Milton Friedman was an American economist, educator and statistician who is recognized amongst the most influential economists of the twentieth century. Friedman’s contributions to the discipline were acknowledged when he was awarded the Nobel Prize in Economic Sciences in 1976.
Friedman was born in Brooklyn, New York on July 31, 1912, but ended up being raised in New Jersey. He enrolled in Rutgers University, from where he graduated in 1932 with the help of a scholarship. Friedman proceeded with pursuing a Masters degree in economics from the University of Chicago, and ultimately completed his doctoral studies from Columbia University in 1946.
During his educational endeavors, Friedman often waited tables and clerked in stores to meet ends, and planned on becoming an actuary before specializing in economics and mathematics. He soon found some success after acquiring a research assistant position at the University of Chicago, followed by working on consumer budgets at the National Resources Committee in 1935. Friedman got inducted in the National Bureau of Economic Research a couple of years after in 1937, which set the platform for him to launch one of his first works, ‘Income from Independent Professional Practice‘ in 1945. In this book he criticized the government’s protection of medical professionals. By restricting entry in to the profession via stringent legal procedures, the state facilitated consumer exploitation by allowing doctors to exercise monopolistic practices, according to Friedman.
Friedman added the U.S. Treasury Department to his list of work experiences in 1941 as he was sought to help the country devise appropriate tax policies during the war. In 1943, he became part of a team at Columbia University as a mathematical statistician who helped create military plans of action and solve issues regarding weaponry. Two years later however, Friedman accepted an offer to join the University of Chicago in the capacity of a professor, and went on to teach there for over thirty years. He was employed by the National Bureau in the same year to offer his expertise on monetary policy.
In 1957, Milton Friedman published one of his most groundbreaking study titled, ‘A Theory of Consumption Function‘. This challenged the Keynesian perspective that consumption expenses and savings are determined by actual income of individuals at the time, whereas Friedman argued that they spend and save keeping in mind their average expected earnings in the coming years. This was followed by ‘Capitalism and Freedom‘ in the 1960s which opened to widespread critical acclaim. Friedman made a strong case for free market mechanisms in this book.
Friedman was a staunch advocate of monetarism which is why his views were often in conflict with Keynesian economics. He questioned the impact of the Keynesian multiplier effect, and instead claimed that increases in the money supply are supplemented by short term economic activity but long term inflation. He published ‘A Monetary History of the United States, 1867-1960‘ in 1963 which further investigated the key role of the money supply in the U.S. economy. For his work on monetary economics, he is often regarded as the founder of monetarism.
Milton Friedman’s contributions extend in the realm of journalism as well as he has published a number of scholarly articles and managed a column for Newsweek from 1966 to 1984. He also assumed advisory roles in serving Presidents Richard M. Nixon and Ronald W. Reagan, offering his insight on critical economic issues. He reached the pinnacle of his achievements when he received the Nobel Prize in 1976. To date, he is regarded as one of the top two most influential economists of the twentieth century, alongside John Maynard Keynes, by numerous fellow scholars and prominent magazines.