Response 1 - Milton Friedman Bio Sketch

Milton Friedman was a prominent economist in the mid-to late 1900’s. He was born in New York City in 1912, and went on to get degrees from Rutgers University (BA), University of Chicago (MA), and Columbia University (Ph.D.). He won numerous awards throughout his lifetime, including the John Bates Clark Medal and the Nobel Prize in economics. He held many prestigious positions, including an advising position in the Nixon administration, a research fellowship at Hoover Institution at Stanford University, as well as a professorship at the University of Chicago.

While he held numerous positions at universities and in the government, his theories in economics actually go against many of the established economic theories of his time. In one of his books, A Theory of the Consumption Function, he disputes the classical consumption function. Instead of the classical assumption that household income reflects current income, Friedman argues that households actually operate using an assumption of what average income will be over the next few years. In another of his books, Monetary History of the United States, he essentially claims that the Great Depression is the Federal Reserve’s fault. His argument is that if the Federal Reserve increased money supply in tandem with GNP, then inflation wouldn’t exist. The Federal Reserve got so angry that they stopped releasing minutes from their board meetings, and commissioned another book to be written in retaliation. Friedman continued to voice his opinions and argue economic policy until his death in November of 2006.

Friedman’s views were not only controversial but also influential. In 1962 he published Capitalism and Freedom, which made a case for relatively free markets. He argued for a volunteer army, freely floating exchange rates, and the abolition of licensing doctors, among other against-the-grain ideas. This book was so influential that it inspired young minds to study economics when they otherwise wouldn’t have. About 20 years later, he and his wife published a book together, Free to Choose, which went along with a TV series on PBS. The book and the series helped to spread Friedman’s ideas and make him a household name. In addition to the general public, Friedman also had an influence on other economists of the day. His work influenced the opinion conveyed in a prominent economics textbook, Economics, with regards to the long-run effect of the trade-off of unemployment and inflation.

It is because Friedman was so influential that his work is important. Friedman and the people whose thinking he shaped played a large part in abolishing the draft, bringing down Communism, and helping deal with stagflation in the 1970’s. While there are still many economic policies in place today that are indirect opposition to Friedman’s viewpoint (e. g. farm subsidies, high taxes, etc.) the world is much more free-market-focused than it would have been without Friedman’s influence.

While organizations don’t necessarily deal with the macroeconomic issues of unemployment and inflation, they do deal somewhat with markets. Although Friedman advocates for free markets that don’t really exist in a hierarchical organization, it’s important to at least view the issue from both sides. While I hadn’t heard of Milton Friedman before this class, my thinking (and obviously many others’) has certainly been shaped by his work.

Sources:
Library of Economics and Liberty Encyclopedia
The Economist - "Unfinished business"
The Economist - "A heavyweight champ, at five foot two"

Picture: Nobel Prizes and Laureates biography