Milton Friedman, 1912-2006

What a pity he’s not here to comment on the follies of the Bush and Obama administrations.

2:24 video

Megan McArdle does to the leftwing professoriate at University of Chicago who signed a letter protesting the establishment of a Milton Friedman Institute (God forbid!) at their university what a Jack Russell terrier does to a rat.

I haven’t heard such transparently wishful claptrap since my fifteen-year-old boyfriend tried to convince me that sex provided unparalleled aerobic exercise.

New York Post:

Today, Americans finally will start working for themselves rather than for their government masters. This milestone arrives two days later than in 2007, clearly proving that the era of big government is back with a vengeance. May 19 is Friedman Day, when the American Institute for Economic Research calculates that citizens finally will have toiled long enough to fund local, state and federal spending.

Merle Hazzard meets Arthur Laffer and sings.

4:30 video

Hat tip to the New York Times.

Milton Friedman died today at the age of 94. There is an excellent obituary by Samuel Brittan in the Financial Times.

Milton Friedman played an exceptionally prominent role in the intellectual revolution which occurred in the later years of the last century, when the 19th century “Progressive” ideals of centralized economic planning, socialism, and collectivism were finally discredited.

It is almost impossible to imagine today the uniformity of leftwing opinion on politics and economics that prevailed in Europe and the United States right up until around 1980. Paul Samuelson’s orthodox Keynesian “neoclassicism” was the bible of Economics study at US universities. But, suddenly and unexpectedly, the consensus of professional economists was perceived virtually overnight to be both impotent and wrong.

No one played a more prominent role in articulating the case for the economic advantage of Freedom over Coercion, of spontaneous order over central planning, than Milton Friedman. In both the most rigorous learned academic publications and in popular books, Milton Friedman made an irrefutable case in favor of Freedom.

I remember when his 10-part television serious Free to Choose ran on PBS. It was in a time of national malaise, when recession and high unemployment was combined with double-digit inflation. Inflation had persisted for mre than a decade. From the conventional liberal point of view, the problem was intractable. In one of the episodes of Free to Choose, Milton Friedman walked through a government monetary printing plant. As he approached the gigantic press turning out US currency, Friedman reached out and hit the red emergency STOP button. The press’s operation instantly came to a halt. Milton Friedman twinkled at the camera, and announced: “I have just stopped Inflation.” And the viewing audience understood that he was perfectly right.

He died at age 94 covered with honors for a lifetime devoted to fighting for human liberty. There should be commissioned a painting after Girodet of the Spirit of Ayn Rand Welcoming Milton Friedman Into Valhalla.

Friedman Foundation announcement.

New York Times

Wikipedia entry

Ralph Kinney Bennett played tennis with Friedman.

Not so very long ago, almost universally accepted common wisdom blamed the Great Depression on “the excesses of capitalism,” and believed that it was Franklin Delano Roosevelt and the New Deal which saved the capitalist system from itself by the addition of social welfare and more intense federal management of the economy. As the Wall Street Journal reports, the world has since turned upside down:

For decades, many economists and policy makers thought the Depression was the inevitable consequence of excess investment, flawed corporate governance and speculation in the 1920s, culminating in the 1929 stock-market crash. That view was reinforced by John Kenneth Galbraith’s 1955 book “The Great Crash, 1929.”

Milton Friedman and Anna Jacobson Schwartz upended that view in 1963. In “A Monetary History of the United States, 1867-1960,” they argued that the Depression was far from inevitable, but brought about by an “inept” Federal Reserve. First, they said, the Fed foolishly raised interest rates in 1928 to end speculation on Wall Street, causing a recession the next year that precipitated the crash. Then, it let thousands of banks fail and the money supply shrink. In part, it thought weak banks should be allowed to fail. It also feared that lower interest rates might lead foreigners to dump dollars, straining the currency’s link to gold.

Mr. Bernanke read the book as a graduate student at Massachusetts Institute of Technology in the 1970s. “I was hooked, and I have been a student of monetary economics and economic history ever since,” he recalled at a 2002 conference honoring Mr. Friedman’s 90th birthday. Mr. Bernanke, by then one of the Fed’s seven governors, told Mr. Friedman: “Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”