Economist Milton Friedman dies at 94
SAN FRANCISCO --Milton Friedman was the rare public intellectual whose ideas extended from the ivory tower to seats of power around the world.
So when the economist, a tireless proponent of free enterprise, died on Thursday at 94 it was fitting that he was lauded by former heads of state as well as his academic peers. President Bush said that "America has lost one of its greatest citizens."
"Milton Friedman was a revolutionary thinker and extraordinary economist whose work helped advance human dignity and human freedom," Bush said of the 1976 Nobel Prize winner.
Friedman, a longtime professor at the University of Chicago, died in San Francisco, said Robert Fanger, a spokesman for the Milton and Rose D. Friedman Foundation in Indianapolis. His cause of death wasn't released.
Tributes quickly followed from universities, boardrooms and politicians.
The chair of the Federal Reserve said Friedman "had no peer." Former British Prime Minister Margaret Thatcher called him "an intellectual freedom fighter."
"Milton Friedman revived the economics of liberty when it had been all but forgotten," Thatcher said. "Never was there a less dismal practitioner of a dismal science."
In numerous books, a Newsweek magazine column and a PBS show, Friedman championed individual freedom in economics and politics. He pioneered a school of thought that became known as the Chicago school of economics.
Friedman's theory of monetarism, adopted in part by the Nixon, Ford and Reagan administrations, opposed the traditional Keynesian economics that had dominated U.S. policy since the New Deal. He was a member of Reagan's Economic Policy Advisory Board.
His work in consumption analysis, monetary history and stabilization policy earned him the Nobel Prize in economics in 1976.
Friedman favored a policy of steady, moderate growth in the money supply, opposed wage and price controls and criticized the Federal Reserve when it tried to fine-tune the economy.
A believer in the principles of 18th century economist Adam Smith, he consistently argued that individual freedom should rule economic policy. Friedman saw his theories attacked by many traditional economists such as Harvard's John Kenneth Galbraith.
"He, more than any other person, has changed the composition and ideology of the economists' profession," said Paul Samuelson, a 91-year-old professor emeritus of economics at the Massachusetts Institute of Technology who was a contemporary liberal foil to Friedman's conservatism.
In an essay titled "Is Capitalism Humane?" Friedman said that "a set of social institutions that stresses individual responsibility, that treats the individual ... as responsible for and to himself, will lead to a higher and more desirable moral climate."
Friedman argued that government should allow the free market to operate to solve inflation and other economic problems. But he also urged adoption of a "negative income tax" in which people who earn less than a certain amount would get money back from national coffers.
"Milton was one of the great thinkers and economists of the 20th century, and when I was first exposed to his powerful writings about money, free markets and individual freedom, it was like getting hit by a thunderbolt," California Gov. Arnold Schwarzenegger said in a statement.
Friedman lived to see free market reforms spread in the former communist world and Latin America, but played down his own influence.
"I hope what I wrote contributed to that, but it was not the moving force," Friedman told The New York Sun in March 2006. "People like myself, what we did was keep these ideas open until the time came when they could be accepted."
Born in New York City on July 31, 1912, Friedman began developing his economic theories during the Great Depression when President Franklin D. Roosevelt based his New Deal on the ideas of Britain's John Maynard Keynes, the most influential economist of the time.
Keynes argued that the government should intervene in economic affairs to avoid depressions by increasing spending and controlling interest rates.
Friedman graduated from Rutgers University in 1932 and earned his master's degree the following year at the University of Chicago.
After working for the National Resources Commission in Washington from 1935 to 1937, he served on the staff of the National Bureau of Economics Research in New York from 1937 to 1945 and received his doctorate from Columbia University in 1946.
After World War II, he taught at the University of Minnesota, then returned to the University of Chicago. He became a senior fellow at the Hoover Institution at Stanford University in 1977.
Friedman married Rose Director in 1938. They had two children, Janet and David, and Rose was co-author of some of his books.
Among his most famous books were: "Price Theory," 1962 (with Rose Friedman); "Capitalism and Freedom," 1962 (with Anna J. Schwartz); "An Economist's Protest," 1972 and "There Is No Such Thing As a Free Lunch," 1975.
Friedman wrote columns for Newsweek from 1966 to 1983 and was one of the few economists to bridge the gap between academia and the public. He supported Barry Goldwater in 1964 and Richard Nixon in 1968 and served on Nixon's commission for an All-Volunteer Army in 1969 and 1970.
"The direct and indirect influences of his thinking on contemporary monetary economics would be difficult to overstate," Federal Reserve Chairman Ben Bernanke said.
The Friedmans started the foundation that bears their names in 1996 to promote and advocate parental choice in education.
Ed Crane, president of the Cato Institute, a think tank that promotes free market concepts, said that "ultimately, what Milton believed in was human liberty and he took great joy in trying to promote that concept."
Friedman is survived by his wife and two children.
Associated Press Writers Martin Crutsinger in Washington and Mark Jewell in Boston contributed to this report.