Milton Friedman

Andrew Norton alterts me to the fact that Milton Friedman died several hours ago. His Wikipedia biography and a long New York Times obituary provide more background. (Friedman was 94, so the NYT has clearly had plenty of time to polish up the obit.)

When I first came to economics, I could see nothing in Friedman to admire. My initial impression was that of a scorched-earth economist who lacked nuance, and had no scruples about meeting with Pinochet after he’d overthrown Chile’s elected government. His singleminded monetarism often flew in the face of facts. As Robert Solow once said: “Everything reminds Milton of the money supply. Well, everything reminds me of sex, but I keep it out of my papers.”

But learning more economics (and maybe getting a bit older), has mellowed my views. I still don’t agree with much of what Friedman stood for, but he’s given us incredibly important ideas. Two of my favourite policies – the Higher Education Contribution Scheme (HECS) and the Earned Income Tax Credit – have their genesis in Friedman’s thinking. He may not have been left, but he was often right.

Update: Alex Millmow points me to his account of Friedman’s 1975 visit to Australia (coauthored with Jerry Courvisanos). More too from Don Arthur, Jason Soon, John Quiggin, Harry Clarke, Greg Mankiw, Tyler Cowen, Alex Tabarrok, Steve Levitt, Larry Summers, and probably just about every other economist in and out of the blogosphere.

Further update: Bryan Caplan quotes what Ben Bernanke told Milton Friedman on his 90th birthday:

Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.

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15 Responses to Milton Friedman

  1. Patrick says:

    I certainly never had your ‘youthful’ problems with him – indeed it is closer to the mark to say that he helped inspire my interest (such as it is) in economics.

    I’ll miss him – maybe in his honour Australia can inaugurate school vouchers?

  2. The Speaker says:

    I don’t know whether any of you have watched the “Commanding Heights” documentary series, but it gives great overview of Milton Friedman’s economic ideas and is highly recommended.

  3. Sinclair Davidson says:

    From the preface of Free to Choose,
    “You must turn the issues over in your mind at leisure, consider the many arguments, let them simmer, and after a long time turn your preferences into convictions.”

    When I first read Friedman I was underwhelmed. Yet, over time, the ideas did perculate and I did come around to his views.

  4. Pingback: Club Troppo » Milton Friedman dies at 94

  5. Christine says:

    I remember arguing about Free to Choose and rent control policies in a tutorial (run by one of your esteemed co-authors) in my first year at UQ. And being against everything he wrote on principle, pretty much.

    Two days ago, I reread his 1955 paper dealing with student loans, and was quite frankly astonished at how good it was. Just covered almost every point that needed covering, and it was pretty much the first attempt at the issue.

    Still not convinced on vouchers, though. Even completely brilliant people can be wrong on some things. (Love the Solow quote.)

  6. harry clarke says:

    I had the opposite reaction. Reading ‘Capitalism and Freedom’ shifted my politics on finishing a fairly left oriented economics degree.

    His work pmodelling attitudes to risk contains some very important ideas. His theories on positivve economics have been discussed in every economics classroom on the planet.

  7. derrida derider says:

    Its the permanent income hypothesis that I think will stand the test of time. Originally written as a rebuttal of Keynesain countercyclical fiscal policy, it proved fruitful far beyond that.

    There’s no doubt he was a creative thinkre. I just wish he spent more time in the real world.

  8. Dan A says:

    Nice post mate.
    DA

  9. Bring Back the Currency Lad's Blog says:

    As usual DD is on the money although I thought his stuff on negative income tax was as good as he did.

    Like Solow his greatness seem to gain when his theory , in this cae monetarism, was shown to be wrong

  10. Peter says:

    MF’s support for the murderer, torturer, dictator and thief Augusto Pinochet cancels any of his other positives, IMHO. Either MF’s actions supporting Pinochet indicate an extreme political naivety — which would be odd in someone clearly so clever in policy argument — or they reveal a gross lack of common human decency and a gross disrespect for the most fundamental principle of democracy, that election results be accepted.

  11. Sinclair Davidson says:

    Peter – that is an old, tired story. And just plain silly. Friedman also gave advice to the PR China – where they don’t even have elections.

  12. George says:

    Yes Sinclair, perhaps if Pinochet had killed over 50 million people then the Left would finally shut up about how awful it was that Milton Friedman advised Chile on how to keep inflation low.

  13. Peter says:

    The story may be old, and it may even be silly. It certainly is not irrelevant in judging the calibre of human being Milton Friedman was.

  14. Sinclair Davidson says:

    I’m trying to understand, Peter. What calibre was he? How are his actions any different from Médecins Sans Frontières?

  15. derrida derider says:

    Peter –

    Sinclair & George’s response was exactly the one that MF himself gave – he said words to the effect “How does my advising Pinochet how to cure the disease of inflation differ from a doctor advising him how to stop an epidemic of cholera?”

    I think he could be criticised far more for giving bad advice to Pinochet than just for giving technical advice full stop.

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