Sunday, July 31, would have been the 99th birthday of Dr. Milton Friedman. Although he passed away almost five years ago, Dr. Friedman’s impact on freedom and liberty remains. In his honor we celebrate today the Friedman Legacy for Freedom Day. Students for a Free Economy — the campus outreach program of the Mackinac Center — in association with the Foundation for Educational Choice, is taking several students to the Henry Ford Museum where they will see an exhibit on the sesquicentennial of the U.S. Civil War and hear talks on the work and influence of Dr. Friedman.

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To mark the event, several Mackinac Center summer interns have written blog posts about the 1976 Nobel Memorial Prize winner and his wife, Rose. You can read them below.

This essay by Michael LaFaive, director of the Morey Fiscal Policy Initiative, appeared in The Detroit News just hours after it was announced that Dr. Friedman had passed away on Nov. 16, 2006.

A brief sample of how Friedman’s work impacted Mackinac Center scholars over the years can be found here.

 

Friedman: The Influence of Ideas

By Shelli Camenga

On the bookshelf of an average American patriot, it would be more common to see a collection of Ronald Reagan biographies than books on the life of Milton Friedman. Ask a person on the street who they think holds the most power in America and you have a good chance of hearing “the president.” However, the president is a single man whose power is limited by checks, balances, and, depending on his character, his personal desire for re-election. One free man with an idea can prove influential and limitless without holding public office. Milton Friedman was that man.

Behind every great success lies a great inspiration. For the millions of conservatives who venerate Reagan, they are also (wittingly or unwittingly) admiring the impact Friedman made on the mentality of his times and on Reagan himself. That the political climate even allowed a man with Reagan’s platform to be elected was due in part to Friedman’s work, starting as early as the failed Barry Goldwater presidential campaign, which began calling for a return to laissez-faire economic principles when the position was considered extreme. This movement gained momentum, culminating in Reagan’s election.

In 1980, Reagan appointed Friedman to the select Economic Policy Coordinating Committee. As a team they applied Adam Smith’s concepts, and the economy became a freer and more prosperous place; regulations were limited, inflation was brought under control, taxes were cut, and government began to find its place — on the sidelines. Reagan’s policies are widely recognized as bringing about the second-longest peacetime economic expansion in the history of the United States. The key to bringing this prosperity was the wisdom of those advisors who, like Friedman, truly understood economic policy. Later, Friedman was given the Presidential Medal of Freedom, the nation’s highest civilian honor.

Friedman didn’t only have an influence at home in America; his ideas brought significant changes around the world. Former prime minister of Estonia, Mart Laar, who is credited with bringing about Estonia’s rapid economic development in the 1990s, said that the only book on economics he read before his election was Milton Friedman’s “Free to Choose.” Under Laar, Estonia became the first country to institute a flat tax, which was very successful. While speaking about Friedman’s “Free to Chose” TV series, Reagan mentioned that the principles Friedman expressed had also helped inspire the Polish drive for freedom.

Although politicians come and go and their ideas can change with the political winds, the protection and presentation of sound economic ideas remains a vital tenant of freedom. Politicians are only in power for a few terms at most, but influencing the electorate and swaying public opinion toward freedom is a full time job with no term limit. This position in the cause of freedom is taken today by think tanks like the Mackinac Center. They, like Friedman, publish articles, give lectures and research responsible policy changes, sharing their findings publicly.

As an intern at a think tank, I am inspired by Milton Friedman. Looking at his example, I know that as a responsible citizen, I can live an influential life of loving and sharing liberty without needing to be elected. My job is to provide, present and protect the principles which will bring about the next age of prosperity.

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An Ode to the Frie Market

By Elizabeth Ryan

Milton Friedman won a Nobel Memorial Prize in economics
But that isn’t all about this man; a lesson on him isn’t quick

Born in Brooklyn, New York in July of nineteen hundred twelve,
Milton Friedman was a brilliant economist; in this topic he deeply delved

For thirty years, teaching economic theory was his passion
At the University of Chicago he taught the youth of the nation

As “the most influential economist of the second half of the 20th century,”
His ideas spread like wildfire, to almost everyone, and were not elementary

Big government he said to shun,
Instead, free markets should have all the fun

The virtues of a free market system are so clear
Market intervention a nation should never have to bear

The government’s role in the economy should be greatly restricted.
Interference would only bring about poverty, depressions, and an economy constricted

A natural rate of unemployment he believed existed
No government could change this rate; it was healthy and should not be resisted

Though greatly opposed to the Federal Reserve,
Advice he still gives so the economy will be preserved

The advice: A small steady expansion of the money supply is the only way
If the central bank did otherwise, hyperinflation would never be kept at bay

Services offered by the government can be inefficient,
Should be performed by the private sector: that’s where they ought to be sent

One of these services is the production of money,
The private sector should produce it; and a gold base will lead to the highest stability

“Inflation is always and everywhere a monetary phenomenon,” he claimed
The relation between inflation and the money supply is close, he proclaimed

A monetarist at heart: Control of price inflation should be done with monetary deflation
In addition, price deflation is best controlled by only monetary inflation

An economic adviser to Ronald Reagan,
He predicted the policies of Keynes were bad, close to pagan

Not only would they cause high inflation
But minimal growth; later called stagflation

“Capitalism and Freedom,” a book he co-authored in nineteen sixty two
Speaks for policies like volunteer military and education vouchers, just to name a few

“A Monetary History of the United States,” which he published in nineteen sixty three
Investigates the role of money supply and economics in U.S. history

“Free to Choose,” another book that he and his wife did write,
Is where on monetary policy they shed much light

A staunch supporter of libertarian ideas, he took a chance,
When he fought for legalization of drugs and prostitution, not a popular stance

“Nothing is so permanent as a temporary government program” is his quote,
Noting: Once a program is started, participants will do everything to keep it afloat

He coined the phrase, “There’s no such thing as a free lunch.”
Someone always pays in the end, and will feel the punch

Milton Friedman taught many good economic lessons
Which if heeded, may have kept us out of horrid recessions

With a full life behind him and theories not previously in the mix,
Friedman died on November 16 of two thousand and six

Though he is gone, this week we honor the day Friedman was born
Today his advice to us would be, go free the market rather than mourn

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Remembering Rose

By Kahryn Rombach

Rose Friedman was once described as “equal parts velvet and steel.” At once her husband’s wife and colleague, Rose was never the great woman behind a great man. She noted in a 1999 interview that “I’ve always felt that I’m responsible for at least half of what he’s gotten.”  From co-authoring three of his most influential works to providing the impetus for such ambitious projects as their television series and nonprofit foundation, Rose Director Friedman can rightfully be called Milton’s partner.

An influential economist in her own right, Rose greatly influenced Milton’s economic thought. “It was an extremely close intellectual fellowship, and she was not someone who got credit for things she didn’t do,” Milton’s student Gary Becker observes. “They discussed ideas constantly.” Another longtime friend of the couple remarks that, for Milton, Rose’s opinion was “the ultimate test.” Friedman eagerly sought his wife’s point of view when developing his own, and openly admitted that she was the only person who had ever won an argument with him. This intellectual equality rendered their professional collaboration a very natural one. Still, she said, “I was smart enough to know that he was smarter than me.” So while Milton focused his efforts on technical economics, Rose set out to bring their theory of freedom to the public.

PBS approached the couple about turning their co-written international best-seller “Free to Choose” into a television series. After convincing Milton to take on the project with her, Rose assumed the role of associate producer and was heavily involved in organizing the series, which achieved global success. Friends and relations also credit her with providing the inspiration for the Friedman Foundation. But while she is universally recognized as an expert economist with intelligence and drive, Rose is also remembered for the grace with which she balanced her roles as colleague and wife.

“She was a great lady, in every sense of the word,” an acquaintance recalls. Outspoken yet polite, patient yet uncompromising, Rose stepped confidently — never aggressively — into her husband’s spotlight and quickly bowed out again when appropriate. She complemented Milton, earning the admiration of her peers and setting a tremendous example of feminine strength, courage and love.

These virtues helped to sustain the Friedmans through an arduous fight for freedom. When they entered academia, the field was virtually void of principled conservatives. Their work reintroduced classical liberalism as a valid and critically important body of thought with the power to revolutionize society as well as the academy. Milton and Rose changed the world together, leaving a legacy that will flourish for generations to come.

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Milton Friedman and Historical Landmarks

By Wesley Reynolds

Time flies, and with it the memory of the late economist Milton Friedman, who would have been 99 years old this year. However, we at the Mackinac Center and the Foundation for Educational Choice hope to revive Friedman’s legacy by hosting some lectures this Friday on his monetary policy. It is also the 150th anniversary of the American Civil War, an issue encompassing a context for economic analysis.

Friedman’s free-market principles are vital to comprehending monetary supply during the Civil War. An entire generation of brothers hammered their plowshares into swords. As Northern factories shaped rifles and Southern farmers smelt bullets, the strain on local economies was enormous. Like a plague of locusts, the “terrible swift sword” burned through the Virginian Shenandoah Valley and across Georgia, destroying Southern crops and vegetation. Along the Western front, raiders on both sides wreaked havoc on the civilian populace. In the words of a song, “not now for songs of a nation’s wrongs, not the groans of starving labor; Let the rifle ring and the bullet sing to the clash of the flashing saber!”

The elephant in the room was big government, as usual. Both North and South inflated their money supplies, causing a rise in prices. Southern currency especially suffered a significant decrease in value due to the printing of excess Confederate money. As was apparent to Friedman, inflation is most often the fault of central banks, like those during the Civil War, that print more money than reflects actual market demand.

As a historian, I have always found Friedman’s work to be historically pertinent. His view of the late 19th and early 20th centuries as an era of prosperity deserves more academic acceptance than it gets. I agree with Friedman’s impression that America during the Victorian era was a beacon to all those persecuted peoples throughout the earth who wished simply for the freedom to work hard for their existence. It was not a “gilded age” as historians want to paint it but a golden one. Friedman’s love for America’s heritage and his presumption of good will to all people, even his enemies, are his two qualities I admire most.

This Friday will be a day of both celebration and solemn reflection, as we remember Friedman’s legacy and the many thousands of lives lost during the Civil War. History often repeats itself in various forms. If we do not apply absolute principles to past events, we will be subject to repeating the same mistakes that history contains. We must remember those who are important in the history of our freedom, and reclaim our historical landmarks of liberty.

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Knowing Freedom

By Andrew Koehlinger

John Maynard Keynes famously quipped, “Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.” Free-market economist Milton Friedman, however, actually did manage to capture the minds not only of practical men, but of politicians and even other intellectuals. He understood that the world would change if people understood the meaning of freedom.

Historic social and political movements began with powerful ideas. For instance, the rise of the Roman Empire predicated itself on the idea of Roman citizenship and a sense of personal duty, and America’s founding relied on a distinct knowledge of personal liberty and its implied negative rights. Pivotal events, such as shifts of culture or the rise of a new state, occur in response to the outcomes of various conflicts in an ongoing war of ideas.

Milton Friedman joined this intellectual struggle knowing that education provides the best weapon. Most importantly, he believed education was a personal undertaking. This perception led to his recognition that most current “education” was actually compulsory schooling or training. The government mandated that children attend taxpayer-funded schools where little to no actual education ever occurred. His solution: school vouchers, which enabled parents to choose where they think their children will be best educated, whether it be public schools, private schools, charter schools or even home schools. Vouchers redirect taxpayer dollars from bureaucrats to the families who need them, coupling education and choice to make the greatest impact.

Friedman’s book “Free to Choose” and a subsequent television series highlight the tenets behind the power of ideas and an education’s role in shaping those ideas. Free markets result from a combination of individual choice and scarcity of information. They offer great benefits, but require individuals to trade with each other in order to obtain them. These types of exchanges only result when individuals possess freedom of choice. This idea undergirded America’s economy until progressive promotion of increased centralization eroded individual choice and increased government meddling in the economy. Thanks to their efforts, a large portion of Americans now hold the institution of federal government responsible for their every need, from the cradle to the grave.

Ultimately, Friedman recognized education’s foundational role in changing society’s institutions. Sustainable political change must be preceded by sustainable social change, which can only result from education. The battle of ideas starts in our schools. Friedman knew ideas like individual choice and freedom had lost significant ground there, but he also recognized that the ground could be regained by letting people choose how they want to educate themselves. He, like economist F.A Harper, knew that “men who know freedom will find ways to be free.”

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Our Greatest Protection

By Josiah Kollmeyer

Americans have increasingly come to view government as a vital protector against economic hardship. U.S. politicians, especially from 1900 on, have touted various interventionist economic programs as essential for America’s prosperity and security. Free-market economist Milton Friedman, on the other hand, understood that the best protection for American workers and consumers springs not from government intervention, but from economic freedom. It is this freedom to choose that guards us from exploitation and opens innumerable doors of opportunity.

Friedman describes in his book “Free to Choose” how economic freedom aids consumers. In a competitive market, businesses have strong incentives to produce goods that consumers need and demand. The freedom of new entrepreneurs to grab a share of the population’s demands ensures that the vast majority of consumer needs are met. Also, price spikes are mitigated by the competition: even if all existing stores agree to keep prices artificially high through collusion, new vendors can enter the marketplace and thwart their efforts. Consumers cannot be forced to buy particular products, and thus will voluntarily contribute to the expansion of high-quality vendors while abandoning companies that provide poor service. According to Friedman, it is free competition, not government regulation, that protects consumers from exploitation and shortages of essential goods. 

In his works, Friedman also points out the benefit workers gain from economic freedom: the crucial ability to earn wages that reflect the value of their skills. In an open market, companies will compete strategically for the most productive workers, driving wages up and rewarding good work. The free market also allows workers to become entrepreneurs and manage their own time and resources. Free markets ultimately protect workers from poor conditions by providing them with the freedom to choose a job according to their own desires and abilities. By contrast, a legally enforced monopoly system hurts workers, as they can only seek work from an employer with little incentive to offer competitive wages or pleasant working environments. 

Similarly, Friedman argued that the freedom to choose among schools can help protect American children against a poor education. The more options parents have regarding schooling, the more schools will be held accountable for the teaching they provide. The worst situation for any student is to have only one compulsory schooling option, as is true for many inner-city children. Without any alternative, they have nowhere to turn if their assigned school fails to provide a good service. Friedman and his wife Rose were tireless advocates for increased school choice, knowing that increased freedom for families could provide an escape route for children in poor schools.

Dr. Friedman deeply understood the importance of freedom in our society. America’s key to prosperity and long-term economic security is the liberty that enables her citizens to apply their skills and talents without arbitrary government interference. Anytime a citizen is left with only one vendor to buy from, one employer to work for or one school to attend, that citizen becomes vulnerable. Our greatest protection against both corporate and government exploitation lies in our freedom to choose.

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Young Man, You Owe Milton Friedman a Thank You

By Andrew Kaluza

Every young man living after 1973 owes his life to Milton Friedman. In that year, Friedman, became the intellectual father behind ending conscripted military service. He wasn’t the first person to voice his opposition to the draft, but he was the first to communicate his ideas effectively enough to change the public mindset on the issue.

Ideas lay the groundwork for a philosophy and provide the foundation for a society. As Peter Kreeft said, “Philosophy is just thought, but sow a thought, reap an act; sow an act, reap a habit; sow a habit, reap a character; sow a character, reap a destiny. This is just as true for societies as it is for individuals.” Given that ideas guide our every action, we must look to have not just valid ideas, but ones that are intellectually grounded and sound.  Ideas must be communicated, compared and pieced together in order to create even better ideas. Communication is particularly important, as the better the communication, the more accessible and understandable ideas become. Fortunately, Friedman was a great communicator. His ability to communicate the message of liberty and free choice in regard to the draft kept young American males out of compulsory military service.

What was he able to communicate about the draft? When making a case for the draft, advocates claimed that if soldiers enlisted for pay, it would create an army of mercenaries.  They argued that a paid volunteer army would not be a virtuous army, because the soldiers would join for monetary desire and not for patriotic duty.  Milton Friedman rebutted this by pointing out that mandatory conscription hypocritically fails this patriotic test, since forced servitude, rather than inner volition, causes individuals to serve.  Friedman believed that incentives are the foundation of each individual’s action, and therefore, it was inappropriate to attribute unpatriotic motives to paid army volunteers.

Friedman’s repudiation of such mercenary concerns are illustrated in a famous confrontation with General William Westmoreland:

 In the course of his [General Westmoreland’s] testimony, he made the statement that he did not want to command an army of mercenaries. I [Milton Friedman] stopped him and said, ‘General, would you rather command an army of slaves?’ He drew himself up and said, ‘I don’t like to hear our patriotic draftees referred to as slaves.’ I replied, ‘I don’t like to hear our patriotic volunteers referred to as mercenaries.’ But I went on to say, ‘If they are mercenaries, then I, sir, am a mercenary professor, and you, sir, are a mercenary general; we are served by mercenary physicians, we use a mercenary lawyer, and we get our meat from a mercenary butcher.’ That was the last that we heard from the general about mercenaries.  

This example highlights the importance of communicating ideas effectively. By doing so, Friedman successfully convinced people of the ills of conscripted military service and persevered in the all-important court of public opinion. Friedman changed the landscape of modern war — and along with it the destiny of young Americans everywhere.

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