It is simply not possible to adequately describe the importance of Milton Friedman. In the the 1950s and 1960s, most men and women of stature simply assumed that state control of the individual and of the economy was inevitable and desirable. Friedman, then a professor of economics at the University of Chicago, said that it was neither inevitable nor desirable. In books, lectures, articles--wherever he could find a pulpit--Friedman said freedom, specifically individual liberty, was the optimal condition of mankind, both for human satisfaction and for prosperity.
He rewrote our economic memory. The Great Depression had been blamed largely on free markets, underlining the need for draconian government supervision of the economy. Yet Friedman argued that free markets had not caused the Great Depression. Rather, in A Monetary History of the United States, written with the great economist Anna Jacobson Schwartz, Friedman said it was horrifying incompetence by the government, specifically the Federal Reserve, that had caused and prolonged the Depression. He showed in minute detail how failures of monetary policy--occasionally motivated by the anti-Semitism of some Fed governors--had created catastrophe from what could have been a short recession. This analysis was so powerful that it revitalized the monetarist school of economic thought: that the supply of money greatly affects not only prices but economic output. It redeemed the free market.
He was a friend and mentor and inspiration all my life. He and his wife Rose, his constant colleague and support, were lifelong friends of my parents Herbert and Mildred Stein after they met at the University of Chicago in the mid '30s. My father, a distinguished economist himself and chairman of the President's Council of Economic Advisers under Nixon and briefly under Ford, forever stood in awe of the man. As my pop said many times, "Friedman was like every other economics student at Chicago in those days except twice as smart."
When I was a Columbia undergrad in the early '60s, Friedman taught there for a year and was a good friend to me. He even used applied statistics to save me from romantic desperation when I was worried about replacing a girlfriend. If there were only one right woman for every right man, he advised, they would never find each other. Another time, he stopped me from crossing against the light on Broadway and 116th Street, telling me, "Why risk your whole life to save 10 seconds?"
Friedman, as much as anyone, stood athwart history and cried "Stop" as it seemed headed towards collectivism--only he did it with a masterly, genius-level grasp of mathematics, history and statistics. He proved, inasmuch as it can be proved, that free markets would not impoverish the poor but enrich them, would not ride roughshod over the downtrodden but would empower them. His work with the Pinochet dictatorship in Chile was widely reviled, but Chile is now the free-market powerhouse of the Andes and a democracy. These principles paid off for whole populations in South America, in Russia and in Asia. He was the mentor to Ronald Reagan, to Bush 41, even to Nixon--who did not quite believe just how strong Friedman's arguments were and went ahead and imposed ineffectual price-wage controls in 1971.