Milton Friedman, 1912-2006

Yesterday was a sad day for the economics profession, as one of its leading minds passed on at the age of 94:

STANFORD — Milton Friedman, recipient of the 1976 Nobel Memorial Prize for Economic Science and a senior research fellow at the Hoover Institution since 1977, died this morning. He was 94…

A longtime and outspoken proponent of political and economic freedom, Friedman conceived many of the most important innovations in economic theory during the second half of the 20th century. Of those, his landmark work explaining monetary supply and its effect on economic and inflationary shifts garnered him worldwide renown and respect.

The influence of Friedman’s work was felt again this year when Edmund Phelps was announced as the 2006 Nobel Prize winner in economics for a theory the two Nobelists developed in the 1960s regarding unemployment and inflationInflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a “hidden tax,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spending power. . That theory continues to be used as a practical guide among the world’s major central banks, including the U.S. Federal Reserve.

Friedman, who often served as an adviser and sage for many government leaders, played a key role in this nation’s economic policy despite never having formally served in an administration after World War II. He also was known for championing school vouchers, particularly through the foundation he and his wife created, the Milton and Rose D. Friedman Foundation for Educational Choice…

He was widely regarded as the leader of the Chicago School of monetary economics, which stresses the importance of the quantity of money as an instrument of government policy and as a determinant of business cycles and inflation.

In addition to his scientific work, Friedman wrote extensively on public policy, always with a primary emphasis on the preservation and extension of individual freedom. His most important books in this field were (with his wife, Rose) Capitalism and Freedom (University of Chicago Press, 1962); Bright Promises, Dismal Performance (Thomas Horton and Daughters, 1983), which consists mostly of reprints of columns he wrote for Newsweek from 1966 to 1983; (also with Rose) Free to Choose (Harcourt Brace Jovanovich, 1980), which complemented a ten-part television series of the same name shown on the Public Broadcasting Service (PBS) network in early 1980; and (with Rose) Tyranny of the Status Quo (Harcourt Brace Jovanovich, 1984), which complemented a three-part television series of the same name, shown on PBS in early 1984…

Friedman was active in public affairs, serving as an informal economic adviser to Senator Barry Goldwater in his unsuccessful campaign for the presidency in 1964, to Richard Nixon in his successful 1968 campaign, to President Nixon subsequently, and to Ronald Reagan in his 1980 campaign.

He published numerous books and articles, most notably A Theory of the Consumption Function, The Optimum Quantity of Money and Other Essays, and (with A. J. Schwartz) A Monetary History of the United States, Monetary Statistics of the United States, and Monetary Trends in the United States and the United Kingdom.

Friedman received a B.A. degree in 1932 from Rutgers University, an M.A. in 1933 from the University of Chicago, and a Ph.D. degree in 1946 from Columbia University…

Milton Friedman was born July 31, 1912, in Brooklyn, N.Y., the fourth and last child and first son of Sarah Ethel (Landau) and Jeno Saul Friedman. He and his wife, Rose Director Friedman, who survives, were married in 1938. He is also survived by their two children, Janet Martel and David Friedman, four grandchildren, and three great-grandchildren. (Full piece here.)

Many of our own economists were profoundly influenced by Friedman’s scientific work, as well as his forceful advocacy of the ideal of a free and open society subject to limited government and the rule of law. He will be dearly missed.

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