Milton Friedman

Pioneer of economic freedom

50minutes

• Publisher: 50Minutes.com
• Year: 2015
• Print ISBN: 9782806270689
• eBook ISBN: 9782806266194
• Topic: Economics
• Subtopic: Monetary Policy
• Index: Economics

Nobel Prize-winning economist and free market advocate This book is a practical and accessible guide to understanding the life and works of Milton Friedman. In 50 minutes you will be able to: •Recognize and understand the main ideas behind the works of Milton Friedman and his reasons for writing them
•Identify the impact Milton Friedman had on other economists and political figures, including Ronald Raegan and Margaret Thatcher
•Evaluate the mixed reception of his works: the numerous criticisms and the extensions of similar economists ABOUT 50MINUTES.COM | Economic Culture 50MINUTES.COM provides the tools to quickly understand the main theories and concepts that shape the economic world of today.Our publications are easy to use and they will save you time. They provide elements of theory and case studies, making them excellent guides to understand key concepts in just a few minutes. They are the starting point for readers to develop their skills and expertise.

HIS WORK: A CONSIDERABLE CONTRIBUTION TO THE ECONOMY

Capitalism and Freedom (1962), Monetary History of the United States (1963) and Free to Choose (1980) are three major works of Milton Friedman that have significantly influenced the economists and politicians of the twentieth century.

CAPITALISM AND FREEDOM (1962)

Context

Published at a time when Keynesian ideas dominated the policies of the economic world, Capitalism and Freedom claims that inflation and unemployment slow down the economy. Today, this book is still considered one of the most influential works published since World War II because it remains relevant in an absolute economic context. In this works, the author discusses major issues, such as money, education, competition and regulation.

Main idea: economic freedom

The main idea developed by Friedman in this works can be summarized as:

In fact, based on the fact that each individual has natural rights that no power can violate, the Liberals – such as Milton Friedman – want to protect them by limiting any social obligations (and therefore any state intervention) that are capable of hindering individual economic and civic freedoms.

Friedman therefore advocates:

• Complete freedom of individuals;
• Private initiative;
• Free competition.

More generally, Milton Friedman defends a market economy where state intervention is reduced to guarantee the greatest level of civil liberty possible. However, absolute freedom (or anarchy) is not possible or viable; Friedman agrees that government is still necessary to ensure compliance with certain rules (rights, laws, etc.).

Like total civil liberty, political freedom can also lead to abuse such as dictatorships, which then prevent any economic freedom.

Other ideas: The theory of free trade and consumption

The second important idea defended by Milton Friedman is the theory of free trade in international commerce.

Questioning Keynes’ ideas, in particular he formed the permanent income hypothesis, which states that consumer choices are not guided by their current income but the expectations they have of their future income. Thus, if expectations are stable, they will tend to regulate consumption, even when disposable income increases or decreases.

Friedman, a monetarist, also criticized the monetary control of the state, thinking of it as the source of danger and downward spirals. According to him, without the intervention of the central bank, recessions would not have degenerated into disasters during the 1929 Wall Street Crash.

Friedman also said that the role of the state is to guarantee citizen’s security, ensuring compliance with legal rules and to intervene if the market fails or shows weakness (e.g. the monopoly of some companies). According to him, even if limited government intervention contributes to freedom, this does not mean that it can do this definitively.

Finally, this text also addresses the role of the state in funding education. Since basic education is essential for everyone, he suggests a system of ‘education vouchers’ in order to monitor the individual student, not the institution. For him, this was the best solution available.

In conclusion, Friedman is firmly opposed to Keynesianism, which advocates a planned economy, and puts freedom at the heart of his thoughts. For him, this actually involves an inevitable limitation of public power and decentralization.

MONETARY HISTORY OF THE UNITED STATES (1963)

Context

This book, by Milton Friedman and Anna Schwartz, offers a different view on the prevailing issue of the time, Keynesianism. In fact, the authors attempt to statistically and theoretically demonstrate the ineffectiveness of Keynesian policies. Their words echo those seen in Capitalism and Fre...

Table of contents

• Title Page
• Milton Friedman
• His life
• His work: a considerable contribution to the economy
• Limits and extensions of the economist’s approach
• Summary
• Further reading
• Copyright