Influential economist Milton Friedman dead at 94
SAN JOSE, Calif. - Milton Friedman, the Nobel Memorial Prize-winning economist whose groundbreaking scholarship and provocative free-market advocacy made him one of the most influential American thinkers of the 20th century, died Thursday at the age of 94.
An intellectual guru to political leaders ranging from Barry Goldwater to Arnold Schwarzenegger, Friedman helped develop the arguments that powered the "Reagan Revolution" of the 1980s and its promotion of lower taxes, less government intervention and more faith in the marketplace.
In one of his last interviews, with the Mercury News in late October, Friedman smiled and laughed frequently, reflecting with satisfaction that many of his once-maverick ideas seemed to have been validated by history, including such events as the fall of the Soviet Union, the spread of capitalism throughout the world and the shift in how the Federal Reserve Bank fights inflation.
"I started out being a very small minority," Friedman said. "I now have a lot of company. People learn from history, from experience."
Friedman transcended the academic and political realms to become an unlikely celebrity in the 1970s and '80s through his bestselling books, a Newsweek column, speaking engagements and a 10-part television documentary titled "Free to Choose." His philosophy equated laissez-faire capitalism with personal liberty, and his persona, as one admirer put it, was that of a "Happy Warrior."
"Milton Friedman was arguably the greatest economist of the 20th century," said John Raisian, director of Stanford University's Hoover Institution, his intellectual home since 1978. "He contributed to the notion that ideas have meaning; no economist could claim that phrase more than he could."
Friedman, who had lived in San Francisco since 1978, is survived by 95-year-old Rose Director Friedman, a fellow economist and his frequent collaborator. They were married 68 years, had two children, four grandchildren and three great-grandchildren and titled their joint autobiography "Two Lucky People."
Raisian described Rose Friedman as her husband's "intellectual partner. It was a joy to see them in action together. Indeed, the only time I saw Milton pause on an analytic point was when Rose was his interrogator."
Milton Friedman essentially had two careers: one as a scholar, the second as a policy advocate. As a scholar, his ideas usually prevailed. His record as an activist was more mixed.
In the 1970s, he was a leading advocate for the abolition of the military draft. At one hearing, Friedman became annoyed with a general who likened those in an all-volunteer military to "mercenaries." Friedman told the general that if he insisted on using that term, he would liken draftees to "slaves." The general made a rhetorical retreat.
Friedman was also a leading advocate for school vouchers as means to break up what he called the public school "monopoly." The Milton and Rose Friedman Foundation continues to push the cause, which has failed in California ballot measures. In the recent interview, Friedman expressed optimism that progress was being made, and a few states could give vouchers a serious test.
Friedman was a genial host in his 19th floor home on San Francisco's Russian Hill, displaying his cheerful charisma as he expounded on a libertarian philosophy often too radical for the political mainstream. For example, he advocated the legalization of all drugs and prostitution.
Friedman's extraordinary life bracketed the rise and fall of the communist ideology he loathed. Born in Brooklyn in 1912 and raised in modest circumstances in Rahway, N.J., Friedman as a young man had aspired to be an insurance actuary, but found his calling in economics. As a graduate student at the University of Chicago, he met Rose Director, his future wife.
In addition to his wife, he is survived by daughter Janet and son David, an economics professor at Santa Clara University.
Friedman, often the shortest man in a crowded room, began to stand out in the 1940s because of his bold thinking as a young professor at the University of Chicago. He became a leader of the contrarian "Chicago School," which bucked the orthodoxy of economist John Maynard Keynes, who believed fiscal policy - that is, government taxing and spending - was the best way to manage the economy.
Friedman argued for a robust free market and said that monetary policy - controlling the money supply - was the best means for managing the economy.
At a 90th birthday tribute to Friedman, Ben S. Bernanke, then a Federal Reserve Bank governor and now its chairman, saluted Friedman's "paradigm-shifting" monetary research. In one seminal study, Friedman had showed that Fed actions had actually exacerbated economic woes in the 1930s. Bernanke said: "Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."
Friedman's popular works resonated with an Austrian bodybuilder turned movie star. In 1980, Schwarzenegger, who grew up under socialism, gave copies of "Free to Choose" to several liberal friends. After Newsweek reported the Hollywood tidbit, the producer of the documentary version arranged for Schwarzenegger to meet the Friedmans.
As described in "The People's Machine: Arnold Schwarzenegger and the Rise of Blockbuster Democracy" by Joe Mathews, Schwarzenegger and the Friedmans went out to a tiny French restaurant and talked for three hours. Friedman and the movie star stayed in touch, and Schwarzenegger later taped an introduction to a re-release of the documentary.
Gov. Schwarzenegger would put Friedman on his Council of Economic Advisers and on Thursday recalled some of this personal history in a press statement. Friedman, the governor said, "was a constant source of inspiration and insight. The world has lost a true giant, a tireless advocate for freedom, and I have lost a great friend."