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Loss of a Freedom Fighter - By Roger Kerr

Loss of a Freedom Fighter - By Roger Kerr

When Milton Friedman died in San Francisco on 16 November 2006 at the age of 94, tributes flowed around the world.

In a popular sense, he was arguably the most famous economist of the last 50 years, and among the foremost of economic scholars.

Born in New York to poor immigrant parents, Friedman graduated from Rutgers University and went on to do postgraduate studies and teach at the University of Chicago, where he did most of his scholarly work.

His contributions to economic science were recognised by the award of the 1976 Nobel Prize for Economics. Among them was his book A Monetary History of the United States, co-authored with Anna Schwartz.

The book showed that the Great Depression of the 1930s was not, as was once commonly presumed, a ‘market failure’ that demonstrated the instability of capitalism and called for the guiding hand of government.

Rather, it was a failure of government policy. The contractionary monetary policy of the US central bank turned the 1929 sharemarket crash into a banking collapse with economic consequences that seared Western politics for more than a generation.

Friedman played a major role in rescuing economics from the pervasive Keynesian orthodoxy that followed the depression years. With others he argued that there was no long-run trade-off between inflation and unemployment. His work explained the ‘stagflation’ of the 1970s and helped prepare the ground for the implementation of stable, medium-term monetary policies that tamed the scourge of inflation in the 1980s.

But Friedman was much more than a monetary specialist. He also championed the case for free markets, and helped create the intellectual climate that led to the Reagan and Thatcher revolutions and worldwide moves to greater economic freedom.

In this he was a moderate who recognised important roles for governments such as maintaining the rule of law, protecting property rights, safeguarding the environment and underwriting the incomes of the poor.

And he was an advocate for liberty well beyond the economic sphere. He campaigned for the abolition of compulsory military service in the United States, and was a lifelong supporter of school choice.

Friedman became a household name in the late 1970s with his popular book Free to Choose and the television series of the same name. The series exposed his gifts as a lucid exponent of economic ideas and a formidable debater.

Some of Friedman’s bons mots, such as “there’s no such thing as a free lunch”, have entered popular discourse. “Inflation is always and everywhere a monetary phenomenon” is an abiding insight.

With his wife Rose, Friedman spent 10 days in New Zealand in 1981. I recall his patient exposition of social credit monetary theory in response to a question at a public meeting in Wellington, followed by a crushing demolition of the concept.

From occasional subsequent contacts I can attest to Friedman’s unfailing courtesy, cheerfulness and generosity with his time in support of liberal ideas.

Among the outpouring of tributes to Friedman, one particularly resonates.

Gary Becker, another pre-eminent Nobel Laureate and longstanding colleague at the University of Chicago, wrote as follows:

“There are various ways to describe Friedman’s influence. But one way is to ask, ‘Has he helped many people – poor people in the world?’ And I would just take India and China, 37% of the world’s population. Hundreds of millions of people in these two countries, who used to live on less than one dollar a day or two dollars a day, are now able to live at a much more decent standard of living as a result of the reform of their economic policies toward more free-market policies, less regulation, less government and the like. There was one person whom they are more indebted to than anybody else for their great improvement in their situation. In my judgment, that person is Milton Friedman.”

So much for the criticisms he endured for years of championing ‘inhumane’ policies and the interests of ‘big business’ to the detriment of the little guy. As this tireless and courageous freedom fighter once said:

“Freedom means diversity, but also mobility. It enables today’s disadvantaged to become tomorrow’s privileged, and, in the process, enables everyone, from top to bottom, to enjoy a fuller and richer life.”

Friedman’s death comes just as a new television series The Power of Choice: The Life and Ideas of Milton Friedman is about to be screened by PBS in the United States.

It is to be hoped that it will be picked up locally so that New Zealand viewers can learn more about a great thinker whose ideas have also helped change this country for the better. The task is not finished. As The Economist wrote in a lead article, “Those of liberal spirit … have plenty to thank Mr Friedman for – and sadly, an enormous amount still to do.”

Roger Kerr is the executive director of the New Zealand Business Roundtable.

Ends


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