Milton Friedman was one of the most influential economists of the twentieth century, whose ideas and policies shaped the turn toward free markets and individual freedom that defined the 1980s and beyond. In this definitive biography, historian Jennifer Burns reveals the complex and nuanced life and legacy of America’s first neoliberal – and perhaps its last great conservative.
If you are interested in learning more about the man, his ideas, his times, and his enduring influence, read on to find out why you should pick up this book today.
Table of Contents
Genres
Politics, Economics, Biography, Memoir, Biography, History, Philosophy, Sociology, Business, Education, Journalism, Psychology
The book is divided into three parts, each covering a different aspect of Friedman’s life and work. The first part, “The Making of an Economist”, traces Friedman’s early years, from his childhood in Brooklyn to his education at Rutgers, Chicago, and Columbia, where he encountered the intellectual currents that shaped his worldview.
The second part, “The Making of a Public Intellectual”, follows Friedman’s rise to fame and influence, as he became a prolific writer, a popular lecturer, a media star, and a policy adviser to presidents and governments around the world.
The third part, “The Making of a Conservative”, explores Friedman’s role in creating a new economic vision and a modern American conservatism, as well as his reactions to the challenges and criticisms he faced from his opponents and successors.
The book also examines Friedman’s personal life, including his long-standing collaborations with women, such as his wife Rose and his co-author Anna Schwartz, and his complex relationships with powerful figures, such as the Federal Reserve chairman Arthur Burns and the Treasury secretary George Shultz.
Review
This book is a well-researched and well-written biography of one of the most important and controversial figures in modern history. Jennifer Burns does a great job of balancing the personal and professional sides of Friedman’s story, and of providing lucid and lively context for his groundbreaking work on various topics, such as monetary theory, inflation, taxation, education, welfare, and civil rights.
She also does not shy away from addressing the criticisms and controversies that Friedman faced, both from his peers and from the public, and from assessing his impact and legacy on the world today. The book is not only a biography of one man, but also an intellectual history of twentieth-century economic thought, and a political history of the rise and fall of neoliberalism and conservatism.
It is a book that will appeal to anyone interested in economics, politics, history, or philosophy, and that will challenge and enlighten readers of all backgrounds and perspectives.
Introduction: Explore the origins of an economics giant
Milton Friedman (2023) provides a nuanced biography of the influential free-market economist. Tracing Friedman’s groundbreaking work across diverse policy areas, it explores his instrumental role in the rise of modern American conservatism and free market ideology.
During his 2020 election campaign, then-candidate Joseph Biden defiantly declared, “Milton Friedman isn’t running the show anymore!” Who was this figure that inspired such strong reactions – even 15 years after his death?
A bespectacled economist standing barely five feet tall might seem an unlikely iconoclast. Yet Milton Friedman inspired awe and rage in equal measure. His ideas on free markets and limited government powered the conservative movement, even as they influenced leaders from the right to the center-left.
Whether vilified as a high priest of greed or revered as a champion of liberty, Friedman decisively shaped the economic thinking of the twentieth century.
In this summary, we’ll look at Friedman’s remarkable trajectory – focusing on his early life and intellectual influences before taking a step back and examining his legacy and impact.
Early life
How did a small-town boy from New Jersey rise to become one of the most influential economists of the twentieth century?
Among his classmates in Rahway during the late 1920s, Milton Friedman stood out as exceptionally gifted across a range of subjects. But it was economics that would ultimately captivate his intellect and propel his rise.
Friedman was born to Jenő Saul Friedman and Sára Ethel, two working-class Jewish immigrants from Hungary. The couple had established a successful family-owned dry goods store in Rahway. They quickly integrated into the close-knit Jewish community there while creating a nurturing environment for Milton and his three older sisters.
But tragedy struck when Friedman’s father suddenly passed away during the boy’s senior year of high school. Friedman’s grief was profound, but it didn’t derail his ambition. He enrolled at Rutgers College and set his sights on becoming an actuary.
In his sophomore year, Friedman took an introductory economics course. Two of Friedman’s professors, Arthur Burns and Homer Jones, helped draw him into economics and swayed him toward the University of Chicago for graduate studies.
Friedman’s camaraderie with Burns and Jones played out in the darkening context of the Great Depression. In 1932, the University of Chicago economics department was a hotbed of intellectual ferment stirred by the Depression. As America confronted bread lines and mass unemployment, pressing economic questions took on new urgency.
Milton Friedman arrived in Chicago that fall with unformed ideas and wavering plans. His classmate Rose Director had a deeper connection to the department thanks to her brother Aaron, who was already on the faculty. But Rose, too, was unsure whether to continue her studies or seek employment.
Friedman’s professors, including the intimidating Jacob Viner and the biting Frank Knight, were engaged in urgent debates over the causes and cures for the deepening economic crisis. The department placed great emphasis on “price theory,” the elegant mathematical analysis of supply, demand, and market equilibrium pioneered by earlier neoclassical economists.
Against this backdrop, Friedman and Director excelled in their coursework. Becoming friends, they often studied late together – and feelings grew between the future couple.
Armed with a one-year fellowship, Friedman soon headed off to pursue his doctoral studies at Columbia University. There, he’d begin formulating his own distinct ideas about the causes of and cures for economic depression.
Columbia, Washington, and beyond
Friedman enrolled at Columbia in 1933, entering a department that was the polar opposite of the University of Chicago – both intellectually and politically. While Chicago prized free markets and was skeptical of government intervention, Columbia hosted the nation’s largest economics program, which focused heavily on detailed economic planning.
Still enrolled in his PhD program, Friedman landed in Washington, DC; he’d been hired by a New Deal agency to assist with a massive survey tracking family spending. His statistical innovations brought him to the attention of Simon Kuznets at the National Bureau of Economic Research. Soon after, Friedman moved to New York City and married Rose Director, his collaborator and college sweetheart.
But controversy stalked Friedman. His doctoral research on medical licensing accused the American Medical Association of artificially restricting the supply of doctors to raise incomes. The charge outraged his National Bureau of Economic Research, or NBER, superiors – triggering years of dispute over methodology and ideology. Friedman, they said, was too aggressively applying Chicago-style free market theory to real-world problems.
As Friedman sparred with the NBER, a revolution swept economics. The towering John Maynard Keynes’s General Theory inspired economists like Alvin Hansen to develop the intellectual basis for federal deficit spending. But while New Dealers embraced fiscal policy, Friedman disregarded Keynes; he taught Chicago price theory and questioned the notion that the boom-bust cycle was inevitable.
An escape route seemed to open when Friedman was offered a professorship at the University of Wisconsin. But conflict followed him to Madison, where the economics faculty split into hostile camps. When a departmental memo criticized the school’s statistics offerings, Friedman’s enemies pounced. Despite support from the dean, he agreed to resign.
Humiliated, Friedman weighed whether to salvage his reputation with government work or return to academia. The choice became urgent when Rose suffered a stillbirth in a traumatic delivery.
As war engulfed America, Friedman landed in the Treasury Department, where he hit upon a brilliant innovation for military testing as part of a statistics research group. His collaboration with Abraham Wald on sequential analysis allowed for more efficient testing of munitions, freeing resources for the wider war effort. Sequential analysis went on to become a vital concept in postwar statistics.
Despite Friedman’s success navigating wartime bureaucracy, his doctoral dissertation still languished. He continued to conflict with superiors at the NBER – until, nearly a decade later, Friedman finally prevailed in publishing his disputed thesis.
As veterans streamed back from war, mass higher education was born, and Friedman readily found a faculty position. Soon after, an opportunity emerged that perfectly suited his faith in laissez-faire principles: a spot had opened at the University of Chicago economics department.
This pivotal moment marked the start of Friedman’s ascent as a public intellectual and policy entrepreneur. Chicago would provide the perfect base to develop his monetarist counter-revolution, an approach that finally displaced Keynesianism in the 1970s.
The return to Chicago
When Friedman returned to Chicago, he rejoined a tight-knit group of Frank Knight disciples including George Stigler, Allen Wallis – and, of course, his wife, Rose. They engaged in long debates about Knight’s ideas, rejecting other schools of thought like institutionalism.
Friedman’s Chicago education set him apart with its focus on expanding price theory to address social problems, instead of more intellectually fashionable schools like institutionalism. The social world of the emerging Chicago school was equally formative, binding Friedman to conservative, market-oriented thinkers through a sense of shared mission. At a time when Franklin Roosevelt was realigning national politics around New Deal liberalism, Friedman’s circle would form the nucleus of a rising counter-establishment in economics and economic policy.
It was a warm summer day in 1946 when Milton Friedman crossed paths with his mentor and champion, Henry Simons, on the streets of Hyde Park. What should have been a joyful reunion of two kindred spirits who’d beat long odds and tough competition for prized positions at the prestigious University of Chicago instead proved ominous. The typically oblivious Friedman immediately sensed something was amiss with the normally vibrant Simons, who “rattled and rambled” about suicide during their brief encounter. Within days, Simons was dead from an apparent accidental overdose of sleeping pills.
The tragic loss of his friend and ally was an inauspicious start to what Friedman hoped would be a triumphant homecoming. Having threaded the needle to secure a coveted tenured Chicago post, Friedman had expected to reunite with his like-minded scholars to recreate the intellectual ferment of their earlier days together. Instead, he returned to a department diminished by the loss of key luminaries and increasingly dominated by the growing influence of the Keynesian planning-oriented Cowles Commission for Research in Economics.
Building alliances across the university, Friedman outmaneuvered the Cowles economists and ensured they soon departed for Yale. In their wake, Friedman helped nurture two new intellectual movements centered on skeptical reassessments of market failure. The first was law and economics; pioneered by his brother-in-law, Aaron Director, it employed price theory to systematically critique the legal basis for antitrust regulations. The second was spearheaded by Friedman’s friend George Stigler, who applied Chicago analysis to explain regulatory capture and other instances of government failure.
Between these twin poles, Friedman began to articulate his own unique vision of liberalism – one that carved out space for state action while still prioritizing individual freedom and markets. He experimented with policy ideas like school vouchers and negative income taxes that could address social issues through cash grants rather than bureaucracies. And he grappled with the question of values, moving away from an emphasis on equality toward a new watchword: freedom. This allowed Friedman to differentiate himself from both reactionaries on the right as well as Keynesians and New Deal liberals, while still retaining echoes of his mentors’ concern for social improvement.
By the late 1950s, Friedman and his allies had nurtured a distinctive Chicago counter-tradition in economics, law, and political science – one positioned to contest the dominant paradigm of demand management, regulation, and Keynesian economic planning.
These are the building blocks of the extensive legacy Friedman left behind, which we’ll explore in the final section.
Friedman’s legacy
From his first challenges to Keynesian orthodoxy, Milton Friedman left an indelible mark as one of history’s most impactful economists. Though initially met with skepticism, Friedman’s policy prescriptions gained traction over time as real-world developments seemed to validate many of his theories and warnings.
Friedman’s work on monetary theory formed the basis for his most groundbreaking contributions. In their 1963 study, A Monetary History of the United States, 1867-1960, Friedman and coauthor Anna Schwartz identified poor policy decisions by the Federal Reserve as the primary cause of the staggering severity of the Great Depression. This assertion directly contradicted the conventional Keynesian narrative that pinned blame on inherent instability in private investment. The Fed itself would later admit the accuracy of Friedman’s conclusions.
Friedman’s extensive research on money supply and consumption provided the foundation for his famous dictum that “inflation is always and everywhere a monetary phenomenon.” Though disputed for decades, this core monetarist principle has proven remarkably durable, underpinning the inflation targets used by modern central banks.
Friedman’s public influence peaked during the late 1970s and early 1980s. With Keynesian solutions failing to tame rampant inflation, Federal Reserve Chairman Paul Volcker explicitly turned to Friedman’s monetarist remedies, targeting money supply instead of interest rates. Though it was a painful process, this monetary tightening broke the back of stagflation. In politics, Friedman’s small-government ethos and faith in markets aligned with President Reagan’s outlook, making Friedman an informal adviser shaping administration policies around taxes, regulation, and education.
Beyond academia, Friedman became an iconic champion of free markets and libertarianism. His 1980 TV series and accompanying book Free to Choose made a powerful case to the general public for limited government and economic freedom. His vision of replacing welfare programs and bureaucratic agencies with a simple negative income tax to guarantee basic sustenance presaged contemporary ideas about a universal basic income.
Friedman’s foundational insights never disappeared from view for long. The COVID pandemic response rekindled debates over government stimulus and central bank policies, putting Friedman’s ideas front and center again. When inflation unexpectedly resurged in 2021, after years of dormancy, some saw Friedman as vindicated once again.
Regardless of ideological persuasion, the depth and breadth of Friedman’s contributions cement his legacy as one of history’s seminal economic thinkers. As with his intellectual hero, Adam Smith, you don’t need to subscribe to Friedman’s political views to recognize the enduring wisdom and impact of his work. For both supporters and detractors, grappling with his questions and theories remains essential to understanding the modern economic landscape.
Conclusion
Through his long career, Milton Friedman left an enduring imprint on economic thought and policy. Though initially viewed as a radical, his steadfast belief in free markets and limited government gained increasing mainstream credibility over time. Friedman fundamentally altered how both policymakers and the public understood core issues like inflation and the role of the Federal Reserve. Even for those who dispute his diagnoses and remedies, grappling with Friedman’s worldview remains imperative to navigating the modern economic landscape.
About the Author
Jennifer Burns