Economist Milton Friedman: biography, ideas, life path and sayings

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:45

Milton Friedman is an American economist who received the Nobel Prize in 1976 for his research on consumption, monetary history and the complexities of stabilization policy. Together with George Stigler, he was the intellectual leader of the second generation of the Chicago School. Among his students are such prominent economists as Gary Bakker, Robert Vogel, Ronald Coase, Robert Lucas Jr. Friedman's main ideas concern monetary policy, taxation, privatization, deregulation of public policy, especially in the 1980s. Monetarism also influenced the decisions of the US Federal System during the global financial crisis.

Milton Friedman Brief Biography: The Early Years

The future scientist was born in Brooklyn, one of the poorest areas of New York. His parents were immigrants from Hungary. The city from which they emigrated is now on the territory of Ukraine (the city of Beregovo in the Transcarpathian region). Friedman's parents were engaged in the sale of textiles. Shortly after the birth of a child, the familymoved to Rahway, New Jersey. As a child, Friedman got into an accident, the scar on his upper lip remained with him for life. He graduated from high school in 1928 and entered Rutgers University. The young man majored in mathematics and economics. He originally intended to become a secretary. However, while studying, he met two scientists - Arthur Burns and Homer Jones, who convinced him that the economy could help bring the world out of the Great Depression.

After graduating from university, he was offered two scholarships: in mathematics at Brown and in economics at Chicago. Friedman chose the latter and received his Master of Arts degree in 1933. His views were influenced by Jacob Wiener, Frank Knight and Henry Simons. There he met his future wife, Rose. He then studied statistics under renowned economist Harold Hotelling and worked as an assistant to Henry Schultz. At the University of Chicago, Friedman met two of his best friends, George Stigler and Allen Wallis.

Public service

After graduation, Friedman at first failed to find a job as a teacher. So he decided to go to Washington with his friend Allen Wallis, where Roosevelt was just beginning to implement his New Deal. Friedman later concluded that all government interventions are "ineffective cures for the wrong disease." In 1935 he served on the National Resources Committee, where he first began to think about the interpretation of the consumption function. Then Friedmangot a job at the National Bureau of Economic Research. He worked as an assistant to Simon Kuznets.

In 1940, Friedman received a professorship at the University of Wisconsin, but returned to public service because of anti-Semitism. He worked on the federal government's military tax policy as an advisor. On duty, he advocated Keynesian state intervention in the economy.

Career and achievements

Milton Friedman was an adviser to US Republican President Ronald Reagan and British Conservative Prime Minister Margaret Thatcher. His political philosophy extolled the virtues of the free market with minimal government intervention. Once Friedman noted that he considers his main achievement to be the elimination of conscription in the US army. During his life he wrote many monographs, books, articles in scientific journals and newspapers, was a guest on television programs, lectured at various universities. His works were popular not only in the USA and Great Britain, but also in the countries of the socialist camp. The Economist magazine named him the most influential economist of the second half of the 20th century, and perhaps of the entire century. Although some polls give the palm to John Maynard Keynes.

Economic views

Milton Friedman is best known for drawing attention to the money supply. Monetarism is a set of views associated with quantity theory. Its traces can be found as early as the 16th century. With Anna Schwartz, Friedman wrote a book called "A Monetary History of the United States of America, 1867-1960 (1963)". Several regression analyzes have confirmed the primacy of the money supply over investment and government spending. Natural unemployment is inevitable, so it makes no sense to fight it. There is no need for the government to guide the economy through fiscal policy.

Developments in the field of statistics

Sequential analysis developed by Milton Friedman. The main ideas came to him while serving in the military research department in Colombia. Then sequential statistical analysis became the standard method of evaluation. Like many of Friedman's discoveries, today it seems remarkably simple. But this is the indicator of a genius who managed to penetrate the very essence of phenomena. Today, consistent statistical analysis is a key tool for modern economists.

Milton Friedman: capitalism and freedom

The concept of monetarism began with a refutation of Keynesian theory. Later, Milton Friedman would call many of her positions naive. In the 1950s he made his own interpretation of the consumption function. Capitalism and freedom are two concepts that were reintroduced into scientific circulation by Milton Friedman. Monetarism uses "Keynesian language and methodological apparatus", but denies the initial assumptions of the theory of state regulation of the economy. Friedman does not believe in the possibility of a full bootproduction capacity. In his understanding, there is always a natural level of unemployment, which is pointless to fight. The economist argued that in the long run the Phillips curve looks like a vertical straight line, and predicted the possibility of such a phenomenon as stagflation. Therefore, the only effective government policy is to gradually increase the money supply.