Periodically we will elaborate on historical figures that have advocated or originated the cause for free market capitalism that has created wealth for more people than any other system ever devised. It is only though oversight that we did no place Milton Freidman on our Historical Figures page from the start, and that is being corrected with this post.
From wikipedia…Milton Freidman (July 31, 1912 – November 16, 2006) was an American economist and statistician at the University of Chicago, and recipient of the Nobel Memorial Prize in Economic Sciences. Among scholars, he is best known for his theoretical and empirical research, especially consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy. He was an economic advisor to U.S. President Ronald Reagan. Over time, many governments practiced his restatement of a political philosophy that extolled the virtues of a free market economic system with little intervention by government. As a leader of the Chicago school of economics, based at the University of Chicago, he had great influence in determining the research agenda of the entire profession. Friedman was best known for reviving interest in the money supply as a determinant of the nominal value of output, that is, the quantity theory of money. Monetarism is the set of views associated with modern quantity theory. Its origins can be traced back to the 16th-century School of Salamanca or even further but Friedman’s contribution is largely responsible for its modern popularization. He co-authored, with Anna Schwartz, A Monetary History of the United States (1963), which was an examination of the role of the money supply and economic activity in U.S. history. A striking conclusion of their research was one regarding the role of money supply fluctuations as contributing to economic fluctuations. (http://en.wikipedia.org/wiki/Milton_Friedman)
Mr. Freidman won his Nobel Prize for his work on the money supply, but explaining how free market capitalism was the best system was also a skill he possessed. The pencil, and how it came to be, was an example he would use to explain the achievement of our system. He would point to the fact that the production of this product brought together such disparate interests and ingredients (wood, paint, graphite, metal, rubber), to create such a universally useful product for under a penny. No central planner could motivate these different factions to do what the capitalist system did through individuals seeking their own self interests. He took this example from the story “I, Pencil” which is not the latest Steve Jobs invention, but an essay written by Leonard Read told from the point of view of a pencil. I have attached the story with an introduction by Mr. Freidman. (http://www.econlib.org/library/Essays/rdPncl0.html)
One of the best examples of the ease at which Milton Freidman explained economics was during an appearance on the Phil Donahue show in 1979. You can actually see Donahue (a committed leftist) learning as Mr. Freidman speaks. Based on Donahue’s politics since this interview, the education was short lived. Due to the wonderful world of “You Tube” you can see many of his speaches. I have attached the 5 part interview (about 10 minutes each).
Whether you are a committed capitalist, or still learning, I implore you to listen to Mr. Freidman explain his views in simple easy to understand language that translates to any time period.