50 Facts About Milton Friedman

Early Life and Education

Milton Friedman, a name synonymous with modern economics, had a fascinating journey from his humble beginnings to becoming a Nobel laureate. Let's dive into his early life and education.

1. Milton Friedman was born to Jewish immigrants, Sarah Ethel (Landau) and Jeno Saul Friedman. He was the youngest of four children, with three sisters.

2. When Friedman was one year old, his family moved from Brooklyn to Rahway, New Jersey. This is where he spent his formative years.

3. Friedman attended Rutgers University on a scholarship, studying mathematics and economics. He earned his B.A. in 1932, setting the stage for his future contributions to economics.

4. During his time at Rutgers, Friedman was influenced by Arthur Burns. Burns introduced him to Alfred Marshall’s Principles of Economics, shaping his view of economics as a tool for understanding the real world.

5. After Rutgers, Friedman continued his studies at the University of Chicago, earning his M.A. in 1933. It was here that he met his future wife, Rose Director.

6. Friedman completed his Ph.D. at Columbia University in 1946. His dissertation, Incomes from Independent Professional Practice, co-authored with Simon Kuznets, introduced the concepts of permanent and transitory income.

Early Career and World War II

Friedman's early career was marked by significant contributions to economic research and wartime efforts.

7. In 1935, Friedman moved to Washington, D.C., to assist with a consumer budget study for the National Resources Committee. This work later influenced his Theory of the Consumption Function.

8. In 1937, Friedman joined the National Bureau of Economic Research to assist Simon Kuznets in studies of professional income. This collaboration led to the publication of Incomes from Independent Professional Practice.

9. During the early years of World War II, Friedman worked at the Department of the Treasury in the Division of Tax Research. Later, he joined the Statistical Research Group at Columbia University, applying statistical analysis to war research.

10. Friedman taught for one year each at the Universities of Wisconsin and Minnesota. These experiences shaped his understanding of economic theory and its practical applications.

University of Chicago and Monetarism

Friedman's tenure at the University of Chicago was pivotal in shaping his economic theories, particularly monetarism.

11. In 1946, Friedman accepted a position in the economics department at the University of Chicago. He became a key figure in the Chicago school of economics, which rejected Keynesianism in favor of monetarism.

12. Friedman is best known for his advocacy of monetarism. This theory posits that the money supply is the primary driver of economic activity, challenging the Keynesian view that government intervention could stabilize the economy.

13. In 1976, Friedman was awarded the Nobel Memorial Prize in Economic Sciences. He was recognized for his research on consumption analysis, monetary history and theory, and the complexity of stabilization policy.

14. In 1951, Friedman received the John Bates Clark Medal. This award recognized his outstanding achievement in economics under the age of 40.

Public Policy Influence and Major Works

Beyond academia, Friedman had a significant impact on public policy and authored several influential works.

15. Friedman served as an economic adviser to Senator Barry Goldwater in 1964 and to President Richard Nixon in 1968. He also wrote a triweekly column on current affairs for Newsweek magazine.

16. Published in 1962, Capitalism and Freedom is one of Friedman’s most influential works. It argued for free markets and criticized government intervention in economic matters, selling over 400,000 copies in the first eighteen years.

17. In 1980, Friedman and his wife Rose co-authored Free to Choose. This best-selling nonfiction book accompanied a ten-part television series, presenting Friedman’s economic and social philosophy to a broad audience.

18. The Free to Choose television series was broadcast by the Public Broadcasting Service (PBS). It made Friedman a household name, exploring various economic and social issues from a monetarist perspective.

Influence on Reagan Administration and Later Years

Friedman's ideas significantly influenced the Reagan administration and continued to shape economic thought even after his retirement.

19. Friedman served as an unofficial adviser to Ronald Reagan during his 1980 presidential campaign. He later joined the President’s Economic Policy Advisory Board, often referred to as the "guru" of the Reagan administration.

20. In 1988, Friedman received both the Presidential Medal of Freedom and the National Medal of Science from President Reagan. These awards recognized his significant contributions to economic thought and policy.

21. After retiring from the University of Chicago in 1977, Friedman became a senior research fellow at the Hoover Institution at Stanford University. This affiliation allowed him to continue his research and influence economic policy.

22. In 1950, Friedman spent a quarter in Paris as a consultant to the U.S. governmental agency administering the Marshall Plan. His work on the Schuman Plan led to his interest in floating exchange rates.

23. During the academic year 1953-54, Friedman was a Fulbright Visiting Professor at Gonville & Caius College, Cambridge University. His liberal policy views were seen as extreme by Cambridge standards but allowed him to engage with both anti-Keynesian and Keynesian groups.

Key Economic Theories and Contributions

Friedman's contributions to economic theory are vast and have left a lasting impact on the field.

24. Much of Friedman’s trailblazing work was done on price theory. This explains how prices are determined in individual markets and was foundational to monetarism.

25. Friedman presented evidence to resurrect the quantity theory of money. This theory posits that the price level depends on the money supply, challenging Keynesian views on monetary policy.

26. Friedman proposed a money supply rule. He suggested that the Federal Reserve Board increase the money supply at the same rate as real GNP increased, arguing this would eliminate inflation.

27. Friedman and Edmund Phelps challenged the Phillips Curve. They argued that once people adjusted to higher inflation rates, unemployment would creep back up, disputing the idea of a stable long-run trade-off between unemployment and inflation.

28. The stagflation of the 1970s provided strong evidence for Friedman’s view. This period of rising inflation combined with rising unemployment swayed many economists to reconsider their stance on monetary policy.

Global Influence and Legacy

Friedman's ideas have had a global impact, influencing economic policies and inspiring future generations of economists.

29. Friedman’s ideas spread worldwide through his books and television series. Capitalism and Freedom was translated into eighteen languages, making his work accessible to a broad audience.

30. Friedman advocated for education vouchers. He believed these would increase competition and improve the quality of education, part of his broader argument for free markets in education.

31. Friedman proposed a negative income tax. This idea would provide financial assistance to low-income families, part of his broader critique of welfare programs and his advocacy for individual freedom.

32. Friedman was a passionate foe of the military draft. He argued that a volunteer army would be more efficient and fairer than a conscripted one.

33. Friedman criticized occupational licensure. He argued that it artificially restricts the supply of services and raises prices, part of his broader argument against government intervention in professional practices.

34. Friedman’s work with the Public Broadcasting System (PBS) made him a household name. The Free to Choose series was broadcast on PBS and reached a wide audience.

35. Friedman’s ideas influenced economic policies globally. He advised governments in Eastern Europe and China, shaping their economic reforms.

36. Friedman was a trustee of the Philadelphia Society. This organization is dedicated to promoting classical liberal values, reflecting his commitment to individual freedom and limited government.

37. Throughout the 1980s and 1990s, Friedman continued to write editorials and appear on television. He remained a prominent voice in economic debates even after his retirement from academia.

38. After retiring, Friedman and his wife Rose traveled extensively. They filmed a documentary on former Soviet satellites during a trip through Eastern Europe in 1990, included in a shortened reissue of Free to Choose.

39. No other economist since Keynes has reshaped the way we think about and use economics as much as Milton Friedman. His work laid a cornerstone of contemporary economic thought and built an entire construction of monetarist theory.

40. Many young economists were encouraged to study economics after reading Capitalism and Freedom. Friedman’s ideas inspired a generation of economists, including Gary Becker, Robert Fogel, and Robert Lucas Jr.

41. Friedman’s monetarist ideas influenced the profession significantly. Even Paul Samuelson, a prominent Keynesian, changed his views on monetary policy in response to Friedman’s arguments.

42. The change in textbooks, particularly those by Paul Samuelson, reflects the shift in economic thinking. The 1967 edition of Samuelson’s textbook indicated a trade-off between inflation and unemployment, while the 1980 edition showed less of a trade-off in the long run. The 1985 edition stated there was no long-run trade-off.

43. Friedman challenged the stable long-run trade-off between unemployment and inflation. He argued that once people adjusted to higher inflation rates, unemployment would creep back up, supported by the stagflation of the 1970s.

44. Friedman’s work on the complexity of stabilization policy highlighted the challenges of using monetary policy to stabilize the economy. He demonstrated that stabilization policies could have unintended consequences, such as inflation.

45. Friedman’s research on consumption analysis introduced the permanent income hypothesis. This theory posits that annual consumption is a function of permanent income rather than current income, challenging Keynesian views on consumption behavior.

46. Friedman’s work on professional income distribution showed that barriers to entry, such as those maintained by the American Medical Association, could explain the higher incomes of physicians relative to other professionals. This finding was controversial but scientifically significant.

47. Friedman served on the President’s Economic Policy Advisory Board during Ronald Reagan’s presidency. His influence on economic policy during this period was substantial, reflecting his monetarist views.

48. In 1988, President Reagan awarded Friedman the Presidential Medal of Freedom. This is one of the highest honors in the United States, recognizing his significant contributions to economic thought and policy.

49. Friedman also received the National Medal of Science in 1988 for his outstanding contributions to science. This award acknowledged his impact on scientific research and its applications in economics.

50. Milton Friedman’s legacy extends beyond economics. His advocacy for individual freedom and limited government has influenced political thought and policy globally. His commitment to classical liberal values continues to inspire scholars and policymakers today.

Friedman’s Lasting Impact

Milton Friedman left a huge mark on economics and public policy. His monetarism theory reshaped how we think about money supply and inflation. Books like Capitalism and Freedom and Free to Choose made complex ideas accessible to everyone. Friedman’s push for education vouchers and a volunteer army showed his belief in individual freedom. His work earned him the Nobel Prize, the Presidential Medal of Freedom, and the National Medal of Science. Even after retiring, he kept influencing economic thought and policy. Friedman’s ideas continue to inspire economists, policymakers, and anyone interested in the power of free markets. His legacy is a testament to the enduring power of clear, bold thinking in shaping our world.