Milton Friedman

Milton Friedman (1912—2006) was an American economist and statistician who won the 1976 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for his work on consumption analysis and to monetary theory and history."Milton Friedman - Facts". Nobelprize.org. Nobel Media AB 2014. Web. 6 Aug 2018.https://www.theguardian.com/business/2002/sep/22/theobserver.observerbusiness15https://yasha.substack.com/p/its-all-a-big-lie-there-is-no-nobel-d55https://www.minneapolisfed.org/article/1999/the-beauty-pageant-of-economics He held a right-libertarian point of view that was in favor of a strong private sector without government intervention — the free market cures all ills (or at least cures them better than the government). Generally ranked as one of the most important economists of the 20th century,https://econjwatch.org/articles/economics-professors-favorite-economic-thinkers-journals-and-blogs-along-with-party-and-policy-views Friedman's economic ideas were also partially implemented in the United States by Ronald Reagan, in the United Kingdom by Margaret Thatcher, and in Chile by Augusto Pinochet during the 1970s and 1980s.
Despite taking a progressive position at the time in various social debates, including LGBT issues, Friedman spent most of his political time (for example on his PBS show Free to Choose and in lectures, as well as in Washington, D.C) arguing against most of the welfare state, and against public housing, the minimum wage, public education, rent control, progressive taxation and trade unions, while advocating for free trade, deregulation, privatization and school vouchers.
==Contributions==
Friedman's contribution to economics is often buried and forgotten by friends and foes alike due to his extreme libertarian philosophy. His book A Monetary History of the United States (written with Anna Schwartz) is still considered an (if not the) authoritative work on the history of the Federal Reserve.A Monetary History of the United States, reviewed by Hugh Rockoff, Encyclopedia of Economic History. His negative income tax proposal, i.e. a minimum income for all those who didn't qualify for the lowest tax bracket, is similar to what other economists that worked on the suggested.
In the 1970s, when stagflation hit, Friedman made mathematically rigorous revisions to Keynesian models, specifically the Phillips curve (i.e. how inflation and unemployment could be balanced) by adding adaptive expectations. These were later accepted by New Keynesians, who borrowed from Keynes to modernise Neoclassical economics, even if they were mostly superceded by the rational expectations theory. His , that predicts that consumers will spend based on long-term income patterns, implying that people would continue to spend at the same rates despite a temporary change in their income, also forced Keynesian economists to re-think their theories. Finally, Friedman's famous essay The Methodology of Positive Economics provided one of the most influential insights of all time in social sciences: assumptions don't need be "realistic" in order to bee scientific hypotheses; they just need to make correct predictions. These ideas are still rejected Post-Keynesian economists who continued to reject Neoclassical concepts. Contrary to the popular belief, one his most famous ideas, monetarism, the defense of a steady, small expansion of the money supply, didn't age well nonetheless, and money targeting was mostly abandoned by central banks around the world, with the interest rate becoming the most used tool to control inflation since the 1990s.
According to Paul Krugman, Friedman's academic work tended to be far more nuanced than his policy prescriptions.Who Was Milton Friedman?
==Change of views==
From the 1930s to the 1950s, Friedman was more moderate, supporting, for instance, higher taxation, but still being a founding member of the , in 1947. However, in the 1960s, he started to disagree more and more with the , and came to believe that there was in fact a "" that the central government had no control over. He believed that the Keynesian system would lead to the stagflation, something that indeed happened in the 1970s. The basis behind this idea was adaptive expectations. As the government pushed unemployment, through old Keynesian stimulus, below the natural rate, inflation went up. However, since unemployment reverted back to normal over the long run due to the neutrality of demand side stimulus, inflation remained high due to the population expecting inflation to be high.
This period also marks Friedman's appoximation with the Republican Party. In 1964, he became an economic advisor and speech writer for Barry Goldwater's presidential campaign. Friedman also remained very active in the academia during that time. In 1962, two years before Goldwater's campaign, he published his widely popular book Capitalism and Freedom and in the following year, he published what is possible his most important work, the gargantuan A Monetary History of the United States.
==Influence on libertarianism==
Milton Friedman was a leading light in the "Chicago school" of economics, which is distinct from the Austrian school of Ludwig von Mises. The two competing schools are the source of one of the main splits in the libertarian movement. As a rule, the more radical Austrian schoolers — many of whom are anarcho-capitalists in other ways as well (i.e. anti-war, anti-police state) — view Chicago schoolers as "Beltway libertarians" and stealth Reaganites whose utilitarian approach lacks a broader critique of the state beyond merely cutting spending and regulation. Indeed, Austrian "scholar" Walter Block concluded Milton Friedman to be a socialist.https://www.researchgate.net/publication/273074293_WAS_MILTON_FRIEDMAN_A_SOCIALIST_YES Make of that what you will. Friedman rebutted this criticism by claiming that libertarians like Murray Rothbard and Ayn Rand were "cult leaders."
Despite this, or perhaps because of it, Milton Friedman and the Chicago school have been much more influential on real world government policy, having guided the policies of Reagan, Thatcher, Pinochet, and several other countries at various points in time. The fact they could apply some of Friedman's economic ideas while still endorsing a highly socially conservative agenda (and, Pinochet's case, a brutal dictatorship) perhaps indicates the Austrians have a point. The real world influence of Austrian school economics, meanwhile, has been limited to occasional small-time politicians like Ron Paul. Another main difference is the Chicago school holds to the neoclassical microeconomic model of supply and demand while the Austrian school rejects such mathematical models in favor of a strictly narrative study of human action they term "praxeology."
In 1948, still is his more moderate phase, he synthetizes his views on political economy:
This views were criticized by other economists such as Joseph Stiglitz. The second one, isn't, according to him, necessarily true, since market failures mean that the unfettered markets won't always produce the most efficient outcome. At the same time, unfettered markets can, in his opinion, result in the rich and the elites having a disproportionate voice in shaping both government policies and societal narratives, undermining political freedom and democracy, also resulting in concentration of economic power.
==The laissez-faire President==
Friedman sat on Ronald Reagan's Economic Policy Advisory Board for the whole of the administration. Reagan even went so far as to give him the Presidential Medal of Freedom, an honor which Reagan himself had bestowed upon him in 1988. Despite resulting in a remarkably economic growth, his presidency was also marked by many economic issues caused fiscal irresponsibility that had to be solved in by his successors:
#Dramatic increases in defense spending, causing large deficits. Friedman was opposed to this.The S&L Crisis: A Chrono-Bibliography, Federal Deposit Insurance Corporation
#The Savings and Loan crisis.The S&L Crisis: A Chrono-Bibliography, Federal Deposit Insurance Corporation
#The stock market crash of 1987.25 Years Later: In the Crash of 1987, the Seeds of the Great Recession, TIME
#Raising the national debt from $700 billion to $3 trillion in a matter of only eight years. Friedman was opposed to this in the manner it was implemented, although he once said, "I would rather have a $1 trillion budget that is way out of balance than a $2 trillion budget that is in balance."https://www.washingtonpost.com/wp-srv/politics/special/budget/stories/op071597.htm
#Changing the U.S. from the world's largest creditor to the world's largest debtor].Reagan Policies Gave Green Light to Red Ink, Washington Post Friedman is criticized by conservatives for having been a globalist in this sense.
==Chile and the Chicago Boys==
In 1973, Augusto Pinochet, who was supported/funded by America/CIA, couped the then democratically elected Chilean president, the Marxist physician Salvador Allende, and destroyed decades Chilean democratic tradition.http://nsarchive.gwu.edu/NSAEBB/NSAEBB8/nsaebb8i.htm Friedman visited the country in 1975, and shortly after, Chile underwent to a "shock treatment", with many structural market reforms being implemented by the military junta. For the next years, the "Chicago boys" (Chilean young graduates from the University of Chicago, many of whom were Friedman's students) freed prices and interest rates, lowered import tariffs, privatized hundreds of state-owned enterprises, instituted school vouchers, created individual savings pension accounts, deregulated businesses and banks and furthered markets everywhere. Friedman called the vigorous economic growth that Chile saw during the Pinochet's dictatorship as the "Miracle of Chile". The period still faced at least one major downturn in 1982, when Chile saw a serious crisis. According to Friedman, the crisis happened because Chile wasn't at that moment neoliberal enough, blaming, for instance, political interventions in the Chilean peso. The post-1982 reforms were much more pragmatic, despite still having a strong neoliberal tilt, and by the dawn of the 21st century, Chile became, by a wide margin, the wealthiest nation in Latin America, also attaining the best social indicator levels in the region for health, education, and life expectancy.
While Friedman is often regarded as the most influential figure on the Chilean economy during Augusto Pinochet's dictatorship, according to economist Sebastián Edwards this title in fact belongs to a pragmatic and more flexible thinker, Al Harberger. Friedman said that he never supported nor personally advised Pinochet. He once had a roughly 45-minute talk with Pinochet – on his six-day trip to Chile in March 1975 – however he never accepted a penny from the Chilean regime and turned down two honorary degrees from Chilean universities that received government funding, because it could be interpreted as support of the junta. He wrote Pinochet a formal letter afterward, arguing for a plan to end hyperinflation and liberalize the economy, similar to those letters he sent to communist dictators in the USSR, China, and Yugoslavia.Milton Friedman on Pinochet and Chile. Uploaded by LibertyPen on YouTube. Cited on July 13, 2015.Norberg, Johan. The Klein Doctrine: The Rise of Disaster Polemics. Cited on July 13, 2015.https://www.cato.org/policy-report/septemberoctober-2017/little-known-story-milton-friedman-china His views on Pinochet can be contrasted with those of Friedrich Hayek, an Austrian school economist and philosopher who made public defenses of the Chilean dictator. Friedman still claimed that the free market institutions were ultimately responsible for Chile's return to democracy in 1990 nonetheless:
==Religion==
Coming from a Jewish family, Friedman called himself an agnostic, though he defined atheism in the strong sense, so his views were similar to those of weak atheism. He also subscribed to the view of morality put forth by evolutionary psychology.https://www.celebatheists.com/wiki/Milton_Friedman
==Family==
Milton Friedman married Ukrainian Rose Director Friedman who was also a free-market economist and the sister of another prominent Chicago school economist, . Together, Rose and Milton parented David D. Friedman, who is, believe it or not, more far-out than his father on economics, being an anarcho-capitalist and the author of a seminal book in that field entitled The Machinery of Freedom. David Friedman is one of the few anarcho-capitalists to adhere to the Chicago school and a utilitarian view on ethics (the majority are Austrian school schoolers, and many adhere to a natural rights view.) This is a reason for much back and forth between Friedman's utilitarian versus the natural rights versions of anarcho-capitalism of Murray Rothbard, Morris and Linda Tannehill and others, as well as a source of some interesting, some would say way out there, ideas on the part of David Friedman, such as polycentric law being enforced by competing private courts. David's son, , is also a prominent anarcho-capitalist activist and a proponent of seasteading.
Friedman also had a daughter named Janet Friedman Martel, who is bridge player from California.
==See also==
*Ben Bernanke
*Classical liberalism
*Great Depression - Along with Anna Schwartz, Friedman provided one of the most widely accepted explanations to the Great Depression 
*Alan Greenspan
*Monetary policy
*Thomas Sowell - one of his most prominent students
*School vouchers
==Notes==
==External links==
*Entry in EconLib
==References==
Category:Agnostics
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Category:Classical liberalism
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