Milton Friedman (July 31, 1912 - November 16, 2006) is an American economist who received the 1976 Nobel Prize in Economic Sciences for his research on consumption analysis, historical monetary and theory, and the complexity of stabilization policies. Together with George Stigler and others, Friedman was one of the intellectual leaders of Chicago's second-generation price theory, a methodological movement at the University of Chicago's School of Economics, Law School and Graduate School since the 1940s. Some young students and professors who were recruited or mentored by Friedman in Chicago later became prominent economists; they include Gary Becker, Robert Fogel, Thomas Sowell, and Robert Lucas Jr.
Friedman's challenge to what he later called the "naive Keynesian" theory began with his reinterpretation in the 1950s on the function of consumption. In the 1960s, he became a major advocate against Keynesian government policies, and described his approach (along with mainstream economics) using "Keynesian language and equipment" but rejected "early" conclusions. He theorizes that there is a "natural" unemployment rate, and argues that employment below this figure will cause inflation to be faster. He argues that the Phillips curve, in the long run, is vertical at "natural levels" and predicts what came to be known as stagflation. Friedman promotes an alternative macroeconomic point of view known as "monetarism", and argues that a stable and stable expansion of the money supply is the preferred policy. His ideas on monetary policy, taxation, privatization and deregulation affected government policy, especially during the 1980s. Monetary theory affected the Federal Reserve's response to the 2007-08 global financial crisis.
Friedman is an adviser to US President Ronald Reagan and British Conservative Prime Minister Margaret Thatcher. His political philosophy praised the virtues of a free market economy system with minimal intervention. He once stated that his role in eliminating US conscription was his proudest achievement. In his book 1962 Capitalism and Freedom, Friedman advocates policies such as voluntary military, free-floating exchange rates, the abolition of medical licenses, negative income taxes and school vouchers and against the War on drugs. His support for school choice made him discover the Friedman Foundation for Education Choices, which was renamed EdChoice.
Milton Friedman's works include monographs, books, scientific articles, papers, magazine columns, television programs, and lectures, covering various economic topics and public policy issues. His books and essays have a global influence, including in former communist countries. A survey of economists put Friedman as the second most popular economist in the 20th century, following John Maynard Keynes, and The Economist described it as "the most influential economist in the second half of the 20th century".... maybe from all that ".
Video Milton Friedman
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Friedman was born in Brooklyn, New York on July 31, 1912. His parents, SÃÆ'¡ra Ethel (nÃÆ'Â © e Landau) and Jen? Saul Friedman, is a Jewish immigrant from Beregszász at Carpathian Ruthenia, Kingdom of Hungary (now Berehove in Ukraine). They both work as dry merchants. Shortly after Milton's birth, the family moved to Rahway, New Jersey. In early teens, Friedman was injured in a car accident, which made his upper lip scratched. An talented student, Friedman graduated from Rahway High School in 1928, just before his 16th birthday.
In 1932, Friedman graduated from Rutgers University, where he specializes in mathematics and economics and was originally intended to be an actuary. During his time at Rutgers, Friedman became influenced by two economics professors, Arthur F. Burns and Homer Jones, who assured him that the modern economy could help end the Great Depression.
After graduating from Rutgers, Friedman was offered two scholarships to do postgraduate work - one in mathematics at Brown University and the other in economics at the University of Chicago. Friedman chose the latter, earning him a Master of Arts degree in 1933. He was greatly influenced by Jacob Viner, Frank Knight, and Henry Simons. It was in Chicago that Friedman met his future wife, economist Director Rose. During the academic year 1933-1934 he had a scholarship at Columbia University, where he studied statistics with renowned statistician and economist Harold Hotelling. He returned to Chicago for the academic year 1934-1935, working as a research assistant for Henry Schultz, who later worked on Theory and Demand Measurement. That year, Friedman formed what proved to be a lifelong friendship with George Stigler and W. Allen Wallis.
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Public services
Friedman initially could not find academic work, so in 1935 he followed his friend W. Allen Wallis to Washington, D.C., where the New Deal Franklin D. Roosevelt was a "savior" for many young economists. At this stage, Friedman said that he and his wife "consider job creation programs like WPA, CCC, and PWA appropriate responses to critical situations," but not "pricing and wage steps from the National Recovery Administration and Administration of Agricultural Adjustment. "With the shadow of his ideas in the future, he believes price controls disrupt important signaling mechanisms to help resources be used where they are most valued. Indeed, Friedman then concluded that all government intervention associated with the New Deal was "the wrong drug for the wrong disease," arguing that the money supply should have only been expanded, not contracted. Later, Friedman and his colleague Anna Schwartz wrote A Monetary History of the United States, 1867-1960 , who argued that the Great Depression was caused by a severe monetary contraction due to the banking crisis and bad policies on the part of the Federal Reserve.
During 1935, he began working for the National Resource Planning Agency, which then worked on a large consumer budget survey. The ideas of this project then became part of the Theory of the Function of Consumption . Friedman began working with the National Economic Research Bureau during the fall of 1937 to assist Simon Kuznets in his work on professional income. This work resulted in their joint publication Revenue from Independent Professional Practice , which introduced the concept of permanent and temporary income, a major component of the Permanent Revenue Hypothesis Friedman worked out in more detail in the 1950s. The book hypothesizes that professional licenses artificially limit the supply of services and raise prices.
During 1940, Friedman was appointed as an assistant professor who taught Economics at the University of Wisconsin-Madison, but underwent antisemitism in the Economics department and decided to return to government service. From 1941 to 1943, Friedman worked on a wartime tax policy for the federal government, as an advisor to senior officials of the US Treasury. As a spokesman for the Treasury in 1942 he advocated the Keynesian taxation policy. He helped create a payroll tax cut system, because the federal government desperately needs money to fight the war. He then said, "I do not have an apology for that, but I really hope we do not feel the need and I hope there are some ways of eliminating now."
Academic career
Initial years
In 1940, Friedman accepted a position at the University of Wisconsin-Madison, but left due to differences with the faculty regarding US involvement in World War II. Friedman believes the United States should enter the war. In 1943, Friedman joined the Division of War Research at Columbia University (led by W. Allen Wallis and Harold Hotelling), where he spent the rest of World War II working as a mathematical statistician, focusing on weapons design issues, military tactics, and metallurgical experiments.
In 1945, Friedman filed Revenue from Independent Professional Practice (co-authored with Kuznets and completed during 1940) to Columbia as his doctoral dissertation. The university gave him a PhD in 1946. Friedman spent the academic year 1945-1946 at the University of Minnesota (where his friend George Stigler was employed). On February 12, 1945, his son, David D. Friedman was born.
University of Chicago
In 1946, Friedman accepted an offer to teach economic theory at the University of Chicago (position opened by the departure of his former professor, Jacob Viner to Princeton University). Friedman will work for the University of Chicago for the next 30 years. There he contributed to the formation of an intellectual community that produced a number of Nobel Prize winners, known collectively as the Chicago economic school.
At that time, Arthur F. Burns, then head of the National Economic Research Bureau, asked Friedman to rejoin the Bureau staff. He accepted the invitation, and took responsibility for the Bureau's investigation into the role of money in the business cycle. As a result, he started a "Workshop on Money and Banking" ("Chicago Workshop"), which promotes the resurgence of monetary studies. During the second half of the 1940s, Friedman began a partnership with Anna Schwartz, an economic historian at the Bureau, which would eventually produce a 1963 publication co-written by Friedman and Schwartz, A Monetary History of the United States, 1867 -1960 .
Friedman spent the academic year 1954-1955 as a Visit Fulbright Fellow at Gonville and Caius College, Cambridge. At that time, Cambridge's economic faculty was divided into Keynesian majority (including Joan Robinson and Richard Kahn) and an anti-Keynesian minority (led by Dennis Robertson). Friedman speculates that he was invited into the fellowship, because his views were unacceptable to both factions of Cambridge. Then his weekly column for Newsweek magazine (1966-84) reads well and is increasingly influential among political and business people. From 1968 to 1978, he and Paul Samuelson participated in the Economic Cassette Series, a series of biweekly subscriptions in which economists will discuss the issues of the day for about half an hour at a time.
Friedman was an economic advisor for President Barry Goldwater's presidential candidate during 1964.
Capitalism and Freedom
Capitalism and its Freedom bringing national and international attention outside the academic world. It was published in 1962 by the University of Chicago Press and consists of essays that use non-mathematical economic models to explore public policy issues. It sold over 400,000 copies in its first eighteen years and over half a million since 1962. It has been translated into eighteen languages. Friedman spoke of the need to move to a classical liberal society, that free markets will help countries and individuals in the long run and improve the efficiency issues currently faced by the United States and other major powers in the 1950s and 1960s. He discusses the chapters that explain the specific issues in each chapter of the role of government and the supply of money for social welfare programs up to a special chapter on job licensing. Friedman concludes Capitalism and Liberty with his "classical liberal" attitude, that the government must stay away from unnecessary things and should only involve itself when it is really necessary for the survival of its people and the state. He tells how the country's best ability comes from its free market while its failure comes from government intervention.
Personal life
Retirement
In 1977, at the age of 65, Friedman retired from the University of Chicago after teaching there for 30 years. He and his wife moved to San Francisco, where he became a visiting scholar at the Federal Reserve Bank of San Francisco. Since 1977, he is affiliated with the Hoover Institution at Stanford University. During the same year, Friedman was approached by the Free Network to Vote and was asked to create a television program presenting his economic and social philosophy.
The Friedmans worked on this project for the next three years, and during the 1980s, the ten-part series, titled Free Select , was broadcast by the Public Broadcasting Service (PBS). The companion book for the series (co-written by Milton and his wife, Rose Friedman), also titled Free For Choosing , was the best-selling nonfiction book of the 1980s and has since been translated into 14 languages.
Friedman served as an unofficial adviser to Ronald Reagan during his 1980 presidential campaign, and later served on the President's Economic Policy Advisory Board for the rest of the Reagan Administration. Ebenstein says Friedman is the "teacher" of the Reagan administration. "In 1988 he received the National Medal of Science and Reagan honored him with the Presidential Medal of Freedom.
Milton Friedman is now recognized as one of the most influential economists of the 20th century. Throughout the 1980s and 1990s, Friedman continued to write editorials and appeared on television. He made several visits to Eastern Europe and to China, where he also advised the government. He has also served for many years as Philadelphia Community Trustee.
Next life
According to a 2007 article in the magazine Commentary , "his parents are devout Jews, but Friedman, after the devastation of childhood piety, denies religion altogether." He describes himself as an agnostic. Friedman wrote a great deal about his life and experience, especially in 1998 in his memoirs with his wife, Rose, entitled Two Lucky People .
Death
Friedman died of heart failure at age 94 in San Francisco on November 16, 2006. He is still an economist working on genuine economic research; his last column was published in The Wall Street Journal one day after his death. He survived by his wife (who died on August 18, 2009) and their two children, David, known for the anarcho-capitalist book The Machinery of Freedom, and Jan Martel's bridge expert.
Scientific contribution
Economy
Friedman is renowned for reviving interest in the money supply as a determinant of the nominal output value, the quantity theory of money. Monetarism is a set of views related to modern quantity theory. Its origins can be traced back to the 16th century Salamanca School or even further; However, Friedman's contributions are largely responsible for his modern popularization. He co-authored, with Anna Schwartz, US Monetary History, 1867-1960 (1963), which was an examination of the role of money supply and economic activity in US history. A striking conclusion from their study considers how fluctuations in the money supply contribute to economic fluctuations. Several regression studies with David Meiselman during the 1960s demonstrated the superiority of money supply over investment and government spending in determining consumption and output. This challenges the prevailing view, but is largely untested, of their relative importance. Friedman's empirical research and several theories support the conclusion that the short-run effects of changes in the money supply are primarily on output but their long-term effects are primarily at the price level.
Friedman is a major supporter of the monetarist economic school. He maintains that there is a close and stable relationship between inflation and the money supply, especially that inflation can be avoided by the proper arrangement of the growth rate of the monetary base. He is famous for using the analogy of "dropping money from helicopters", to avoid dealing with money injection mechanisms and other factors that will complicate his model.
Friedman's argument is designed to counter the popular concept of cost-boosting inflation, that an increase in general price levels at the time was a result of rising oil prices, or wage increases; as he wrote,
Inflation is always and everywhere a monetary phenomenon.
Friedman rejects the use of fiscal policy as a demand management tool; and he argues that the government's role in economic guidance must be strictly limited. Friedman wrote extensively about the Great Depression, which he called the Great Contraction, arguing that it was caused by the usual financial turmoil whose duration and seriousness was greatly increased by the subsequent contraction of the money supply caused by the false policies of the Federal Reserve directors.
The Fed is largely responsible for turning what might be a various-garden recession, though perhaps a pretty severe one, becoming a major disaster. Instead of using his power to compensate for depression, it led to a decrease in the quantity of money by a third from 1929 to 1933... Away from the depression of being a system free enterprise failure, it was a tragic failure. from the government.
Friedman also argues for the cessation of government intervention in the currency market, resulting in a large literature on the subject, as well as promoting the practice of free-floating exchange rates. His close friend, George Stigler, explains: "As usual in science, he has not won a full victory, in part because research is directed along different lines by rational expectations theory, a newer approach developed by Robert Lucas, also at the University of Chicago. "The relationship between Friedman and Lucas, or new classical macroeconomics as a whole, is very complex. The Friedmanian Phillips curve was an interesting starting point for Lucas, but he soon realized that the solution provided by Friedman was not quite satisfactory. Lucas outlines a new approach in which rational expectations are considered not Friedmanian's adaptive expectations. Because of this reformulation, the story in which the new classical embedded classical Phillips curve theory is changing. This modification, however, had a significant influence on Friedman's own approach, so, as a result, the Phillips Friedmanian curve theory also changed. In addition, the new Neil Wallace, who was a graduate student at the University of Chicago between 1960 and 1963, considered Friedman's theory course a mess. This evaluation clearly shows the broken relationship between Friedmanian monetism and new classical macroeconomics.
Friedman is also known for his work on the consumption function, the permanent income hypothesis (1957), which Friedman himself referred to as his best scientific work. This work argues that rational consumers will spend a proportionate amount of what they perceive as their regular income. Windfall hikes will mostly be saved. Tax deductions too, as rational consumers will predict that taxes will increase later to balance public finances. Other important contributions include his critique of the Phillips curve and the concept of natural unemployment (1968). This criticism links his name, along with Edmund Phelps, with the view that governments carrying bigger inflation can not permanently reduce unemployment by doing so. Unemployment may be temporarily lower, if inflation is staggering, but in the long run unemployment will be determined by friction and imperfection of the labor market.
Friedman's Essay "Positive Economic Methodology" (1953) provides an epistemological pattern for his own subsequent research and to that level from the Chicago School. There he argues that economics as science should be free from value judgments to be objective. In addition, useful economic theory should be judged not by descriptive realism but because of its simplicity and success as a prediction engine. That is, students should measure the accuracy of predictions, rather than 'health assumptions'. His argument is part of an ongoing debate among statisticians such as Jerzy Neyman, Leonard Savage, and Ronald Fisher.
Statistics
One of his most notable contributions to statistics is sequential sampling. Friedman did statistical work at the Division of War Research at Columbia, where he and his colleagues came up with this technique. It becomes, in the words of the New Palgrave Economic Dictionary, "the standard analysis of quality control checks". The dictionary adds, "Like Friedman's many contributions, in retrospect it seems very simple and clear to apply basic economic ideas for quality control, which is however the size of his genius."
Public policy position
Federal Reserve
Due to his poor performance, Friedman believes that the Federal Reserve Board should be abolished. Friedman was very critical about Federal Reserve policy, even during what was called 'Volcker shock' labeled 'monetaris'. He further believes that if the money supply is controlled centrally (as by the Federal Reserve System), then a better way to do it is with a mechanical system that will keep the money amounts up at a fixed rate.
Exchange rate
Friedman is a strong supporter of floating exchange rates throughout the Bretton-Woods period. He argues that flexible exchange rates will enable external adjustments and allow countries to avoid a balance of payments crisis. He sees the exchange rate as a form of unwanted government intervention. This case was articulated in an influential paper in 1953, the "Case for Flexible Exchange Rates", at a time, when most commentators considered the possibility of floating exchange rates as a fantasy.
School options
In his 1955 article "The Role of Government in Education", Friedman proposes to equip publicly-run schools with government-funded private schools through school voucher systems. Reforms similar to those proposed in the article were implemented in, for example, Chile in 1981 and Sweden in 1992. In 1996, Friedman, together with his wife, founded the Friedman Foundation for Education Choices to advocate school and voucher choices. In 2016, the Friedman Foundation changed its name to EdChoice in honor of Friedman's desire to have their unnamed life-style educational movement attached to him after their death.
Required
While Walter Oi is credited with building an economic base for military volunteers, Milton Friedman is a supporter, stating that the draft was "inconsistent with a free society." In Capitalism and Freedom, he argues that conscription is unfair and arbitrary, preventing youth from shaping their lives at will. During the Nixon administration he led the committee to examine the conversion to paid/voluntary armed forces. He then stated that his role in abolishing compulsory military service in the United States was his proudest achievement. Friedman, however, believes a nation can force military training as a backup in case of war time.
Foreign policy
Biographer Lanny Ebenstein notes a shift from time to time in Friedman's view of an interventionist to a more cautious foreign policy. He supported US involvement in the Second World War and initially supported the hard line against Communism, but was moderated from time to time. But Friedman stated in a 1995 interview that he was anti-interventionist. He opposed the Gulf War and the Iraq War. In a 2006 spring interview, Friedman said that the US stature in the world has been eroded by the Iraq War, but that it may be remedied if Iraq becomes a peaceful and independent country.
Libertarianism and Republicans
Friedman was a supporter of Barry Goldwater's candidacy against Lyndon Johnson after Kennedy in 1964. Later, he served as a member of President Reagan's Economic Policy Advisory Council beginning in 1981. In 1988, he received the Presidential Medal of Freedom and the National Medal of Science. He said he was a libertarian philosophically but a member of the US Republican Party for "intelligence" ("I am a libertarian with a small 'l' and a Republic with a capital 'R.' And I am a Republic with the capital 'R' on the basis of wisdom, not on principle. ") But he said," I think the classical liberal terms are the same, I do not really care what I'm called, much more interested in getting people to think about ideas, than people. "
Public goods and monopoly
Friedman supports the state's provision of some of the public goods that private businesses can not. However, he argues that many services performed by the government can be done better by the private sector. Above all, if some public goods are provided by the state, it believes that they should not become a legal monopoly in which personal competition is forbidden; for example, he writes:
There is no way to justify our current public monopoly at the post office. It can be said that carrying a letter is a technical monopoly and that government monopoly is the lowest crime. Along these lines, one might be able to justify a government post office, but not by current law, which makes it illegal for others to carry mail. If mail delivery is a technical monopoly, no one else can succeed in competition with the government. Otherwise, there is no reason why the government should be involved in it. The only way to find out is to let others get in.
Social security, welfare programs, and negative income tax
In 1962, Friedman criticized Social Security in his book Capitalism and Freedom on the grounds that he had created dependence on welfare. However, in the last second chapter of the same book, Friedman argues that while capitalism has greatly reduced the poverty rate in absolute terms, "poverty is partly a relative matter, [and] even in the [rich Western] nations, there are clearly many living under conditions we call poverty. "Friedman notes that while personal charity may be one way of reducing poverty (and citing England in the nineteenth and US centuries as an exemplary period of immense personal and eleemosinary activity) , Friedman also noted that:
It can be said that personal charity is inadequate because the benefits are earned by someone other than those who make a prize -... environmental effects. I am depressed by the sight of poverty; I am benefited by its alleviation; but I am benefited equally whether I or someone else pays for the eradication; the benefits of other people's charity therefore partly increase in me. To express it differently, we may all be willing to contribute to eliminating poverty, as long as others do. We may not want to donate the same amount without such a guarantee. In small communities, public pressure is sufficient to realize the provision even with a private charity. In a large impersonal community that is increasingly dominating our society, it is much harder to do so.
Suppose a person accepts, like me, this line of thought as a justification for government action to reduce poverty; to organize, as it were, a floor below the standard of every person's life in society. [Although there are questions about how much to spend and how,] an arrangement that recommends itself on pure mechanical grounds is a negative income tax.... The advantages of this arrangement are clear. This is directed specifically at the problem of poverty. It provides assistance in the form most useful to individuals, that is, cash. It is common and can be replaced with a number of special steps that apply now. It makes explicit the costs borne by society. It operates outside the market. As with other measures to reduce poverty, it reduces the incentives of those who help to help themselves, but that does not eliminate the incentive entirely, as a revenue entry system to a certain minimum. An extra dollar earned always means more money is available for expenses.
Friedman argues further that another advantage of negative income taxes is that it can go directly into the tax system, will be cheaper, and will reduce the administrative burden of implementing social safety nets. Friedman repeats this argument 18 years later at the Drug policies
Friedman also supports libertarian policies such as legalization of drugs and prostitution. During 2005, Friedman and more than 500 other economists advocated a discussion on the economic benefits of legalizing marijuana.
Gay Rights
Friedman is also a supporter of gay rights. He never specifically supported same-sex marriage, but said, "I do not believe there should be discrimination against gays."
Economic freedom
Michael Walker of the Fraser Institute and Friedman held a series of conferences from 1986 to 1994. The aim was to create a clear definition of economic freedom and a method for measuring it. Finally this produces the first report on economic freedom around the world, the World Economic Liberty . This annual report has since provided data for peer reviewed studies and has influenced policies in several countries.
Together with sixteen other prominent economists he opposed the Copyright Extension Act and lodged a brief report at Eldred v. Ashcroft . He supports the participation of the word "no-brainer" in brief.
Friedman argues for a stronger protection of the constitutional (fundamental) law of economic rights and freedom to further promote the commercial growth of industry and prosperity and sustain democracy and freedom and rule of law generally in society.
Awards, recognition, and influence
George H. Nash, a prominent historian of American conservatism, said that, "by the late 1960s he was probably the most respected and influential conservative scholar in the country, and one of the few people with an international reputation." Friedman allowed the Libertarian Cato Institute to use his name for Milton Friedman's Gift every two years to Promote Freedom that began in 2001. Friedman's prize was awarded to the British economist Peter Bauer in 2002, the Peruvian economist Hernando de Soto in 2004, Mart Laar, the former Prime Estonian Minister in 2006 and a young Venezuelan student, Yon Goicoechea in 2008. His wife, Rose, sister of Aaron's Director, with whom he started the Friedman Foundation for Education Choices, served on the international selection committee. Friedman is also the recipient of the Nobel Prize in Economics.
After Friedman's death, Harvard President Lawrence Summers called him "The Great Liberator" who said "... anyone who is honest, Democrats will admit that we are all Friedmanites." He said that Friedman's great contribution was "in convincing people of the importance of allowing the free market to operate."
In 2013 Stephen Moore, an editorial editorial member of the Wall Street Journal said, "Quotes the most respected free-market market champion since Adam Smith has become a bit like quoting the Bible." He added, "Sometimes there are several conflicting interpretations."
Nobel Prize in Economic Sciences
Friedman won the Nobel Prize Memorial in Economics, the only recipient for 1976, "for his achievements in the areas of consumption analysis, history and monetary theory and for the demonstration of the complexities of stabilization policies."
Hong Kong
Friedman once said, "If you want to see capitalism in action, go to Hong Kong." He wrote in 1990 that the Hong Kong economy is perhaps the best example of a free-market economy.
One month before his death, he wrote the article "Hong Kong Wrong - What would Cowperthwaite say?" in the Wall Street Journal, criticized Donald Tsang, Chief Executive of Hong Kong, for leaving "non-intellectual positive". Tsang later said he only changed the slogan into "big market, small government," where small governments were defined as less than 20% of GDP. In a debate between Tsang and his rival, Alan Leong, before the Election Chief Executive 2007, Leong introduces the topic and jokingly accuses Tsang of frying Friedman to death.
Chile
During 1975, two years after the military coup that brought military dictator President Augusto Pinochet to power and end Salvador Allende's government, the Chilean economy suffered a severe crisis. Friedman and Arnold Harberger accepted invitations from private Chilean foundations to visit Chile and talked about the principles of economic freedom. He spent seven days in Chile giving a series of lectures at Universidad CatÃÆ'³lica de Chile and (National) University of Chile. One of the lectures entitled "The Fragility of Freedom" and according to Friedman, "handles precisely the threat to freedom from a centralized military government."
In a letter of 21 April 1975, to Pinochet, Friedman considered "Chile's major economic problem clearly... inflation and promotion of a healthy social market economy". He stated that "There is only one way to end inflation: by drastically reducing the rate of increase in the quantity of money..." and that "... cut government spending far and away the most desirable way to reduce fiscal deficits, because... the private sector thus laying the foundations for healthy economic growth.Regarding how quickly inflation should end, Friedman feels that "for Chile where inflation is raging at 10-20% per month... gradualism is not worth it. This will involve so painful surgery so long periods that the patient will not survive. "Choosing" a short period of higher unemployment... "is a smaller crime.. and that" the German experience,... of Brazil..., of postwar adjustments in the US... all argue for shock therapy. "In the letter Friedman recommends to provide a shock approach with the"... package to relieve shock and to relieve acute suffering "and"... for the sake of certainty letting me make a sketch of the contents of a proposal package... should be illustrated "although his knowledge of Chile" is too limited to enable him to be precise or comprehensive. "He included a" sample proposal "of 8 monetary and fiscal measures including" the removal of as many obstacles that now hamper private market. For example, suspending... this law against employee dismissal. "He concluded, stating" Such a surprise program can end inflation within a few months. "The letter suggests that cutting spending to reduce fiscal deficits would result in transitional unemployment less than raising taxes.
Sergio de Castro, a graduate of the Chicago School in Chicago, became Minister of Finance of the country in 1975. Over a period of six years, foreign investment increased, restrictions placed on unions and trade unions, and GDP rose every year. An overseas exchange program was established between the Catholic University of Chile and the University of Chicago. Many other Chicago School alumni are appointed as government posts during and after Pinochet's years; others teach economic doctrine in Chilean universities. They are known as the Chicago Boys.
Friedman did not criticize Pinochet's dictatorship at the time, or murder, illegal detention, torture, or other cruelty known at the time. In 1976 Friedman defended the position of unofficial adviser with: "I do not consider it a crime for an economist to provide technical economic advice to the Chilean Government, more than I would consider it a crime for a doctor to provide technical medical advice to the Chilean Government to help end medical outbreaks. "
Friedman defended his activities in Chile on the grounds that, in his opinion, the adoption of free market policies not only enhanced Chile's economic situation but also contributed to the improvement of Pinochet's rule and ultimately the transition to democratic government during the 1990s. The idea was included in Capitalism and Freedom , where he stated that economic freedom is not only desirable in itself but also a necessary condition for political freedom. In his 1980 Free documentary, he said the following: "Chile is not a politically free system, and I do not justify the system, but the people there are freer than the people in society communist because the government plays a smaller role... The conditions of the people in recent years have become better and not worse.They will be better to get rid of the junta and to be able to have a free democratic system. "In 1984, Friedman stated that he "never refrained from criticizing the political system in Chile." In 1991 he said: "I do not have a good thing to say about the political regime imposed by Pinochet.This is a terrible political regime.A real Chilean miracle is not how well it is done economically, the real wonder of Chile is that junta military willing to challenge its principles and support free-market regimes designed by principled believers in the free market. [...] In Chile, the impetus for political freedom, generated by economic freedom and resulting economic success, ultimately led to a referendum that introducing political democracy Now, in the end, Chile has three things: political freedom, human freedom and economic freedom Chile will continue to be an interesting experiment to watch out for whether to keep all three or whether, now have political freedom, that political freedom will tend to be used to destroy or reduce k economic freedom. "He stressed that the lecture he gave in Chile was the same lecture he later gave in China and other socialist countries.
During 2000 PBS documentary The Commanding Heights (based on the book), Friedman continues to argue that "free market will weaken [Pinochet] political centralization and political control.", And criticism of his role in Chile loses his main opinion that the market the more free to produce the more free, and the free Chilean economy has led to the military government. Friedman advocates for a free market undermining "political centralization and political control".
Iceland
Friedman visited Iceland during the fall of 1984, met important Icelandians and gave lectures at the University of Iceland about "tyrannical status quo ." He participated in live television debates on 31 August 1984 with socialist intellectuals, including ÃÆ' â € Å"lafur Ragnar GrÃÆ'msson, who later became president of Iceland. When they complain that there is a fee imposed for attending college at the University and that, until now, lectures by guest scholars have been free, Friedman replied that previous lectures are not free in the sense that means: lectures always have related costs. What matters is whether participants or non-participants cover the cost. Friedman thinks that it's more fair that only those present are paid. In this discussion Friedman also stated that he did not receive money to deliver the lecture. Estonian
Although Friedman never visited Estonia, his book United Kingdom
After 1950 Friedman was often invited to lecture in England, and in the 1970s his ideas had gained widespread attention among conservatives. For example, he is a regular speaker at the Institute of Economic Affairs (IEA), a libertarian think tank. Conservative politician Margaret Thatcher participated in the IEA program and idea, and met Friedman there in 1978. He also greatly influenced Keith Joseph, who became Thatcher's senior adviser on economic affairs, as well as Alan Walters and Patrick Minford, two other key advisers. Large newspapers, including The Times, and The Financial Times all announced Friedman's monumental ideas to British decision-makers. Friedman's ideas greatly affected Thatcher and his allies when he became Prime Minister in 1979.
Criticism
Econometrician David Hendry criticized parts of Friedman's and Anna Schwartz's 1982 Monetary Trends . When asked about it during an interview with Icelandic TV in 1984, Friedman said that criticism refers to a problem different from what he and Schwartz have been addressed, and therefore irrelevant, and pointed to the lack of valuable peer review among economists on Hendry work. In 2006, Hendry said that Friedman was guilty of a "serious mistake" misunderstanding which meant "the t-ratio he reported for British money demand was exaggerated by almost 100 percent", and said that, in a paper published in 1991 with Neil Ericsson, he has denied "almost every empirical claim [...] made about the demand for British money" by Friedman and Schwartz. A 2004 paper updated and confirmed the validity of Hendry-Ericsson's findings until 2000.
Although the recipient of the Nobel Prize in Keynesian Paul Krugman praised Friedman as "great economist and great man" after Friedman's death in 2006, and recognizes many of his widely accepted contributions to the empirical economy, Krugman has, and remains, a leading critic Friedman. Krugman has written that "he easily sneaks into the good claim that the market is always working and that only the market works." It is very difficult to find cases where Friedman acknowledges the possibility that the market could be wrong, or that government intervention can serve a useful purpose. "
In his book The Shock Doctrine, writer and social activist Naomi Klein criticized Friedman's economic liberalism, identifying with the principles that guide economic restructuring following the military coup in countries like Chile and Argentina. Based on their assessment of the extent to which what he describes as a neoliberal policy contributes to income inequality and inequality, both Klein and Noam Chomsky have suggested that the main role of what they describe as neoliberalism is as ideological closing to the accumulation of capital by multinational corporations..
Visit to Chile
Because of his involvement with the Pinochet government, there were international protests when Friedman was awarded the Nobel Prize in 1976. Friedman was accused of supporting a military dictatorship in Chile because of the relationship of University of Chicago economists with Pinochet, and the controversial seven-day trip he took to Chile during March 1975 (less two years after the coup that ousted President Salvador Allende). Friedman replied that he had never been a dictatorship adviser, but gave only a few lectures and seminars on inflation, and met with officials, including Augusto Pinochet, while in Chile.
Source of the article : Wikipedia
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