Supporter of the Chicago School and avid monetarist, Friedman was one of the most influential modern economists whose ideas are still in use today.

Early Life

Friedman was born July 31, 1912, in New York. He lived in Brooklyn with his parents, working-class Jewish immigrants, and Friedman was their fourth child and only son. Shortly after his birth, they relocated to New Jersey, but their working-class status meant they were financially insecure with low income stability. He himself described his family’s situation in the following manner:

The family income was small and highly uncertain; financial crisis was a constant companion. Yet there was always enough to eat, and the family atmosphere was warm and supportive.

Milton Friedman

His father died during his senior year of high school, or Year 13 in the UK, leaving him and his two sisters to care for their mother.

Education

An avid reader and focused student, Milton Friedman graduated from Rahway High School in 1928. Despite no one in his family having attended university before him, he was awarded a competitive scholarship at Rutgers University to read Mathematics and Economics. He graduated in 1932. The state of the economy at the time, which at this point was in a deep depression, greatly influenced his decision to pursue Economics. He took up yet another scholarship for Economics at the University of Chicago, where he would later teach. He completed his degree in 1933 and went on to do research for 2 years before entering public service in 1935. Fast track to mid-WWII, and Friedman began work at Columbia University in their Division of War Research and eventually received his PhD from the university in 1946. That same year, he accepted an offer to teach economic theory at the University of Chicago, thus beginning his revolutionary career as a Chicago School economist.

Published Works

As such a renowned economist, Friedman published many different insightful documents and research papers, such as A Program for Monetary Policy (1960) and Capitalism and Freedom (1962) and many more. However, by far the most influential was A Theory of the Consumption Function (1957), which challenged traditional Keynesian viewpoints about the household. It redefined the connections between aggregate consumptions or savings and aggregate income and created controversy in the field of economics.

How did Friedman think economies should be run?

The Chicago School economist was an avid supporter of free-market thinking, with his monetarist theories frequently clashing with Keynesian ideologies. Friedman argued for free trade, smaller government, and a slow, steady increase of the money supply in a growing economy. He believed that the free market would work best without intervention. He advocated for restricting government intervention to the provision of public goods and the prevention of monopolistic behaviour. His emphasis on monetary policy and the quantity theory of money is what we referred to and became known as monetarism. His popularity drew in other free-market thinkers to the University of Chicago, establishing the well-renowned Chicago School of Economics, which is still functioning to this day on the foundation laid out by Friedman.

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