Milton Friedman (1912–2006)
Throughout the first 15 years following the end of World War II the economics profession throughout the Western world was characterized by a touching belief in the omniscience and impartiality of government as the servant of the public good and by a cynical belief in the endemic failure of free markets to maximize social welfare as defined by the Pareto Principle supplemented by the Kaldor–Hicks–Scitovsky potential compensation test. It was also characterized by the hegemony of Keynesian economics with its support for large and fiscally interventionist governments and its contempt for monetary instruments of macroeconomic intervention.
The behemoths who bestrode the economics profession throughout that period were Paul Samuelson, Kenneth Arrow, John Kenneth Galbraith, James Tobin, Robert Solow, and Joan Robinson. Classical political economy was dead, buried by the Great Depression and by the writings of John Maynard Keynes (1936). Free market economics was on the ropes, with few advocates and even those forced into perpetual defense in an environment in which public choice analysis played no role. The future for economic liberty and capitalism was bleak indeed.
KeywordsMonetary Policy Public Choice Economic Freedom Phillips Curve Consumption Function
Unable to display preview. Download preview PDF.
- Breit, W. and Ransom, R.L. (1998). The Academic Scribblers. Princeton: Princeton University Press.Google Scholar
- Buchanan, J.M. and Wagner, R.E. (1977). Democracy in Deficit: The Political Legacy of Lord Keynes. New York: Academic Press.Google Scholar
- Butler, E. (1985). Milton Friedman: A Guide to His Economic Thought. New York: Universe Books.Google Scholar
- De Vroey, M. (2001). ‘‘Friedman and Lucas on the Phillips curve: From a disequilibrium to an equilibrium approach’’. Eastern Economic Journal, 27(2), 127-148.Google Scholar
- Fisher, I. (1930). The Theory of Interest. London: Macmillan.Google Scholar
- Friedman, M. and Meiselman, D. (1963). ‘‘The Relative Stability of Monetary Velocity and the Investment Multiplier in the United States, 1897-1958’’, in Stabilization Policies. New Jersey: Prentice Hall, pp. 165-268.Google Scholar
- Hirsch, A. and de Marchi, N. (1990). Milton Friedman: Economics in Theory and Practice. Ann Arbor: University of Michigan Press.Google Scholar
- Johnson, P. (1983). Modern Times: The World from the Twenties to the Eighties. New York: Harper & Row.Google Scholar
- Keynes, J.M. (1936). The General Theory of Employment, Interest and Money. New York: Harcourt, Brace and Jovanovich.Google Scholar
- Kuznets, S. (1952). ‘‘Proportion of capital formation to national product’’. American Economic Review, 42, 507-526.Google Scholar
- Mill, J.S. (1865). On Liberty. London: Longman.Google Scholar
- Mises, Ludwigvon (1963). Human Action. New Haven: Yale University Press.Google Scholar
- Robbins, L.C. (1932). An Essay on the Nature and Significance of Economic Science. London: Macmillan.Google Scholar
- Rowley, C.K. (1999a). ‘‘Five market friendly nobelists.’’ The Independent Review, 3(3), 413-431.Google Scholar
- Samuelson, P.A. (1963). ‘‘Comment on Ernest Nagel’s ‘assumptions in economic theory.’’’ American Economic Review, May, 211-219.Google Scholar
- Sargent, T.J. (1987). Some of Milton Friedman’s Scientific Contributions to Macroeconomics. Stanford: Hoover Institution.Google Scholar
- Walters, A. (1987). ‘‘Milton Friedman: Born 1912,’’ in John Eatwell, Murray Milgate, and Peter Newman (eds.) The New Palgrave: A Dictionary of Economics, vol. 2. London: Macmillan, pp. 422-427.Google Scholar