(Note: This commentary appeared in The Detroit News on Nov. 16, 2006, just hours after it was announced that Milton Friedman had died).
Nobel Prize-winning economist Milton Friedman died today at the age of 94. He was an intellectual giant — helping mightily to shift policy and thought away from state economic intervention and toward free people and free-market alternatives.
Friedman’s many books, scholarly papers, speeches and television appearances inspired countless people to rigorously debate and articulate a vision of a truly free society. It was Friedman’s best-selling book and Public Broadcasting Service program, "Free to Choose," that inspired me to earn two economics degrees and join the Mackinac Center.
Friedman was born to immigrant parents in Brooklyn, N.Y., in July 1912. He would earn degrees at Rutgers, the University of Chicago and Columbia. Friedman later said the Great Depression helped influence his decision to become an economist because he was intrigued by the causes and consequences of such economic misery. He would later answer one of the most important questions of all: Why had it occurred?
Friedman cut his professional teeth in 1945 when he co-published a paper arguing that government licensing laws for doctors artificially raise the cost of becoming one, restricting supply and raising prices for consumers.
He would continue to publish scholarly papers but began to make a name for himself in wider circles by publishing his book "Capitalism and Freedom" in 1962. Friedman persuasively argued for market competition in education, an all-volunteer army and greater trade among nations.
In 1963, Friedman and co-author Anna Schwartz published "A Monetary History of the United States," which showed that the Great Depression was caused by flawed monetary policy by the Federal Reserve. According to the Fortune Encyclopedia of Economics, Federal Reserve officials were so unnerved by Friedman’s work that they "discontinued their policy of releasing minutes from the board’s meetings to the public." They also hired a scholar to write a rebuttal, but it had little impact. Friedman’s analysis remains the standard on America’s monetary history.
Friedman was in Michigan on Oct. 14, 1976, when he learned he had won the Nobel Prize in Economics. Friedman was traveling from Chicago to a press conference at the Detroit Athletic Club to tout Proposal C, a ballot initiative to cap what the state of Michigan could spend in a given year, when the announcement was made from Stockholm, Sweden.
"When we got to the press center, I was surprised by the number of photographers and reporters in the parking lot," Friedman wrote later. "I knew that Proposal C was important but didn’t think my campaigning for it deserved that much attention." Friedman quickly learned of the honor from the reporters in attendance.
Proposal C would fail that year, but a version of it would later pass as the Headlee Amendment, which restricts state revenue to 9.49 percent of personal income from all state sources.
Throughout his life, Friedman advanced his ideas with both intelligence and wit. When addressing a crowd of academics, he spoke as a professor would speak to fellow scholars. When speaking to the public, he simplified his arguments. His ability to link abstract theory with concrete detail and wrap both in velvet for his audience made the man an irresistible draw.
Reportedly, while traveling by car during one of his many overseas travels, Friedman spotted scores of road builders moving earth with shovels. When he asked why powerful equipment wasn’t used instead of so many laborers, his host told him it was to keep unemployment low. If they used tractors, fewer people would have jobs was his host’s logic.
"Then why don’t you give them spoons?" Friedman inquired. It was quintessential Friedman: Employment doesn’t make us wealthy — production does.
Milton Friedman, a great friend of freedom, rewrote the way economists and others look at economics and the world around them. He will be missed.
Michael D. LaFaive is director of the Morey Fiscal Policy Initiative at the Mackinac Center for Public Policy. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.