Milton Friedman
“There are very few people over the generations who have ideas that are sufficiently original to materially alter the direction of civilization. Milton is one of those very few people.” –Alan Greenspan
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Nobel Laureate economist and Red Planet hero Milton Friedman passed away one year ago this week at age 94. He was, as Thomas Sowell once said, “one of the very few intellectuals with both genius and common sense.”
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Milton Friedman is the twentieth century’s most prominent economist advocate of free markets. He was born in 1912 to Jewish immigrants in New York City. He attended Rutgers University, where he received his B.A. at the age of twenty, then went on to earn his M.A. from the University of Chicago in 1933 and his Ph.D. from Columbia University in 1946. In 1951 Friedman won the John Bates Clark Medal honoring economists under age forty for outstanding achievement. In 1976 he won the Nobel Prize in economics for “his achievements in the field of consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy.” Before that time, he had served as an adviser to President Nixon and was president of the American Economic Association in 1967. Since retiring from the University of Chicago in 1977, Friedman has been a senior research fellow at the Hoover Institution at Stanford University.
Friedman established himself in 1945 with Income from Independent Professional Practice, coauthored with Simon Kuznets. In it he argued that state licensing procedures limited entry into the medical profession, thereby allowing doctors to charge higher fees than if competition were more open.
His landmark work of 1957, A Theory of the Consumption Function, took on the Keynesian view that individuals and households adjust their expenditures on consumption to reflect their current income. Friedman showed that, instead, people’s annual consumption is a function of their expected lifetime earnings.
In Capitalism and Freedom, Friedman liberated the study of market economics from its ivory tower and brought it down to earth. He argued for, among other things, a volunteer army, freely floating exchange rates, abolition of licensing of doctors, a negative income tax, and education vouchers. (Friedman is a passionate foe of the military draft: he once stated that the abolition of the draft was the only issue on which he had personally lobbied Congress.) Although his book did not sell well, many of the young people who did read it were encouraged by it to study economics themselves. His ideas spread worldwide with Free to Choose (coauthored with his wife, Rose Friedman), the best-selling nonfiction book of 1980, written to accompany a TV series on the Public Broadcasting System. This book made Milton Friedman a household name.
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