Milton Friedman: Free Market Economist Assignment

Milton Friedman: Free Market Economist Assignment Words: 1834

Milton Friedman: Free Market Economist Many consider Milton Friedman one of the greatest, most prominent economists of the twentieth century. From his free market advocacy to his ideas of competition in education and less government, Milton Friedman’s ideas have lead to change around the world. His contributions have arguably added tens of trillions of dollars to the world product over time (Ebenstein, 2007). Milton Friedman rose from vary humble beginnings to become one of the most respected economists of his time. Born in 1912 to poor Jewish immigrants in New York City, Friedman took his life in stride. We always had enough to eat and the family atmosphere was warm supportive”, Freidman stated. His parents were born in a Hungarian community in what is now known as the Ukraine. They met in New York City as teens. When Milton was a year old the family moved to Rahway, New Jersey where the Freidman’s ran a dry-goods store (Lindbeck, 1992). Along with his sisters, Milton attended public schools and graduated from Rahway High School in 1928, shortly before is 16th birthday. During that year, Milton’s father died leaving his mother and two older sisters to support the family (Lindbeck 1992).

Friedman attended Rutgers University on scholarship and earned his B. A. in 1932 (The Concise Encyclopedia of Economics, 2008). Although he specialized in mathematics, Friedman became interested in economics and graduated with a major in both fields. Two professors, Homer Jones and Arthur Burns, made economics “exciting and relevant”, exclaimed Friedman, and helped him to obtain a scholarship to pursue his master’s degree at the University of Chicago (Lindbeck, 1992). At the same time Milton was offered a mathematics scholarship to Brown University, which he turned down.

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His choice was “inspired by the ongoing Great Depression and his belief that economics could help solve it” (Doherty, 2007). Milton Friedman completed his Master’s Degree in only one year in 1933. During that time period he met another economics student and future wife, Rose Director. They would marry six years later after the fears of the depression had past. Milton proclaimed that Rose has been an “active partner in all of his professional work”, pinning many books together (Lindbeck, 1992). In 1933 Milton Friedman accepted a graduate fellowship at Columbia

University where he was introduced to mathematical economics and economic theory and would later earn his PH. D. Friedman was also exposed to institutional and empirical approach to economics that was completely different from that he was a part of in Chicago. In 1935 Friedman began working for the federal government with the National Resources Committee on a consumer budget study. Two years later he began working at the National Bureau of Economic Research where he jointly published Incomes from Independent Professional Practice, which later became his doctoral dissertation at Columbia (Doherty, 2007).

These two experiences led to his “landmark work, A Theory of the Consumption Function”, that was later published in 1957 (The Concise Encyclopedia of Economics, 2008). Freidman worked for two years at the U. S. Treasury’s tax research division from 1941-1943. During his stint there, he was “partially responsible for developing the withholding system for paying income tax”, which he later wished there was a way to abolish (Doherty, 2007).

Milton Friedman made is mark over the next 31 years from 1946-1977, as a teacher, scholar, and finally the Dean of the Chicago School of Economics, while simultaneously maintaining a position with the Bureau of Economic Research (Ebenstein, 2007). Milton Friedman had no real political aspirations, but in the early 1960’s he was drawn to the public arena. In 1964, Friedman served, as an economic advisor to Senator Goldwater during his failed presidency bid. Again in 1968 he was on the economic committee during Richard Nixon’s successful presidential candidacy. (Lindbeck, 1992).

Then again in 1980, Friedman advise presidential candidate Ronald Reagan, whose views were closely related to Milton’s “laissez faire” philosophy. Friedman then served as a member of the Regan administration’s Economic Policy Advisory Board for one year (Academy of Achievement, 2006). Friedman consistently refused appointments to full-time government positions, “preferring to focus on his scientific work and promote his public policy beliefs outside of government” (Academy of Achievement, 2006). Milton was a strong believer that less government would equal a freer society, which would in turn create a stronger economy.

The Nobel Prize for Economic Science was awarded to Milton Friedman in 1976 for his “achievements in the field of consumption analysis, monetary history and theory” (Lindbeck, 1992). During 1988, Ronald Reagan awarded him the Presidential Metal of Freedom and he also was awarded the National Metal of Science (Arbeiter, Chitester, & Skinner, 2006). On May 9, 2002, President Bush honored Friedman at the White house. As the President put it “Milton Friedman has shown us that when government attempts to substitute its own judgments for the judgments of free people, the results are usually disastrous.

In contrast to the free market’s invisible hand, which improves lives of people, the invisible foot of the government tramples on people’s hopes and destroys their dreams. ” (Manhattan Institute, 2007). “If there was ever one person who was not a world leader, who never held a public office, nor led an army could have such an influence on the lives of so many, it was Milton Friedman”, asserted executive producer Tom Skinner from the biography, The Power of Choice (Chitester, et al. , 2006). Milton Friedman opposes government involvement in almost every area of the private industry.

He would abolish virtually all regulations on industry, working conditions, and the professional industry. Milton would turn over all publicly operated industry to the private sector such as the nations school, highways, and utilities. Friedman felt that balance would come eventually without the government taking control away from the people. The unifying theme of Friedman’s life and work was a belief in the power of the individual, prosperity, and freedom. Along those same lines of thinking is his theory as he states in his book, The Consumption Function.

He asserted that consumption decisions are based on what he termed “permanent income”. If someone suddenly gains or looses income, they do not make immediate changes in their spending habits. When the government attempts to manipulate our economic behavior through quick tax raises or cuts, the effects are not what the politicians looked for (Doherty, 2007). Friedman and his like-minded colleagues see money supply as the major determinate in the business cycle and inflation and regard it as the most effective instrument in government economic policy (Friedman, 1992).

He argued that most forms of government intervention in the economy are not only counterproductive, but also fundamentally contrary to the values of a free society (Academy of Achievement, 2006). Throughout the hundreds of articles, 25 books, PBS TV series, tri-weekly column in Newsweek, and numerous speaking engagements, Milton Friedman often discussed the government’s involvement in education. While speaking to the American Legislative Exchange Council (ALEC), Friedman contended that the U. S. does a great job with the universities, but an extremely poor job with elementary and secondary schooling.

At the college level the investment is in the students. At the K-12 group all the investment is in the schools and that is the problem. Friedman wrote in 1955 that governments could give parents vouchers to redeem at approved educational institutes equal to the amount that each student is already costing the government to educate (Friedman, 1955). Denationalization of education would widen the range of choices to parents. Private schools would challenge public schools to do a better job at educating the children.

The salaries of schoolteachers would become responsive to the market as well as the cost to attend the institutions (Friedman, 1955). A national voucher system was in place after WWII in the form of the GI Bill on the college level with great success, as well as similar forms currently in the form of grants for kids to attend any university of their choice. “Here, as in other fields, competitive private enterprise is likely to be more efficient in meeting the demands of the consumer than national enterprises Friedman, 1955). While the progress towards school vouchers continues to be a slow process in the U.

S. , there has been headway in other countries such as Chile, and Denmark. In 1996 The Milton and Rose D. Friedman Foundation were formed, devoting resources and promoting parental choice in schooling (Lindbeck, 1992). Milton Friedman’s influence on the economic conditions around the world has had a greater impact arguably more than any other economist in the twentieth century. His ethical view of the world … is the libertarian view that adults should be able to do as they wish so long as they are not harming anyone else (Ebenstien, 2007).

This viewpoint typically leads to advocacy of less government. Friedman went on over the course of his career to give advise and influence officials in countries from “Israel to China, from England to Yugoslavia” (Doherty, 2007). Chile went from being one of the most socialist countries in the world with hyperinflation of 500 percent, to the closest to a free-market nation in the world with total political freedom (Manhattan Institute, 2007). By anyone’s measure, Milton Friedman is one of the most influential economists in history.

Larry Mone of the Manhattan Institute declared, “Friedman built the foundation of the modern economic theory, which is responsible for much of the prosperity that the United States has enjoyed in recent decades, and his ideas have helped lift millions of people around the world out of poverty in those countries that have been smart enough to embrace them” (Manhattan Institute, 2007). Until his death on November 16, 2006, at the age of 94, Milton Friedman remained an intellectual warrior for the ideas in the day-today world, and helped change the world in important and positive ways (Doherty, 2007).

From his humble beginnings to the multiple awards and honors bestowed upon him, Milton remained a relentless believer in the power of a free people and the justice of a free society. Friedman was never a politician, and he could never make things happen. He could only attempt to persuade and influence fellow citizens and the officials that economic freedom leads to political freedom, which in turns becomes a free society. References Academy of Achievements. (2006). Biography: Milton Friedman, Nobel Prize in Economics.

Retrieved from http://www. achievement. org/autodoc/page/friObio-1. Arbeiter, L. , Chitester, B. & Skinner, t. (2006). The power of Choice. Free to Choose Media. Retrieved from http://www. freetochoosemedia. org/production/POC/index. php Doherty, Brian. (2007). The life and Times of Milton Friedman. Reason Magazine. Retrieved from http://www. reason. com/archives/2007/02/21/the-life-and-times-of-milton-friedman. Ebenstein, Lanny. (2007). Milton Friedman: A Biography. New York: Palgrave Macmillian. Friedman, Milton. 1955). Economics and the Public Interest: The Role of Government in Education. New Jersey: Rutgers University Press. Lindbeck, Assar. (1992). Nobel Lectures, Economics 1969-1980: Milton Friedman. Singapore: World Scientific Publishing Co. Manhattan Institute. (2007). The legacy of Milton Friedman. New York: Author. The Concise Encyclopedia of Economics. (2008). Library of Economics and Liberty. Retrieved March 25, 2010 from the World Wide Web: http://. econlib. org/library/enc/bois/Friedman. html

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