Hailed as the godfather of conservative libertarianism, Milton Friedman quotes openly attacked Keynesianism in an era when most economists widely accepted its fundamental premises.
Friedman won the 1976 Nobel Prize in Economic Sciences “for his achievements in the fields of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilization policy.” As a leader of the Chicago school of economics he taught several of the country’s future preeminent economists including Gary Becker, Robert Fogel, and Thomas Sowell.
Friedman was born to working class Jewish parents in Brooklyn in 1912. He studied economics at Rutgers University and then the University of Chicago, and upon graduating moved to Washington, D.C. to work as an economist for the Roosevelt administration.
Although Friedman approved of some aspects of the New Deal which he deemed suitable responses to the Great Depression, he opposed its regulation of both prices and wages. This opposition would color much of Friedman’s later stance on government intervention.
Friedman continued working for the government as a mathematical weapons statistician throughout the Second World War. When peace resumed he earned his doctorate from Columbia University and accepted a position at the University of Chicago where he would remain for 30 years. During his tenure Friedman wrote several influential books including A Theory of the Consumption Function and Capitalism and Freedom in which he laid out his groundbreaking theories.
Friedman developed the permanent income hypothesis, which holds that changes in a person’s permanent income – their expected long-term average income – predicts their consumption habits far more reliably then their current income could alone. This hypotheses was formative in helping economists predict how consumers would stabilize their spending, and furthermore a blatant contradiction to Keynesian theory.
Friedman coined the term “helicopter money” while illustrating the effects of monetary expansion, as well as introduced the concept of “natural rate of unemployment.” This theory, which won Friedman and Edmund Phelps their Nobel Prize, explains that inflation results from too low an unemployment rate. In effect Friedman predicted the concept of “stagflation,” or persistent high inflation combined with high unemployment and stagnant demand in a country’s economy, years before it was properly named. Friedman also popularized the theory of monetarism, which advocates for small, controlled expansions in the supply of money as part of responsible monetary policy. The Federal Reserve put this theory to work during the financial crisis of 2007-2008.
While he acknowledged the role of government in the monetary system, Friedman believed the Federal Reserve’s historically poor performance begged its replacement by a computer algorithm. He also advocated for floating exchange rates, the implementation of school choice and school vouchers, abolishing a system of conscription which he deemed inequitable and arbitrary, and the adoption of an anti-interventionist foreign policy.
Although a member of the Republican party who advised both Barry Goldwater and Ronald Reagan, Friedman always espoused libertarian philosophical principles. He was soundly in favor of legalizing drugs, prostitution, and homosexuality, and while he was also in favor of immigration for its economic benefits he opposed immigrants’ access to the welfare system.
Friedman worked right up until the age of 94. Like Charles Schultz, his final work appeared in newspapers the day following his death.
Milton Friedman Quotes on Greed
Milton Friedman Capitalism and Freedom Quotes
Milton Friedman Famous Quotes
Milton Friedman Quotes Inflation
Milton Friedman Quotes Social Responsibility
Milton Friedman Quotes on Socialism
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