Milton Friedman and the Power of Ideas

200px-Portrait_of_Milton_FriedmanBy John Hendrickson

The Wall Street Journal declared that 2011 was “the year of school choice.” School choice, which offers more freedom and opportunities in education for families while improving the educational structure, is still currently on the march as many states are pursuing educational reforms. The school choice movement demonstrates the power of ideas and owes much to the noted economist Milton Friedman. Friedman’s ideas not only continue to shape the field of economics, but also public policy. On July 31st the nation will remember the contributions made by Friedman as we celebrate his 100th birthday. Friedman’s ideas centered on freedom and liberty, which not only helped the 20thcentury become the “American Century,” but his ideas are still impacting people and policies not just here in the United States, but across the globe.

Milton Friedman is considered the father of the Chicago school of economics. Friedman and the Chicago school played a crucial part in applying classical free-market economics to public policy problems. The classical school of economics was influenced by the ideas of Adam Smith, who wrote The Wealth of Nations.

Friedman is especially known for his expertise on monetary theory and the role of the Federal Reserve. A Monetary History of the United States is still considered a fundamental volume on the role of the Federal Reserve and monetary policy. Friedman also influenced the conservative movement by serving as an adviser to Senator Barry M. Goldwater’s presidential campaign in 1964 and defending free-market ideas during the economic decline of the 1970s. When Ronald Reagan was elected President, Friedman served as an economic adviser in the administration. Both Friedman and Reagan shared a similar worldview of the importance of liberty.

Friedman’s defense of liberty and free markets was not only applied to academics and public policy, but also to the general public. One of his many gifts was the ability to discuss and teach complex economic theories and issues to the general public. In Capitalism and Freedom and Free to Choose: A Personal Statement, which was co-authored with his wife Rose, Friedman outlined his philosophy of free-market principles and capitalism. Issues such as education, welfare policy, and taxation were addressed in a common sense form. Free to Choose was the genesis of the popular PBS television series of the same name hosted by Friedman, and the book itself had a global impact.

It is essential that we remember the ideas of Milton Friedman. Friedman’s principles of freedom and liberty over centralized government authority are desperately needed in our current political and economic climate. As the nation celebrates Friedman’s birthday his ideas are still on the march, being pushed by academics, policymakers, but also numerous citizens who make up the Tea Party movement, who are fighting to restore the principles of constitutional limited government.

John Hendrickson is a Research Analyst with Public Interest Institute in Mount Pleasant, Iowa.  Republished by permission from In The Public Interest, a publication of Public Interest Institute.

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