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Nobel laureate economist Milton Friedman dies at 94
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President George W. Bush honored Milton Friedman (left) on his 90th birthday in May 2002, with his wife, Dr. Rose Friedman. He won the 1976 Nobel Memorial Prize for Economic Science. Milton Friedman died today at the age of 94.
By Mark Feeney, Globe Staff
Milton Friedman, the Nobel Prize-winning economist who played a key role in the intellectual resurgence of capitalism and the global shift to free-market economics in the final third of the 20th century, died today at a San Francisco hospital. He was 94. The cause of death was heart failure.
His death was announced by the Milton and Rose D. Friedman Foundation, of Indianapolis.
In a 90th-birthday tribute, the columnist George F. Will described Dr. Friedman as "the most consequential public intellectual of the 20th century."
Few rivaled Dr. Friedman, a self-described "classical liberal," in the 19th-century sense, in shaping the intellectual climate of the 21st century. A forceful advocate for laissez-faire economics, he provided the theoretical underpinnings for many of the policies put into practice by President Ronald Reagan and British Prime Minister Margaret Thatcher in the 1980s.
Dr. Friedman had resisted the revolution in economics and public policy wrought during the middle third of the last century by the British economist John Maynard Keynes. Keynesianism saw government spending as the key to economic health and viewed a planned economy as the inevitable — and superior — successor to a market economy. (In a nice irony, Dr. Friedman twice submitted articles to an economic journal Keynes edited that were rejected.)
An upholder of the quantity theory of money, Dr. Friedman argued that the money supply mattered more than spending or taxing in influencing the economy. He proclaimed the primacy of the market and argued that it did the most to promote personal freedom.
"Freedom is the major objective in relations among individuals," Dr. Friedman wrote in a 1968 essay collection, "Dollars and Deficits," and "the preservation of freedom requires limiting narrowly the role of government and placing primary reliance on private property, free markets, and voluntary arrangements."
Speaking on college campuses in the ’60s, Dr. Friedman had a standard response when heckled by the New Left. "Your objective is the same as mine — greater individual freedom," he would say. "The difference is that I know how to achieve that objective and you do not."
For many years, he was seen as a voice in the economic and political wilderness. When Time magazine put Dr. Friedman on its cover, in 1969, it proclaimed him a "maverick messiah."
Dr. Friedman considered himself a libertarian and radical and had the courage of his sometimes off-putting convictions. He advocated abolition of the Food and Drug Administration, for example, and legalizing drugs. Dr. Friedman dismissed the idea of corporate social responsibility.
"The only responsibility of companies is to make a profit," he wrote in a widely quoted 1970 article for The New York Times Magazine.
Among the areas where Dr. Friedman saw his views prevail were tax reform, deregulation, floating currency exchanges, free trade, and an all-volunteer Army. He also supported a flat tax, education vouchers, and privatizing Social Security. He proposed replacing the Federal Reserve Board with a computer.
"Money is too important to be left to central bankers," he quipped in a 2001 Chicago Sun-Times interview.
Dr. Friedman owed his influence not just to his ideas but also his presentation of them. He was a gifted polemicist, well aware that economics was intimately bound up with social and political concerns.
"There is no such thing as a purely economic issue," he wrote in his book "An Economist's Protest" (1972).
Dr. Friedman wrote a column for Newsweek magazine from 1966 to 1984. His 10-part PBS series, "Free to Choose" (1980) was an enormous popular success — and not just in the United States.
"I know you," Britain"s Queen Elizabeth told Dr. Friedman at a 1983 royal reception. "[Prince] Philip is always watching you on the telly."
The book “Free to Choose,” which he wrote with his wife, Rose, was the top-selling US nonfiction title of 1980 and has been translated into 17 languages.
Dr. Friedman’s ability to get across his ideas to a larger public made him in certain respects the conservative counterpart of the liberal Harvard economist John Kenneth Galbraith. They made for an unlikely pair: Dr. Friedman stood 5 feet 3 inches tall, Galbraith 6 feet 8 inches. Moreover, Dr. Friedman was an outstanding technical economist, whereas Galbraith was more social commentator and public policy analyst.
In addition to the 1976 Nobel Economics Prize, Dr. Friedman received the John Bates Clark Medal (given biennially to the nation’s outstanding economist under 40) in 1951 and served as president of the American Economic Association in 1967.
Among Dr. Friedman’s best-known books are “A Theory of the Consumption Function (1957); “A Monetary History of the United States, 1867-1960” (with Anna D. Schwartz, 1963); and two collaborations with his wife, “Capitalism and Freedom” (1963) and “Tyranny of the Status Quo” (1984), which was also a three-part PBS series.
Milton Friedman was born on July 31, 1912, in Brooklyn, N.Y., the son of Eastern European immigrants, Jeno Saul Friedman and Sarah (Landau) Friedman. When Dr. Friedman was a year old, the family moved to Rahway, N.J., about 20 miles from New York City. Dr. Friedman’s mother ran a dry-goods store and his father worked as a businessman in New York City.
Intellectually precocious, Dr. Friedman graduated from high school at 15. He earned a scholarship to attend Rutgers University and intended to become an actuary. Dr. Friedman became increasingly interested in economics, thanks in part to the influence of a professor, Arthur F. Burns, later chairman of the Federal Reserve Board.
The Great Depression helped determine his choice of career. “Under the circumstances,” he wrote in “Two Lucky People” (1998), a joint memoir written with his wife, “becoming an economist seemed more relevant to the burning issues of the day than becoming an applied mathematician or an actuary.”
After earning his bachelor’s degree in 1932, Dr. Friedman was offered a graduate scholarship in economics by the University of Chicago and one in applied mathematics by Brown University. He went to Chicago.
“Intellectually, it opened new worlds,” Dr. Friedman said in his Nobel Prize autobiographical essay.
The university exposed him, he wrote, “to a cosmopolitan and vibrant intellectual atmosphere of a kind that I had never dreamed existed. I have never recovered.”
Chicago also introduced Dr. Friedman to a fellow graduate student, Rose Director, courtesy of the alphabetical seating arrangement of the economics theory course they were taking. The couple married in 1938.
The University of Chicago was a bastion of more traditional, monetarist economics, a status it would retain.
“The small minority of economists who did not succumb to the Keynesian revolution,” Dr. Friedman wrote in “Two Lucky People,” “consisted disproportionately of Chicago-trained economists.”
Dr. Friedman earned his master’s at Chicago and his doctorate at Columbia University. He went to work for the National Resources Committee, in Washington, DC.
“Ironically, the New Deal was a lifesaver for us personally,” he and his wife recalled in their memoir. Dr. Friedman later worked for the National Bureau of Economic Research and briefly taught at the University of Wisconsin at Madison.
During World War II, he worked for the Treasury Department in Washington and did statistical analysis at Columbia University for the War Department. After a year at the University of Minnesota, he returned to Chicago in 1946. He remained there until his retirement, in 1977.
Dr. Friedman turned down an offer to serve on President Dwight D. Eisenhower’s Council of Economic Advisers. He later served as an economic adviser in a less formal capacity to Presidents Richard Nixon and Ronald Reagan. Dr. Friedman’s idea of a “negative income tax,” or guaranteed income for the poor, was the basis of Nixon’s Family Assistance Plan, a sweeping welfare reform proposal, which failed to be enacted into law.
Dr. Friedman was economic adviser to US Sen. Barry Goldwater (R-Ariz.) during his 1964 presidential campaign. Goldwater lost that election, but Dr. Friedman won a different one soon thereafter — as policy-holder representative on the board of the College Retirement Equity Foundation, a pension fund for academics.
“I concluded that the liberal professors did not want a conservative as president of the country,” Dr. Friedman joked, ‘’but when it came to looking after their retirement funds, that was something else again.”
Dr. Friedman became the subject of controversy in 1975 over a brief meeting with Chilean dictator Augusto Pinochet.
“I do not regard it as evil for an economist to render technical economic advice to the Chilean government to help end the plague of inflation,” he stated, “any more than I would regard it as evil for a physician to give technical medical advice to the Chilean government to end a medical plague.”
After retiring from the University of Chicago, Dr. Friedman became a senior research fellow at the Hoover Institution at Stanford University. He received the nation’s highest civilian honor, the Presidential Medal of Freedom, in 1988. That same year he received the National Medal of Science.
As he grew older, Dr. Friedman devoted less time to economic research and more to public pronouncements.
“People’s capacities to do scientific work decline with age,” he remarked in a 1986 Los Angeles Times interview, “while their capacities to throw the bull increase.”
In addition to his wife, Dr. Friedman leaves a son, David, and daughter, Janet. Funeral arrangements are incomplete.