Milton Friedman: life, ideas and books

Life

Milton Friedman was born in Brooklyn in 1912, studied at Rutgers, Chicago and Columbia, and worked at the National Resources Planning Board, the National Bureau of Economic Research and the Treasury during the Second World War. He taught at the University of Chicago from 1946 to 1977, where he helped build the Chicago school of economics.

He won the John Bates Clark Medal in 1951 and the Nobel Memorial Prize in Economic Sciences in 1976, and he wrote a column for Newsweek from 1966 to 1984. From 1977 he was a senior fellow at the Hoover Institution, and from 1980 to 1988 he advised Ronald Reagan informally. He received the Presidential Medal of Freedom and the National Medal of Science in 1988 and died in San Francisco in 2006.

Ideas

Friedman's monetarism holds that the growth of the money supply drives inflation and nominal output, and that steady, predictable monetary growth is better than discretionary fine-tuning. With Anna Schwartz he argued in A Monetary History of the United States that the Great Depression was deepened by a collapse in the money supply. His permanent income hypothesis explained consumer spending as a response to expected long-term income.

On policy he favoured school vouchers, an all-volunteer military, floating exchange rates, a negative income tax in place of many welfare programs and ending the war on drugs. In a 1970 essay he argued that the social responsibility of business is to increase its profits within the rules.

Major works

• A Theory of the Consumption Function (1957).
• Capitalism and Freedom (1962).
• A Monetary History of the United States, 1867-1960 (1963), with Anna Schwartz.
• Free to Choose (1980), a book and television series with Rose Friedman.

Why conservatives read him

Friedman is a central figure in the economic side of the postwar conservative and libertarian movement. Debates over inflation, the Federal Reserve, school choice and the size of government return to his work, and his plain-spoken books made the arguments for markets and individual freedom accessible to general readers. Conservatives who disagree with parts of his program, such as drug policy, still engage with his reasoning.