Milton Friedman (1912–2006)
Author of Capitalism and Freedom
About the Author
Milton Friedman (1912-2006), Nobel Prize winner for excellence in economics, was a senior research fellow at the Hoover Institution at Stanford University and the Paul Snowden Distinguished Service Professor Emeritus of Economics at the University of Chicago. His many published books include Essays show more in Positive Economics, Monetary Trends in the United States and the United Kingdom, and Milton Friedman on Economics, all published by the University of Chicago Press. show less
Image credit: Milton Friedman, Nobel Prize in economics and libertarian activist by http://www.freetochoosemedia.org/
Works by Milton Friedman
Friedman and Szasz on Liberty and Drugs: Essays on the Free Market and Prohibition (1992) 31 copies, 1 review
Milton Friedman on Freedom: Selections from The Collected Works of Milton Friedman (Hoover Institute Press Publication) (2017) 12 copies
From New Deal Banking Reform to World War II Inflation. Reprinted from the Author's Monetary History of the United States, 1867-1960 (1980) 7 copies
Monetary Statistics of the United States: Estimates, Sources, Methods (Business Cycles Ser. : No. 20) (1970) 6 copies
Monetary correction : a proposal for escalator clauses to reduce the costs of ending inflation (1974) 4 copies
Välfärdsstatens myter : föredrag [inför] Företagsekonomiska och Nationalekonomiska föreningen i Skåne den 20 juni 1977 (1978) 3 copies
The Economics of Freedom 2 copies
Kapitalismens fremtid 2 copies
Politics and Tyranny: Lessons in the Pursuit of Freedom (Pacific studies in public policy) (1984) 2 copies
By Friedman, Milton ( Author ) [ Essays in Positive Economics (Revised) By Aug-1966 Paperback 1 copy
Kapitalizm ve Özgürlük [Paperback] Milton Friedman and Nilgün Himmetoğlu, Doğan Erberk (2021) 1 copy
Non esistono pasti gratis 1 copy
Kapitalism & frihet 1 copy
The one percent 1 copy
Lord Keynes - Opus und Vita heute. Vademecum zu einem bahnbrechenden Klassiker in seiner Zeit (1989) 1 copy
Teoria dos preços 1 copy
Associated Works
Did You Ever See a Dream Walking? American Conservative Thought in the Twentieth Century (1970) — Contributor — 86 copies
Tagged
Common Knowledge
- Canonical name
- Friedman, Milton
- Birthdate
- 1912-07-31
- Date of death
- 2006-11-16
- Gender
- male
- Education
- Rahway High School, Rahway, New Jersey, USA (1928)
Rutgers University (B.A.|1932)
University of Chicago (M.A.|Economics|1933)
Columbia University (Ph.D.|Economics|1946) - Occupations
- economist
professor - Organizations
- University of Chicago
Hoover Institution - Awards and honors
- Nobel Prize (Economic Sciences|1976)
Presidential Medal of Freedom (1988)
National Medal of Science (1988)
John Bates Clark Medal (1951) - Relationships
- Friedman, Rose (wife)
- Short biography
- American economist and Nobel Prize Recipient. Born in New York City to Jewish parents who had immigrated from Hungary, he began developing his economic theories during the Great Depression. He received a Ph.D. from Columbia University in 1946, was Professor of Economics at the University of Chicago from 1946 to 1976, became a senior research fellow at Stanford University's Hoover Institution in 1977, and influenced the economic policies of three presidents (Richard Nixon, Gerald Ford and Ronald Reagan). Recognized for his work on macroeconomics, microeconomics, economic history, and statistics, he believed strongly in laissez-faire capitalism for a free market economy and in the principles of 18th century economist Adam Smith, consistently asserting that individual freedom should rule economic policy. His book, "Capitalism and Freedom" (1962) sought to minimize the role of government in a free market, thereby promoting political and social freedom. He won the Nobel Prize in Economics in 1976 for his achievements in the fields of consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy. He hosted a television series "Free to Choose" on PBS in early 1980 which became a widely-read book, co-authored with his wife, Rose Friedman. His more well known books were: "Price Theory" (1962 with Rose Friedman), "Capitalism and Freedom" (1962 with Anna J. Schwartz), "An Economist's Protest" (1972), and "There Is No Such Thing As a Free Lunch" (1975). In addition to authoring 32 books on economics, he also wrote a column for Newsweek magazine from 1966 to 1983 and was one of the few economists able to bridge the gap between academia and the public. He put his economic policies to the test by working with his former students and Chilean military dictator Augusto Pinochet. He died of heart failure in San Francisco, California.
- Cause of death
- heart failure
- Nationality
- USA
- Birthplace
- New York, New York, USA
- Places of residence
- Rahway, New Jersey, USA
Chicago, Illinois, USA
New York, New York, USA
San Francisco, California, USA - Place of death
- San Francisco, California, USA
- Burial location
- cremated, ashes scattered over San Francisco Bay
- Associated Place (for map)
- USA
Members
Reviews
I decided to revisit Free to Choose almost four decades after first reading it because Naomi Klein’s The Shock Doctrine: The Rise of Disaster Capitalism strongly suggested that Milton Friedman, or at least the ideas and policies he championed, had some explaining to do.
At the time Free was published, several events recounted in Klein’s book already lay in the recent past. I wondered, did Free talk at all about them? If so, would it claim that the acts described in Shock were expressive show more of Free’s sunny capitalistic optimism? Worth finding out, I thought, since the events Klein described were less than sunny and more like extinction of national independence, more like deploying any means possible to achieve arguable goals, more like the dungeon of a violent medieval torturer laboring at behest of a capitalist cabal.
Now, I’ve long been influenced by what Free to Choose advocates because free market capitalism can be more dynamic, creative, and rewarding than the results of central economic planning. But I am appalled at what Klein catalogues in The Shock Doctrine.
In the Introduction to Free to Choose, Milton and Rose Friedman note that “Adam Smith’s key insight was that both parties to an exchange can benefit and that, so long as cooperation is strictly voluntary, no exchange will take place unless both parties do benefit. No external force, no coercion, no violation of that freedom is necessary to produce cooperation among individuals all of whom can benefit.” They go on to say that “The combination of economic and political power in the same hands is a sure recipe for tyranny.” A good warning.
However, the “shock doctrine” criticized by Klein violates “Adam Smith’s key insight” in the most extreme way by applying violence or its threat against all parties who do not want to cooperate. Instead of being “strictly voluntary,” it is strictly coercive. As the Friedmans write, “The armed robbers’ ‘Your money or your life’ offers me a choice, but no one would describe it as a free choice, or the subsequent exchange as voluntary.” Yet that is the effect of acts described in The Shock Doctrine. The purpose of the violations Klein reports are to lodge economic power with those who do the violating, or with corporate entities or plutocrats on whose behalf the violations are executed. It is not an ethos of cooperative benefit; it is an ethos to permit creating victims when asserting the will of the powerful. That Friedman and allied policy gurus have supported such measures is central to Klein’s book and must be part of the reckoning a concerned person undertakes.
As it happens, Free to Choose is not the right book with which to make that reckoning. It focuses on domestic economic issues rather more than the issues in other countries. While that made my second reading less fruitful than hoped, it remains a good book for understanding the Friedmans’ thought. Well presented, chatty rather than academic, the Friedmans seem like friendly if persistent relatives who just want you to understand their version of a better world. You could emerge from it a cheerleader for free market capitalism. If you do, I’d still urge that you attend to Naomi Klein’s assertions and the questions she raises. Does supporting free market capitalism in our own country require that we coercively interfere with economic decisions other countries make when pursuing their own aims, even if we think they could do better for themselves by doing what we want? Is that respecting the ideals of freedom? Of sovereignty? Of independence? Or peace? Can one simultaneously be for peace and for free markets in a corporatist world? If yes, how make it happen? Not, I’ll protest, by doing the horrific things described in The Shock Doctrine. show less
At the time Free was published, several events recounted in Klein’s book already lay in the recent past. I wondered, did Free talk at all about them? If so, would it claim that the acts described in Shock were expressive show more of Free’s sunny capitalistic optimism? Worth finding out, I thought, since the events Klein described were less than sunny and more like extinction of national independence, more like deploying any means possible to achieve arguable goals, more like the dungeon of a violent medieval torturer laboring at behest of a capitalist cabal.
Now, I’ve long been influenced by what Free to Choose advocates because free market capitalism can be more dynamic, creative, and rewarding than the results of central economic planning. But I am appalled at what Klein catalogues in The Shock Doctrine.
In the Introduction to Free to Choose, Milton and Rose Friedman note that “Adam Smith’s key insight was that both parties to an exchange can benefit and that, so long as cooperation is strictly voluntary, no exchange will take place unless both parties do benefit. No external force, no coercion, no violation of that freedom is necessary to produce cooperation among individuals all of whom can benefit.” They go on to say that “The combination of economic and political power in the same hands is a sure recipe for tyranny.” A good warning.
However, the “shock doctrine” criticized by Klein violates “Adam Smith’s key insight” in the most extreme way by applying violence or its threat against all parties who do not want to cooperate. Instead of being “strictly voluntary,” it is strictly coercive. As the Friedmans write, “The armed robbers’ ‘Your money or your life’ offers me a choice, but no one would describe it as a free choice, or the subsequent exchange as voluntary.” Yet that is the effect of acts described in The Shock Doctrine. The purpose of the violations Klein reports are to lodge economic power with those who do the violating, or with corporate entities or plutocrats on whose behalf the violations are executed. It is not an ethos of cooperative benefit; it is an ethos to permit creating victims when asserting the will of the powerful. That Friedman and allied policy gurus have supported such measures is central to Klein’s book and must be part of the reckoning a concerned person undertakes.
As it happens, Free to Choose is not the right book with which to make that reckoning. It focuses on domestic economic issues rather more than the issues in other countries. While that made my second reading less fruitful than hoped, it remains a good book for understanding the Friedmans’ thought. Well presented, chatty rather than academic, the Friedmans seem like friendly if persistent relatives who just want you to understand their version of a better world. You could emerge from it a cheerleader for free market capitalism. If you do, I’d still urge that you attend to Naomi Klein’s assertions and the questions she raises. Does supporting free market capitalism in our own country require that we coercively interfere with economic decisions other countries make when pursuing their own aims, even if we think they could do better for themselves by doing what we want? Is that respecting the ideals of freedom? Of sovereignty? Of independence? Or peace? Can one simultaneously be for peace and for free markets in a corporatist world? If yes, how make it happen? Not, I’ll protest, by doing the horrific things described in The Shock Doctrine. show less
This is a very well written, carefully considered and concise defense of competitive free market capitalism, and a well-supported argument for minimizing government involvement in the economy and the size and scope of government in the absence of a very compelling argument in support of that government activity. The first chapter is essentially a synopsis of Friedrich Hayek's The Road to Serfdom, arguing that economic liberty is inseparable from individual liberty; that allowing free show more individuals to pursue self-interest in a free market leads to more productivity, prosperity and creativity than is possible otherwise; and that central control stifles that fecundity along with individual freedoms. The next couple chapters deal with what I found to be Hayek's most significant omissions: delineation of the legitimate roles of the state and discussion of appropriate (and inappropriate) monetary policy and fiscal policy.
Friedman then discusses several important areas in which government involvement in the market has been both harmful in terms of misallocation of resources, creating disincentives and the like; and by having consequences that are the opposite of those purportedly intended. He's convinced, and convincing, that monetary policy since creation of the Federal Reserve, and the Fed itself, are net negatives. Various government sanctioned monopolies and similar arrangements are condemned, including professional licensure; minimum wage laws; labor unions; and not having stock dividends taxed as income of the stockholders, thereby encouraging reinvestment in the corporation, making it larger than otherwise while that capital is unavailable for and even diverted from new enterprises/competitors (sounds a bit like too big to fail; combined with his monetary arguments, the result is there. No doubt Friedman would say Dodd-Frank compounds the problem while expanding government bureaucracy, when changes in tax and monetary policy would help or solve the problem; if not adequately, it's probably a monopolistic problem that needs to be addressed as such. Several other topics and arguments in the book are highly relevant today). Other items pretty convincingly critiqued are government-run education, social security, the graduated tax with high nominal rates but riddled with loopholes, farm support, and public housing.
Simply listing these hardly makes Friedman's cases against them, which he does well. He notes a particular problem which may be more true today than when the book was published in 1962: the "tyranny of the status quo" - e.g. we tend to accept social security and the education system as they are since we're accustomed to them and haven't experienced alternatives. But there's no reason, for example, that a government requirement that we save for retirement involve a government run insurance program (which is really just a transfer program rather than a trust, and one that depends on demographics for its solvency). As with auto insurance, we can simply be required by government to have something provided by the market that meets minimum requirements (if the program is even legitimate, which Friedman doesn't believe).
The one serious flaw I find with Friedman's overall argument is that, like other strong defenders of laissez faire, he seems to treat the idea of free individuals making free exchanges in a competitive marketplace as a first principle. But he, like Hayek, notes that it's critical that the state establish the rule of law, and in particular ensure that contracts are enforced, for the market to work. That's necessary because people can't be trusted to honor their commitments. The point is that there's a broader and more fundamental ethical system prior to the free market principle. And besides our moral flaws, our knowledge is limited. And there are limits to the good that can be done through everyone pursuing self-interest. The market knows how to value the lumber in tropical rain forests, but it doesn't seem capable of adequately valuing unknown benefits that might come from new medicinal discoveries, much less does it seem able to even address the inherent value in biological diversity. The market can value cod, crabs and oysters as food commodities, but due to a lack of knowledge, or to concern only for present income regardless of whether productive fisheries will continue to exist in the future, capitalism clearly hasn't prevented us from decimating some "commercial fisheries" (otherwise known as components of ecosystems).
This critique could be taken into other areas, but that should suffice. I do generally agree with Friedman, and in fact I think we're getting into dangerous territory by moving in a direction opposite the one he would have us take. But I do think he has a blind spot (while admitting that, in the absence of widespread consensus regarding traditional Judeo-Christian ethics, that's a contentious area without a very clear foundation or way to establish widespread consensus). show less
Friedman then discusses several important areas in which government involvement in the market has been both harmful in terms of misallocation of resources, creating disincentives and the like; and by having consequences that are the opposite of those purportedly intended. He's convinced, and convincing, that monetary policy since creation of the Federal Reserve, and the Fed itself, are net negatives. Various government sanctioned monopolies and similar arrangements are condemned, including professional licensure; minimum wage laws; labor unions; and not having stock dividends taxed as income of the stockholders, thereby encouraging reinvestment in the corporation, making it larger than otherwise while that capital is unavailable for and even diverted from new enterprises/competitors (sounds a bit like too big to fail; combined with his monetary arguments, the result is there. No doubt Friedman would say Dodd-Frank compounds the problem while expanding government bureaucracy, when changes in tax and monetary policy would help or solve the problem; if not adequately, it's probably a monopolistic problem that needs to be addressed as such. Several other topics and arguments in the book are highly relevant today). Other items pretty convincingly critiqued are government-run education, social security, the graduated tax with high nominal rates but riddled with loopholes, farm support, and public housing.
Simply listing these hardly makes Friedman's cases against them, which he does well. He notes a particular problem which may be more true today than when the book was published in 1962: the "tyranny of the status quo" - e.g. we tend to accept social security and the education system as they are since we're accustomed to them and haven't experienced alternatives. But there's no reason, for example, that a government requirement that we save for retirement involve a government run insurance program (which is really just a transfer program rather than a trust, and one that depends on demographics for its solvency). As with auto insurance, we can simply be required by government to have something provided by the market that meets minimum requirements (if the program is even legitimate, which Friedman doesn't believe).
The one serious flaw I find with Friedman's overall argument is that, like other strong defenders of laissez faire, he seems to treat the idea of free individuals making free exchanges in a competitive marketplace as a first principle. But he, like Hayek, notes that it's critical that the state establish the rule of law, and in particular ensure that contracts are enforced, for the market to work. That's necessary because people can't be trusted to honor their commitments. The point is that there's a broader and more fundamental ethical system prior to the free market principle. And besides our moral flaws, our knowledge is limited. And there are limits to the good that can be done through everyone pursuing self-interest. The market knows how to value the lumber in tropical rain forests, but it doesn't seem capable of adequately valuing unknown benefits that might come from new medicinal discoveries, much less does it seem able to even address the inherent value in biological diversity. The market can value cod, crabs and oysters as food commodities, but due to a lack of knowledge, or to concern only for present income regardless of whether productive fisheries will continue to exist in the future, capitalism clearly hasn't prevented us from decimating some "commercial fisheries" (otherwise known as components of ecosystems).
This critique could be taken into other areas, but that should suffice. I do generally agree with Friedman, and in fact I think we're getting into dangerous territory by moving in a direction opposite the one he would have us take. But I do think he has a blind spot (while admitting that, in the absence of widespread consensus regarding traditional Judeo-Christian ethics, that's a contentious area without a very clear foundation or way to establish widespread consensus). show less
Milton Friedman died in 2006, and his teachings live on. The economist as demagogue, preaching all will be subordinate to the Market, all-powerful, all-knowing. It giveth and taketh away.
I admit freely for the purposes of bias that I lean to the left. But I recognize that the market is a powerful force for innovation, for growth and change. I am willing to recognize that at times, the market can be too constrictive, and that there are times where we must carefully examine the situation and show more determine which policies are best. Milton Friedman, despite his efforts here, is an intelligent man, and recognizes the subtleties of economics.
However, this book discards all subtlety and offers only one solution to all problems. Deregulation, lowering taxes, lowering them again, cutting out social aid networks, and doing so again. Deregulation of public education, leading to fundamentalist and revisionist curricula, and poor performing charter schools. Removal of all worker's rights, making them relatively powerless against corporations. He even goes so far as to suggest the removal of medical licensing to alleviate a doctor shortage, and let the market act, leaving bodies in its wake.
Speaking of bodies, the name of Milton Friedman is still widely reviled in Latin America, most notably due to his advice to the Pinochet dictatorship in Chile, which adopted many of his policies as a national experiment. Dictatorship and bloodbaths aside, the economic gains from those years are fragmentary at best - Chile's privatized pension system was in a state of disrepair.
And what of his belief that unions or minimum wages were not necessary for all to share in the growth that free markets provide? The past thirty years have been an extended counter-example to him, with corporations achieving record profits after the recession, and the wages of the lower and middle classes barely rising to make pace with inflation. Perhaps now the pendulum of history and policy will swing another way. show less
I admit freely for the purposes of bias that I lean to the left. But I recognize that the market is a powerful force for innovation, for growth and change. I am willing to recognize that at times, the market can be too constrictive, and that there are times where we must carefully examine the situation and show more determine which policies are best. Milton Friedman, despite his efforts here, is an intelligent man, and recognizes the subtleties of economics.
However, this book discards all subtlety and offers only one solution to all problems. Deregulation, lowering taxes, lowering them again, cutting out social aid networks, and doing so again. Deregulation of public education, leading to fundamentalist and revisionist curricula, and poor performing charter schools. Removal of all worker's rights, making them relatively powerless against corporations. He even goes so far as to suggest the removal of medical licensing to alleviate a doctor shortage, and let the market act, leaving bodies in its wake.
Speaking of bodies, the name of Milton Friedman is still widely reviled in Latin America, most notably due to his advice to the Pinochet dictatorship in Chile, which adopted many of his policies as a national experiment. Dictatorship and bloodbaths aside, the economic gains from those years are fragmentary at best - Chile's privatized pension system was in a state of disrepair.
And what of his belief that unions or minimum wages were not necessary for all to share in the growth that free markets provide? The past thirty years have been an extended counter-example to him, with corporations achieving record profits after the recession, and the wages of the lower and middle classes barely rising to make pace with inflation. Perhaps now the pendulum of history and policy will swing another way. show less
Cool short story about the "invisible hand". It gives a refreshing perspective on the million of goods and services generated by the modern economy every seconds - how it could be extremely difficult to plan and make a pencil from scratch without free competition, private property and market.
My question is, is free market the only place where innovation thrives? There are advanced inventions that are a direct product of central planning and governmental research funding - coming to my mind show more are Apollo 11, atomic bombs, even some argue, the many technology components behind the first iPhone ([b:Fifty Inventions That Shaped the Modern Economy|33358206|Fifty Inventions That Shaped the Modern Economy|Tim Harford|https://i.gr-assets.com/images/S/compressed.photo.goodreads.com/books/1491703991l/33358206._SY75_.jpg|54098044] has a great chapter on this). Military research seems to be a great driving force in technology advancement
Perhaps the free market is the best way to productionalize and distribute progress? show less
My question is, is free market the only place where innovation thrives? There are advanced inventions that are a direct product of central planning and governmental research funding - coming to my mind show more are Apollo 11, atomic bombs, even some argue, the many technology components behind the first iPhone ([b:Fifty Inventions That Shaped the Modern Economy|33358206|Fifty Inventions That Shaped the Modern Economy|Tim Harford|https://i.gr-assets.com/images/S/compressed.photo.goodreads.com/books/1491703991l/33358206._SY75_.jpg|54098044] has a great chapter on this). Military research seems to be a great driving force in technology advancement
Perhaps the free market is the best way to productionalize and distribute progress? show less
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- Rating
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