By the time I attended Chicago, Milton Friedman was no longer teaching. But, his presence was still felt and his ideas, more commonly dubbed as “the Chicago School” of thought in economic and social science circles was pervasive at Chicago and, since leaving Chicago, I see his ideas proliferate the media, academia, pop culture, and almost everywhere.
Friedman died on November 16 at the age of 94 in San Fransciso, where he lived with his wife, Rose.
Below are a few of his contributions to social science and economics; while he also contributed much to politics and mathematics, I’ll only highlight what I view to be his more well-known contributions:
- Monetarism: Friedman contended that changes in the money supply precede, instead of follow, changes in overall economic conditions. He pointed out, for instance, that inflation results from â€œtoo much money chasing too few goods.â€
- Interventionism: Friedman maintained that the economy functions best when people have opportunities to make free choices unfettered by government regulations. He was an opponent of Keynes, who believed that the government should be involved in the management of national economies.
- Barriers-to-Entry: In his book, Income from Independent Professional Practice, He contended in the book that state-licensing procedures limit entry into the medical profession and accordingly, doctors can charge higher fees than they could if competition were more open.
- Consumption Function: In A Theory of Consumption Function, which contested one of the key Keynesian positions: that people spend less of their income and save more, as their societies become wealthier. Friedman showed that people always want more, no matter how wealthy they become. The book also showed that peopleâ€™s annual consumption is a function of their expected lifetime earnings, rather than a reflection of current income, which was the Keynesian view.
- Deregulation: In Capitalist and Freedom, He supported flexible exchange rates, a permanent departure from the gold standard, a volunteer army, a negative income tax, trucking and airline deregulation, competition for the Post Office, and a broader-based income tax. The ideas set forth in that book eventually become part of the U.S. Economic policy.
- Natural Rate of Unemployment: He introduced the notion of the “Natural Rate of Unemployment” and argued that if unemployment figures go below that “natural rate”, the inflation will most likely follow.
- Educational Vouchers: He was a strong advocate for educational vouchers to encourage school choice.
In his book Free to Choose, one thread that can be found in Friedman’s work is his love for freedom, choice, and democracy. He saw free economics as an organizing principle by which to build a government; a country — free economics is consistent with a democracy and political freedom. In his words,
I know of no example in time or place of a society that has been marked by a large measure of political freedom, and that has not also used something comparable to a free market to organize the bulk of economic activity.
While I don’t completely believe in Friedman’s view that a market, left on its own, will become supra efficient (some government intervention is sometimes necessary), his contribution to the world is deserving of praise, thanks, and memorial.
Below are just a few articles about Milton Friedman; they are far from being obituaries — these are more like tributes:
“And it quotes some of the pungent observations I remember from our shipboard dinner. Of the many presidents who turned to him for advice, Richard Nixon “had the highest IQ, but it was not matched by his character,” Friedman says in the film. Ronald Reagan was “not as intellectual, but he had high principles and he stuck to them.””
“When we heard the news at the University of Chicago that he had died, we actually stopped arguing and were quiet for a moment. It was a most extraordinary event for Chicago economists. Each of us seemed to contemplate Mr. Friedmanâ€™s legacy for ourselves. After that bit of calm, the argument resumed. It was, perhaps, just what the old man would have wanted.”
“Mr. Friedman had long since ceased to be called a flat-earther by anyone. â€œWhat was really so important about him,â€ said W. Allen Wallis, a former classmate and later faculty colleague at the University of Chicago, â€œwas his tremendous basic intelligence, his ingenuity, perseverance, his way of getting to the bottom of things â€” of looking at them in a new way that turned out to be right.â€”
The New York Times
“For right-of-center American libertarians, Milton Friedman was a powerful leader. For left-of-center American liberals, Milton Friedman was an enlightened adversary, and one whose view is now ascendant. We are all the stronger for his work. We will miss him.”
“Friedman leaves us an embarrassment of rich thoughts. He was a conservative. But he was advancing bold ideas across the ideological spectrum–from the left’s beloved earned-income tax credits to the right’s school vouchers–decades before they went mainstream. Friedman even left his own epitaph: “There’s no such thing as a free lunch.” Government inefficiency, pork-barrel projects, runaway inflation, well-intentioned subsidies–they all have costs. Guess who pays.”
The Chicago Tribune
“There was always a strong sense of friendship emanating from him and Rose. Though he really didn’t know me well, he invited me and my children to visit them in their San Francisco apartment. We still have the Polaroid photos of our boys posing with the Friedmans. I wasn’t the only one: The Friedmans have helped push forward the careers of hundreds of people, with free-market advice and affection.”
“Those who were won over by his unexpected charm sometimes underestimated his resolve. He would not give a millimetre where his convictions were at stake. Although an unassuming and essentially democratic personality, he was human enough to be aware of, and enjoy, his reputation in the last decades of his life.
His professed attitude to the political process was that of the critical Public Choice theorists. The latter believe that legislators follow their self-interest in a highly defective political marketplace in which geographical and industrially-concentrated special interest groups gain at the general expense. But Friedman’s ingrained belief in the power of reason and persuasion always got the better of any such theoretical misgivings. Although he occasionally professed gloom about the future of freedom, such forebodings were best left to the central Europeans whom he met at the Mont Pelerin Society. Friedman himself was an optimistic American to his fingertips.”
The Financial Times