FREE ESSAY ON MILTON FRIEDMAN

MILTON FRIEDMAN

Milton Friedman has been credited with many different achievements, including being one of
the most effective advocates of economic freedoms and free enterprise, being the greatest
economist to ever walk the face of the earth, and proving every single word that Lord
Maynard Keynes ever said to be wrong. Why these may or may not all be true, it is obvious
that Friedman was a brilliant man of many accomplishments.
Milton Friedman was born on July 15th, 1912 in New York City. His parents were poor
immigrants and his father died when he was a senior in high school. Despite all of these
obstacles he had to overcome, Friedman received a scholarship to Rutgers University and
got his B.A., an M.A. in 1933 from the University of Chicago, and a Ph.D. in 1946 from
Columbia University. He worked as a research assistant to Henry Schultz at University of
Chicago until 1937 when he started working with the National Bureau of Economics. There
he jointly published the book Incomes from Independent Professional Practice with Simon
Kuznets, which also served as his doctoral dissertation at Columbia. This book introduced
the concepts of permanent and transitory income. In 1933 Milton Friedman met Rose
Director, a fellow Economics student, and six years later they were married. Rose and
Milton have collaborated on quite a few books and essays, and have established the Milton
& Rose D. Friedman foundation, which promotes School Choice, which will be explained in
more detail later.
In 1976 Milton Friedman won the Nobel Prize in Economic Sciences for his achievements in
the fields of consumption analysis, monetary history and theory, and for his
demonstration of the complexity of stabilization policy. Milton Friedman coined the terms
only money matters as his emphasis on the role of monetary policy in the United States
economy. Friedman is perhaps the most effective advocate for free enterprise and
monetarist policies from 1945-1985. His only rival among economists of the 20th century
would have to be Keynes.
As well as being a Nobel Prize winner and just an overall brilliant man, Friedman served
as Senator Barry Goldwater's informal economic advisor in 1964 and for Richard Nixon in
1968, then as President Nixon's advisor. He served as President Reagan's Economic Advisor
on his Advisory Board in 1981. Friedman was awarded the Presidential Medal of Freedom in
1988 and received the National Medal of Science the same year. He was also a member of
the President's Commission on an All-Volunteer Armed Force and the President's Commission
on White House Fellows. He is a past president of the American Economic Association, the
Western Economic Association, and the Mont Pelerin Society and is a member of the
American Philosophical Society and the National Academy of Sciences. Friedman was awarded
with many honorary degrees by universities in the United States, Japan, Israel, and
Guatemala, as well as the Grand Cordon of the First Class Order of the Sacred Treasure by
the Japanese government in 1986. He is known as the leader of the Chicago School of
monetary economics. 
Milton Friedman is the author of many books and two public television series that he did
with his wife Rose: Free to Choose(1980) and Tyranny of the Status Quo(1984). His most
important books include Free to Choose and Tyranny of the Status Quo( both of which
compliment the TV series), Capitalism and Freedom(1962 with Rose D. Friedman); and Bright
Promises, Dismal Performance (1983), which consists mostly of reprints of tri-weekly
columns that he wrote for Newsweek from 1966 to 1983. Also, A Theory of the Consumption
Function(1957) and A Monetary History of the U.S.(1963 with A.J. Schwartz). 
Milton Friedman has a primary belief in the tenet of limited government. He describes
himself as classic liberalism. Today's liberalism views are very opposite to Friedman's,
and therefore he is often considered a Republican Libertarian, as conservative is really
to narrow a label to encompass his other views of a limited government. Friedman's belief
in a limited government is supported by his desires to restrict the scope of government's
authority in the lives of individuals and to decentralize the power base of government to
prevent a person's unwanted entanglements with a federal bureaucracy. Friedman's belief
is that any one person given the power that officials of the government are given is
bound to become corrupted. Therefore, he believes that the original intentions of
separation of the branches of government should be enforced more strictly. Friedman says
Government has three primary functions. It should provide for military defense of the
nation. It should enforce contracts between individuals. It should protect citizens
against crimes against themselves or their property. This entire belief is based simply
upon the principles that the United States was founded on. Principles like that of Thomas
Jefferson that government is best that governs least. The economic arena is the major
area where Friedman feels government has no right to intrude in the freedom of the
collective or individual rights of its constituents. Government should be completely
hands-off, laissez-faire when it comes to the private market. Otherwise, the government
will only end up doing more harm than good, government should trust in the free market
system and support the capitalism that this country is a product of. Friedman very much
chooses to follow the beliefs and theories of Adam Smith, who was a free market supporter
all the way. Today's liberals support regulation to deal with economic and social
problems, where as Friedman supports only an entirely free market of capitalism galore. 
Milton Friedman has many things to say about the common idea that higher unemployment and
slow growth are cures for unemployment. Milton Friedman argues that this is not so, and
it's evident just by examining the trends of countries in which growth level has slowed,
unemployment has risen, yet at the same time inflation is also rising. Friedman's
explanation seems simple enough as well. Slow growth and higher unemployment are not
cures to inflation, but only side effects of the cure. For example, a producer is going
about, producing his product when he notices that he's selling a lot more for the same
price as usual. So he orders more from his manufacturer, who orders more from the
workers. If this increase in demand is coming from newly created money though, other
products are increasing demand as well. This puts a greater demand on labor to work
harder and longer, so they think for more money. But when they get their money, they
discover that the price of things they must buy has gone up. Therefore it takes a bigger
percentage of their paychecks to buy their necessities, so they didn't make any more
money at all. This results in the companies raising their prices higher and higher to
make up for the money they've lost and eventually results in a vicious downward spiral of
inflation. And then this is going to make employment and prices go way up. This is how he
proves the common theory wrong, and you can't argue with facts like that.
In the free market system that Milton Friedman saw workers are protected either by
unions, the government, other employees or no one at all. Unions bring workers of a
common trade together so that they can make sure they are getting the proper safe and
comfortable work conditions. As well as getting paid for what they think they should be
paid for their profession. This can be very beneficial to a work force by either keeping
down the number of jobs available, or the number of people available for a class of job;
both by enforcing a higher wage rate. Of course unions can also be harmful to the
workers. This is because anytime one group of workers is benefiting from the increased
wages or other union benefits, another group is being hurt by it. For example, if the
pilots union decides to raise his ticket prices, he would benefit with the profit, but
the consumer is hurt by this transaction. Even other pilots are hurt by this raising of
wages, because when wages are raised, more must be charged for the tickets, and as a
result less people will fly. This will mean that fewer pilots are required, and some can
be let go. The government sets laws such as minimum wage, child labor laws, and
affirmative action to help to protect the worker. Once again these laws definitely do
help the worker, however some laws, such as the minimum wage law can give certain groups,
especially minorities, an unfair disadvantage. Minimum wage laws stop workers that maybe
aren't worth as much as minimum wage from getting a job where they could work up with on
the job training or something. Instead many minority teenagers have great problems
finding jobs. Some laws, like child labor and workmen's compensation simply embody
practices that had already become commonplace. Other employers especially protect many
employees. This is simply competition in the job market. If workers are mistreated or not
paid enough, they can always get another job at another company. Finally, there are
certain job situations in which the worker is really covered by no one. Workers who have
only one possible employer, and workers who have no possible employer. A good example of
a worker with one possible employer would be a professional sports team player. While
they have a contract, the only leverage they have is to threaten not to play. This can
work to great lengths, or it can work not at all, just depending on the situation. People
who have no choice among employers are usually victims of government measures. For
example, it's only beneficial for a welfare recipient to get a job if the wages he earns
will make up for the money he will lose. However, it may not be possible for a person of
such a disadvantaged background to find an employer to which he is worth that much. Such
people are the victims of bad socioeconomic background and bad schooling, says Friedman.
Milton and Rose Friedman have founded the entire movement of School Choice. They believe
that public schools are a large part of what is wrong with our society today, and why so
many average people are so grossly uneducated. If you have a child, they are herded into
the nearest school district, then herded into the nearest overpopulated under-funded
public school. This is just another version of the post office, where an establishment
has no rival business to live up to, therefore can do whatever it wants and be as sub-par
as it wants. And very often parents don't have any other choice except for very pricey
private schools. Schools that are run independent from local government bureaucracy
provide better education at lower cost. School choice would allow more students to attend
better schools. It is a potent educational reform that is far more effective than
increased spending. The fears of opponents of school choice are factually unfounded.
Through allowing more parental choice in education, school choice forces education into a
free market environment, thus creating competition, and thus a desire to improve. If a
family is wealthy enough, they can send their children to a private school, however then
they are paying twice as much to send their child to private school as well as still
paying taxes on public school. What Milton and Rose propose is that any parent who
decides to send their child to a private school will receive a scholarship from the
government, redeemable for tuition at scholarship-accepting private schools. The
scholarship dollar amount is far below that of the average cost per student per year at
public schools, but would allow millions of parents who cannot presently afford private
tuition to do so. One conflict of the voucher program, however, is the racial
implications of it. Some people believe that because the schools can now be chosen, the
melting pot environment of public school will no longer exist, instead vouchers will only
be a flashback to the vouchers that were used by the white community to avoid
integration. However, Friedman assures that this will not be so. Instead he feels that
since children will be grouped into schools based upon common interests, like arts or
sciences, whatever the school specializes in, they will look past racial implications and
would be a step in the right direction for civil rights. Another question of the school
voucher program is whether or not the students would be permitted to use thir vouchers at
parochial schools, and whether that would violate the first amendment. Obviously this
issue would have to be settled in court, however Bush compred the school voucher system
to the GI Bill for kids and no problems were ever brought up with any of the veterans who
attended religious colleges. Friedman believes however, that despite the many questions
and conflicts the voucher program would make public and private schools a safer place to
send your children. By grouping children by schools of interest, you are more likely to
have children who want to go to school, and are therefore less likely to cause problems.
Milton Friedman is known mostly as the anti-Keynesian. This is mostly in reference to the
Phillip's Curve, or the inflation-unemployment trade-off, which is the Keynesian model
that depicts the inverse relationship between inflation and unemployment, namely when
inflation goes up unemployment will go down. This theory helped to add some signification
to inflation, recognizing that is had a purpose. However, Milton Friedman came along in
the 60's and 70's and proved there were many points that just did not fit along this
curve, in which both unemployment and inflation were high. These points fell far to the
right of the initial curve. This shows higher rates of inflation coexisting everywhere
with high rates of unemployment. It seemed to require higher and higher rates of
inflation to bring the unemployment down to an acceptable level. 
Another one of Friedman's strongest and most well known opinions was on the Federal
Reserve and how it is practically useless. Friedman being the big free-market capitalist
that he is, thinks that the Federal Reserve acts stupidly, rashly and doesn't take the
time-lag into respect when making their dramatic decisions. Friedman also blames most of
the economic instabilities on the federal reserve's action. 
Milton Friedman has definitely been one of the most influential economists of the 20th
century. His discoveries and theories in monetary policy, school choice liberalism and
inflation relations impact economic history in a way only a few people can do. He and his
wife Rose are now running the Foundation for school-choice and have just published Two
Lucky People: Memoirs.
Bibliography
Bibliography
-  Friedman, Milton. Bright Promises, Dismal Performance: An Economist's Protest. New
York: HBJ, 1983.
-  Friedman, Milton and Rose. Free to Choose: A Personal Statement. New York: HBJ, 1980.
-  Hodges, Michael. Milton Friedman- A Tribute by MWHodges. May 2001. September 2001. 
-  Walters, Alan. A Dictionary of Economics, The New Palgrave. Vol.2, 1987. Pp.422-427.