If Milton Friedman were alive today — and there was never a
time when he was more needed — he would be one hundred years old.
He was born on July 31, 1912. But Professor Friedman’s death at age
94 deprived the nation of one of those rare thinkers who had both
genius and common sense.
Most people would not be able to understand the complex economic
analysis that won him a Nobel Prize, but people with no knowledge
of economics had no trouble understanding his popular books like
Free to Choose or the TV series of the same name.
In being able to express himself at both the highest level of
his profession and also at a level that the average person could
readily understand, Milton Friedman was like the economist whose
theories and persona were most different from his own — John
Maynard Keynes.
Like many, if not most, people who became prominent as opponents
of the left, Professor Friedman began on the left. Decades later,
looking back at a statement of his own from his early years, he
said: “The most striking feature of this statement is how
thoroughly Keynesian it is.”
No one converted Milton Friedman, either in economics or in his
views on social policy. His own research, analysis, and experience
converted him.
As a professor, he did not attempt to convert students to his
political views. I made no secret of the fact that I was a Marxist
when I was a student in Professor Friedman’s course, but he made no
effort to change my views. He once said that anybody who was easily
converted was not worth converting.
I was still a Marxist after taking Professor Friedman’s class.
Working as an economist in the government converted me.
What Milton Friedman is best known for as an economist was his
opposition to Keynesian economics, which had largely swept the
economics profession on both sides of the Atlantic, with the
notable exception of the University of Chicago, where Friedman was
both trained as a student and later taught.
In the heyday of Keynesian economics, many economists believed
that inflationary government policies could reduce unemployment,
and early empirical data seemed to support that view. The inference
was that the government could make careful trade-offs between
inflation and unemployment, and thus “fine tune” the economy.
Milton Friedman challenged this view with both facts and
analysis. He showed that the relationship between inflation and
unemployment held only in the short run, when the inflation was
unexpected. But, after everyone got used to inflation, unemployment
could be just as high with high inflation as it had been with low
inflation.
When both unemployment and inflation rose at the same time in
the 1970s — “stagflation,” as it was called — the idea of the
government “fine tuning” the economy faded away. There are still
some die-hard Keynesians today who keep insisting that the
government’s “stimulus” spending would have worked, if only it was
bigger and lasted longer.
This is one of those heads-I-win-and-tails-you-lose arguments.
Even if the government spends itself into bankruptcy and the
economy still does not recover, Keynesians can always say that it
would have worked if only the government had spent more.
Although Milton Friedman became someone regarded as a
conservative icon, he considered himself a liberal in the original
sense of the word — someone who believes in the liberty of the
individual, free of government intrusions. Far from trying to
conserve things as they are, he wrote a book titled Tyranny of
the Status Quo.
Milton Friedman proposed radical changes in policies and
institutions ranging from the public schools to the Federal
Reserve. It is liberals who want to conserve and expand the welfare
state.
As a student of Professor Friedman back in 1960, I was struck by
two things — his tough grading standards and the fact that he had
a black secretary. This was years before affirmative action. People
on the left exhibit blacks as mascots. But I never heard Milton
Friedman say that he had a black secretary, though she was with him
for decades. Both his grading standards and his refusal to try to
be politically correct increased my respect for him.
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