Birth of Milton Friedman

July 31, 2018

31 July 1912 marks the birth date of Milton Friedman – American economist, Nobel Prize winner, clear thinker, free-market capitalist and warrior for liberty and freedom. Arguably the most influential 20th century economist (rivalled for that title by left-wing economist and advocate of government-based economic stimulation, John Maynard Keynes), Friedman's signature policy outcomes were enhanced freedom and prosperity.

Friedman was born in Brooklyn, New York, to parents in a struggling small business. In the 1980s, Friedman became a key advisor to Republican US President, Ronald Reagan, and Conservative British Prime Minister, Margaret Thatcher. Those highly successful administrations – and Australia (under Hawke-Keating, with Howard's backing from opposition), New Zealand (Rogernomics) and other parts of the Western world – instituted Friedman-inspired policies. His rational macro-economic and micro-economic reforms famously corrected the Keynesian pits and economic cul-de-sacs most nations had suffered in the preceding decade.

Friedman's economic framework and philosophy helped guide the world - particularly Western nations - out of stagflation*, protectionism, budgetary and regulatory demises of the 1970s. Keynesian theory had failed to conceptualise - let alone deal with - supply-side shock brought on by two OPEC oil price-supply crises that effectively tripled the price of oil.

Many of Friedman's policy approaches dominate economic and political thought, debate and practice today.  Yet Keynesian big-government intervention policies and the “nanny state” have made an unwelcome comeback, particularly advocated by the Australian Labor Party since the Global Financial Crisis.

Celebrate the birth, life and achievements of the great Milton Friedman by:

  • watching this “best of” clip, or some of his other famous clips and take-downs of progressive US liberals on YouTube (embedded below at the point where Friedman answers a young leftist promoting forcible wealth redistribution and a 100% inheritance tax)
  • viewing his many profound and insightful quotes over the decades
  • checking out the work and life of one of Friedman’s finest protégés, Thomas Sowell, and/or
  • sharing this Action Plan post on social media with family, friends, proud Western citizens and those imbued with common sense, curiosity and keen interest in free, prosperous and civil society.

*stagflation: a portmanteau of stagnation and inflation - the combined effects of low economic growth, high unemployment and high inflation

Further details

From the 1970s, Friedman was the world’s leading “economic dry” and most effective advocate for:

  • lower and simpler taxation
  • minimal government spending, welfare, regulation and intervention
  • low and stable inflation
  • monetary rules over bureaucratic/central bank discretion
  • floating exchange rates
  • “free and competitive markets” through trade liberalisation and deregulated, well-informed and transparent capital, labour and product markets
  • privatisation, competitive neutrality, and
  • minimal price controls (floors and ceilings) in labour and product markets, so the price mechanism can better clear excesses in demand or supply.

Beyond his classical economics, Friedman was also an exceptional advocate for freedoms of speech, association and exchange, liberty and personal responsibility, which he understood was needed for competitive, well-functioning capitalism and minimal government intervention in lives, markets and societies. 

Friedman’s command of monetary history and theory from the 1960s were instrumental in explaining the stagflation of the 1970s. His framework of monetarism and liberal economics provided the policy tools for governments and central banks in the 1980s, particularly across the West, to fix the economic binds and conundrums inherited from the prior decade.

 

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