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Economists rarely
shape policy to the extent that Milton Friedman
did.
He died on November sixteenth in San Francisco,
California, at the age of ninety-four.
Milton Friedman is best known for his work on
the idea that governments can slow inflation by
shrinking the money supply. He expanded on this
theory, known as monetarism, by studying years
of American monetary policy.
He argued against the advice of John Maynard
Keynes. The British economist was a major
influence from the nineteen thirties to the
sixties. His answer to recession and high
unemployment was government spending on public
works, and printing more money to pay for it.
This increase in the money supply fed inflation.
But policymakers at that time generally accepted
that job growth meant high inflation rates.
Milton Friedman showed that inflation hurt job
growth. He argued that governments should
control the money supply to keep prices from
rising, or falling, too much. But he thought
they should not intervene in markets or job
creation.
His ideas in the nineteen fifties and sixties
were not popular at the time. But in the early
seventies the United States had both high
inflation and high unemployment. Policymakers
started to listen. He won a Nobel Prize in
economics in nineteen seventy-six.
His advice to cut taxes and control inflation
influenced the policies of President Ronald
Reagan and British Prime Minister Margaret
Thatcher. He brought his ideas to the public by
writing for magazines like Newsweek and
appearing on television.
But some critics blame his strong support of tax
cuts for increased budget deficits in the United
States. And he was criticized for dealing with
the military government of Chilean dictator
Augusto Pinochet. That government overthrew a
democratically elected president in nineteen
seventy-three. But, as Milton Friedman noted, it
was also willing to make economic reforms.
Today, changes in financial markets have made it
much harder to control money supplies the way he
advised. But his belief in small government and
free markets is still popular with economic
conservatives and libertarians.
He believed deeply in individual choice. Last
year, he told public television's Charlie Rose
that he wanted to be remembered as someone who
helped increase human freedom.
Survivors include his wife, Rose, an economist
with whom he wrote many of his books. |
