FRIEDMAN, MILTON

FRIEDMAN, MILTON (1912– ), U.S. economist. Friedman, who was born in Rahway, New Jersey, received his B.A. from Rutgers University in 1932, his M.A. from the University of Chicago in 1933, and his Ph.D. from Columbia University in 1946. He began working for the U.S. government in 1935 and taught at several American universities before becoming professor of economics at the University of Chicago (1946–76). There, he acquired an international reputation and served as consultant to national and international institutions. He also acted as adviser to President Nixon. Friedman became the leader of the "Chicago school" of economic thought, opposed to those following the generally accepted theories of John Maynard Keynes. He argued that the U.S. government relied too much on changes in taxation and government spending instead of controlling the money supply, in order to regulate the economy. In addition, he maintained that the   U.S. Federal Reserve Board repeatedly erred in the rate at which it changed the money supply and, as a result, intensified the fluctuations in economic growth. Friedman favored a simplified taxation system, floating exchange rates, and the demonetization of gold. He also advocated the abolition of the social welfare system, which he considered paternalistic, ineffective, and inefficient. In its place he wanted a "negative income tax," which would provide ready cash for the poor to pay for their basic needs. Friedman was awarded the Nobel Prize for economics in 1976 for "his achievements in the field of consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy." By that time he had become one of the most influential and high-profile economic theorists of his day. His theory of monetarism – which related increases in the money supply to inflation – was adopted by the English Conservative party under Margaret Thatcher, which followed his prescriptions for reducing the money supply during the early years of the 1980s. Friedman was a member of the research staff of the National Bureau of Economic Research (1937–81). He also served on the President's Economic Policy Advisory Board during President reagan 's administration in the 1980s. After retiring from the University of Chicago in 1977, Friedman became Paul Snowden Russell Distinguished Service Professor Emeritus of Economics at the University of Chicago and a senior research fellow at the Hoover Institution at Stanford University. In 2002 the Cato Institute in Washington established the Milton Friedman Prize for Advancing Liberty, a cash prize awarded every second year to a person who has made a significant contribution to the advancement of freedom. A prolific writer, Friedman was the author of A Monetary History of the United States (1963; with Anna Schwarz), a major work on economic history in which he showed that declines in the supply of money have led to nearly every recession in the U.S. economy in the last hundred years. Among his other writings are A Theory of Consumption Function (1957), A Program for Monetary Stability (1960), Price Theory (1962), Essays in Positive Economics (1966), Capitalism and Freedom (1967), A Theoretical Framework for Monetary Analysis (1971), There's No Such Thing as a Free Lunch (1975), Tax Limitation, Inflation and the Role of Government (1978), Bright Promises, Dismal Performance: An Economist's Protest (1983), The Essence of Friedman (with K. Leube, ed., 1992), Why Government Is the Problem (1993), Foreign Economic Aid: Means and Objectives (1995), A Choice for Our Children: Curing the Crisis in America's Schools (with A. Bonsteel and S. Sugarman, 1997), and Two Lucky People: Memoirs (with Rose Friedman, 1998). -ADD. BIBLIOGRAPHY: R. Gordon (ed.), Milton Friedman's Monetary Framework: A Debate with His Critics (1975); D. Goldman and L. Lerouche, The Ugly Truth about Milton Friedman (1980); E. Butler, Milton Friedman: A Guide to His Economic Thought (1985); E. Rayack, Not So Free to Choose: The Political Economy of Milton Friedman and Ronald Reagan (1986); A. Hirsch, Milton Friedman: Economics in Theory and Practice (1990); J. Wood, Milton Friedman: Critical Assessments (1990); N. De Marchi and A. Hirsch, Milton Friedman: Economics in Theory and Practice (1991); W. Frazer, The Legacy of Keynes and Friedman: Economic Analysis, Money, and Ideology (1994); J. Hammond, Theory and Measurement: Causality Issues in Milton Friedman's Monetary Economics (1996); W. Frazer, The Friedman System: Economic Analysis of Time Series (1997); J. Hammond (ed.), The Legacy of Milton Friedman as Teacher (1999). (Joachim O. Ronall and Rohan Saxena / Ruth Beloff (2nd ed.)