How Milton Friedman Changed the World: The Untold Story of the Last Conservative

Milton Friedman’s life story reads like a riveting novel of intellectual courage and cultural impact. Born into modest circumstances, his early curiosity and resilience set the stage for a career that would challenge economic orthodoxies and political conventions alike. From editing his high school newspaper to excelling at university, Friedman's formative years were marked by a thirst for knowledge and a questioning spirit.

His academic journey through the University of Chicago and Columbia introduced him to rigorous economic theories like price theory and the quantity theory of money. These frameworks became the backbone of his thinking, emphasizing market equilibrium and the critical role of money supply. Yet, it was during the Great Depression that his ideas were put to the test. The economic collapse revealed the limits of laissez-faire policies and inspired bold proposals like the Chicago Plan, advocating radical banking reforms and government intervention to stabilize the system.

Friedman's intellectual maturation coincided with the rise of the Second Chicago School, where economic analysis expanded into law and social institutions. Collaborations with pioneering economists, including influential women like Anna Schwartz, enriched his work and broadened its impact. Their joint efforts produced seminal works that reshaped monetary economics and laid foundations for new interdisciplinary fields like law and economics.

The 1970s presented a defining challenge: stagflation. The simultaneous rise of inflation and unemployment confounded existing theories, but Friedman's monetarist perspective offered clarity. He argued that inflation was fundamentally a monetary phenomenon caused by excessive money supply growth. His advocacy for tight monetary control culminated in policies like the Volcker Shock, which, despite short-term pain, restored economic stability. This period validated his theories and cemented his role as a public intellectual.

Friedman’s influence extended beyond academia into the political arena. Through television appearances and advisory roles to leaders like Ronald Reagan and Barry Goldwater, he helped shape the conservative economic agenda known as Reaganomics. His promotion of free markets, deregulation, and tax cuts transformed policy debates worldwide. Yet, his legacy is complex. Beyond conservative economics, he supported ideas like universal basic income, revealing a nuanced philosophy that transcended partisan lines.

Today, Milton Friedman remains a towering figure whose ideas continue to provoke discussion and inspire change. His story reminds us that economic theories are not just abstract concepts but powerful forces shaping societies. As we reflect on his life and work, we appreciate the enduring impact of intellectual bravery and the quest for understanding in a complex world.

Explore more about this fascinating economist and his legacy in the following blogs.

Sources: CFA Institute Blog, The New York Times, Cato Institute, Goodreads 1 2 3 4