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Friedman, Milton 1912-2006

Friedman, Milton 1912-2006

OBITUARY NOTICE—

See index for CA sketch: Born July 31, 1912, in New York, NY; died of heart failure, November 16, 2006, in San Francisco, CA. Economist, educator, and author. An anti-Keynesian, free-market economist, Friedman was a Nobel Prize winner who was an influential giant in his field. Born to Czechoslovakian immigrants, he attended Rutgers University on a scholarship. Here, he was influenced by professors Homer Jones and Arthur F. Burns, who sparked his passion for a scientific approach to economics and in monetary policy. Graduating in 1932, he earned a master's degree from the University of Chicago the next year. Friedman worked as a researcher for the university, then the National Resources Committee in Washington, DC, hired him. From 1937 through the end of World War II, Friedman was on staff at the National Bureau of Economic Research; he would also serve there from 1948 to 1981 while pursuing his academic career. From 1941 to 1943, he was principal economist for the U.S. Treasury Department. It was there that he helped create the withholding tax system that is part of the U.S. income tax. Sometimes criticized for his role in the withholding tax—even by his own wife, fellow economist Rose Friedman—he defended it as necessary for America to pay for the war effort. However, Friedman also admitted that the withholding tax has since been problematic. During the war, he additionally worked as associate director of statistical research at Columbia University's Division of War Research.

With World War II over, Friedman pursued a career in academia. He taught briefly at the University of Minnesota before joining the University of Chicago faculty. Made a full professor in 1948 and named Paul Snowden Russell Distinguished Service Professor of Economics in 1962, Friedman would stay at Chicago until his 1982 retirement. Having joined the Hoover Institution in 1976 as a senior research fellow, he remained there for years after his retirement from teaching. While at the University of Chicago, Friedman was instrumental in establishing what became known as the Chicago School of economics. He held that Keynesian economics, which preached government control of a nation's economy, stifled individual freedoms and inevitably led to economic downturns. Instead, he had faith in the laissez-faire ideals established by Adam Smith that held that the government should interfere as little as possible in the economy. Free market systems worked best when allowed to regulate themselves and grow naturally, according to Friedman. The only area where a federal government should be involved was in control of the money supply. When he first began to put forth his theories, the economist was widely criticized. However, in predicting the 1970s economic problems in which inflation and unemployment rose simultaneously—a phenomenon that ran counter to Keynesian reasoning—Friedman proved himself triumphantly correct. This phenomenon was given the name "stagflation." His theories about the connections between inflation, employment, and government controls resulted in his winning the Noble Prize for economic science in 1976. Friedman's Free to Choose: A Personal Statement (1980), written with his wife, explains his ideas and became a best seller. It even led to his hosting a public television miniseries of the same title that year. Although he had been expressing his ideas on the economy for decades, it was not until the administration of President Ronald Reagan that Friedman saw his conservative theories really come into play in national policy during the 1980s. While some critics believed that Reagan did not strictly follow Friedman's ideas, the president's conservative route of trying to limit government controls has been credited with resulting in an economic boom that lasted until his successor, George H.W. Bush, began raising taxes again.

Praised by many conservative politicians for championing limited government, Friedman also held some very controversial ideas on other subjects. For example, he did not believe in free public education, saying that it was inferior to private schools. He believed that the government should not have the power to issue licenses, such as those for doctors or even for driving a car. Perhaps most controversial was his advocacy for the legalization of drugs. In short, almost all government controls over a citizenry were a threat to freedoms in Friedman's mind. In later years, Friedman was also criticized for his support of Chile's military regime, but he was lauded for encouraging capitalism in Eastern Europe, Vietnam, and China. Among his many other publications are A Monetary History of the United States, 1867-1960 (1963), The Counter-Revolution in Monetary Theory (1970), Politics and Tyranny: Lessons in Pursuit of Freedom (1985), and Why Government Is the Problem (1993). The recipient of the Presidential Medal of Freedom and the National Medal of Science, among many other honors, Friedman will be remembered as one of the most important economists of the twentieth century.

OBITUARIES AND OTHER SOURCES:

BOOKS

Friedman, Milton, and Rose D. Friedman, Two Lucky People: Memoirs, University of Chicago Press (Chicago, IL), 1998.

PERIODICALS

Chicago Tribune, November 17, 2006, section 1, pp. 1, 4.

Los Angeles Times, November 17, 2006, pp. A1, A26-27.

New York Times, November 17, 2006, pp. A1, A28; November 18, 2006, p. A2; December 21, 2006, p. A2.

Times (London, England), November 17, 2006, p. 78.

Washington Post, November 17, 2006, pp. A1, A13.

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