"Wherever the state undertakes to control in detail the economic activities of its citizens, wherever, that is, detailed central economic planning reigns, there ordinary citizens are in political fetters, have a low standard of living, and have little power to control their own destiny"
Free to Choose p. 54-55

"Inflation is always and everywhere a monetary phenomenon. To control inflation, you need to control the money supply."

"Annual consumption is a function of people's expected lifetime earnings, not just their income at the current time."

"Keynes was wrong on just about everything, and his followers are wrong on absolutely everything."

"Minimum wage laws cost jobs. Employers cut out, or mechanise, jobs that are not worth the minimum rate to them. Worst affected are the inexperienced young people, those with poor skills, and minorities."

"Education and other public services should be financed through a system of vouchers, so that everyone has access to important services but service users."

Milton Friedman (1912 - 2006)

Born in New York, the son of poor immigrants, Friedman spent his early career at Columbia University. In 1946 he joined the University of Chicago, taking up a position as Professor of Economics. During this period at Chicago Friedman wrote some of his most prolific works, surrounded by the monetarists that made up the "Chicago School". With a mix of monetarist values and classical ideals, Friedman was to produce works which crossed the academic/public divide, making a strong case for limited government, and the perseverance and extension of individual liberties. Friedman was awarded the Nobel Prize in economics in 1976.

He is widely regarded as the leader of the Chicago School of monetary economics, which stresses the importance of the quantity of money as an instrument of government policy and as a determinant of business cycles and inflation.

Friedman's Theories

Monetarism - Friedman revitalised and promoted a new approach to economics, advocating macroeconomic theory and policy which broke significantly from the dominant school of Keynes. As a monetarist Friedman believed that money supply is the chief determinant in economic activity. But it is not a tool for interventionists, its influence would only become realised over the long term.

The Quantity Theory of Money - Whilst Keynes thought that monetary policy was a weak tool that could be used for short term adjustment, Friedman argued that it was a strong measure. The source of its power was the stability of the demand for money. Friedman proved that households are not fickle in this, but take a 'whole life' view of their need for money and credit.

The Phillips Curve - There is no long-run 'Phillips Curve' trade-off between inflation and employment. To keep employment down below its natural level would require a permanently accelerating inflation rate which would soon lead to chaos.

Sources of information: Adam Smith Institute and Hoover Institution