WSJ and others on Milton Friedman

Here is an excerpt from Wall Street Journal “How Milton Friedman Changed Economics, Policy and Markets“,

A half century ago, Milton Friedman’s advocacy of free markets over government intervention and his prescription for inflation-fighting by central banks were treated as fringe notions by many economists. By the time the Nobel Prize-winning economist died yesterday at the age of 94, his views had helped to reshape modern capitalism.

A diminutive man known for his strong-willed and combative style, Mr. Friedman provided the intellectual foundations for the anti-inflation, tax-cutting and antigovernment policies of President Ronald Reagan and British Prime Minister Margaret Thatcher and an era of more-disciplined central banking. His ideas helped to end the military draft in the 1970s, gave birth to staple conservative causes such as school vouchers and created the groundwork for new economic views about the Great Depression, unemployment, inflation and exchange rates.

Many of his ideas remain controversial to this day, or carry less weight. Central bankers don’t follow his prescriptions for how to implement monetary policy, considering them impractical. And despite his strong advocacy, publicly funded vouchers for students to attend private schools are still rare and researchers struggle to prove their effectiveness. His advocacy of the decriminalization of drugs hasn’t been heeded.

But few would argue against the notion that Mr. Friedman — with highly technical academic papers, popular books and columns, and the ear of powerful politicians — helped to shift the center of debate in the U.S. and abroad about the proper role of government in managing a nation’s economy. His influence spread far afield, from Hong Kong to Chile to Russia and Eastern Europe, and his ideas took root with reformers pushing for privatization and open markets.

From The Sunday Times, “The Chicago boy who gave monetarism to the world“,

THE last time I interviewed Milton Friedman, on the occasion of his 90th birthday, the famously sharp and agile mind of the world’s greatest economist was still working overtime.

At the time there were worries about whether Japan, mired in a deflationary slump that had lasted more than a decade, would ever pull out of it. Friedman was unfashionably upbeat, arguing strongly that the rising sun would shine once again. Japan, he said, would surprise the world by recovering strongly, on the back of the ultra-low interest rates. It did.

Friedman, who died last week aged 94, was similarly upbeat about America, then still groping its way out of the economic uncertainty after September 11. Alan Greenspan was doing the right thing by cutting interest rates, he said, and the economy would respond by bouncing back. Again, he was right.

I first met Friedman, who stood 5 ft tall in his shoes, a quarter of a century earlier. He and his equally diminutive wife Rose, also an economist, were in London to publicise a television series he had made.

Probably doing their tenth interview of the day, they were animated and interested. The most enduring image of the series was of him standing next to a banknote printing press. The only way to stop inflation was to switch off the press.

[…]

The depression, he [Friedman] and Schwartz argued, was due to the Federal Reserve losing its nerve during the boom years of the 1920s. It slammed the brakes on, causing hundreds of bank failures and a plunge in the money supply. The surprise was not that there was a depression but that it was not a lot worse.

Ben Bernanke, the Fed chairman, told Friedman recently: “You’re right, we did it. We’re very sorry.”

But Friedman was proudest, he told me, of another piece of work, which explained what determined people’s spending. “The natural rate had more influence on the world but as a consistent programme carried through it doesn’t seem to me it was in the same class as the theory of the consumption function,” he said.

From The Age, Australia, “Milton Friedman, patron saint of free-market economics“,

WHEN Mongolia emerged from seven decades of socialism in the early 1990s, its leaders considered building a statue of Milton Friedman on the mountain overlooking the capital Ulan Bator, such was their new-found admiration for the man they saw as the patron saint of free markets.

Friedman, who died of heart failure on Thursday aged 94, advised and influenced world leaders including Margaret Thatcher and Ronald Reagan. His theories, which linked economic growth to the supply of money, are now fundamental to how central banks operate around the world, limiting the role of governments in policymaking.

From Canada’s National Post, “Inflation’s foe: Milton Friedman tireless champion of stable monetary policy“,

Milton Friedman was the most influential economist of the second half of the 20th century. His work had profound effects on the theory and practice of economic policy, particularly macroeconomic policy, but also, albeit less visibly to the public at large, on academic economics. And, through his once famous Newsweek column, and his television series, he was a tireless popularizer of economic ideas, too.

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