Milton Friedman, the greatest living economist, turns 90 on July 31. Over his long life, he has had the satisfaction of seeing the world turn in his direction.
Friedman was born in New York in 1912, at the end of a long period of peace and prosperity. The first half of his life witnessed a series of catastrophes for peace and freedom - World War I, the Bolshevik coup d’etat in Russia, the rise of fascism and national socialism, World War II, communist domination of half the world. Happily, Friedman’s parents had left Eastern Europe, avoiding the cataclysms there.
But freedom was under challenge in their adopted home, as well. The federal income tax began in 1913. World War I ushered in government planning on an unprecedented scale. Then came Prohibition, the New Deal, Keynesian economics, and a widespread feeling that the federal government could solve any problem it set its mind to.
Then, after World War II, with the big-government mentality almost unchallenged in the United States, Milton Friedman began writing. He wrote first about technical economic issues and laid the groundwork for a shift in U.S. monetary policy that would come later. Then in 1962, amidst the enthusiasm for John F. Kennedy’s New Frontier, he published “Capitalism and Freedom,” a book that influenced a whole generation of younger people. He proposed such ideas as school vouchers to bring the benefits of competition to education, a flat-rate tax to make the income tax less burdensome, and floating exchange rates to improve international finance.
After that the brilliant academic economist became a public figure-probably the most important advocate of individual freedom in the United States for the next 40 years. He wrote a column for Newsweek, lectured around the world, and appeared on television, always arguing for the benefits of free markets and free societies. He was enlisted as an adviser to Republican presidents and candidates, yet rejected the label “conservative,” insisting that he is a liberal like Thomas Jefferson and John Stuart Mill, or a libertarian in modern terms.
His advice was also sought around the world. Most famously, in the 1970s he advised the military government of Chile - for which he received years of abusive criticism - and the communist government of China - which no one seemed to mind. Happily, both governments listened, and both have become “economic miracles.” Chile now has the most successful economy in Latin America, and China’s path along the “capitalist road” has made it more prosperous than anyone could have dreamed in 1976, the year that Mao Zedong died and Friedman won the Nobel Prize.
In 1980 Friedman broadened his audience further with the publication of a book, “Free to Choose,” and an accompanying PBS television series. Millions of people watched “Free to Choose” and came to understand how markets work. One viewer, a young actor named Arnold Schwarzenegger, said in 1994: “In Austria I noticed that people would worry about when they would get their pension. In America, they would worry if they were going to meet their potential. Friedman’s books explained to me how a dynamic capitalist system allows people to fulfill their dreams.”
That show appeared just after Margaret Thatcher became prime minister of Great Britain, and just before Ronald Reagan was elected president. Thatcher and Reagan represented a revolution that Milton Friedman had helped to create: a shift away from central planning and the welfare state and toward a renewed appreciation for entrepreneurship, free markets, and limited government. The collectivist ideas that had dominated the 20th century were being replaced by a more libertarian spirit.
And not just in England and the United States. The success of the free market in Chile influenced other Latin American countries to move away from their long tradition of interventionism and tentatively embrace markets. About a decade after Reagan’s election, the Soviet empire collapsed, and many of the new leaders in eastern and central Europe turned out to be readers of … Milton Friedman. Estonia quickly became one of the post-Soviet success stories. When its young Prime Minister Mart Laar visited Washington, he was asked where he got the idea for his market-based reforms. Laar replied, “We read Milton Friedman and F. A. Hayek.” Another successful reformer, Czech Prime Minister Vaclav Klaus, was described as a “Friedmanite with a staff of Hayekians.”
Friedman was the intellectual father of the all-volunteer army—in particular, he persuaded a young congressman, Donald Rumsfeld, to become a leader in the successful effort to end the draft-and has also been an outspoken opponent of the war on drugs, which violates individual rights and fosters crime and corruption.
Most recently, Friedman’s long crusade for school choice received a boost in June from the Supreme Court, which held a voucher program constitutional. What a great 90th birthday present for a man who has said, “My central theme in public advocacy has been the promotion of human freedom.”