Milton Friedman

Milton Friedman was one of those who made a difference in a field of study that didn’t really exist prior to WW II. Richard Posner posts Gary Becker’s reminiscences.

Milton Friedman died this past week. He was the most influential economist of the 20th century when one combines his contributions to both economic science and to public policy. I knew him for many decades starting first when I was a graduate student at Chicago, and then as a colleague, mentor, and very close friend.

I will discuss instead several ideas in his remarkable book, Capitalism and Freedom, published in 1962, that contains almost all his well-known proposals on how to improve public policy in different fields. These proposals on based on just two fundamental principles. The first is that in the vast majority of situations, individuals know their own interests and what is good for them much better than government officials and intellectuals do. The second is that competition among providers of goods and services, including among producers of ideas and seekers of political office, is the most effective way to serve the interests of individuals and families, especially of the poorer members of society.

Professor Friedman tied it up with General Westmoreland about the volunteer army idea. At issue was the distinction between mercenary and volunteer. It is the idea that people are driven by self interest that the cynics twist towards a mean view of humanity. As Friedman uses the idea, self interest is much more than monetary greed and a lust for power. His view is more in line with the idea that people are driven by more subtle rewards such as that described by Maslow’s hierarchy of needs.

School vouchers, social security, and many other of today’s issues are all on the table and subject to Friedman’s ideas for clarity of discussion. He was one of thoese who left a big footprint.

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