Milton Friedman (born July 31, 1912) is a U.S. economist, known primarily for his work on macroeconomics and for his advocacy of laissez-faire capitalism. In 1976 he was awarded the Nobel Prize for Economics "for his achievements in the fields of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilization policy." His book Free to Choose, coauthored with his wife Rose, was made into a ten-part television series that aired on PBS in early 1980.
Born in Brooklyn, New York to a working-class family of Jewish Hungarian immigrants from Beregszász (Berehove, today Ukraine), Friedman grew up in Rahway, New Jersey, was educated at Rutgers University (B.A., 1932) and at the University of Chicago (M.A., 1933). After working for the federal government and for Columbia University, he received a Ph.D. from that institution in 1946. He then served as Professor of Economics at the University of Chicago from 1946 to 1976, where he contributed significantly to the intellectual tradition of the so-called Chicago school of economics. Since 1977, Friedman has been affiliated with the Hoover Institution at Stanford University.
Friedman can be classified as a monetarist and he is widely regarded as the leading proponent of that economic school of thought. He maintains that there is a close and stable link between inflation and the money supply, rejects the use of fiscal policy as a tool of demand management and holds that the government's role in the management of the economy should be severely restricted. Friedman wrote a veritable tome on the subject of the Great Depression which he called the Great Contraction, attributing it to the failure of The Federal Reserve. He argued for the cessation of intervention in exchange markets, thereby spawning an enormous literature on the subject, as well as the practice of freely floating exchange rates.
Friedman has also supported various libertarian policies such as decriminalization of drugs and prostitution. In addition, he headed the Reagan committee that researched the possibility of a move towards a paid/volunteer armed force, and played a role in the abolition of the draft that took place in the 1970s in the U.S. He served as a member of U.S. President Ronald Reagan's Economic Policy Advisory Board in 1981. In 1988 he received both the Presidential Medal of Freedom and the National Medal of Science.
Friedman made headlines by proposing a negative income tax to replace the existing welfare system and then opposing the bill to implement it because it merely supplemented the existing system rather than replacing it.
In recent years Friedman has devoted much of his effort to promoting school vouchers that can be used to pay for tuition at both private and public schools, saying, "What is needed in America is a voucher of substantial size available to all students, and free of excessive regulations."
Milton Friedman's son, David Friedman, has carried on his tradition of arguing in favor of free markets.
Friedman allowed the Cato Institute to use his name for its Milton Friedman Prize for Advancing Liberty in 2001. His wife Rose D. Friedman with whom he founded the Milton and Rose D. Friedman Foundation for School Choice served in the international selection committee.
Friedman visited Chile in 1975 during the military dictatorship of Augusto Pinochet. Invited by a private foundation, he gave a series of lectures on economics. Several professors from the University of Chicago became advisors to the Chilean government and several Ph.D. graduates from the same university -- known as "the Chicago boys" -- served in Chilean ministries. Despite having no direct personal contact with Pinochet's government, Friedman was accused of supporting a regime whose policies included torture and the killing of political opponents. A number of protesters demonstrated against Friedman during the 1976 Nobel Prize ceremony. (See: Miracle of Chile)
Critics have remarked that Chile's dictatorship used its power to implement free-market policies, thus contradicting the relationship that Friedman claims exists between open markets and political freedom. Friedman defends his role in Chile on the grounds that the move towards open market policies by the dictatorship was laudable, and that, in his view, it contributed to the softening of Pinochet's rule and to its eventual replacement by a democratic government in 1990. He also stresses that the lectures he gave in Chile in 1975 were the same lectures he later gave without incident in China and other Socialist states.
In the 1970's, Friedman argued against the trade and diplomatic embargoes that many Western nations had imposed on the white minority governments of South Africa and Rhodesia (now Zimbabwe), claiming that the embargoes played into the hands of anti-Western, Communist insurgencies in those countries, that far more repressive regimes in Africa and elsewhere were not being similarly punished, and that progress towards racial equality and freedom in South Africa and Rhodesia might be better pursued through a policy of engagement with their governments. Friedman was criticized for visiting those countries in 1976 and meeting with members of pro-Apartheid government without publicly calling for repealing the racist electoral laws that were then in place.
Notable academic publications
- "I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible."
- "A major source of objection to a free economy is precisely that it [...] gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself."
- "Inflation is the one form of taxation that can be imposed without legislation."
- "The government solution to a problem is usually as bad as the problem."
- "There's no such thing as a free lunch."
- "We have a system that increasingly taxes work and subsidizes nonwork."