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Source link: http://archive.mises.org/5901/milton-friedmans-contribution/

Milton Friedman’s Contribution

November 16, 2006 by

Milton Friedman died today at the age of 94. His passing is a milestone. Friedman stood out as a leading figure in the fight for limited government and personal freedom in the mid twentieth century.

Of course, libertarianism has in some ways developed beyond the writings of Friedman. Today many libertarians advocate privatization beyond what Friedman envisioned. Yet Friedman stood against numerous efforts to expand government, and drew attention to the moral and practical arguments for liberty. He often acknowledged the great contribution of Mises and the Austrian School even as he disagreed with many important issues of method, money, and more–yet even here he caused us to strengthen our arguments.
Friedman’s intellectual accomplishments were most impressive. He led the movement against Keynesian economics for decades. His arguments against Keynesian economics changed professional opinion for the better. The permanent income hypothesis reintroduced the idea of time preference into economics. Friedman argued that people consider lifetime or permanent income, rather than current income, when deciding upon current consumption. Friedman also argued that ‘long and variable lags’ would confound Keynesian efforts to fine tune the economy. Friedman also convinced most economists that faulty monetary policy was at least partially responsible for the initial phase of the Great Depression. While Friedman advocated limiting the discretionary powers of Federal Reserve authorities, he also saw that free banking (as advocated by Austrian economist Larry White) could work even better. Last but not least, Friedman overturned the faulty idea ideas of static expectations and the ‘Philips Curve’ trade off between output and unemployment.

Friedman also worked to re-popularize price theory in economics. Friedman entered the economics profession at the time when Keynesian macroeconomics had attained a dominant position. Friedman insisted upon the microeconomic approach. Friedman’s price theory class at the University of Chicago has a legendary reputation. I was once told that after Friedman taught this class the first time, all UC grad students who had taken this class previously were required (by Frank Knight) to retake this class with Friedman.

Friedman’s influence extended beyond the economics profession. Friedman’s books Capitalism and Freedom and Free to Choose reached a broad audience. While there is no method of measuring the influence of books exactly, these books surely did much to sway public opinion.
Milton Friedman led a remarkable life. Early in life he saw capitalism come under grave threats, both by Keynesian interventionism and Marxism. Latter in life he witnessed the retreat of Keynesians and the collapse of Bolshevik Marxism. Of course, many people lived to see these events, but unlike most Friedman played a major role in countering these threats to capitalism and freedom. While others will continue to defend capitalism and advance the cause of individual liberty, few will do it as effectively as Milton Friedman.

{ 2 comments }

Björn Lundahl November 17, 2006 at 7:51 am

Friedman, my heart is bleeding.

When I was 19 years old, Milton Friedman was my idol. His views contrasted a lot against the political opinions in Sweden. He was the counterpart to John Kenneth Galbraith.

He was the man who learnt me that there is something which is called the money supply and that there is a connection between the money supply, business cycles and inflation.

He opened the door to a more free market policy. I followed his ideas closely when some of them were practised in Chile.

When Ronald Reagan and Margaret Thatcher were elected, I was very happy. They were influenced by his ideas. I was in an ecstasy. Now his ideas would have an influence throughout the entire world! God, I must be dreaming! Life was bright and liberty, I thought, was taking over! Everyone who knew me also knew that I loved Friedman. I always talked about him.

I bought his video films with his television series “Free to choose”. My best friend George and I watched those videos. He was not at all interested. My best friend George always started to fall asleep when I started the video recorder. I watched George, hey! Watch and listen! George! And I rewound the tape so George did not miss anything! Poor George, he was really forced to watch those movies.

George and I went to Hong Kong. I really wanted to experience his ideas in reality. I was impressed!

I also read some of Hayek’s work. For a New liberty, by Murray Rothbard, I first read it in the spring 1980. He was too extreme, I thought, in those days, “but still his ideas seemed to be very logical”.

Much later on, in life, I converted entirely to the Austrian School of Economics (I believe in the late 90s).

I, still, do believe that it was Friedman’s ideas that were one of the very great causes for all deregulations and relatively low inflation rates throughout the entire world.

The Austrian School of Economics is a lot more sophisticated than the Chicago School. It has a comprehensive world view, which the Chicago school is lacking. I believe that The Austrian School of Economics is superior compared to any school of economics.

I do also believe that it was Friedman’s charisma as an individual that influenced my heart.

He was a good and nice man, really quite sweet.

Well, life must go on… I am so sorry…

Björn Lundahl
Göteborg, Sweden

Björn Lundahl November 17, 2006 at 3:27 pm

Watch some video clips from Milton Friedman’s television series ”Free to Choose”:

http://www.youtube.com/watch?v=WbUl7flfEhw&mode=related&search=

Björn Lundahl

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