U amp Maki U Eds 2009 The methodology of positive economics reflections on the Milton Friedman legacy Cambridge University Press Block Walter 2013 Was Milton Friedman a Socialist Yes MEST Journal 1 1 11 26 13 14 doi 10 12709 mest 01 01 01 02 pdf via ResearchGate a b Eichengreen Barry 1992 Golden Fetters Oxford University Press pp 187 222 ISBN 978 0195064315 Bordo Michael 1989 The Contributions of A Monetary History of the United States 1867 1960 to Monetary History Money History and International Finance Essays in Honor of Anna J Schwartz University of Chicago Press p 15 ISBN 0226065936 A Monetary History of the United States 1867 1960 Cato Institute November 21 2003 Retrieved May 16 2021 Temin Peter Review Money Money Everywhere A Retrospective Review Reviewed work s A Monetary History of the United States 1867 1960 By Milton Friedman Anna Jacobson Schwartz Reviews in American History Vol 5 No 2 Jun 1977 pp 151 159 Monetary aggregates Broad money M3 theOECD Retrieved May 16 2021 Krugman Paul 2012 Milton s Paradise Lost The New York Times Milton Friedman Unperson New York Times August 8 2013 Retrieved May 16 2021 Tobin James 1965 The Monetary Interpretation of History American Economic Review 55 3 464 485 JSTOR 1814559 via JSTOR a b c Rebuilding Worker Power IMF F amp D www imf org Retrieved January 11 2022 Sources Edit Bernanke Ben 2004 Essays on the Great Depression Princeton University Press ISBN 978 0691118208 Ebenstein Alan O 2007 Milton Friedman A Biography St Martin s Press ISBN 978 0230603455 Friedman Milton 1999 Two Lucky People Memoirs University of Chicago Press ISBN 978 0226264158 Further reading Edit Symposium Why Is There No Milton Friedman Today Econ Journal Watch 10 2 May 2013 Jones Daniel Stedman Masters of the Universe Hayek Friedman and the Birth of Neoliberal Politics 2nd ed 2014 McCloskey Deirdre Winter 2003 Other Things Equal Milton Eastern Economic Journal 29 1 143 146 JSTOR 40326463 Steelman Aaron 2008 Friedman Milton 1912 2006 In Hamowy Ronald ed The Encyclopedia of Libertarianism Thousand Oaks CA Sage Cato Institute pp 195 197 doi 10 4135 9781412965811 n118 ISBN 978 1412965804 LCCN 2008009151 OCLC 750831024 Wood John Cunningham and Ronald N Wood ed 1990 Milton Friedman Critical Assessments v 3 Routledge External links EditMilton Friedman at Wikipedia s sister projects Media from Commons News from Wikinews Quotations from Wikiquote Collected Works of Milton Friedman Multiple Text audio video The Milton Friedman papers at the Hoover Institution Archives Selected Bibliography for Milton Friedman at the University of Chicago Library Profile and Papers at Research Papers in Economics RePEc Milton Friedman collected news and commentary at The New York Times Becker Friedman Institute at the University of Chicago The Foundation for Educational Choice Milton Fridman at Scarlett Inflation and Unemployment 1976 lecture at NobelPrize org Nobel Memorial Prize acceptance speech Milton Friedman 1912 2006 The Concise Encyclopedia of Economics Library of Economics and Liberty 2nd ed Liberty Fund 2008 Milton Friedman vs The Fed Bailout by Michael Hirsh Newsweek July 17 2009 Four Deformations of the Apocalypse David Stockman The New York Times July 31 2010 Roberts Russ Milton Friedman Podcasts EconTalk Library of Economics and Liberty Milton Friedman publications indexed by Google Scholar A collection of Milton Friedman s worksVideosAppearances on C SPAN Booknotes interview with Friedman on the 50th Anniversary Edition of F A Hayek s Road to Serfdom November 20 1994 In Depth interview with Friedman September 3 2000 A film clip The Open Mind Living Within Our Means 1975 is available at the Internet Archive A film clip The Open Mind A Nobel Laureate on the American Economy 1977 is available at the Internet Archive Milton Friedman on Charlie Rose Free To Choose on YouTube Milton Friedman Commanding Heights PBS October 1 2000 interview profile and video Free To Choose 1980 a PBS TV series by Milton Friedman Milton Friedman at the Cato Institute Free to Choose Network Retrieved from https en wikipedia org w index php title Milton Friedman amp oldid 1152423321, wikipedia, wiki, book, books, library,

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