November 17, 2006

Milton Friedman, GSAS Alumnus and Free-Market Theorist, Dies

The Graduate School of Arts and Sciences is deeply saddened to announce the death on November 16 of Milton Friedman, a GSAS alumnus in Economics (’46 PhD) and winner of the 1976 Nobel Prize in Economic Sciences. Dr. Friedman was 94 and lived in San Francisco.

After attending Rutgers and the University of Chicago, Dr. Friedman won a fellowship to pursue a doctorate at Columbia. Here he studied with Nobel Laureate Simon Kuznets. Working with Professor Kuznets, Friedman transformed his doctoral thesis into a book, Income From Independent Professional Practice. It was the first of more than a dozen books that Mr. Friedman wrote alone or with collaborators.

Dr. Friedman enjoyed an illustrious career both as an academic and as a high-profile economic theorist and governmental advisor.

As a professor, he enjoyed academic affiliations with the University of Wisconsin, the University of Minnesota, Cambridge University, UCLA, and the University of Hawaii. The majority of his academic career was spent at the University of Chicago, where he taught from 1946 to 1982.

It was at Chicago that Dr. Friedman fostered the growth of the Chicago School of economics, a conservative group within the University’s Department of Economics. He and his colleagues became a counterforce to their liberal peers at the Massachusetts Institute of Technology and Harvard, influencing close to a dozen American winners of the Nobel Prize in economics.

Forceful in expressing his sometimes-unpopular views, Dr. Friedman spearheaded the growth of free-market economic theory in the postwar era and became a prime force in the movement of nations toward less government and greater reliance on individual responsibility. He was a spiritual heir to Adam Smith, the 18th-century founder of the science of economics and proponent of laissez-faire: that government governs best which governs least.

The only economic lever that Mr. Friedman sanctioned for government use was the control over the supply of money: a monetarist view that had gone out of favor when he embraced it in the 1950s.

Dr. Friedman’s analysis and predictions were regarded as stunning intellectual accomplishments. In the 1960s he accurately predicted the end of the economic boom and predicted a period of “stagflation”: the simultaneous occurrence of high unemployment and high inflation. His analysis of the causes of the Great Depression, blaming the Federal Reserve, broke new ground in the understanding of economic theory. Finally, Dr. Friedman was an early predictor of the fall of communism, arguing that free-market forces would eventually lead to the downfall of state-controlled economies.

Rarely, colleagues said, did anyone have such impact on his own profession and on government. Though he never served officially in any government posting, his ideas were widely embraced by politicians the world over, including Ronald Reagan and Margaret Thatcher.

Colleagues on both ends of the political spectrum regarded Dr. Friedman as one of the 20th century’s leading economic scholars, on a par with giants like John Maynard Keynes and Paul Samuelson.

“Among economic scholars, Milton Friedman had no peer,” Ben S. Bernanke, the Federal Reserve chairman, said yesterday. “The direct and indirect influences of his thinking on contemporary monetary economics would be difficult to overstate.”

On Tuesday, Alan Greenspan, the former Federal Reserve chairman, said of Dr. Friedman: “From a longer-term point of view, it’s his academic achievements which will have lasting import. But I would not dismiss the profound impact he has already had on the American public’s view.”

Greenspan added that Dr. Friedman had made a broader political argument: that you have to have economic freedom to have political freedom.

In addition to writing books, Dr. Friedman also served as a columnist for Newsweek from 1966 to 1983 and even as the star of a public television series. He was a bridge between the academic and popular worlds, and his broader impact stemmed in large part from the fact that he was preaching a gospel of capitalism that fit neatly into American self-perceptions.

A committed libertarian, Dr. Friedman advocated the legalization of drugs and opposed public education and the state’s power to license doctors, car drivers and others. He was criticized for those views, but he stood by them, arguing that prohibiting, regulating or licensing human behavior either does not work or creates inefficient bureaucracies.

In the words of Dr. Friedman, “the free market is the only mechanism that has ever been discovered for achieving participatory democracy,” he said.

In 1998, Dr. Friedman and his wife, Rose Director Friedman (a former classmate and a prominent economist in her own right), published a memoir, Two Lucky People ( University of Chicago Press), in which they reveled in “having intellectual children throughout the world.”

Dr. Friedman is survived by his wife, his son David, his daughter Janet Martel, four grandchildren, and three great-grandchildren.

For more information about Dr. Friedman’s life and work, please visit:

http://www.friedmanfoundation.org/index.html