Is Milton Friedman Running the Show?

In April 2020, then presidential candidate Joe Biden told Politico, “Milton Friedman isn’t running the show anymore.” Biden advocated for, and eventually signed into law, massive economic stimulus packages—first, to counteract the economic slowdown that accompanied COVID restrictions, and then, to prepare for the threat of climate change. These came on top of other multi-trillion-dollar bills signed in 2020 before the end of President Trump’s first term.

The late economist Milton Friedman was famous for warning about the inflationary effects of government stimulus. So the dismissive line from the Politico article was resurrected by Biden’s critics when inflation reared its head—just as Friedman would have predicted. Sound economics always gets the last laugh.

“[Inflation is] always and everywhere a result of too much money, of a more rapid increase in the quantity of money than in output. Inflation in the United States is made in Washington and nowhere else.”

Perhaps you’ve seen this Friedman quote in your social media feed—or others explaining the dangers of protectionist tariffs. No 20th-century economist gets mentioned more often today than Friedman. According to data from Talkwalker, a consumer intelligence platform that uses social listening technology, Friedman has been referenced more in the past year than John Maynard Keynes, Paul Samuelson, and John Kenneth Galbraith combined. His social media presence also far surpasses that of fellow free-market thinkers such as F.A. Hayek, Ludwig von Mises, Gary Becker, and Murray Rothbard. But, of course, Friedman was quite a bit more than a social media influencer.

Raised by Jewish immigrant parents in Rahway, New Jersey, Friedman studied economics at Rutgers, the University of Chicago, and Columbia University. He met Rose Director while at the University of Chicago and they married six years later. Sixty years after that, they co-authored a memoir, Two Lucky People (1998), about their lives and their work together.

The University of Chicago was Friedman’s academic home from 1946 to 1976, the year he won the Nobel Prize in Economics. By that time, he had revolutionized macroeconomics by demonstrating the fallibility of Keynesian principles like the Phillips Curve. He had shown, in his books with Anna Schwartz, that the Great Depression had been misunderstood; its severity and duration was due principally to bad policy at the Federal Reserve. As an advisor to President Nixon, Friedman helped end the draft and create an all-volunteer military. As an advisor to President Reagan, he cheered on the reduction in marginal tax rates that boosted economic growth and living standards.

Friedman’s contributions to economics and public policy were visible to a public audience because his articles in Newsweek appealed to readers’ common sense as he argued against price controls, cronyism, and redistributionist economic schemes.

After Friedman relocated from the University of Chicago to the Hoover Institution in 1977, he began work onFree To Choose, an enormously popular 10-part television series that appeared on public television in 1980.

“Free To Choose was a phenomenon,” explained Rob Chatfield who now runs Free to Choose Network, a non-profit that creates videos to make classical liberal ideas accessible to a popular audience. “Young people might not appreciate it today, but once upon a time, you could choose from only four broadcast television stations, and you had no remote control. So, if a program captured your attention for two minutes, there was a good chance you’d watch for an entire hour. Free To Choose made a huge impact on a huge audience in 1980 because its message resonated with the challenges of the times, and because Milton Friedman was a captivating messenger. Milton put things in terms that ordinary Americans could understand, while standing toe-to-toe with the brightest intellectuals.”

Proving that a mass audience could be persuaded to embrace free-market ideas by a video program is an underappreciated part of Friedman’s legacy. Chatfield noted, “But Milton was a skeptic at first. He figured if someone could be influenced by watching one hour of television, they would just as easily change their mind with the next broadcast. It was producer Bob Chitester who convinced Milton of the impact the video could have, and now, decades later, many organizations in the freedom movement have put video communications at the center of their outreach efforts. I don’t know if that would have happened without the example of Bob and Milton’s collaboration on Free To Choose.”

Would there even be a freedom movement without Milton Friedman?

Milton and Rose Friedman were neighbors of Atlas Network’s founder, Antony Fisher, and his wife, Dorian, when Free To Choose was first broadcast in 1980. By then, Fisher’s first think tank, the Institute of Economic Affairs in London, had grown famous for its inspiration on the recently elected prime minister Margaret Thatcher. Other groups that Fisher was involved in getting launched—Manhattan Institute and Fraser Institute, among them—were gaining influence too. In a letter dated May 8, 1980, Friedman reflected on the success of Fisher’s “intellectual entrepreneurship” and wrote, “Any extension of institutes of this kind around the world is certainly something ardently to be desired.” It was a letter Fisher used for fundraising during the first years of Atlas Network.

It is worth noting that Friedman had attended the first meeting of what became the Mont Pelerin Society (MPS) at F.A. Hayek’s invitation in 1947, and he called that the beginning of his active engagement in the world of ideas beyond a university setting. The idea of Atlas Network complementing the MPS’s global network of scholars with a vision of a global network of think tanks, resonated with Friedman, who was thinking deeply at the time about how nations can improve their public policies.

There is a famous passage in Friedman’s introduction to the 1982 edition of Capitalism and Freedom.

“Only a crisis—actual or perceived—produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.

I wish that Friedman had elaborated on a logical follow-up question: what’s the best way to keep our ideas “alive and available” as he recommends? I imagine that Antony Fisher’s dream of a global network of think tanks promoting liberty was in his mind.”

Of course, others have projected something very different onto Friedman’s observation that the opportunity for policy change is greatest when a crisis has shown that existing policies don’t work. Naomi Klein’s The Shock Doctrine alleges that Friedman conspired to create crises to ease the implementation of economic liberalization. She misrepresents a solitary meeting between Friedman and Augusto Pinochet in 1975 to suggest he was an advisor to the Chilean dictator with some level of responsibility for the coup two years prior.

Professor Robert Lawson clarified, “It’s simple. Milton Friedman wanted to share sound economics with anyone who would listen. He offered advice to communist regimes in China and the USSR, just as he did to leaders in Chile. You can look at the work I’ve done with the Economic Freedom of the World (EFW) index as a continuation of that.

After all, Milton and Rose inspired the index by teaming up with Fraser Institute founder Mike Walker after a spirited Mont Pelerin Society debate in 1984. They wanted an empirical answer to the question of whether freedom was increasing or decreasing—some at MPS said yes and others said no. This led to a series of six Liberty Fund conferences that laid the groundwork for the initial EFW index in 1996 that I co-authored with James Gwartney and Walter Block.”

The Economic Freedom of the World report has become a favorite tool for demonstrating the strong correlation between the economic freedom of a country and its level of prosperity. Atlas Network has teamed up with Fraser Institute and local partners in 34 countries to perform Economic Freedom Audits that identify areas ripe for reform based on the report’s methodology.

Where countries are improving in economic freedom, it’s often because the Overton Window has shifted on topics for which Milton Friedman used to present the case for freedom with a smile. Friedman’s 1962 book, Capitalism and Freedom, looks in retrospect like a playbook for pro-liberty think tanks, concisely providing a framework for critical public policy issues they would later take up issues from liberalizing trade to ending rent control to scaling back occupational licensure.

One concept that Friedman championed as early as 1955 was school choice. Robert Enlow is president and CEO of EdChoice, which was founded by Milton and Rose Friedman to promote parental choice of the schools their children attend. Enlow explained, “Milton and Rose saw that it was tragic and ironic that our education system, which was supposed to deliver a common set of values about citizenship to everyone, was instead making social stratification worse. They wanted young Americans to benefit from better education, and they knew that our institutional arrangements around schooling made that unlikely.”

After decades of frustratingly slow progress, school choice policies have gained significant momentum in recent years. Fifteen states now claim to offer universal school choice programs. “It’s not time for a victory lap yet,” noted Enlow. “Having students eligible for school choice is a step forward, but the goal has always been bigger. That is, we want robust markets in education that innovate to serve families. We need to turn the dial up to 11 to support a market in education.”

Whether they work for educational freedom or for other liberties restricted by governments, think tanks connected to Atlas Network are indebted to the intellectual contributions of Milton Friedman.

Milton and Rose last appeared at an Atlas Network event when we celebrated our 25th anniversary in San Francisco on June 22, 2006.

Milton died less than five months later; news of his passing became public just hours before our third annual Freedom Dinner. Think-tank luminaries Ed Crane, Ed Fuelner, and Michael Walker were on the program. Each adapted their assignment—offering a Toast to Freedom—into a toast “to Freedom and to Friedman!”

Ed Crane tied his remarks back to the importance of a freedom movement to carry forward, every day, the ideas Milton Friedman espoused so effectively. “Someone asked me, ‘Does Milton’s passing create a void?’ and I said, ‘Well, yeah, it creates a hell of a void. But there are a number of organizations out there that are just as passionately committed to liberty as he was, and he knew that.’ So let me toast one of the organizations that is right at the top of the list: Atlas Network.”

It is satisfying to realize that the work Milton and Rose Friedman conducted in their lifetimes, and the work they helped put in motion through their friendship with Antony and Dorian Fisher, continues to grow. Milton closed his remarks at Atlas Network’s 20th anniversary celebration in 2001 with a prediction: “We have the opportunity to create a freer world, and Atlas Network will play a foremost role in that effort.”

The opportunity that Milton observed—and yes, the responsibility that goes with it—is bigger than ever. Freedom movement aficionados should take this to heart.