Examine individual changes

'{{short description|American economist}} {{use mdy dates|date=September 2017}} {{Infobox economist | name = Milton Friedman | image = Portrait of Milton Friedman.jpg | image_size = 250px | caption = Friedman in 2004 | birth_date = {{birth date|mf=yes|1912|7|31}} | birth_place = [[Brooklyn]], [[New York (state)|New York]], U.S. | death_date = {{nowrap|{{death date and age|mf=yes|2006|11|16|1912|7|31}}}} | death_place = [[San Francisco]], [[California]], U.S. | nationality = American | institution = {{plainlist| * National Resources Planning Board (1935–1937) * {{longitem|[[National Bureau of Economic Research]] (1937–1940)}} * [[Columbia University]] (1937–1941; 1943–1945; 1964–1965) * [[University of Wisconsin, Madison]] (1940) * [[U.S. Department of the Treasury]] (1941–1943) * [[University of Chicago]] (1946–1977) * [[University of Cambridge]] (1954–1955) * [[Hoover Institution]] (1977–2006) }} | school_tradition = [[Chicago school of economics|Chicago School]] | alma_mater = {{plainlist| * [[Rutgers University]] ([[Bachelor of Arts|BA]]) * [[University of Chicago]] ([[Master of Arts|MA]]) * [[Columbia University]] ([[PhD]]) }} | doctoral_advisor = [[Simon Kuznets]] | doctoral_students = [[Phillip Cagan]]<br />[[Harry Markowitz]]<br />[[Lester G. Telser]]<ref name="Ebenstein 2007 89">{{harvnb|Ebenstein|2007|p=89}}</ref><br />[[David I. Meiselman]]<br />[[Neil Wallace]]<br />[[Miguel Sidrauski]]<br />[[Edgar L. Feige]] | influences = {{hlist|[[Adam Smith|Smith]]|[[Alfred Marshall|Marshall]]|[[John Stuart Mill|Mill]]|[[Irving Fisher|Fisher]]|[[Thomas Paine|Paine]]|[[Frank Knight|Knight]]|[[Simon Kuznets|Kuznets]]|[[Jacob Viner|Viner]]|[[Harold Hotelling|Hotelling]]|[[Arthur F. Burns|Burns]]|[[Friedrich Hayek|Hayek]]|[[Homer Jones (economist)|H. Jones]]|[[Henry Calvert Simons|H.C. Simons]]|[[George Stigler|Stigler]]|[[Henry Schultz|Schultz]]|[[Henry George|George]]}} | influenced = <!-- People. -->{{hlist|[[Margaret Thatcher|Thatcher]]<ref name="google576">{{cite book|author=Charles Moore|title=Margaret Thatcher: The Authorized Biography, Volume One: Not For Turning|url=https://books.google.com/books?id=lXMFs8427kQC&pg=PT576|year=2013|publisher=Penguin|pages=576–77|isbn=978-1846146497}}</ref>|[[Gary Becker|Becker]]|[[Mart Laar|Laar]]|[[Alan Greenspan|Greenspan]]|[[Anna Schwartz|Schwartz]]|[[Ben Bernanke|Bernanke]]|[[J. Bradford DeLong|DeLong]]|[[Thomas Sowell|Sowell]]|[[Herbert Stein|Stein]]|[[Hernando de Soto Polar|de Soto Polar]]|[[William F. Buckley Jr.|Buckley]]|[[David D. Friedman|Friedman]]|[[Scott Sumner|Sumner]]|[[Ronald Reagan|Reagan]]<ref name="Ebenstein 2007 208">{{harvnb|Ebenstein|2007|p=208}}</ref>|[[Ron Paul]]|[[Rand Paul]]|[[Walter E. Williams|Williams]]}}<!-- Institutions. -->{{hlist|[[Cato Institute]]|[[Augusto Pinochet|Pinochet]] and [[Chicago Boys]] [[Fraser Institute]]}} | contributions = {{plainlist| * [[Microeconomics|Price theory]]{{int:dot-separator}}[[Monetarism]] * [[Macroeconomics|Applied macroeconomics]] * [[Floating exchange rate]]s * [[Permanent income hypothesis]] * [[Helicopter money]] * [[Conscription in the United States#End of conscription|Volunteer military]] * [[Natural rate of unemployment]] * [[Friedman test]] }} | awards = {{plainlist| * {{longitem|[[Member of the National Academy of Sciences]] (1973)}} * {{nowrap|[[National Medal of Science]] (1988)}} * {{longitem|[[Presidential Medal of Freedom]] (1988)}} * {{longitem|[[Nobel Memorial Prize in Economic Sciences]] (1976)}} * [[John Bates Clark Medal]] (1951) }} | signature = Milton friedman signature.svg | repec_prefix = e | repec_id = pfr10 | spouse = [[Rose Friedman]] | notes = '''Children'''<br />[[David D. Friedman]], [[Jan Martel (bridge)|Jan Martel]] }} {{Capitalism sidebar}} '''Milton Friedman''' ({{IPAc-en|ˈ|f|r|iː|d|m|ən}}; July 31, 1912 – November 16, 2006) was an American [[economist]] who received the 1976 [[Nobel Memorial Prize in Economic Sciences]] for his research on [[Consumption (economics)|consumption]] analysis, [[Money supply|monetary]] history and theory and the complexity of [[stabilization policy]].<ref name="nobel1">{{cite web|title=Milton Friedman on nobelprize.org|url=http://nobelprize.org/nobel_prizes/economics/laureates/1976/|year=1976|publisher=Nobel Prize|access-date=February 20, 2008|archive-url=https://web.archive.org/web/20080412092230/http://nobelprize.org/nobel_prizes/economics/laureates/1976/|archive-date=April 12, 2008|url-status=live|df=mdy-all}}</ref> With [[George Stigler]] and others, Friedman was among the intellectual leaders of the [[Chicago school of economics]], a [[Neoclassical economics|neoclassical]] school of economic thought associated with the work of the faculty at the [[University of Chicago]] that rejected [[Keynesian economics|Keynesianism]] in favor of [[monetarism]] until the mid-1970s, when it turned to [[new classical macroeconomics]] heavily based on the concept of [[rational expectations]]. Several students and young professors who were recruited or mentored by Friedman at Chicago went on to become leading economists, including [[Gary Becker]], [[Robert Fogel]], [[Thomas Sowell]]<ref>{{cite book|title=A Personal Odyssey|author=Thomas Sowell |page=320 |publisher=Free Press|isbn=978-0743215084|url=https://books.google.com/books?id=jADMwD6NgX0C|date=2016}}</ref> and [[Robert Lucas Jr.]]<ref>{{cite book|author=Johan Van Overtveldt|title=The Chicago School: How the University of Chicago Assembled the Thinkers Who Revolutionized Economics and Business|url=https://books.google.com/books?id=GKcrdEN_3WUC |date=2009|publisher=Agate Publishing|isbn=978-1-57284-649-4}}</ref> Friedman's challenges to what he later called "naive [[Keynesian economics|Keynesian]] theory"<ref name=pbsinterview>{{cite web|title=Milton Friedman|website=Commanding Heights|publisher=PBS|date=October 1, 2000|url=https://www.pbs.org/wgbh/commandingheights/shared/minitext/int_miltonfriedman.html#7|access-date=September 19, 2011|archive-url=https://web.archive.org/web/20110908104355/http://www.pbs.org/wgbh/commandingheights/shared/minitext/int_miltonfriedman.html#7|archive-date=September 8, 2011|url-status=live|df=mdy-all}}</ref> began with his 1950s reinterpretation of the [[consumption function]]. During the 1960s he became the main advocate opposing Keynesian government policies,<ref>[http://www.dallasfed.org/research/ei/ei0202.html "Milton Friedman—Economist as Public Intellectual"] {{webarchive |url=https://web.archive.org/web/20090529013032/http://www.dallasfed.org/research/ei/ei0202.html |date=May 29, 2009}}. . Dallasfed.org (April 1, 2016). Retrieved on September 6, 2017. </ref> and described his approach (along with mainstream economics) as using "Keynesian language and apparatus" yet rejecting its initial conclusions.<ref>{{cite book|title=The Making of Modern Economics: The Lives and Ideas of the Great Thinkers|author=Mark Skousen|page=407|publisher=M.E. Sharpe|isbn=978-0-7656-2227-3|url=https://books.google.com/books?id=6sisXMv_AecC&q=friedman%20we.are.all.keynesians.now&pg=PA407|date=2009}}</ref> He theorized that there existed a [[natural rate of unemployment]] and argued that unemployment below this rate would cause inflation to accelerate.<ref>Among macroeconomists, the "natural" rate has been increasingly replaced by [[James Tobin]]'s [[NAIRU]], the non-accelerating inflation rate of unemployment, which is seen as having fewer normative connotations.</ref> He argued that the [[Phillips curve]] was in the long run vertical at the 'natural rate' and predicted what would come to be known as [[stagflation]].<ref>Paul Krugman (1995). ''Peddling Prosperity: Economic Sense and Nonsense in an Age of Diminished Expectations''. [https://archive.org/details/peddlingprosperi0000krug_1995/page/43 <!-- quote=friedman stagflation krugman decisive. --> p. 43]. "In 1968 in one of the decisive intellectual achievements of postwar economics, Friedman not only showed why the apparent tradeoff embodied in the idea of the Phillips curve was wrong; he also predicted the emergence of combined inflation and high unemployment ... dubbed 'stagflation".</ref> Friedman promoted an alternative macroeconomic viewpoint known as 'monetarism' and argued that a steady, small expansion of the [[money supply]] was the preferred policy.<ref name=bestofbothworlds/> His ideas concerning [[monetary policy]], [[tax]]ation, [[privatization]] and [[deregulation]] influenced government policies, especially during the 1980s. His [[Monetarism|monetary theory]] influenced the Federal Reserve's response to the [[Financial crisis of 2007–08|global financial crisis of 2007–2008]].<ref>Edward Nelson (April 13, 2011). [http://www.federalreserve.gov/PubS/feds/2011/201126/201126pap.pdf "Friedman's Monetary Economics in Practice"] {{webarchive |url=https://web.archive.org/web/20141231143039/http://www.federalreserve.gov/pubs/feds/2011/201126/201126pap.pdf |date=December 31, 2014}}. "in important respects, the overall monetary and financial policy response to the crisis can be viewed as Friedman's monetary economics in practice. ... Friedman's recommendations for responding to a financial crisis largely lined up with the principal financial and monetary policy measures taken since 2007". "Review" in ''Journal of Economic Literature'' (December 2012). 50#4. pp. 1106–09.</ref> Friedman was an advisor to [[Republican Party (United States)|Republican]] President [[Ronald Reagan]]<ref name="Ebenstein 2007 208"/> and [[Conservative Party (UK)|Conservative]] British Prime Minister [[Margaret Thatcher]].<ref name="google576"/> His political philosophy extolled the virtues of a [[free market]] economic system with minimal intervention. He once stated that his role in eliminating [[conscription in the United States]] was his proudest accomplishment. In his 1962 book ''[[Capitalism and Freedom]]'', Friedman advocated policies such as a [[volunteer military]], freely [[floating exchange rate]]s, abolition of [[medical license]]s, a [[negative income tax]] and [[school voucher]]s<ref>[http://www.econlib.org/library/Enc/bios/Friedman.html "Milton Friedman (1912–2006)"] {{webarchive |url=https://web.archive.org/web/20070103173849/http://www.econlib.org/library/enc/bios/Friedman.html |date=January 3, 2007}}. Econlib.org. Retrieved on September 6, 2017.</ref> and opposed the [[war on drugs]]. His support for [[school choice]] led him to found the Friedman Foundation for Educational Choice, later renamed [[EdChoice]].<ref name=sullivan>{{cite magazine|author=Maureen Sullivan|title=Milton Friedman's Name Disappears From Foundation, But His School-Choice Beliefs Live On|url=https://www.forbes.com/sites/maureensullivan/2016/07/30/milton-friedmans-name-disappears-from-foundation-but-his-school-choice-beliefs-live-on/#ed848a179437|access-date=September 14, 2016|magazine=Forbes|date=July 30, 2016|archive-url=https://web.archive.org/web/20160921200835/http://www.forbes.com/sites/maureensullivan/2016/07/30/milton-friedmans-name-disappears-from-foundation-but-his-school-choice-beliefs-live-on/#ed848a179437|archive-date=September 21, 2016|url-status=live|df=mdy-all}}</ref> [[Milton Friedman bibliography|Friedman's works]] include monographs, books, scholarly articles, papers, magazine columns, television programs, and lectures, and cover a broad range of economic topics and public policy issues.<ref>{{cite encyclopedia|url=https://www.britannica.com/biography/Milton-Friedman|title=Milton Friedman|encyclopedia=Encyclopedia Britannica|access-date=August 2, 2017|archive-url=https://web.archive.org/web/20170802212154/https://www.britannica.com/biography/Milton-Friedman|archive-date=August 2, 2017|url-status=live|df=mdy-all}}</ref> His books and essays have had global influence, including in former [[communist state]]s.<ref>"Capitalism and Friedman" (editorial). ''[[The Wall Street Journal]]''. November 17, 2006.</ref><ref>{{cite web|title=Remarks at Milton Friedman Memorial Service|author=Václav Klaus|date=January 29, 2007|url=http://www.klaus.cz/klaus2/asp/clanek.asp?id=3DpXss5H9RJv|access-date=August 22, 2008|archive-url=https://web.archive.org/web/20070702192445/http://klaus.cz/klaus2/asp/clanek.asp?id=3DpXss5H9RJv|archive-date=July 2, 2007|url-status=dead|df=mdy-all|author-link=Václav Klaus}}</ref><ref name=defaming>Johan Norberg (October 2008). [http://reason.com/archives/2008/09/26/defaming-milton-friedman "Defaming Milton Friedman: Naomi Klein's disastrous yet popular polemic against the great free market economist"] {{Webarchive|url=https://web.archive.org/web/20100411211951/http://reason.com/archives/2008/09/26/defaming-milton-friedman |date=April 11, 2010 }}. ''Reason Magazine''. Washington, D.C.</ref><ref>{{harvnb|Friedman|1999}}, p. 506.</ref> A survey of economists ranked Friedman as the second-most popular economist of the 20th century, following only [[John Maynard Keynes]].<ref>William L Davis, Bob Figgins, David Hedengren and Daniel B. Klein (May 2011). [http://econjwatch.org/articles/economics-professors-favorite-economic-thinkers-journals-and-blogs-along-with-party-and-policy-views "Economic Professors' Favorite Economic Thinkers, Journals, and Blogs"] {{webarchive |url=https://web.archive.org/web/20111218212117/http://econjwatch.org/articles/economics-professors-favorite-economic-thinkers-journals-and-blogs-along-with-party-and-policy-views |date=December 18, 2011}}. ''Econ Journal Watch''. 8(2). pp. 126–46.</ref> Upon his death, ''[[The Economist]]'' described him as "the most influential economist of the second half of the 20th century ... possibly of all of it".<ref>{{cite news|title=Milton Friedman, a giant among economists |url=https://www.economist.com/business/displaystory.cfm?story_id=8313925|date=November 23, 2006|work=The Economist|access-date=February 20, 2008|archive-url=https://web.archive.org/web/20080217004356/http://www.economist.com/business/displaystory.cfm?story_id=8313925|archive-date=February 17, 2008|url-status=live|df=mdy-all}}</ref> == Early life == Friedman was born in [[Brooklyn]], New York on July 31, 1912. His parents, Sára Ethel (née Landau) and Jenő Saul Friedman,<ref>{{cite book |url=https://books.google.com/books?id=aYlmAAAAMAAJ&q=%22Bklyn.,+N.Y..+July+31.+1912;+s.+Jeno+Saul+and+Sarah+Ethel+(Landau);+BA.+Rutgers+%22 |title=Who's who in American Jewry |year=1980}}</ref> were Jewish immigrants from Beregszász in [[Carpathian Ruthenia]], [[Kingdom of Hungary]] (now [[Berehove]] in Ukraine). They both worked as [[dry goods]] merchants. Shortly after his birth, the family relocated to [[Rahway, New Jersey]]. In his early teens, Friedman was injured in a car accident, which scarred his upper lip.<ref>{{harvnb|Ebenstein|2007|p=10}}</ref><ref>Milton & Rose Friedman, ''Two Lucky People. Memoirs'', Chicago 1998, p. 22.</ref> A talented student, Friedman graduated from [[Rahway High School]] in 1928, just before his 16th birthday.<ref>{{Cite book|author=Eamonn Butler|year=2011|title=Milton Friedman|series=Harriman Economic Essentials|chapter=Ch. 1}}</ref><ref>{{harvnb|Ebenstein|2007|pp=5–12}}</ref> He was awarded a competitive scholarship to [[Rutgers University]] (then a private university receiving limited support from the State of New Jersey, e.g., for such scholarships). He specialized in mathematics and economics, and became influenced by two economics professors, [[Arthur F. Burns]] and [[Homer Jones (economist)|Homer Jones]], who convinced him that modern economics could help end the [[Great Depression]]. Friedman graduated in 1932, and initially intended to become an [[actuary]]. But he was offered two scholarships to do graduate work, one in mathematics at [[Brown University]] and the other in economics at the [[University of Chicago]].<ref>{{cite news|title=Milton Friedman and his start in economics|url=https://www.youtube.com/watch?v=EhYOtG2pt3w|date=August 2006|publisher=Young America's Foundation|access-date=March 12, 2012|archive-url=https://web.archive.org/web/20130223172833/http://www.youtube.com/watch?v=EhYOtG2pt3w|archive-date=February 23, 2013|url-status=live|df=mdy-all}}</ref> Friedman chose the second, earning a [[Master of Arts]] degree in 1933. He was strongly influenced by [[Jacob Viner]], [[Frank Knight]], and [[Henry Calvert Simons|Henry Simons]]. At Chicago Friedman met his future wife, economist [[Rose Friedman|Rose Director]]. During the 1933–1934 academic year he had a [[Fellow#Graduate school fellowships|fellowship]] at [[Columbia University]], where he studied statistics with statistician and economist [[Harold Hotelling]]. He was back in Chicago for the 1934–1935 academic year, working as a research assistant for [[Henry Schultz]], who was then working on ''Theory and Measurement of Demand''. That year, Friedman formed what would prove to be lifelong friendships with [[George Stigler]] and [[W. Allen Wallis]].<ref>{{harvnb|Ebenstein|2007|pp=13–30}}</ref> == Public service == Friedman was unable to find academic employment, so in 1935 followed his friend W. Allen Wallis to [[Washington, D.C.]], where [[Franklin D. Roosevelt]]'s [[New Deal]] was "a lifesaver" for many young economists.<ref>{{cite web|title=Nobel laureate economist Milton Friedman dies at 94|author=Mark Feeney|date=November 16, 2006|url=https://www.boston.com/news/globe/city_region/breaking_news/2006/11/nobel_lauriet_e.html|website=The Boston Globe|access-date=February 20, 2008|archive-url=https://web.archive.org/web/20070330084012/http://www.boston.com/news/globe/city_region/breaking_news/2006/11/nobel_lauriet_e.html|archive-date=March 30, 2007|url-status=live|df=mdy-all}}</ref> At this stage, Friedman said that he and his wife "regarded the job-creation programs such as the [[Works Progress Administration|WPA]], [[Civilian Conservation Corps|CCC]], and [[Public Works Administration|PWA]] appropriate responses to the critical situation," but not "the [[price fixing|price-]] and wage-fixing measures of the [[National Recovery Administration]] and the [[Agricultural Adjustment Act|Agricultural Adjustment Administration]]."<ref>{{harvnb|Friedman|1999|p=59}}</ref> Foreshadowing his later ideas, he believed [[price controls]] interfered with an essential signaling mechanism to help resources be used where they were most valued. Indeed, Friedman later concluded that all government intervention associated with the New Deal was "the wrong cure for the wrong disease," arguing that the money supply should simply have been expanded, instead of contracted.<ref>{{cite web|title=Right from the Start? What Milton Friedman can teach progressives|url=http://delong.typepad.com/pdf/20070308_108-115.delong.FINAL.pdf|publisher=J. Bradford DeLong|access-date=February 20, 2008|archive-url=https://web.archive.org/web/20080216100725/http://delong.typepad.com/pdf/20070308_108-115.delong.FINAL.pdf|archive-date=February 16, 2008|url-status=live|df=mdy-all}}</ref> Later, Friedman and his colleague [[Anna Schwartz]] wrote ''[[A Monetary History of the United States|A Monetary History of the United States, 1867–1960]]'', which argued that the [[Great Depression]] was caused by a severe [[Monetary policy|monetary contraction]] due to banking crises and poor policy on the part of the [[Federal Reserve]].<ref>{{harvnb|Bernanke|2004|p=7}}</ref> [[Robert J. Shiller]] describes the book as the "most influential account" of the Great Depression.<ref>{{Cite journal|last=Shiller|first=Robert J.|date=2017|title=Narrative Economics|journal=American Economic Review|language=en|volume=107|issue=4|pages=967–1004|doi=10.1257/aer.107.4.967|issn=0002-8282}}</ref> During 1935, he began working for the National Resources Planning Board,<ref>Daniel J. Hammond, Claire H. Hammond (eds.) (2006), ''Making Chicago Price Theory: Friedman-Stigler Correspondence 1945–1957'', Routledge, p. xiii. {{ISBN|1135994293}}</ref> which was then working on a large consumer budget survey. Ideas from this project later became a part of his ''Theory of the Consumption Function''. Friedman began employment with the [[National Bureau of Economic Research]] during autumn 1937 to assist [[Simon Kuznets]] in his work on professional income. This work resulted in their jointly authored publication ''Incomes from Independent Professional Practice'', which introduced the concepts of permanent and transitory income, a major component of the [[Permanent income hypothesis|Permanent Income Hypothesis]] that Friedman worked out in greater detail in the 1950s. The book hypothesizes that professional licensing artificially restricts the supply of services and raises prices. During 1940, Friedman was appointed as an assistant professor teaching Economics at the [[University of Wisconsin–Madison]], but encountered [[antisemitism]] in the Economics department and returned to government service.<ref>{{harvnb|Friedman|1999|p=42}}</ref><ref>{{harvnb|Friedman|1999|pp=84–85}}</ref> From 1941 to 1943 Friedman worked on wartime tax policy for the [[federal government]], as an advisor to senior officials of the [[United States Department of the Treasury]]. As a Treasury spokesman during 1942 he advocated a [[Keynesian economics|Keynesian]] policy of taxation. He helped to invent the payroll [[withholding tax]] system, since the federal government needed money to fund the war.<ref>{{cite book |author1=Milton Friedman|author2=Rose D. Friedman|title=Two Lucky People: Memoirs|url=https://archive.org/details/twoluckypeopleme00frie|url-access=registration|year=1999|publisher=University of Chicago Press|pages=[https://archive.org/details/twoluckypeopleme00frie/page/122 122]–23|isbn=978-0226264158}}</ref> He later said, "I have no apologies for it, but I really wish we hadn't found it necessary and I wish there were some way of abolishing withholding now."<ref name="reason">{{cite web|author=Brian Doherty|date=June 1995|title=Best of Both Worlds|url=http://reason.com/archives/1995/06/01/best-of-both-worlds|publisher=Reason|access-date=July 28, 2010|archive-url=https://web.archive.org/web/20100709180107/http://reason.com/archives/1995/06/01/best-of-both-worlds|archive-date=July 9, 2010|url-status=live|df=mdy-all}}</ref> In Milton and Rose Friedman's jointly-written memoir, he wrote, "Rose has repeatedly chided me over the years about the role that I played in making possible the current overgrown government we both criticize so strongly."<ref>{{cite book |author1=Milton Friedman|author2=Rose D. Friedman|title=Two Lucky People: Memoirs|url=https://archive.org/details/twoluckypeopleme00frie|url-access=registration|year=1999|publisher=University of Chicago Press|pages=[https://archive.org/details/twoluckypeopleme00frie/page/122 122]–23|isbn=978-0226264158}}</ref> == Academic career == === Early years === In 1940, Friedman accepted a position at the University of Wisconsin–Madison, but left because of differences with faculty regarding United States involvement in World War II. Friedman believed the United States should enter the war.<ref name="Achievement.org">{{cite web |url=https://www.achievement.org/achiever/milton-friedman-ph-d/#interview |website=www.achievement.org|publisher=[[American Academy of Achievement]]|title=Milton Friedman Biography and Interview – American Academy of Achievement}}</ref> In 1943, Friedman joined the Division of War Research at [[Columbia University]] (headed by [[W. Allen Wallis]] and [[Harold Hotelling]]), where he spent the rest of [[World War II]] working as a mathematical statistician, focusing on problems of weapons design, military tactics, and metallurgical experiments.<ref name="Achievement.org"/><ref>{{cite book |author=Philip Mirowski|title=Machine Dreams: Economics Becomes a Cyborg Science|url=https://archive.org/details/machinedreamseco0000miro|url-access=registration|year=2002|publisher=Cambridge University Press|pages=[https://archive.org/details/machinedreamseco0000miro/page/202 202]–03|isbn=978-0521775267}}</ref> In 1945, Friedman submitted ''Incomes from Independent Professional Practice'' (co-authored with Kuznets and completed during 1940) to Columbia as his doctoral dissertation. The university awarded him a PhD in 1946.<ref>{{cite web|url=http://c250.columbia.edu/c250_celebrates/remarkable_columbians/milton_friedman.html|title=Milton Friedman|website=c250.columbia.edu|access-date=2019-03-07}}</ref><ref>{{cite web|url=http://www-news.uchicago.edu/releases/06/061116.friedman.shtml|title=Professor Emeritus Milton Friedman dies at 94|website=www-news.uchicago.edu|access-date=2019-03-07}}</ref> Friedman spent the 1945–1946 academic year teaching at the [[University of Minnesota]] (where his friend George Stigler was employed). On February 12, 1945, his son, [[David D. Friedman]] was born. === University of Chicago === [[File:Harper Midway Chicago.jpg|thumb|upright=0.9|The [[University of Chicago]], where Friedman taught]] In 1946, Friedman accepted an offer to teach economic theory at the University of Chicago (a position opened by departure of his former professor [[Jacob Viner]] to [[Princeton University]]). Friedman would work for the University of Chicago for the next 30 years. There he contributed to the establishment of an intellectual community that produced a number of Nobel Prize winners, known collectively as the [[Chicago school of economics]]. At that time, [[Arthur F. Burns]], who was then the head of the [[National Bureau of Economic Research]], asked Friedman to rejoin the Bureau's staff. He accepted the invitation, and assumed responsibility for the Bureau's inquiry into the role of money in the [[business cycle]]. As a result, he initiated the "Workshop in Money and Banking" (the "Chicago Workshop"), which promoted a revival of monetary studies. During the latter half of the 1940s, Friedman began a collaboration with Anna Schwartz, an [[Economic history|economic historian]] at the Bureau, that would ultimately result in the 1963 publication of a book co-authored by Friedman and Schwartz, ''A Monetary History of the United States, 1867–1960''. Friedman spent the 1954–1955 academic year as a Fulbright Visiting Fellow at [[Gonville and Caius College, Cambridge]]. At the time, the Cambridge economics faculty was divided into a Keynesian majority (including [[Joan Robinson]] and [[Richard Kahn, Baron Kahn|Richard Kahn]]) and an anti-Keynesian minority (headed by [[Dennis Robertson (economist)|Dennis Robertson]]). Friedman speculated that he was invited to the fellowship, because his views were unacceptable to both of the Cambridge factions. Later his weekly columns for ''Newsweek'' magazine (1966–84) were well read and increasingly influential among political and business people,<ref>CATO, "Letter from Washington," ''National Review,'' September 19, 1980, Vol. 32 Issue 19, p. 1119</ref> and helped earn the magazine a [[Gerald Loeb Special Award]] in 1968.<ref name="HC-19680522">{{cite news |url=https://newspapers.com/image/370559693/?terms=Nicholas%2BMolodovsky%2BLoeb%2BAward |title='Playboy', 'Monitor' Honored |last=Devaney |first=James J. |date=May 22, 1968 |work=[[Hartford Courant]] |access-date=March 20, 2019 |issue=143 |edition=final |volume=CXXXI |page=36 |via=[[Newspapers.com]]}}</ref> From 1968 to 1978, he and [[Paul Samuelson]] participated in the Economics Cassette Series, a biweekly subscription series where the economist would discuss the days' issues for about a half-hour at a time.<ref>[https://web.archive.org/web/20130620070153/http://hoohila.stanford.edu/friedman/ecs.php Rose and Milton Friedman]. stanford.edu</ref><ref>[http://library.duke.edu/rubenstein/findingaids/samuelsonpaul/ Inventory of the Paul A. Samuelson Papers, 1933–2010 and undated | Finding Aids | Rubenstein Library] {{Webarchive|url=https://web.archive.org/web/20130112220957/http://library.duke.edu/rubenstein/findingaids/samuelsonpaul/ |date=January 12, 2013 }}. Library.duke.edu. Retrieved on September 6, 2017.</ref> ==== ''A Theory of the Consumption Function'' ==== One of Milton Friedman's most popular works, ''A Theory of the Consumption Function'', challenged traditional Keynesian viewpoints about the household. This work was originally published in 1957 by [[Princeton University Press]], and it reanalysed the relationship displayed "between aggregate consumption or aggregate savings and aggregate income." <ref>{{cite book|url=https://books.google.com/books?id=7_1ZDwAAQBAJ&q=a+theory+of+the+consumption+function+friedman&pg=PP1|title=A Theory of the Consumption Function|publisher=[[Princeton University Press]]|year=2018|author1=Milton Friedman|isbn=9780691188485}}</ref> [[Keynes]] believed that people would modify their household consumption expenditures to relate to their existing income levels. Friedman's research introduced the term "permanent income" to the world, which was the average of a household's expected income over several years, and he also developed the [[permanent income hypothesis]]. Milton Friedman's research changed how economists interpreted the consumption function, and his work pushed the idea that current income was not the only factor that affected people's adjustment household consumption expenditures. Instead, expected income levels also affected how households would change their consumption expenditures. Friedman's contributions strongly influenced research on consumer behavior, and he further defined how to predict [[consumption smoothing]], which contradicts Keynes' [[marginal propensity to consume]]. Although this work presented many controversial points of view that differed from existing viewpoints established by Keynes, ''A Theory of the Consumption Function'' helped Friedman gain respect in the field of economics. ==== ''Capitalism and Freedom'' ==== His ''[[Capitalism and Freedom]]'', inspired by a series of lectures he gave at [[Wabash College]],<ref>{{Cite web|last=Schnetzer|first=Amanda|title=Reading Friedman in 2016: Capitalism, Freedom, and the China Challenge|url=http://www.bushcenter.org/catalyst/freedom/schnetzer-friedman-in-2016.html|access-date=2020-10-29|website=George W. Bush Institute|language=en}}</ref> brought him national and international attention outside academia. It was published in 1962 by the [[University of Chicago Press]] and consists of essays that used non-mathematical economic models to explore issues of public policy.<ref>{{harvnb|Ebenstein|2007|pp=135–46}}</ref> It sold over 400,000 copies in the first eighteen years<ref>1982 edition preface of ''Capitalism and freedom'', p. xi of the 2002 edition</ref> and more than half a million since 1962. It has been translated into eighteen languages. Friedman talks about the need to move to a classically liberal society, that free markets would help nations and individuals in the long-run and fix the efficiency problems currently faced by the United States and other major countries of the 1950s and 1960s. He goes through the chapters specifying a specific issue in each respective chapter from the role of government and money supply to social welfare programs to a special chapter on occupational licensure. Friedman concludes ''Capitalism and Freedom'' with his "classical liberal" (more accurately, [[Libertarianism|libertarian]]) stance, that government should stay out of matters that do not need and should only involve itself when absolutely necessary for the survival of its people and the country. He recounts how the best of a country's abilities come from its free markets while its failures come from government intervention.<ref name=":0">{{cite book|url=https://books.google.com/books?id=zHSv4OyuY1EC&pg=PA182|title=Capitalism and Freedom: Fortieth Anniversary Edition|publisher=U. of Chicago Press|year=1962|isbn=978-0226264189|author1=Milton Friedman|author2=Rose D. Friedman}}</ref> == Personal life == === Retirement === In 1977, at the age of 65, Friedman retired from the University of Chicago after teaching there for 30 years. He and his wife moved to San Francisco, where he became a visiting scholar at the Federal Reserve Bank of San Francisco. From 1977 on, he was affiliated with the [[Hoover Institution]] at [[Stanford University]]. During the same year, Friedman was approached by the Free To Choose Network and asked to create a television program presenting his economic and social philosophy. The Friedmans worked on this project for the next three years, and during 1980, the ten-part series, titled ''[[Free to Choose]]'', was broadcast by the [[Public Broadcasting Service]] (PBS). The companion book to the series (co-authored by Milton and his wife, [[Rose Friedman]]), also titled ''Free To Choose'', was the bestselling nonfiction book of 1980 and has since been translated into 14 languages. Friedman served as an unofficial adviser to Ronald Reagan during his 1980 presidential campaign, and then served on the President's Economic Policy Advisory Board for the rest of the [[Reagan Administration]]. [[Alan O. Ebenstein|Ebenstein]] says Friedman was "the 'guru' of the Reagan administration."<ref name="Ebenstein 2007 208"/> In 1988 he received the [[National Medal of Science]] and Reagan honored him with the [[Presidential Medal of Freedom]]. Friedman is known now as one of the most influential economists of the 20th century.<ref>{{cite news|title=Milton Friedman: An enduring legacy|url=https://www.economist.com/daily/news/displaystory.cfm?story_id=8190872|work=The Economist|date=November 17, 2006|access-date=February 20, 2008|archive-url=https://web.archive.org/web/20080217001346/http://www.economist.com/daily/news/displaystory.cfm?story_id=8190872|archive-date=February 17, 2008|url-status=live|df=mdy-all}}</ref><ref>{{cite web|author=Patricia Sullivan|date=November 17, 2006|title=Economist Touted Laissez-Faire Policy|url=https://www.washingtonpost.com/wp-dyn/content/article/2006/11/16/AR2006111600592.html|website=The Washington Post|access-date=February 20, 2008|archive-url=https://web.archive.org/web/20080726012032/http://www.washingtonpost.com/wp-dyn/content/article/2006/11/16/AR2006111600592.html|archive-date=July 26, 2008|url-status=live|df=mdy-all}}</ref> Throughout the 1980s and 1990s, Friedman continued to write [[op-ed|editorials]] and appear on television. He made several visits to Eastern Europe and to China, where he also advised governments. He was also for many years a Trustee of the [[Philadelphia Society]].<ref>[http://www.cato.org/special/friedman/friedman/index.html Milton Friedman – Biography | Cato Institute] {{Webarchive|url=https://web.archive.org/web/20120502110026/http://www.cato.org/special/friedman/friedman/index.html |date=May 2, 2012 }}. Cato.org (November 16, 2006). Retrieved on 2017-09-06.</ref><ref>{{Cite web|url=http://phillysoc.org/trustees.htm|archive-url=https://web.archive.org/web/20130827033031/http://phillysoc.org/trustees.htm|url-status=dead|title=Trustees|archive-date=August 27, 2013}}</ref><ref>[https://web.archive.org/web/20130827031003/http://www.phillysoc.org/fried.htm Milton Friedman]. phillysoc.org</ref> === Later life === According to a 2007 article in ''[[Commentary (magazine)|Commentary]]'' magazine, his "parents were moderately observant [[Jews]], but Friedman, after an intense burst of childhood piety, rejected religion altogether."<ref>Lanny Ebenstein (May 2007), [https://archive.today/20121217160558/https://www.commentarymagazine.com/viewarticle.cfm/milton-friedman-by-lanny-ebenstein-10876?page=all Milton Friedman], ''[[Commentary (magazine)|Commentary]]'', p. 286.</ref> He described himself as an [[Agnosticism|agnostic]].<ref>{{cite news|author=David Asman|title='Your World' Interview With Economist Milton Friedman|url=http://www.foxnews.com/story/0,2933,230045,00.html|access-date=August 2, 2011|newspaper=Fox News|date=November 16, 2006|archive-url=https://web.archive.org/web/20110206063810/http://www.foxnews.com/story/0,2933,230045,00.html|archive-date=February 6, 2011|url-status=dead|df=mdy-all}}</ref> Friedman wrote extensively of his life and experiences, especially in 1998 in his memoirs with his wife, [[Rose Friedman|Rose]], titled ''Two Lucky People''. In this book, Rose Friedman describes how she and Milton Friedman raised their two children, Janet and David, with a Christmas Tree in the home. "Orthodox Jews of course, do not celebrate Christmas. However, just as, when I was a child, my mother had permitted me to have a Christmas tree one year when my friend had one, she not only tolerated our having a Christmas tree, she even strung popcorn to hang on it."<ref>{{cite book |last1=Friedman |first1=Milton |last2=Friedman |first2=Rose |title=Two Lucky People |date=1999 |publisher=The University of Chicago Press |location=Chicago & London |isbn=0-226-26415-7 |page=129 |edition=Paperback}}</ref> === Death === Friedman died of [[heart failure]] at the age of 94 years in San Francisco on November 16, 2006.<ref name="reuters_20061116">{{cite news|author=Jim Christie|date=November 16, 2006|title=Free market economist Milton Friedman dead at 94|url=https://www.reuters.com/article/ousiv/idUSWBT00621920061116|work=Reuters|access-date=February 20, 2008|archive-url=https://web.archive.org/web/20080410163503/http://www.reuters.com/article/ousiv/idUSWBT00621920061116|archive-date=April 10, 2008|url-status=live|df=mdy-all}}</ref> He was still a working economist performing original economic research; his last column was published in ''[[The Wall Street Journal]]'' the day after his death.<ref name="Milton Friedman Say?">{{cite magazine |url=https://www.forbes.com/2008/10/16/milton-friedman-meltdown-oped-cx_pr_1017robinson.html |title=What Would Milton Friedman Say? |author=Peter Robinson |magazine=forbes.com |date=October 17, 2008 |access-date=December 13, 2014 |archive-url=https://web.archive.org/web/20141027125449/http://www.forbes.com/2008/10/16/milton-friedman-meltdown-oped-cx_pr_1017robinson.html |archive-date=October 27, 2014 |url-status=live |df=mdy-all}}</ref> He was survived by his wife (who died on August 18, 2009) and their two children, [[David D. Friedman|David]], known for the [[Anarcho-capitalism|anarcho-capitalist]] book ''[[The Machinery of Freedom]]'', and [[Contract bridge|bridge]] expert [[Jan Martel (bridge)|Jan Martel]]. == Scholarly contributions == {{see also|Friedman–Savage utility function|Friedman rule|Friedman's k-percent rule|Friedman test|Great Contraction}} === Economics === {{Chicago school sidebar}} {{Macroeconomics sidebar}} Friedman was best known for reviving interest in the money supply as a determinant of the nominal value of output, that is, the [[quantity theory of money]]. [[Monetarism]] is the set of views associated with modern quantity theory. Its origins can be traced back to the 16th-century [[School of Salamanca#Money, value, and price|School of Salamanca]] or even further; however, Friedman's contribution is largely responsible for its modern popularization. He co-authored, with Anna Schwartz, ''[[A Monetary History of the United States, 1867–1960]]'' (1963), which was an examination of the role of the money supply and [[economy of the United States|economic activity]] in the U.S. history. A striking conclusion of their research regarded the way in which money supply fluctuations contribute to economic fluctuations. Several regression studies with David Meiselman during the 1960s suggested the primacy of the money supply over investment and government spending in determining consumption and output. These challenged a prevailing, but largely untested, view on their relative importance. Friedman's empirical research and some theory supported the conclusion that the short-run effect of a change of the money supply was primarily on output but that the longer-run effect was primarily on the price level. Friedman was the main proponent of the [[monetarism|monetarist]] school of economics. He maintained that there is a close and stable association between [[inflation]] and the money supply, mainly that inflation could be avoided with proper regulation of the [[monetary base]]'s growth rate. He famously used the analogy of "[[Helicopter money|dropping money out of a helicopter]]",<ref>{{cite book |title=Optimum Quantity of Money |url=https://archive.org/details/optimumquantityo0000frie |url-access=registration |publisher=Aldine Publishing Company |year=1969 |page=[https://archive.org/details/optimumquantityo0000frie/page/4 4]}}</ref> in order to avoid dealing with money injection mechanisms and other factors that would overcomplicate his models. Friedman's arguments were designed to counter the popular concept of [[cost-push inflation]], that the increased [[Price Level|general price level]] at the time was the result of increases in the price of oil, or increases in wages; as he wrote: {{quote|Inflation is always and everywhere a monetary phenomenon.|Milton Friedman, 1963.<ref>Friedman, Milton. ''Inflation: Causes and Consequences''. New York: Asia Publishing House.</ref>}} Friedman rejected the use of [[fiscal policy]] as a tool of [[demand]] management; and he held that the government's role in the guidance of the economy should be restricted severely. Friedman wrote extensively on the [[Great Depression]], and he termed the 1929–1933 period the [[Great Contraction]]. He argued that the Depression had been caused by an ordinary financial [[shock (economics)|shock]] whose duration and seriousness were greatly increased by the subsequent contraction of the money supply caused by the misguided policies of the directors of the Federal Reserve. {{quote|The Fed was largely responsible for converting what might have been a garden-variety recession, although perhaps a fairly severe one, into a major catastrophe. Instead of using its powers to offset the depression, it presided over a decline in the quantity of money by one-third from 1929 to 1933&nbsp;... Far from the depression being a failure of the free-enterprise system, it was a tragic failure of government.|Milton Friedman|Two Lucky People, 233<ref>{{cite web |url=http://www.themoneymasters.com/the-money-masters/milton-friedman-end-the-fed/ |title=Milton Friedman: End The Fed |publisher=Themoneymasters.com |access-date=April 22, 2014 |archive-url=https://web.archive.org/web/20140615065824/http://www.themoneymasters.com/the-money-masters/milton-friedman-end-the-fed |archive-date=June 15, 2014 |url-status=live |df=mdy-all }}</ref>}} This theory was put forth in ''[[A Monetary History of the United States]]'', and the chapter on the Great Depression was then published as a stand-alone book entitled ''The Great Contraction, 1929–1933''. Both books are still in print from Princeton University Press, and some editions include as an appendix a speech at a [[University of Chicago]] event honoring Friedman<ref name=FriedmanSchwartz/> in which [[Ben Bernanke]] made this statement: <blockquote>Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression, you're right. We did it. We're very sorry. But thanks to you, we won't do it again.<ref>FRB Speech: [http://www.federalreserve.gov/boarddocs/speeches/2002/20021108/default.htm FederalReserve.gov: Remarks by Governor Ben S. Bernanke, At the Conference to Honor Milton Friedman, University of Chicago, Nov. 8, 2002]</ref><ref name=FriedmanSchwartz>{{cite book|author1=Milton Friedman|author2=Anna Jacobson Schwartz|author3=National Bureau of Economic Research|title=The Great Contraction, 1929–1933|chapter-url= https://books.google.com/books?id=-lCArZfazBkC&q=%22Regarding%20the%20Great%20Depression%20You're%20right%20We%20did%20it%22|year=2008|publisher=Princeton University Press|isbn=978-0-691-13794-0 |page=247|chapter=B. Bernanke's speech to M. Friedman}}</ref></blockquote> Friedman also argued for the cessation of government intervention in [[Foreign exchange market|currency markets]], thereby spawning an enormous literature on the subject, as well as promoting the practice of freely [[floating exchange rate]]s. His close friend [[George Stigler]] explained, "As is customary in science, he did not win a full victory, in part because research was directed along different lines by the [[Rational expectations|theory of rational expectations]], a newer approach developed by [[Robert Lucas Jr.|Robert Lucas]], also at the University of Chicago."<ref>{{cite book |title=Memoirs of an Unregulated Economist |author=Milton Friedman |publisher=Aldine Publishing Company |year=1969 |page=4}}</ref> The relationship between Friedman and Lucas, or [[new classical macroeconomics]] as a whole, was highly complex. The Friedmanian [[Phillips curve]] was an interesting starting point for Lucas, but he soon realized that the solution provided by Friedman was not quite satisfactory. Lucas elaborated a new approach in which [[rational expectations]] were presumed instead of the Friedmanian [[adaptive expectations]]. Due to this reformulation, the story in which the theory of the new classical Phillips curve was embedded radically changed. This modification, however, had a significant effect on Friedman's own approach, so, as a result, the theory of the Friedmanian Phillips curve also changed.<ref>{{cite book |author=Peter Galbács |title=The Theory of New Classical Macroeconomics. A Positive Critique |location=Heidelberg/New York/Dordrecht/London |publisher=Springer |year=2015 |isbn= 978-3-319-17578-2 |doi=10.1007/978-3-319-17578-2 |series=Contributions to Economics }}</ref> Moreover, new classical [[Neil Wallace]], who was a graduate student at the [[University of Chicago]] between 1960 and 1963, regarded Friedman's theoretical courses as a mess.<ref>{{cite book |author1=Kevin Hoover |author2=Warren Young |title=Rational Expectations – Retrospect and Prospect |location=Durham |publisher=Center for the History of Political Economy at Duke University |year=2011 |url=http://www.dklevine.com/archive/refs4786969000000000227.pdf |access-date=December 15, 2015 |archive-url=https://web.archive.org/web/20160304193421/http://www.dklevine.com/archive/refs4786969000000000227.pdf |archive-date=March 4, 2016 |url-status=live |df=mdy-all }}</ref> This evaluation clearly indicates the broken relationship between Friedmanian [[monetarism]] and new classical macroeconomics. Friedman was also known for his work on the consumption function, the [[permanent income hypothesis]] (1957), which Friedman himself referred to as his best scientific work.<ref>{{cite episode |title=Charlie Rose Show |airdate=December 26, 2005 |series=Nobel Laureates}}</ref> This work contended that rational consumers would spend a proportional amount of what they perceived to be their permanent income. Windfall gains would mostly be saved. Tax reductions likewise, as rational consumers would predict that taxes would have to increase later to balance public finances. Other important contributions include his critique of the [[Phillips curve]] and the concept of the [[natural rate of unemployment]] (1968). This critique associated his name, together with that of [[Edmund Phelps]], with the insight that a government that brings about greater inflation cannot permanently reduce unemployment by doing so. Unemployment may be temporarily lower, if the inflation is a surprise, but in the long run unemployment will be determined by the frictions and imperfections of the labor market. Friedman's essay "[[Essays in Positive Economics#The Methodology of Positive Economics|The Methodology of Positive Economics]]" (1953) provided the [[Epistemology|epistemological]] pattern for his own subsequent research and to a degree that of the Chicago School. There he argued that economics as ''science'' should be free of value judgments for it to be objective. Moreover, a useful economic theory should be judged not by its descriptive realism but by its simplicity and fruitfulness as an engine of prediction. That is, students should measure the accuracy of its predictions, rather than the 'soundness of its assumptions'. His argument was part of an ongoing debate among such statisticians as [[Jerzy Neyman]], [[Leonard Savage]], and [[Ronald Fisher]].<ref>David Teira, "Milton Friedman, the Statistical Methodologist," ''History of Political Economy'' (2007) 39#3 pp. 511–27</ref> However, despite being an advocate of the free market, Milton Friedman believed that the government had two crucial roles. In an interview with Phil Donahue, Milton Friedman argued that "the two basic functions of a government are to protect the nation against foreign enemy, and to protect citizens against its fellows.”.<ref>{{Cite web|title=Friedman's on the Military Industrial Complex - YouTube|url=https://www.youtube.com/watch?v=iXMJHCXXD-c|access-date=2021-01-08|website=www.youtube.com}}</ref> He also, admitted that although privatisation of national defence could reduce the overall cost, he has not yet thought of a way to make this privatisation possible. === Statistics === One of his most famous contributions to statistics is [[sequential analysis|sequential sampling]]. Friedman did statistical work at the Division of War Research at Columbia, where he and his colleagues came up with the technique. It became, in the words of ''[[The New Palgrave Dictionary of Economics]]'', "the standard analysis of quality control inspection". The dictionary adds, "Like many of Friedman's contributions, in retrospect it seems remarkably simple and obvious to apply basic economic ideas to quality control; that, however, is a measure of his genius."<ref name="ReasonOnFriedman">[http://www.reason.com/news/show/118494.html The Life and Times of Milton Friedman – Remembering the 20th century's most influential libertarian] {{Webarchive|url=https://web.archive.org/web/20070224104917/http://www.reason.com/news/show/118494.html |date=February 24, 2007 }}. Reason.com. Retrieved on September 6, 2017.</ref> == Public policy positions == {{economic liberalism sidebar}} {{libertarianism in the United States sidebar}} === Federal Reserve and monetary policy === Although Friedman concluded the government does have a role in the monetary system<ref>Friedman, M., & Schwartz, A.J. (1986). Has government any role in money?. ''Journal of Monetary Economics'', ''17''(1), 37–62.</ref> he was critical of the Federal Reserve due to its poor performance and felt it should be abolished.<ref>[https://www.youtube.com/watch?v=m6fkdagNrjI Milton Friedman – Abolish The Fed] {{Webarchive|url=https://web.archive.org/web/20150611181527/https://www.youtube.com/watch?v=m6fkdagNrjI |date=June 11, 2015 }}. Youtube: "There in no institution in the US that has such a high public standing and such a poor record of performance" "It's done more harm than good"</ref><ref>[https://www.youtube.com/watch?v=m6fkdagNrjI Milton Friedman – Abolish The Fed] {{Webarchive|url=https://web.archive.org/web/20150611181527/https://www.youtube.com/watch?v=m6fkdagNrjI |date=June 11, 2015 }}. Youtube: "I have long been in favor of abolishing it."</ref><ref>{{YouTube|CMY0tAHHF_M|"My first preference would be to abolish the Federal Reserve"}}</ref> He was opposed to Federal Reserve policies, even during the so-called '[[Paul Volcker|Volcker shock]]' that was labeled 'monetarist'.<ref>Reichart Alexandre & Abdelkader Slifi (2016). ''The Influence of Monetarism on Federal Reserve Policy during the 1980s.'' Cahiers d'économie Politique/Papers in Political Economy, (1), [https://www.cairn.info/revue-cahiers-d-economie-politique-2016-1-page-107.htm pp. 107–50] {{Webarchive|url=https://web.archive.org/web/20161203124007/https://www.cairn.info/revue-cahiers-d-economie-politique-2016-1-page-107.htm |date=December 3, 2016 }}</ref> Friedman believed that the Federal Reserve System should ultimately be replaced with a [[computer program]].<ref>{{cite news|url=https://www.hoover.org/research/mr-market|title=Mr. Market|date=30 January 1999|work=Hoover Institution|access-date=2018-09-22|language=en|archive-url=https://web.archive.org/web/20180923005629/https://www.hoover.org/research/mr-market|archive-date=September 23, 2018|url-status=live|df=mdy-all}}</ref> He favored a system that would automatically buy and sell [[Security (finance)|securities]] in response to changes in the money supply.<ref>Friedman, M. (1996). The Counter-Revolution in Monetary Theory. In ''Explorations in Economic Liberalism'' (pp. 3–21). Palgrave Macmillan, London. "It is precisely this leeway, this looseness in the relation, this lack of a mechanical one-to-one correspondence between changes in money and in income that is the primary reason why I have long favored for the USA a quasi-automatic monetary policy under which the quantity of money would grow at a steady rate of 4 or 5 per cent per year, month-in, month-out."</ref> The proposal to constantly grow the [[money supply]] at a certain predetermined amount every year has become known as [[Friedman's k-percent rule]].<ref name="Salter, A. W. 2014">Salter, A.W. (2014). An Introduction to Monetary Policy Rules. ''Mercatus Workıng Paper. George Mason University''.</ref> There is debate about the effectiveness of a theoretical money supply targeting regime.<ref>Marimon, R., & Sunder, S. (1995, December). Does a constant money growth rule help stabilize inflation?: experimental evidence. In ''Carnegie-Rochester Conference Series on Public Policy'' (Vol. 43, pp. 111–56). North-Holland.</ref><ref>Evans, G.W., & Honkapohja, S. (2003). Friedman's money supply rule vs. optimal interest rate policy. ''Scottish Journal of Political Economy'', ''50''(5), 550–66.</ref> The Fed's inability to meet its money supply targets from 1978–1982 has led some to conclude it is not a feasible alternative to more conventional inflation and interest rate targeting.<ref name=":3">{{cite web|url=http://noahpinionblog.blogspot.com/2016/07/how-are-milton-friedmans-ideas-holding.html|title=Noahpinion: How are Milton Friedman's ideas holding up?|last=Smith|first=Noah|date=2016-07-30|website=Noahpinion|access-date=2018-09-22|archive-url=https://web.archive.org/web/20180923005528/http://noahpinionblog.blogspot.com/2016/07/how-are-milton-friedmans-ideas-holding.html|archive-date=September 23, 2018|url-status=live|df=mdy-all}}</ref> Towards the end of his life, Friedman expressed doubt about the validity of targeting the quantity of money.<ref>Simon London, "Lunch with the FT – Milton Friedman," Financial Times (7 June 2003) "The use of quantity of money as a target has not been a success ... I'm not sure I would as of today push it as hard as I once did."</ref> Idealistically, Friedman actually favored the principles of the 1930s [[Chicago plan]], which would have ended fractional reserve banking and, thus, private money creation. It would force banks to have 100% reserves backing deposits, and instead place money creation powers solely in the hands of the US Government. This would make targeting money growth more possible, as [[endogenous money]] created by fractional reserve lending would no longer be a major issue.<ref name="Salter, A. W. 2014"/> === Exchange rates === Friedman was a strong advocate for floating exchange rates throughout the entire [[Bretton Woods system|Bretton-Woods]] period. He argued that a flexible exchange rate would make external adjustment possible and allow countries to avoid [[balance of payments]] crises. He saw fixed exchange rates as an undesirable form of government intervention. The case was articulated in an influential 1953 paper, "The Case for Flexible Exchange Rates", at a time when most commentators regarded the possibility of floating exchange rates as a fantasy.<ref>{{cite book|author=William Ruger |title=Milton Friedman |url=https://books.google.com/books?id=infHAgAAQBAJ&pg=PT72 |date=2013 |publisher=Bloomsbury Publishing |isbn=978-1-62356-617-3 |pages=72–}}</ref><ref>Atish R. Ghosh, Mahvash S. Qureshi, and Charalambos G. Tsangarides (2014) [http://www.imf.org/external/pubs/ft/wp/2014/wp14146.pdf Friedman Redux: External Adjustment and Exchange Rate Flexibility] {{Webarchive|url=https://web.archive.org/web/20150413034103/http://www.imf.org/external/pubs/ft/wp/2014/wp14146.pdf |date=April 13, 2015 }}. [[International Monetary Fund]]</ref> === School choice === In his 1955 article "The Role of Government in Education"<ref>{{cite book | author = Milton Friedman | editor = Robert A. Solo | title = "The Role of Government in Education," as printed in the book Economics and the Public Interest | publisher = Rutgers University Press | year = 1955 | pages = 123–44 | url = http://la.utexas.edu/users/hcleaver/330T/350kPEEFriedmanRoleOfGovttable.pdf | access-date = February 12, 2017 | archive-url = https://web.archive.org/web/20170510103949/http://la.utexas.edu/users/hcleaver/330T/350kPEEFriedmanRoleOfGovttable.pdf | archive-date = May 10, 2017 | url-status = live | df = mdy-all }}</ref> Friedman proposed supplementing publicly operated schools with privately run but publicly funded schools through a system of [[school voucher]]s.<ref>{{cite journal |jstor=795126 |title=Review: Education Vouchers |journal=The Yale Law Journal |volume=80 |issue=2 |date=December 1970 |pages=451–61 |author=Leonard Ross and Richard Zeckhauser |doi=10.2307/795126 }}</ref> Reforms similar to those proposed in the article were implemented in, for example, Chile in 1981 and [[Sweden]] in 1992.<ref>{{cite journal |jstor=1189163 |title=National Voucher Plans in Chile and Sweden: Did Privatization Reforms Make for Better Education? |author=Martin Carnoy |journal=Comparative Education Review |volume=42 |issue=3 |date=August 1998 |pages=309–37 |doi=10.1086/447510 |s2cid=145007866 }}</ref> In 1996, Friedman, together with his wife, founded the Friedman Foundation for Educational Choice to advocate [[school choice]] and vouchers. In 2016, the Friedman Foundation changed its name to [[EdChoice]] to honor the Friedmans' desire to have the educational choice movement live on without their names attached to it after their deaths.<ref name=sullivan/> === Conscription === While [[Walter Oi]] is credited with establishing the economic basis for a [[volunteer military]], Friedman was a proponent, stating that the [[Conscription|draft]] was "inconsistent with a free society."<ref>{{Cite AV media | people = Milton Friedman | title = The War on Drugs | publisher = America's Drug Forum | year = 1991 | url = http://yes390.org/friedmanvideos.html | access-date = August 4, 2009 | archive-url = https://web.archive.org/web/20091029053319/http://yes390.org/friedmanvideos.html | archive-date = October 29, 2009 | url-status = live | df = mdy-all }}</ref><ref>{{cite book |author= Bernard Rostker |title= I Want You!: The Evolution of the All-Volunteer Force |publisher= Rand Corporation |year= 2006 |isbn= 978-0-8330-3895-1 |page= 4 }}</ref> In ''[[Capitalism and Freedom]]'', he argued that conscription is inequitable and arbitrary, preventing young men from shaping their lives as they see fit.<ref name="draft">{{cite book |title=Capitalism and Freedom|page=36|author=Milton Friedman|publisher=University Of Chicago Press|date=2002}}</ref> During the Nixon administration he headed the committee to research a conversion to paid/volunteer armed force. He would later state that his role in eliminating the [[conscription in the United States]] was his proudest accomplishment.<ref name="bestofbothworlds">{{Cite news | author = Brian Doherty | author-link = Brian Doherty (journalist) | title = Best of Both Worlds | newspaper = [[Reason (magazine)|Reason Magazine]] | date = June 1, 1995 | url = http://www.reason.com/news/show/29691.html | access-date = October 24, 2009 | archive-url = https://web.archive.org/web/20141011005521/http://reason.com/archives/1995/06/01/best-of-both-worlds | archive-date = October 11, 2014 | url-status = live | df = mdy-all }}</ref> Friedman did, however, believe that the introduction of a system of universal military training as a reserve in cases of war-time could be justified.<ref name="draft" /> But opposed its implementation in the United States, describing it as a “monstrosity”.<ref>{{cite web |title="National Service, the Draft and Volunteers" A debate featuring Milton Friedman In Registration and the Draft: Proceedings of the Hoover-Rochester Conference on the All- Volunteer Force |url=https://miltonfriedman.hoover.org/friedman_images/Collections/2016c21/Stanford_01_01_1982.pdf |website=Hoover Institution}}</ref> === Foreign policy === Biographer [[Alan O. Ebenstein|Lanny Ebenstein]] noted a drift over time in Friedman's views from an interventionist to a more cautious foreign policy.<ref name="foreign policy">{{harvnb|Ebenstein|2007|pp=231–32}}</ref> He supported US involvement in the Second World War and initially supported a hard-line against Communism, but moderated over time.<ref name="foreign policy" /> However, Friedman did state in a 1995 interview that he was an anti-interventionist.<ref>[https://www.antiwar.com/blog/2006/11/16/milton-friedman-rip/ Milton Friedman, RIP – Antiwar.com Blog] {{Webarchive|url=https://web.archive.org/web/20160922155018/http://www.antiwar.com/blog/2006/11/16/milton-friedman-rip/ |date=September 22, 2016 }}. Antiwar.com (November 16, 2006). Retrieved on 2017-09-06.</ref> He opposed the [[Gulf War]] and the [[Iraq War]].<ref name="foreign policy" /> In a spring 2006 interview, Friedman said that the US's stature in the world had been eroded by the Iraq War, but that it might be improved if Iraq were to become a peaceful and independent country.<ref>{{harvnb|Ebenstein|2007|p=243}}</ref> === Libertarianism and the Republican Party === [[File:President Ronald Reagan and Nancy Reagan in The East Room Congratulating Milton Friedman Receiving The Presidential Medal of Freedom.jpg|alt=Ronald Reagan shaking hands with Milton Friedman giving him the The Presidential Medal of Freedom|thumb|left|250px|Friedman receiving the [[Presidential Medal of Freedom]] from [[Ronald Reagan]] in 1988]] [[File:Nixon Contact Sheet WHPO-6503 (cropped).jpg|thumb|right|Friedman with [[Richard Nixon]] and [[George Shultz]] in 1971]] Friedman was an economic advisor and speech writer in [[Barry Goldwater]]'s presidential campaign in 1964. He was an advisor to California governor Ronald Reagan, and was active in Reagan's presidential campaigns.<ref>{{cite book|author=Robert Van Horn, Philip Mirowski, and Thomas A. Stapleford|title=Building Chicago Economics: New Perspectives on the History of America's Most Powerful Economics Program|url=https://books.google.com/books?id=VDf0hyh11GIC&pg=PA49|year=2011|publisher=Cambridge UP|pages=49–50|isbn=9781139501712}}</ref> He served as a member of President Reagan's [[Economic Policy Advisory Board]] starting in 1981. In 1988, he received the [[Presidential Medal of Freedom]] and the [[National Medal of Science]]. He said that he was a libertarian philosophically, but a member of the U.S. [[Republican Party (United States)|Republican Party]] for the sake of "expediency" ("I am a libertarian with a small 'l' and a Republican with a capital 'R.' And I am a Republican with a capital 'R' on grounds of expediency, not on principle.") But, he said, "I think the term [[classical liberalism|classical liberal]] is also equally applicable. I don't really care very much what I'm called. I'm much more interested in having people thinking about the ideas, rather than the person."<ref>{{cite web|url=http://queensjournal.ca/article.php?point=vol129/issue37/features/lead1 |title=''Friedman and Freedom'' |publisher=Queen's Journal |access-date=February 20, 2008 |archive-url=https://web.archive.org/web/20060811115145/http://queensjournal.ca/article.php?point=vol129%2Fissue37%2Ffeatures%2Flead1 |archive-date=August 11, 2006 |url-status=dead }}, Interview with Peter Jaworski. ''The Journal'', Queen's University, March 15, 2002 – Issue 37, Volume 129</ref> === Public goods and monopoly === Friedman was supportive of the state provision of some [[Public good (economics)|public good]]s that private businesses are not considered as being able to provide. However, he argued that many of the services performed by government could be performed better by the private sector. Above all, if some public goods are provided by the state, he believed that they should not be a [[legal monopoly]] where private competition is prohibited; for example, he wrote: {{quote|There is no way to justify our present public monopoly of the post office. It may be argued that the carrying of mail is a [[technical monopoly]] and that a government monopoly is the least of evils. Along these lines, one could perhaps justify a government post office, but not the present law, which makes it illegal for anybody else to carry the mail. If the delivery of mail is a technical monopoly, no one else will be able to succeed in competition with the government. If it is not, there is no reason why the government should be engaged in it. The only way to find out is to leave other people free to enter.|Milton Friedman|Friedman, Milton & Rose D. ''[[Capitalism and Freedom]]'', University of Chicago Press, 1982, p. 29}} === Social security, welfare programs and negative income tax === In 1962, Friedman criticized [[Social Security (United States)|Social Security]] in his book ''[[Capitalism and Freedom]]'', arguing that it had created [[welfare dependency]].<ref>{{Citation|first=Milton|last=Friedman|title=Capitalism and Freedom|publisher=University of Chicago Press|place=Chicago|edition=40th anniversary|year=2002|pages=182–89|orig-year=1962|isbn=978-0-226-26421-9|title-link=Capitalism and Freedom}}</ref> However, in the penultimate chapter of the same book, Friedman argued that while [[Capitalism#Economic growth|capitalism had greatly reduced the extent of poverty in absolute terms]], "poverty is in part a [[Poverty threshold|relative matter]], [and] even in [wealthy Western] countries, there are clearly many people living under conditions that the rest of us label as poverty." Friedman also noted that while private charity could be one recourse for alleviating poverty and cited late 19th century Britain and the United States as exemplary periods of extensive private charity and eleemosynary activity, he made the following point: {{quote|It can be argued that private charity is insufficient because the benefits from it accrue to people other than those who make the gifts— ... a [[Externality|neighborhood effect]]. I am distressed by the sight of poverty; I am benefited by its alleviation; but I am benefited equally whether I or someone else pays for its alleviation; the benefits of other people's charity therefore partly accrue to me. To put it differently, [[Free-rider problem|we might all of us be willing to contribute to the relief of poverty, ''provided'' everyone else did. We might not be willing to contribute the same amount without such assurance.]] In small communities, public pressure can suffice to realize the proviso even with private charity. In the large impersonal communities that are increasingly coming to dominate our society, it is much more difficult for it to do so. Suppose one accepts, as I do, this line of reasoning as justifying [[Social safety net|governmental action to alleviate poverty]]; to set, as it were, [[Basic income|a floor under the standard of life of every person in the community]]. [While there are questions of how much should be spent and how, the] arrangement that recommends itself on purely mechanical grounds is a [[negative income tax]]. ... The advantages of this arrangement are clear. It is directed specifically at the problem of poverty. It gives help in the form most useful to the individual, namely, cash. It is general and could be substituted for the host of special measures now in effect. It makes explicit the cost borne by society. It operates outside the market. Like any other measures to alleviate poverty, it reduces the incentives of those helped to help themselves, but it does not eliminate that incentive entirely, as a system of supplementing incomes up to some fixed minimum would. An extra dollar earned always means more money available for expenditure.}} Friedman argued further that other advantages of the negative income tax were that it could fit directly into the tax system, would be less costly, and would reduce the administrative burden of implementing a [[social safety net]].<ref>{{Citation|first=Milton|last=Friedman|title=Capitalism and Freedom|publisher=University of Chicago Press|place=Chicago|edition=40th anniversary|year=2002|pages=190–95|orig-year=1962|isbn=978-0-226-26421-9|title-link=Capitalism and Freedom}}</ref> Friedman reiterated these arguments 18 years later in ''[[Free to Choose]]'', with the additional proviso that such a reform would only be satisfactory if it replaced the current system of welfare programs rather than augment it.<ref name=":2">{{citation |first1=Milton |last1=Friedman |first2=Rose |last2=Friedman |author2-link=Rose Friedman |title=Free to Choose: A Personal Statement |publisher=Harcourt |place=New York |edition=1st Harvest|year=1990|pages=119–24|orig-year=1980|isbn=978-0-156-33460-0|title-link=Free to Choose}}</ref> According to economist [[Robert H. Frank]], writing in ''[[The New York Times]]'', Friedman's views in this regard were grounded in a belief that while "market forces&nbsp;... accomplish wonderful things", they "cannot ensure a distribution of income that enables all citizens to meet basic economic needs".<ref>{{cite news|last=Frank|first=Robert H.|author-link=Robert H. Frank|title=The Other Milton Friedman: A Conservative With a Social Welfare Program|work=The New York Times|publisher=The New York Times Company|url=https://www.nytimes.com/2006/11/23/business/23scene.html?_r=2|date=November 23, 2006|access-date=February 22, 2017|archive-url=https://web.archive.org/web/20170701055236/http://www.nytimes.com/2006/11/23/business/23scene.html?_r=2|archive-date=July 1, 2017|url-status=live|df=mdy-all}}</ref> === Drug policy === Friedman also supported [[libertarian]] policies such as legalization of [[recreational drug|drugs]] and prostitution. During 2005, Friedman and more than 500 other economists advocated discussions regarding the economic benefits of the [[legal issues of cannabis|legalization of marijuana]].<ref>{{cite web|title=An open letter|url=http://www.prohibitioncosts.org/endorsers/|publisher=Prohibition Costs|access-date=November 9, 2012|archive-url=https://web.archive.org/web/20121031062704/http://www.prohibitioncosts.org/endorsers/|archive-date=October 31, 2012|url-status=dead|df=mdy-all}}</ref> === Gay rights === Friedman was also a supporter of [[gay rights]].<ref>{{cite web|title=Milton Friedman|url=http://www.ldp.org.au/milton-friedman|publisher=Liberal Democratic Party (Australia)|access-date=February 19, 2013|url-status=dead|archive-url=https://web.archive.org/web/20130410053149/http://ldp.org.au/milton-friedman|archive-date=April 10, 2013|df=mdy-all}}</ref> He never specifically supported [[same-sex marriage]], instead saying "I do not believe there should be any discrimination against gays."<ref>{{harvnb|Ebenstein|2007|p=228}}</ref> === Immigration === Friedman favored immigration, saying "legal and illegal immigration has a very positive impact on the U.S. economy."<ref name=":1">{{Cite news|url=https://theweek.com/articles/785238/weaponization-milton-friedman|title=The weaponization of Milton Friedman|date=2018-07-19|access-date=2018-07-19|archive-url=https://web.archive.org/web/20180719161851/http://theweek.com/articles/785238/weaponization-milton-friedman|archive-date=July 19, 2018|url-status=live|df=mdy-all}}</ref> However, he suggested that immigrants ought not to have access to the welfare system.<ref name=":1" /> Friedman stated that immigration from Mexico had been a "good thing", in particular illegal immigration.<ref name=":1" /> Friedman argued that illegal immigration was a boon because they "take jobs that most residents of this country are unwilling to take, they provide employers with workers of a kind they cannot get" and they do not use welfare.<ref name=":1" /> In ''Free to Choose'', Friedman wrote:<ref name=":2"/> <blockquote>No arbitrary obstacles should prevent people from achieving those positions for which their talents fit them and which their values lead them to seek. Not birth, nationality, color, religion, sex, nor any other irrelevant characteristic should determine the opportunities that are open to a person — only his abilities.</blockquote> === Economic freedom === [[Michael Walker (economist)|Michael Walker]] of the [[Fraser Institute]] and Friedman hosted a series of conferences from 1986 to 1994. The goal was to create a clear definition of [[economic freedom]] and a method for measuring it. Eventually this resulted in the first report on worldwide economic freedom, ''Economic Freedom in the World''.<ref>{{cite web|url=http://www.freetheworld.com/|title=Economic Freedom of the World project|website=Fraser Institute|access-date=February 16, 2016|archive-url=https://web.archive.org/web/20160305144202/http://www.freetheworld.com/|archive-date=March 5, 2016|url-status=live|df=mdy-all}}</ref> This annual report has since provided data for numerous peer-reviewed studies and has influenced policy in several nations. Along with sixteen other distinguished economists he opposed the [[Copyright Term Extension Act]], and signed on to an [[amicus brief]] filed in ''[[Eldred v. Ashcroft]]''.<ref>{{cite web|title=In the Supreme Court of the United States |url=http://cyber.law.harvard.edu/openlaw/eldredvashcroft/supct/amici/economists.pdf |publisher=Harvard Law School |access-date=February 20, 2008 |url-status=dead |archive-url=https://web.archive.org/web/20150402164457/http://cyber.law.harvard.edu/openlaw/eldredvashcroft/supct/amici/economists.pdf |archive-date=April 2, 2015 }}</ref> Friedman jokingly described it as a "[[wikt:no-brainer|no-brainer]]".<ref>{{cite web|author=Lawrence Lessig |url=http://www.lessig.org/2006/11/only-if-the-word-nobrainer-app/ |title=only if the word 'no-brainer' appears in it somewhere: RIP Milton Friedman (Lessig Blog) |publisher=Lessig.org |date=November 19, 2006 |access-date=April 2, 2013 |url-status=dead |archive-url=https://web.archive.org/web/20150402150417/http://www.lessig.org/2006/11/only-if-the-word-nobrainer-app/ |archive-date=April 2, 2015 }}</ref> Friedman argued for stronger basic legal (constitutional) protection of economic rights and freedoms to further promote industrial-commercial growth and prosperity and buttress democracy and freedom and the rule of law generally in society.<ref>{{cite web|url=http://industry.sharepoint.com/Pages/NewBritishBillofRights.aspx |title=A New British Bill of Rights: The Case For |publisher=ISR Online Guide |access-date=February 16, 2016 |url-status=dead |archive-url=https://web.archive.org/web/20160304030437/http://industry.sharepoint.com/Pages/NewBritishBillofRights.aspx |archive-date=March 4, 2016 }}</ref> == Honors, recognition and legacy == [[File:Milton Friedman 1976.jpg|thumb|Friedman in 1976]] [[George H. Nash]], a leading historian of American conservatism, says that by "the end of the 1960s he was probably the most highly regarded and influential conservative scholar in the country, and one of the few with an international reputation."<ref>{{harvnb|Ebenstein|2007|p=260}}</ref> In 1971, Friedman received the Golden Plate Award of the [[Academy of Achievement|American Academy of Achievement]].<ref>{{cite web|title= Golden Plate Awardees of the American Academy of Achievement |website=www.achievement.org|publisher=[[American Academy of Achievement]]|url= https://achievement.org/our-history/golden-plate-awards/#public-service}}</ref><ref>{{cite web|title= Milton Friedman Biography and Interview |publisher=[[American Academy of Achievement]]|url= https://achievement.org/achiever/milton-friedman-ph-d/#interview}}</ref> Friedman allowed the libertarian [[Milton Friedman Prize|Cato Institute]] to use his name for its biannual Milton Friedman Prize for Advancing Liberty beginning in 2001. A Friedman Prize was given to the late British economist [[Peter Thomas Bauer|Peter Bauer]] in 2002, Peruvian economist [[Hernando de Soto (economist)|Hernando de Soto]] in 2004, [[Mart Laar]], former Estonian Prime Minister in 2006 and a young Venezuelan student [[Yon Goicoechea]] in 2008. His wife Rose, sister of [[Aaron Director]], with whom he initiated the [[EdChoice|Friedman Foundation for Educational Choice]], served on the international selection committee.<ref>"[http://www.cato.org/news-releases/2007/9/5/selection-committee-announced-2008-milton-friedman-prize-advancing-liberty Selection Committee Announced for the 2008 Milton Friedman Prize for Advancing Liberty] {{webarchive |url=https://web.archive.org/web/20140105025255/http://www.cato.org/news-releases/2007/9/5/selection-committee-announced-2008-milton-friedman-prize-advancing-liberty |date=January 5, 2014}}," ''Cato Institute'', September 5, 2007. Accessed January 4, 2014.</ref><ref>[http://www.cato.org/friedman-prize Milton Friedman Prize page] {{webarchive |url=https://web.archive.org/web/20140120081700/http://www.cato.org/friedman-prize |date=January 20, 2014}} at [[Cato Institute]] website. Accessed January 5, 2014.</ref> Friedman was also a recipient of the [[Nobel Memorial Prize in Economic Sciences|Nobel Memorial Prize in Economics]]. Upon Friedman's death, Harvard President [[Lawrence Summers]] called him "The Great Liberator", saying "...&nbsp;any honest Democrat will admit that we are now all Friedmanites." He said Friedman's great popular contribution was "in convincing people of the importance of allowing free markets to operate."<ref>{{cite news|author=Larry Summers|title=The Great Liberator|work=The New York Times|date=November 19, 2006|url=https://www.nytimes.com/2006/11/19/opinion/19summers.html|access-date=February 22, 2017|archive-url=https://web.archive.org/web/20170328060857/http://www.nytimes.com/2006/11/19/opinion/19summers.html|archive-date=March 28, 2017|url-status=live|df=mdy-all}}</ref> Stephen Moore, a member of the editorial forward of ''The Wall Street Journal'', said in 2013: "Quoting the most-revered champion of free-market economics since Adam Smith has become a little like quoting the Bible." He adds, "There are sometimes multiple and conflicting interpretations."<ref>Stephen Moore, "What Would Milton Friedman Say?" ''The Wall Street Journal'', May 30, 2013. p. A13</ref> === Nobel Memorial Prize in Economic Sciences === Friedman won the [[Nobel Memorial Prize in Economic Sciences]], the sole recipient for 1976, "for his achievements in the fields of consumption analysis, [[money supply|monetary]] history and theory and for his demonstration of the complexity of stabilization policy."<ref name=nobel1 /> === Hong Kong === Friedman once said: "If you want to see capitalism in action, go to Hong Kong."<ref>{{cite magazine |author=Waldemar Ingdahl |date=March 22, 2007 |title=Real Virtuality |url=http://www.american.com/archive/2007/march-0307/real-virtuality/ |magazine=The American |access-date=February 20, 2008 |archive-url=https://web.archive.org/web/20141003020845/http://www.american.com/archive/2007/march-0307/real-virtuality |archive-date=October 3, 2014 |url-status=dead |df=mdy-all}}</ref> He wrote in 1990 that the [[economy of Hong Kong|Hong Kong economy]] was perhaps the best example of a free market economy.<ref>{{cite book |author=Milton Friedman and Rose Friedman |title=Free to Choose: A Personal Statement |page=34 |publisher=Harvest Books |year=1990 |isbn=978-0-15-633460-0}}</ref> One month before his death, he wrote the article "Hong Kong Wrong—What would [[John James Cowperthwaite|Cowperthwaite]] say?" in ''The Wall Street Journal'', criticizing [[Donald Tsang]], the Chief Executive of Hong Kong, for abandoning "positive noninterventionism."<ref name=wsj_20061006>{{cite web|author=Friedman, Milton|date=October 6, 2006|title=Dr. Milton Friedman|url=http://www.opinionjournal.com/editorial/feature.html?id=110009051|publisher=Opinion Journal|access-date=February 20, 2008|archive-url=https://web.archive.org/web/20061006122046/http://www.opinionjournal.com/editorial/feature.html?id=110009051|archive-date=October 6, 2006|url-status=live|df=mdy-all}}</ref> Tsang later said he was merely changing the slogan to "big market, small government", where small government is defined as less than 20% of GDP. In a debate between Tsang and his rival [[Alan Leong]] before the [[2007 Hong Kong Chief Executive election]], Leong introduced the topic and jokingly accused Tsang of angering Friedman to death.{{citation needed|date=March 2019}} === Chile === {{main|Miracle of Chile|Chicago Boys}} During 1975, two years after the [[1973 Chilean coup d'état|military coup]] that brought [[Military dictatorship|military dictator]] President [[Augusto Pinochet]] to power and ended the government of [[Salvador Allende]], the economy of [[Chile]] experienced a severe crisis. Friedman and [[Arnold Harberger]] accepted an invitation of a private Chilean foundation to visit Chile and speak on principles of [[economic freedom]].<ref>Letter from Arnold Harberger to Stig Ramel as reprinted in ''The Wall Street Journal'', October 12, 1976, and in ''Two Lucky People: Memoirs By Milton Friedman'', Rose D. Friedman. Appendix A, pp. 598–99. Accessible at books.google.com</ref> He spent seven days in Chile giving a series of lectures at the [[Pontifical Catholic University of Chile|Universidad Católica de Chile]] and the (National) [[University of Chile]]. One of the lectures was entitled "The Fragility of Freedom" and according to Friedman, "dealt with precisely the threat to freedom from a centralized military government."<ref name=icelandtv>{{cite AV media|people=Milton Friedman|date=August 31, 1984|title=Iceland Television Debate|url=https://www.youtube.com/watch?v=oJNxg3ZhXf8#t=9m11s&feature=PlayList&p=EBBF6DB20C85145A&playnext_from=PL&index=3|format=[[Flash Video]]|medium=Television production|publisher=[[Television in Iceland|Icelandic State Television]]|location=[[Reykjavík]]|access-date=June 27, 2010|time=009:48:00|archive-url=https://web.archive.org/web/20160423164050/https://www.youtube.com/watch?v=oJNxg3ZhXf8#t=9m11s&feature=PlayList&p=EBBF6DB20C85145A&playnext_from=PL&index=3|archive-date=April 23, 2016|url-status=live|df=mdy-all}}</ref> In a letter to Pinochet of April 21, 1975, Friedman considered the "key economic problems of Chile are clearly&nbsp;... inflation and the promotion of a healthy [[social market economy]]".<ref name="letter">[Two Lucky People: Memoirs By Milton Friedman, Rose D. Friedman. Appendix A, pp. 591–93. Letter from Friedman to Pinochet, April 21, 1975.]</ref> He stated that "There is only one way to end inflation: by drastically reducing the rate of increase of the quantity of money&nbsp;..." and that "...&nbsp;cutting government spending is by far and away the most desirable way to reduce the fiscal deficit, because it&nbsp;... strengthens the private sector thereby laying the foundations for ''healthy'' economic growth".<ref name=letter/> As to how rapidly inflation should be ended, Friedman felt that "for Chile where inflation is raging at 10–20% a month&nbsp;... gradualism is not feasible. It would involve so painful an operation over so long a period that the ''patient'' would not survive." Choosing "a brief period of higher unemployment ..." was the lesser evil.. and that "the experience of Germany,&nbsp;... of Brazil&nbsp;..., of the post-war adjustment in the U.S.&nbsp;... all argue for shock treatment". In the letter Friedman recommended to deliver the shock approach with "...&nbsp;a package to eliminate the surprise and to relieve acute distress" and "...&nbsp;for definiteness let me sketch the contents of a package proposal&nbsp;... to be taken as illustrative" although his knowledge of Chile was "too limited to enable [him] to be precise or comprehensive". He listed a "sample proposal" of 8 [[Monetary policy|monetary]] and [[Fiscal policy|fiscal]] measures including "the removal of as many as obstacles as possible that now hinder the private market. For example, suspend&nbsp;... the present law against discharging employees". He closed, stating "Such a shock program could end inflation in months". His letter suggested that cutting spending to reduce the fiscal deficit would result in less transitional unemployment than raising taxes. Sergio de Castro, a Chilean Chicago School graduate, became the nation's Minister of Finance in 1975. During his six-year tenure, foreign investment increased, restrictions were placed on striking and labor unions, and GDP rose yearly.<ref>{{cite thesis |author=William Ray Mask II|title=The Great Chilean Recovery: Assigning Responsibility For The Chilean Miracle(s)|date=May 2013|publisher=California State University, Fresno|hdl=10211.3/105425}}</ref> A foreign exchange program was created between the Catholic University of Chile and the University of Chicago. Many other Chicago School alumni were appointed government posts during and after the Pinochet years; others taught its economic doctrine at Chilean universities. They became known as the Chicago Boys.<ref>{{cite web|title=Chile and the "Chicago Boys"|url=http://hoohila.stanford.edu/friedman/chile-chicago.php|archive-url=https://web.archive.org/web/20120810043651/http://hoohila.stanford.edu/friedman/chile-chicago.php|url-status=dead|archive-date=August 10, 2012|website=The Hoover Institution|publisher=Stanford University|access-date=June 20, 2014}}</ref> Friedman defended his activity in Chile on the grounds that, in his opinion, the adoption of free market policies not only improved the economic situation of Chile but also contributed to the amelioration of [[Military dictatorship of Chile (1973–90)|Pinochet's rule]] and to the eventual [[Chilean transition to democracy|transition to a democratic government]] during 1990. That idea is included in ''[[Capitalism and Freedom]]'', in which he declared that economic freedom is not only desirable in itself but is also a necessary condition for [[political freedom]]. In his 1980 documentary ''[[Free to Choose]]'', he said the following: "Chile is not a politically free system, and I do not condone the system. But the people there are freer than the people in Communist societies because government plays a smaller role. ...&nbsp;The conditions of the people in the past few years has been getting better and not worse. They would be still better to get rid of the junta and to be able to have a free democratic system."<ref>{{cite web |title=Free to Choose Vol. 5 |url=http://www.freetochoose.net/1980_vol5_transcript.html |access-date=February 20, 2008|archive-url = https://web.archive.org/web/20080209233014/http://www.freetochoose.net/1980_vol5_transcript.html |archive-date = February 9, 2008|url-status=dead}}</ref><ref>[https://www.youtube.com/watch?v=JQkdSj6arn0 Frances Fox Piven vs. Milton Friedman, Thomas Sowell] {{Webarchive|url=https://web.archive.org/web/20141016091409/http://www.youtube.com/watch?v=JQkdSj6arn0 |date=October 16, 2014 }}, debate, 1980, YouTube.</ref> In 1984, Friedman stated that he has "never refrained from criticizing the political system in Chile."<ref name=icelandtv/> In 1991 he said: "I have nothing good to say about the political regime that Pinochet imposed. It was a terrible political regime. The real miracle of Chile is not how well it has done economically; the real miracle of Chile is that a military junta was willing to go against its principles and support a free market regime designed by principled believers in a free market. ... In Chile, the drive for political freedom, that was generated by economic freedom and the resulting economic success, ultimately resulted in a referendum that introduced political democracy. Now, at long last, Chile has all three things: political freedom, human freedom and economic freedom. Chile will continue to be an interesting experiment to watch to see whether it can keep all three or whether, now that it has political freedom, that political freedom will tend to be used to destroy or reduce economic freedom."<ref>[http://www.cbe.csueastbay.edu/~sbesc/frlect.html The Smith Center: Milton Friedman's lecture] {{Webarchive|url=https://web.archive.org/web/20130922130830/http://www.cbe.csueastbay.edu/~sbesc/frlect.html |date=September 22, 2013 }} , "Economic Freedom, Human Freedom, Political Freedom", by Milton Friedman, delivered November 1, 1991.</ref> He stressed that the lectures he gave in Chile were the same lectures he later gave in China and other socialist states.<ref>{{harvnb|Friedman|1999}}, pp. 600–01</ref> He further stated "I do not consider it as evil for an economist to render technical economic advice to the Chilean Government, any more than I would regard it as evil for a physician to give technical medical advice to the Chilean Government to help end a medical plague."<ref>Newsweek of June 14, 1976</ref> During the 2000 PBS documentary ''The Commanding Heights'' (based on [[The Commanding Heights|the book]]), Friedman continued to argue that "free markets would undermine [Pinochet's] political centralization and political control.",<ref>{{cite web |title=Interview with Jeffery Sachs on the "Miracle of Chile" |url=https://www.pbs.org/wgbh/commandingheights/shared/minitextlo/ufd_reformliberty_full.html |publisher=PBS |access-date=February 20, 2008 |archive-url=https://web.archive.org/web/20080222001124/http://www.pbs.org/wgbh/commandingheights/shared/minitextlo/ufd_reformliberty_full.html |archive-date=February 22, 2008 |url-status=live |df=mdy-all }}</ref><ref>{{cite web |title=Commanding Heights: Milton Friedman |url=https://www.pbs.org/wgbh/commandingheights/shared/minitext/int_miltonfriedman.html#10 |publisher=PBS |access-date=December 29, 2008 |archive-url=https://web.archive.org/web/20081228195520/http://www.pbs.org/wgbh/commandingheights/shared/minitext/int_miltonfriedman.html#10 |archive-date=December 28, 2008 |url-status=live |df=mdy-all }}</ref> and that criticism over his role in Chile missed his main contention that freer markets resulted in freer people, and that Chile's unfree economy had caused the military government. Friedman advocated for free markets which undermined "political centralization and political control".<ref name=pbs1>{{cite web |title=Milton Friedman interview |url=https://www.pbs.org/wgbh/commandingheights/shared/minitextlo/int_miltonfriedman.html |publisher=PBS |access-date=February 20, 2008 |archive-url=https://web.archive.org/web/20110109040713/http://www.pbs.org/wgbh/commandingheights/shared/minitextlo/int_miltonfriedman.html |archive-date=January 9, 2011 |url-status=live |df=mdy-all }}</ref> === Iceland === Friedman visited [[Iceland]] during the autumn of 1984, met with important Icelanders and gave a lecture at the University of Iceland on the "tyranny of the ''status quo''." He participated in [https://www.youtube.com/view_play_list?p=EBBF6DB20C85145A a lively television debate] on August 31, 1984, with socialist intellectuals, including [[Ólafur Ragnar Grímsson]], who later became the president of Iceland.<ref>{{Cite AV media|title=Milton Friedman on Icelandic State Television in 1984|people=Friedman, Milton; Grímsson, Ólafur Ragnar}}</ref> When they complained that a fee was charged for attending his lecture at the university and that, hitherto, lectures by visiting scholars had been free-of-charge, Friedman replied that previous lectures had not been free-of-charge in a meaningful sense: lectures always have related costs. What mattered was whether attendees or non-attendees covered those costs. Friedman thought that it was fairer that only those who attended paid. In this discussion Friedman also stated that he did not receive any money for delivering that lecture. === Estonia === Although Friedman never visited [[Estonia]], his book ''[[Free to Choose]]'' exercised a great influence on that nation's then 32-year-old prime minister, [[Mart Laar]], who has claimed that it was the only book on economics he had read before taking office. Laar's reforms are often credited with responsibility for transforming Estonia from an impoverished Soviet Republic to the "[[Baltic Tiger]]." A prime element of Laar's program was introduction of the [[flat tax]]. Laar won the 2006 Milton Friedman Prize for Advancing Liberty, awarded by the [[Cato Institute]].<ref>{{cite web|url=http://www.cato.org/special/friedman/laar/|archive-url=https://web.archive.org/web/20060515231340/http://www.cato.org/special/friedman/laar/|url-status=dead|archive-date=May 15, 2006|title=Mart Laar|publisher=Cato Institute|access-date=February 20, 2008}}</ref> === United Kingdom === After 1950 Friedman was frequently invited to lecture in Britain, and by the 1970s his ideas had gained widespread attention in conservative circles. For example, he was a regular speaker at the [[Institute of Economic Affairs]] (IEA), a libertarian think tank. [[Conservative Party (UK)|Conservative]] politician [[Margaret Thatcher]] closely followed IEA programs and ideas, and met Friedman there in 1978. He also strongly influenced [[Keith Joseph]], who became Thatcher's senior advisor on economic affairs, as well as Alan Walters and Patrick Minford, two other key advisers. Major newspapers, including the ''Daily Telegraph,'' ''The Times,'' and ''The Financial Times'' all promulgated Friedman's monetarist ideas to British decision-makers. Friedman's ideas strongly influenced Thatcher and her allies when she became Prime Minister in 1979.<ref>{{cite book|author=John F. Lyons|title=America in the British Imagination: 1945 to the Present|url=https://books.google.com/books?id=QzOwAgAAQBAJ&pg=PA102|year=2013|publisher=Palgrave Macmillan|page=102|isbn=978-1137376800}}</ref><ref>Subroto Roy & John Clarke, eds. (2005), ''Margaret Thatcher's Revolution: How it Happened and What it Meant''. Continuum. {{ISBN|0826484840}}</ref> === United States === After his death a number of obituaries and articles were written in Friedman's honor, citing him as one of the most important and influential economists of the [[Post-World War II|post-war]] era.<ref>{{Cite news|url=https://www.economist.com/news/2006/11/17/an-enduring-legacy|title=An enduring legacy|date=17 Nov 2006|work=The Economist|access-date=2018-09-25|language=en|archive-url=https://web.archive.org/web/20180926052241/https://www.economist.com/news/2006/11/17/an-enduring-legacy|archive-date=September 26, 2018|url-status=live|df=mdy-all}}</ref><ref>{{Cite news|url=https://www.nytimes.com/2006/11/16/business/17friedmancnd.html?mtrref=www.google.com&gwh=DE2271CBC288BBC4390B471C20257E92&gwt=pay|title=Milton Friedman, Free Markets Theorist, Dies at 94|last=Noble|first=Holcomb B.|access-date=2018-09-25|language=en|archive-url=https://web.archive.org/web/20180926052213/https://www.nytimes.com/2006/11/16/business/17friedmancnd.html?mtrref=www.google.com&gwh=DE2271CBC288BBC4390B471C20257E92&gwt=pay|archive-date=September 26, 2018|url-status=live|df=mdy-all}}</ref><ref>{{Cite news|url=https://www.washingtonpost.com/wp-dyn/content/article/2006/11/16/AR2006111601366.html|title=Economist Milton Friedman Dies at 94|last=Norton|first=Justin M.|date=2006-11-17|access-date=2018-09-25|language=en-US|issn=0190-8286|archive-url=https://web.archive.org/web/20151127171049/http://www.washingtonpost.com/wp-dyn/content/article/2006/11/16/AR2006111601366.html|archive-date=November 27, 2015|url-status=live|df=mdy-all}}</ref><ref>{{cite web|url=http://delong.typepad.com/sdj/2006/11/we_are_live_at_.html|title=We Are Live at Salon, with an Obituary for Milton Friedman|website=Grasping Reality with at Least Three Hands|access-date=2018-09-25|archive-url=https://web.archive.org/web/20180926052017/http://delong.typepad.com/sdj/2006/11/we_are_live_at_.html|archive-date=September 26, 2018|url-status=live|df=mdy-all}}</ref> Milton Friedman's somewhat controversial legacy<ref>{{cite web|url=https://www.theguardian.com/commentisfree/2006/nov/16/post650|title=Milton Friedman: a study in failure|last=Adams|first=Richard|date=2006-11-16|website=the Guardian|language=en|access-date=2018-09-25|archive-url=https://web.archive.org/web/20180926130701/https://www.theguardian.com/commentisfree/2006/nov/16/post650|archive-date=September 26, 2018|url-status=live|df=mdy-all}}</ref><ref>{{Cite news|url=https://www.chronicle.com/article/Milton-Friedmans/28879|title=Milton Friedman's Controversial Legacy|date=2008-08-01|work=The Chronicle of Higher Education|access-date=2018-09-25|archive-url=https://web.archive.org/web/20180926051906/https://www.chronicle.com/article/Milton-Friedmans/28879|archive-date=September 26, 2018|url-status=live|df=mdy-all}}</ref> in America remains strong within the [[Conservatism in the United States|conservative]] movement.<ref>{{Cite news|url=http://www.post-gazette.com/opinion/Op-Ed/2012/07/31/Milton-Friedman-s-legacy-He-is-the-economist-conservatives-love-but-don-t-understand/stories/201207310228|title=Milton Friedman's legacy: He is the economist conservatives love but don't understand|work=Pittsburgh Post-Gazette|access-date=2018-09-25|language=en|archive-url=https://web.archive.org/web/20180926052124/http://www.post-gazette.com/opinion/Op-Ed/2012/07/31/Milton-Friedman-s-legacy-He-is-the-economist-conservatives-love-but-don-t-understand/stories/201207310228|archive-date=September 26, 2018|url-status=live|df=mdy-all}}</ref> However, some journalists and economists like Noah Smith and [[Scott Sumner]] have argued Friedman's academic legacy has been buried under his political philosophy and misinterpreted by modern conservatives.<ref>{{Cite news|url=https://www.thedailybeast.com/articles/2012/07/31/milton-friedman|title=Milton Friedman's Unfinished Legacy|last=Kristula-Green|first=Noah|date=2012-07-31|work=The Daily Beast|access-date=2018-09-25|language=en}}</ref><ref>{{cite web|url=http://noahpinionblog.blogspot.com/2013/08/the-cruel-trick-played-by-history-on.html|title=Noahpinion: The cruel trick played by history on Milton Friedman|last=Smith|first=Noah|date=2013-08-14|website=Noahpinion|access-date=2018-09-25|archive-url=https://web.archive.org/web/20180926051930/http://noahpinionblog.blogspot.com/2013/08/the-cruel-trick-played-by-history-on.html|archive-date=September 26, 2018|url-status=live|df=mdy-all}}</ref><ref>{{cite web|url=http://www.themoneyillusion.com/milton-friedman-vs-the-conservatives/|title=TheMoneyIllusion » Milton Friedman vs. the conservatives|website=www.themoneyillusion.com|language=en|access-date=2018-09-25|archive-url=https://web.archive.org/web/20180926085951/http://www.themoneyillusion.com/milton-friedman-vs-the-conservatives/|archive-date=September 26, 2018|url-status=live|df=mdy-all}}</ref><ref>{{Cite news|url=https://www.theatlantic.com/business/archive/2012/03/what-gop-economists-dont-understand-about-milton-friedman/254405/|title=What GOP Economists Don't Understand About Milton Friedman|last=O'Brien|first=Matthew|date=2012-03-13|work=The Atlantic|access-date=2018-09-25|language=en-US|archive-url=https://web.archive.org/web/20180926085825/https://www.theatlantic.com/business/archive/2012/03/what-gop-economists-dont-understand-about-milton-friedman/254405/|archive-date=September 26, 2018|url-status=live|df=mdy-all}}</ref> == Criticism == {{criticism section|date=June 2019}} Econometrician [[David Forbes Hendry|David Hendry]] criticized part of Friedman's and Anna Schwartz's 1982 ''Monetary Trends''.<ref>David F. Hendry; Neil R. Ericsson (October 1983). "Assertion without Empirical Basis: An Econometric Appraisal of 'Monetary Trends in&nbsp;... the United Kingdom' by Milton Friedman and Anna Schwartz," in ''Monetary Trends in the United Kingdom'', Bank of England Panel of Academic Consultants, Panel Paper No. 22, pp.&nbsp;45–101.<p>See also [http://www.federalreserve.gov/pubs/ifdp/1985/270/ifdp270.pdf Federal Reserve International Finance Discussion Paper No. 270] {{Webarchive|url=https://web.archive.org/web/20131103040319/http://www.federalreserve.gov/pubs/ifdp/1985/270/ifdp270.pdf |date=November 3, 2013 }} (December 1985), which is a revised and shortened version of Hendry–Ericsson 1983.</ref> When asked about it during an interview with Icelandic TV in 1984,<ref>{{cite web|url=https://www.youtube.com/view_play_list?p=EBBF6DB20C85145A|title=M.Friedman – Iceland TV (1984)|website=YouTube|access-date=February 16, 2016|archive-url=https://web.archive.org/web/20160313091204/https://www.youtube.com/view_play_list?p=EBBF6DB20C85145A|archive-date=March 13, 2016|url-status=live|df=mdy-all}}</ref> Friedman said that the criticism referred to a different problem from that which he and Schwartz had tackled, and hence was irrelevant,<ref>{{cite web |author=van Steven Moore, CMA |url=https://www.youtube.com/watch?v=lwBUO45cIyU&list=PLC0EEBC0F24B2EE0E |title=Milton Friedman – Iceland 2 of 8 |publisher=YouTube |date=August 31, 1984 |access-date=April 22, 2014 |archive-url=https://web.archive.org/web/20140512174832/https://www.youtube.com/watch?v=lwBUO45cIyU&list=PLC0EEBC0F24B2EE0E |archive-date=May 12, 2014 |url-status=live |df=mdy-all }}</ref> and pointed out the lack of consequential peer review amongst econometricians on Hendry's work.<ref>{{cite book|author=J. Daniel Hammond|year=2005|title=Theory and Measurement: Causality Issues in Milton Friedman's Monetary Economics|publisher=Cambridge U.P.|pages= 193–99|url=https://books.google.com/books?id=m1n9R4Kr03sC&pg=PA193|isbn=978-0521022644}}</ref> In 2006, Hendry said that Friedman was guilty of "serious errors" of misunderstanding that meant "the t-ratios he reported for UK money demand were overstated by nearly 100 per cent", and said that, in a paper published in 1991<!--The pdf is dated 1989, but papers of this sort are usually published at a later date. The 1991 is given by Hendry in his FT letter (see ref named "Hendry letter"), so it is sourced.--> with Neil Ericsson,<ref>{{cite web|author=David F. Hendry; Neil R. Ericsson|date=July 1989|title=An Econometric Analysis of UK Money Demand in ''Monetary Trends in the United States and the United Kingdom'' by Milton Friedman and Anna J. Schwartz|url=http://www.federalreserve.gov/pubs/ifdp/1989/355/ifdp355.pdf|publisher=Federal Reserve|series=International Finance Discussion Papers: 355|access-date=August 2, 2013|archive-url=https://web.archive.org/web/20131103040149/http://www.federalreserve.gov/pubs/ifdp/1989/355/ifdp355.pdf|archive-date=November 3, 2013|url-status=live|df=mdy-all}}</ref> he had refuted "almost every empirical claim ... made about UK money demand" by Friedman and Schwartz.<ref name="Hendry letter">{{cite news |author= David F. Hendry |author-link= David Forbes Hendry |date= April 25, 2013 |title= Friedman's t-ratios were overstated by nearly 100% |url= http://www.ft.com/cms/s/0/fcfb6334-ac11-11e2-a063-00144feabdc0.html |newspaper= [[Financial Times|ft.com]] |access-date= May 1, 2013 |archive-url= https://web.archive.org/web/20131030075628/http://www.ft.com/cms/s/0/fcfb6334-ac11-11e2-a063-00144feabdc0.html |archive-date= October 30, 2013 |url-status= live |df= mdy-all }}</ref> A 2004 paper updated and confirmed the validity of the Hendry–Ericsson findings through 2000.<ref>{{Cite journal|author=Escribano, Alvaro|year=2004|title=Nonlinear error correction: The case of money demand in the United Kingdom (1878–2000)|url=http://www.eco.uc3m.es/temp/alvaroe/MDUK-MD04.pdf|journal=[[Macroeconomic Dynamics]]|volume=8|number=1|pages=76–116|doi=10.1017/S1365100503030013|access-date=August 1, 2013|archive-url=https://web.archive.org/web/20131103172546/http://www.eco.uc3m.es/temp/alvaroe/MDUK-MD04.pdf|archive-date=November 3, 2013|url-status=live|df=mdy-all|hdl=10016/2573}}<br />Escribano's approach had already been recognized by Friedman, Schwartz, Hendry ''et al''. (p.&nbsp;14 of ''the pdf'') as yielding significant improvements over previous money demand equations.</ref> Although [[Keynesian economics|Keynesian]] [[Nobel Memorial Prize in Economic Sciences|Nobel laureate]] [[Paul Krugman]] praised Friedman as a "great economist and a great man" after Friedman's death in 2006, and acknowledged his many, widely accepted contributions to empirical economics, Krugman had been, and remains, a prominent critic of Friedman. Krugman has written that "he slipped all too easily into claiming both that markets always work and that only markets work. It's extremely hard to find cases in which Friedman acknowledged the possibility that markets could go wrong, or that government intervention could serve a useful purpose."<ref name=Krugman-NYRB>The New York Review of Books, [http://www.nybooks.com/articles/19857 Who Was Milton Friedman?] {{Webarchive|url=https://web.archive.org/web/20080410200144/http://www.nybooks.com/articles/19857 |date=April 10, 2008 }}, February 15, 2007</ref> Others agree Friedman was not open enough to the possibility of market inefficiencies.<ref>Colander, D. (1995). Is Milton Friedman an artist or a scientist?. ''Journal of Economic Methodology'', ''2''(1), 105–22.</ref> Economist Noah Smith argues that while Friedman made many important contributions to economic theory not all of his ideas relating to macroeconomics have entirely held up over the years and that too few people are willing to challenge them.<ref name=":3" /><ref>{{cite web|url=https://www.bloomberg.com/view/articles/2017-01-12/milton-friedman-s-cherished-theory-is-laid-to-rest|title=Milton Friedman's Cherished Theory Is Laid to Rest|last=Smith|first=Noah|date=12 Jan 2017|website=www.bloomberg.com|archive-url=https://web.archive.org/web/20180926085853/https://www.bloomberg.com/view/articles/2017-01-12/milton-friedman-s-cherished-theory-is-laid-to-rest|archive-date=September 26, 2018|url-status=live|access-date=2018-09-25|df=mdy-all}}</ref> Political scientist [[C. B. Macpherson|C.B. Macpherson]] disagreed with Friedman's historical assessment of economic freedom leading to political freedom, suggesting that political freedom actually gave way to economic freedom for property-owning elites. He also challenged the notion that markets efficiently allocated resources and rejected [[Negative liberty|Friedman's definition of liberty]].<ref>Macpherson, C.B. "Elegant Tombstones: A Note on Friedman's Freedom." ''Democratic Theory: Essays in Retrieval.'' Clarendon: Oxford, 1973.</ref> Friedman's [[Essays in Positive Economics|positivist methodological]] approach to economics has also been critiqued and debated.<ref>Caldwell, B.J. (1980). A critique of Friedman's methodological instrumentalism. ''Southern Economic Journal'', 366–74.</ref><ref>Hill, L.E. (1968). A critique of positive economics. ''American Journal of Economics and Sociology'', ''27''(3), 259–66.</ref><ref>Ng, Y.K. (2016). Are unrealistic assumptions/simplifications acceptable? some methodological issues in economics. ''Pacific Economic Review'', ''21''(2), 180–201.</ref> [[Finland|Finnish]] economist [[Uskali Mäki]] has argued some of his assumptions were unrealistic and vague.<ref>Mäki, U. (2009). Unrealistic assumptions and unnecessary confusions: Rereading and rewriting F53 as a realist statement.</ref><ref>Maki, U., & Mäki, U. (Eds.). (2009). ''The methodology of positive economics: reflections on the Milton Friedman legacy''. Cambridge University Press.</ref> In her book ''[[The Shock Doctrine]]'', author and social activist [[Naomi Klein]] criticized Friedman's economic liberalism, identifying it with the principles that guided the economic restructuring that followed the military coups in countries such as Chile and Argentina. Based on their assessments of the extent to which what she describes as [[Neoliberalism|neoliberal]] policies contributed to income disparities and inequality, both Klein and [[Noam Chomsky]] have suggested that the primary role of what they describe as neoliberalism was as an ideological cover for capital accumulation by [[multinational corporation]]s.<ref>{{cite book |author=Noam Chomsky |author-link=Noam Chomsky |year=1999 |title= Profit Over People: Neoliberalism and Global Order |location=New York |publisher=[[Seven Stories Press]] }}</ref> === Visit to Chile === Because of his involvement with the Pinochet government, there were international protests when Friedman was awarded the Nobel Prize in 1976.<ref name="Feldman-p350">{{cite book|author=Burton Feldman|title=The Nobel Prize: A History of Genius, Controversy, and Prestige|chapter=Chapter 9: The Economics Memorial Prize|publisher=Arcade Publishing|year=2000|location=New York|page=[https://archive.org/details/nobelprizehistor00feld/page/350 350]|isbn=978-1-55970-537-0|chapter-url=https://archive.org/details/nobelprizehistor00feld|url=https://archive.org/details/nobelprizehistor00feld/page/350}}</ref> Friedman was accused of supporting the military dictatorship in Chile because of the relation of economists of the University of Chicago to Pinochet, and a controversial seven-day trip<ref>{{cite news|title=General Augusto Pinochet|author=O'Shaughnessy, Hugh|date=December 11, 2006|url=https://www.independent.co.uk/news/obituaries/general-augusto-pinochet-427998.html|work=The Independent|access-date=September 5, 2017|archive-url=https://web.archive.org/web/20110515074418/http://www.independent.co.uk/news/obituaries/general-augusto-pinochet-427998.html|archive-date=May 15, 2011|url-status=live|df=mdy-all}}</ref> he took to Chile during March 1975 (less than two years after the coup that ended with the [[Death of Salvador Allende|death]] of President [[Salvador Allende]]). Friedman answered that he was never an adviser to the dictatorship, but only gave some lectures and seminars on inflation, and met with officials, including [[Augusto Pinochet]], while in Chile.<ref name="HooverDigest-1998-4">{{cite journal|url=http://www.hoover.org/publications/digest/3540561.html|title=Two Lucky People: One Week in Stockholm|author=Milton Friedman and Rose D. Friedman|journal=Hoover Digest: Research and Opinion on Public Policy|volume=1998|issue=4|url-status=dead|archive-url=https://web.archive.org/web/20080314035202/http://www.hoover.org/publications/digest/3540561.html|archive-date=March 14, 2008|df=mdy-all}}</ref> Chilean economist [[Orlando Letelier]] asserted that Pinochet's dictatorship resorted to oppression because of popular opposition to Chicago School policies in Chile.<ref>Orlando Letelier (August 28, 1976), [http://www.tni.org/article/chicago-boys-chile-economic-freedoms-awful-toll "Economic Freedom's Awful Toll"] {{Webarchive|url=https://web.archive.org/web/20130921055808/http://www.tni.org/article/chicago-boys-chile-economic-freedoms-awful-toll |date=September 21, 2013 }}, ''[[The Nation]]''.</ref> After a 1991 speech on drug legalisation, Friedman answered a question on his involvement with the Pinochet regime, saying that he was never an advisor to Pinochet (also mentioned in his 1984 Iceland interview),<ref name=icelandtv/> but that [[Chicago Boys|a group of his students]] at the [[University of Chicago]] were involved in Chile's economic reforms. Friedman credited these reforms with high levels of economic growth and with the establishment of democracy that has subsequently occurred in Chile.<ref>[http://www.druglibrary.org/special/friedman/socialist.htm The Drug War as a Socialist Enterprise] {{Webarchive|url=https://web.archive.org/web/20100613032051/http://druglibrary.org/special/friedman/socialist.htm |date=June 13, 2010 }}, Milton Friedman, From: Friedman & Szasz on Liberty and Drugs, edited and with a Preface by Arnold S. Trebach and Kevin B. Zeese. Washington, D.C.: The Drug Policy Foundation, 1992.</ref><ref>[https://www.youtube.com/watch?v=dzgMNLtLJ2k YouTube clip: ''Milton Friedman – Pinochet and Chile''] {{Webarchive|url=https://web.archive.org/web/20130921062512/http://www.youtube.com/watch?v=dzgMNLtLJ2k |date=September 21, 2013 }}. YouTube.com (January 2, 2013). Retrieved on 2017-09-06.</ref> In October 1988, after returning from a lecture tour of China during which he had met with [[Zhao Ziyang]], [[General Secretary of the Communist Party of China]], Friedman wrote to ''[[The Stanford Daily]]'' asking if he should anticipate a similar "avalanche of protests for having been willing to give advice to so evil a government? And if not, why not?"<ref>{{cite book|author=Milton Friedman and Rose D. Friedman|title=Two Lucky People: Memoirs|publisher=University of Chicago Press|isbn=978-0226264158|url=https://archive.org/details/twoluckypeopleme00frie|url-access=registration|page=[https://archive.org/details/twoluckypeopleme00frie/page/600 600]|date=1999}}</ref> == Selected bibliography == {{main|Milton Friedman bibliography}} * ''A Theory of the Consumption Function'' (1957) {{ISBN|1614278121}}. * ''[[A Program for Monetary Stability]]'' (Fordham University Press, 1960) 110 pp. [https://www.questia.com/PM.qst?a=o&d=22831717 online version] {{ISBN|0-8232-0371-9}} * ''[[Capitalism and Freedom]]'' (1962), highly influential series of essays that established Friedman's position on major issues of public policy ([https://web.archive.org/web/20081105123941/http://www.mtholyoke.edu/acad/intrel/ipe/friedman.htm excerpts]) * ''[[A Monetary History of the United States, 1867–1960]]'', with Anna J. Schwartz, 1963; part 3 reprinted as ''The [[Great Contraction]]'' * "The Role of Monetary Policy." ''American Economic Review,'' Vol. 58, No. 1 (Mar. 1968), pp.&nbsp;1–17 [https://www.jstor.org/pss/1831652 JSTOR] presidential address to American Economics Association * "Inflation and Unemployment: Nobel Lecture", 1977, ''[[Journal of Political Economy]]''. Vol. 85, pp.&nbsp;451–72. [https://www.jstor.org/stable/1830192 JSTOR] * ''[[Free to Choose|Free to Choose: A Personal Statement]]'', with Rose Friedman, (1980), highly influential restatement of policy views * ''The Essence of Friedman'', essays edited by Kurt R. Leube, (1987) ({{ISBN|0-8179-8662-6}}) * ''Two Lucky People: Memoirs'' (with Rose Friedman) {{ISBN|0-226-26414-9}} (1998) [https://www.amazon.com/dp/0226264149 excerpt and text search] * ''Milton Friedman on Economics: Selected Papers by Milton Friedman'', edited by Gary S. Becker (2008) == See also == {{Portalbar|Conservatism|Liberalism|Libertarianism|Business|United States}} {{div col}} * [[Causes of the Great Depression]] * [[Great Contraction]] * [[History of economic thought]] * [[List of economists]] * [[List of Jewish Nobel laureates]] * [[List of Presidential Medal of Freedom recipients]] * [[Monetary/fiscal debate]] * "[[We are all Keynesians now]]" {{div col end}} == References == === Citations === {{reflist}} === Sources === {{refbegin}} ; Works cited * {{cite book |title=Essays on the Great Depression |first=Ben |last=Bernanke |publisher=[[Princeton University Press]] |year=2004 |isbn=978-0-691-11820-8 }} * {{cite book |last=Ebenstein |first=Alan O. |year=2007 |title=Milton Friedman: A Biography |url=https://books.google.com/books?id=0mdWW-z1OPcC&pg=PA89 |publisher=St. Martin's Press |isbn=978-0-230-60345-5 }} * {{cite book |title=Two Lucky People: Memoirs |url=https://archive.org/details/twoluckypeopleme00frie |url-access=registration |first=Milton |last=Friedman |publisher=University of Chicago Press |year=1999 |isbn=978-0-226-26415-8 }} {{refend}} == Further reading == * {{cite journal |title=Symposium: Why Is There No Milton Friedman Today? |journal=Econ Journal Watch |date=May 2013 |volume=10 |issue=2 |url=http://econjwatch.org/issues/volume-10-issue-2-may-2013}} * Jones, Daniel Stedman. ''Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics'' (2nd ed. 2014) [https://www.amazon.com/Masters-Universe-Friedman-Neoliberal-Politics/dp/0691161011/ excerpt]. * {{cite journal |last=McCloskey |first=Deirdre |author-link=Deirdre McCloskey |title=Other Things Equal: Milton |journal=[[Eastern Economic Journal]] |volume=29 |issue=1 |pages=143–146 |jstor=40326463 |date=Winter 2003 }} * {{cite encyclopedia |last=Steelman |first=Aaron |editor-first=Ronald |editor-last=Hamowy |editor-link=Ronald Hamowy |encyclopedia=The Encyclopedia of Libertarianism |chapter-url=https://books.google.com/books?id=yxNgXs3TkJYC |doi=10.4135/9781412965811.n118 |year=2008 |publisher=[[SAGE Publications|SAGE]]; [[Cato Institute]] |location=Thousand Oaks, CA |isbn=978-1-4129-6580-4 |oclc=750831024 |lccn=2008009151 |pages=195–197 |chapter=Friedman, Milton (1912–2006)}} * [[Wood, John Cunningham]], and Ronald N. Wood, ed. (1990), ''Milton Friedman: Critical Assessments'', v. 3. Scroll to chapter-preview [https://books.google.com/books?hl=en&lr=&id=goa--dQ_eHUC&oi=&dq= links.] Routledge. <!-- Don't put Friedman's works here -- we already have a Bibliography section above. If items must be added, they should be reading about him, not by him.--> == External links == {{Sister project links |wikt=no |b=no |n=Economist Milton Friedman dies at 94 |s=no |v=no }} * [http://miltonfriedman.hoover.org Collected Works of Milton Friedman] (Multiple Text, audio, video) * [http://www.oac.cdlib.org/findaid/ark:/13030/tf7t1nb2hx/ The Milton Friedman papers] at the [http://www.hoover.org/library-archives Hoover Institution Archives] * [https://www.lib.uchicago.edu/e/busecon/econfac/Friedman.html Selected Bibliography for Milton Friedman] at the [[University of Chicago Library]] * [https://ideas.repec.org/e/pfr10.html Profile] and [http://econpapers.repec.org/RAS/pfr10.htm Papers] at [[Research Papers in Economics]]/RePEc * {{NYTtopic|people/f/milton_friedman}} * {{IMDb name|0295313}} * [http://bfi.uchicago.edu/ Becker Friedman Institute] at the [[University of Chicago]] * [http://www.edchoice.org/ The Foundation for Educational Choice] * [http://www.economictheories.org/2008/08/milton-friedman-histor-theory-biography.html Milton Fridman] at Scarlett * {{Nobelprize}} with the Prize Lecture December 13, 1976 ''Inflation and Unemployment'' * [http://nobelprize.org/nobel_prizes/economics/laureates/1976/friedman-lecture.html Inflation and Unemployment] 1976 lecture at [[NobelPrize.org]] * [http://nobelprize.org/nobel_prizes/economics/laureates/1976/friedman-speech.html Nobel Prize acceptance speech] * {{cite encyclopedia |title=Milton Friedman (1912–2006) |url=http://www.econlib.org/library/Enc/bios/Friedman.html |encyclopedia=[[The Concise Encyclopedia of Economics]] |edition=2nd |series=[[Library of Economics and Liberty]] |publisher=[[Liberty Fund]] |year=2008}} * [https://dominicstreatfeild.wordpress.com/2010/11/08/interview-with-milton-friedman/ Interview with Milton Friedman], Dominic Streatfeild, May 25, 2000, source material for ''Cocaine: An Unauthorised Biography'' * [http://www.newsweek.com/id/207218 Milton Friedman vs. The Fed Bailout] by Michael Hirsh, ''[[Newsweek]]'', July 17, 2009 * [https://www.nytimes.com/2010/08/01/opinion/01stockman.html?_r=2 Four Deformations of the Apocalypse], [[David Stockman]], ''[[The New York Times]]'', July 31, 2010 * {{cite web |last=Roberts |first=Russ |title=Milton Friedman Podcasts |url=http://www.econtalk.org/archives/_featuring/milton_friedman/ |website=[[EconTalk]] |publisher=[[Library of Economics and Liberty]] |author-link=Russ Roberts}} * {{Google Scholar id|DV6pTH0AAAAJ}} * [https://fraser.stlouisfed.org/author/139 A collection of Milton Friedman's works] ; Videos * {{C-SPAN|miltonfriedman}} ** [https://www.c-span.org/video/?61272-1/milton-friedman-road-serfdom ''Booknotes'' interview with Friedman on the 50th Anniversary Edition of F.A. Hayek's ''Road to Serfdom'', November 20, 1994.] ** [https://www.c-span.org/video/?159003-1/depth-milton-friedman''In Depth'' interview with Friedman, September 3, 2000] * {{Internet Archive film clip|id=openmind_ep494|description="The Open Mind – Living Within Our Means (1975)"}} * {{Internet Archive film clip|id=openmind_ep493|description="The Open Mind – A Nobel Laureate on the American Economy (1977)"}} * {{Charlie Rose|id=3988}} * {{YouTube|id=f1Fj5tzuYBE|title=''Free To Choose''}} * [https://www.pbs.org/wgbh/commandingheights/shared/minitext/int_miltonfriedman.html Milton Friedman], ''Commanding Heights'', [[Public Broadcasting Service|PBS]], October 1, 2000, interview, profile and video * [http://miltonfriedman.blogspot.com/ "Free To Choose" (1980), a PBS TV series by Milton Friedman] * [https://web.archive.org/web/20061201002106/http://www.cato.org/special/friedman/ Milton Friedman] at the [[Cato Institute]] * [http://www.freetochoose.net/ Free to Choose Network] {{-}} {{Navboxes |list= {{S-start}} {{s-ach|aw}} {{s-bef|before=[[Leonid Vitaliyevich Kantorovich]]|before2=[[Tjalling C. 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