Milton Friedman was the best. I had the chance to correspond with him and he was a complete gentleman.

Autobiography

I was born July 31, 1912, in Brooklyn, N.Y., the fourth and last child and first son of Sarah Ethel (Landau) and Jeno Saul Friedman. My parents were born in Carpatho-Ruthenia (then a province of Austria-Hungary; later, part of inter-war Czechoslovakia, and, currently, of the Soviet Union). They emigrated to the U.S. in their teens, meeting in New York. When I was a year old, my parents moved to Rahway, N.J., a small town about 20 miles from New York City. There, my mother ran a small retail “dry goods” store, while my father engaged in a succession of mostly unsuccessful “jobbing” ventures. 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.

Along with my sisters, I attended public elementary and secondary schools, graduating from Rahway High School in 1928, just before my 16th birthday. My father died during my senior year in high school, leaving my mother plus two older sisters to support the family. Nonetheless, it was taken for granted that I would attend college, though, also, that I would have to finance myself.

I was awarded a competitive scholarship to Rutgers University (then a relatively small and predominantly private university receiving limited financial assistance from the State of New Jersey, mostly in the form of such scholarship awards). I was graduated from Rutgers in 1932, financing the rest of my college expenses by the usual mixture of waiting on tables, clerking in a retail store, occasional entrepreneurial ventures, and summer earnings. Initially, I specialized in mathematics, intending to become an actuary, and went so far as to take actuarial examinations, passing several but also failing several. Shortly, however, I became interested in economics, and eventually ended with the equivalent of a major in both fields.

In economics, I had the good fortune to be exposed to two remarkable men: Arthur F. Burns, then teaching at Rutgers while completing his doctoral dissertation for Columbia; and Homer Jones, teaching between spells of graduate work at the University of Chicago. Arthur Burns shaped my understanding of economic research, introduced me to the highest scientific standards, and became a guiding influence on my subsequent career. Homer Jones introduced me to rigorous economic theory, made economics exciting and relevant, and encouraged me to go on to graduate work. On his recommendation, the Chicago Economics Department offered me a tuition scholarship. As it happened, I was also offered a scholarship by Brown University in Applied Mathematics, but, by that time, I had definitely transferred my primary allegiance to economics. Arthur Burns and Homer Jones remain today among my closest and most valued friends.

Though 1932-33, my first year at Chicago, was, financially, my most difficult year; intellectually, it opened new worlds. Jacob Viner, Frank Knight, Henry Schultz, Lloyd Mints, Henry Simons and, equally important, a brilliant group of graduate students from all over the world exposed me to a cosmopolitan and vibrant intellectual atmosphere of a kind that I had never dreamed existed. I have never recovered.

Personally, the most important event of that year was meeting a shy, withdrawn, lovely, and extremely bright fellow economics student, Rose Director. We were married six years later, when our depression fears of where our livelihood would come from had been dissipated, and, in the words of the fairy tale, have lived happily ever after. Rose has been an active partner in all my professional work since that time.

Thanks to Henry Schultz’s friendship with Harold Hotelling, I was offered an attractive fellowship at Columbia for the next year. The year at Columbia widened my horizons still further. Harold Hotelling did for mathematical statistics what Jacob Viner had done for economic theory: revealed it to be an integrated logical whole, not a set of cook-book recipes. He also introduced me to rigorous mathematical economics. Wesley C. Mitchell, John M. Clark and others exposed me to an institutional and empirical approach and a view of economic theory that differed sharply from the Chicago view. Here, too, an exceptional group of fellow students were the most effective teachers.

After the year at Columbia, I returned to Chicago, spending a year as research assistant to Henry Schultz who was then completing his classic, The Theory and Measurement of Demand. Equally important, I formed a lifelong friendship with two fellow students, George J. Stigler and W. Allen Wallis.

Allen went first to New Deal Washington. Largely through his efforts, I followed in the summer of 1935, working at the National Resources Committee on the design of a large consumer budget study then under way. This was one of the two principal components of my later Theory of the Consumption Function.

The other came from my next job – at the National Bureau of Economic Research, where I went in the fall of 1937 to assist Simon Kuznets in his studies of professional income. The end result was our jointly published Incomes from Independent Professional Practice, which also served as my doctoral dissertation at Columbia. That book was finished by 1940, but its publication was delayed until after the war because of controversy among some Bureau directors about our conclusion that the medical profession’s monopoly powers had raised substantially the incomes of physicians relative to that of dentists. More important, scientifically, that book introduced the concepts of permanent and transitory income.

The catalyst in combining my earlier consumption work with the income analysis in professional incomes into the permanent income hypothesis was a series of fireside conversations at our summer cottage in New Hampshire with my wife and two of our friends, Dorothy S. Brady and Margaret Reid, all of whom were at the time working on consumption.

I spent 1941 to 1943 at the U.S. Treasury Department, working on wartime tax policy, and 1943-45 at Columbia University in a group headed by Harold Hotelling and W. Allen Wallis, working as a mathematical statistician on problems of weapon design, military tactics, and metallurgical experiments. My capacity as a mathematical statistician undoubtedly reached its zenith on V. E. Day, 1945.

In 1945, I joined George Stigler at the University of Minnesota, from which he had been on leave. After one year there, I accepted an offer from the University of Chicago to teach economic theory, a position opened up by Jacob Viner’s departure for Princeton. Chicago has been my intellectual home ever since. At about the same time, Arthur Burns, then director of research at the National Bureau, persuaded me to rejoin the Bureau’s staff and take responsibility for their study of the role of money in the business cycle.

The combination of Chicago and the Bureau has been highly productive. At Chicago, I established a “Workshop in Money and Banking”. which has enabled our monetary studies to be a cumulative body of work to which many have contributed, rather than a one-man project. I have been fortunate in its participants, who include, I am proud to say, a large fraction of all the leading contributors to the revival in monetary studies that has been such a striking development in our science in the past two decades. At the Bureau, I was supported by Anna J. Schwartz, who brought an economic historian’s skill, and an incredible capacity for painstaking attention to detail, to supplement my theoretical propensities. Our work on monetary history and statistics has been enriched and supplemented by both the empirical studies and the theoretical developments that have grown out of the Chicago Workshop.

In the fall of 1950, I spent a quarter in Paris as a consultant to the U.S. governmental agency administering the Marshall Plan. My major assignment was to study the Schuman Plan, the precursor of the common market. This was the origin of my interest in floating exchange rates, since I concluded that a common market would inevitably founder without floating exchange rates. My essay, The Case for Flexible Exchange Rates, was one product.

During the academic year 1953-54, I was a Fulbright Visiting Professor at Gonville & Caius College, Cambridge University. Because my liberal policy views were “extreme” by any Cambridge standards, I was acceptable to, and able greatly to profit from, both groups into which Cambridge economics was tragically and very deeply divided: D.H. Robertson and the “anti-Keynesians”; Joan Robinson, Richard Kahn and the Keynesian majority.

Beginning in the early 1960s, I was increasingly drawn into the public arena, serving in 1964 as an economic adviser to Senator Goldwater in his unsuccessful quest for the presidency, and, in 1968, as one of a committee of economic advisers during Richard Nixon’s successful quest. In 1966, I began to write a triweekly column on current affairs for Newsweek magazine, alternating with Paul Samuelson and Henry Wallich. However, these public activities have remained a minor avocation – I have consistently refused offers of full-time positions in Washington. My primary interest continues to be my scientific work.

In 1977, I retire from active teaching at the University of Chicago, though retaining a link with the Department and its research activities. Thereafter, I shall continue to spend spring and summer months at our second home in Vermont, where I have ready access to the library at Dartmouth College – and autumn and winter months as a Senior Research Fellow at the Hoover lnstitution of Stanford University.

From Nobel Lectures, Economics 1969-1980, Editor Assar Lindbeck, World Scientific Publishing Co., Singapore, 1992

This autobiography/biography was written at the time of the award and first published in the book series Les Prix Nobel. It was later edited and republished in Nobel Lectures. To cite this document, always state the source as shown above.

Copyright © The Nobel Foundation 1976

Milton Friedman videos and transcripts Part 8

On my blog www.thedailyhatch.org I have an extensive list of posts that have both videos and transcripts of MiltonFriedman’s interviews and speeches. Here below is just small list of those and more can be accessed by clicking on “Milton Friedman” on the side of this page or searching for Milton Friedman also.

Milton Friedman on Hayek’s “Road to Serfdom” 1994 Interview 1 of 2

Uploaded by PenguinProseMedia on Oct 25, 2011

Here is a review of “Two Lucky People.”

Book Title:	Two Lucky People: Memoirs
	Author:		Milton Friedman and Rose D. Friedman
	Published:		Chicago: University of Chicago Press, 1998
	Price:		$27.65 (hardcover), $20.00 (softcover)
	Pages:		660
	Reviewer:		Timothy F. Bresnahan
	Affiliation:		Trinity University
	This book review appeared in the Winter 1999 issue of The Independent Review

When interviewing student candidates for prestigious national scholarships, my favorite question runs something like: “If you had unlimited funds for planning the perfect dinner party consisting of any ten people you choose, whom would you invite? And why?” Their responses tell me volumes about the students’ range of interests, knowledge, verbal talent, and ability to think on their feet.

Like solitaire, the “ideal dinner party” game can be played alone, and I often play it when I am bored. Although my guest list changes slightly from time to time, depending on my mood and current interests, invariably at the very top of my roster are Milton and Rose Friedman. The Friedmans are my automatic selection not only for my perfect dinner party but as the persons I would most like to accompany on a long journey. Reading their revealing and stimulating memoirs is the next best thing to taking that voyage. They place the reader in the company of two of the most remarkable people of our time.

The memoirs extend from the Friedmans’ early years to 1997. The earliest times are recounted in separate voices by Rose and Milton, each telling her or his own story seriatim. For the later years, their narrative voices are presented sometimes jointly and sometimes in tandem. This method adds a great deal to the readability and interest of their story. It allows the reader to get different impressions of the same people and places and brings out the (rare) disagreements between the two authors. It provides more information and presents a more vivid picture than is typically the case in memoirs by a single author.

Rarely and after a long interval there emerges an economist whose name is destined to become associated with a whole epoch of economic thought and policy. In the period since 1930 only two such names have surfaced: John Maynard Keynes is one of them. His ideas about the causes and cures of unemployment dominated the teaching and research of economists during the period roughly from 1936 to 1970.

Milton Friedman is the other name in the pantheon of recent greats for whom epochs are designated. By one empirical measure he is by far the most influential economist in America, as John Huston and I have shown (“Reputation versus Influence: The Evidence from Textbook References,” Eastern Economic Journal 23 [Fall 1997]: 451–56). But how did he reach this pinnacle? And by what criteria might we judge his achievement? There are two major rubrics under which one might place Friedman’s most important work.

First are the contributions he made to the development of economic theory, what Alfred Marshall, in an earlier century, referred to as the “engine of analysis.” The committee that selected Friedman for the Nobel Memorial Prize in Economic Science in 1976 placed great emphasis on that aspect of his output.

The second criterion is harder to characterize and yet is of paramount importance. It might be referred to as the influence Friedman had in affecting the intellectual and social currents of his era. That influence would include not only his impact on economic and social policy by inspiring legislation and court decisions, but his role in determining the very issues that would be debated.

Of course the two categories are not mutually exclusive and often are so intertwined as to be inseparable. Keynes, for instance, developed a new “box of tools” (in Joan Robinson’s phrase)consisting of such technical arcana as the consumption function, the investment multiplier, the liquidity-preference function, and the marginal efficiency of capital, among othersthat changed the vocabulary and way of thinking of economists who deal with aggregate income and employment problems. But Keynes did more than provide a new arsenal of weapons to be used in what later came to be called macroeconomics. For his ideas had enormous consequences for the practical policy debates of his time. Without his ability to impress his fellow economists with his talents for theoretical abstraction, it is highly unlikely that Keynes would have had much impact on the economics profession and ultimately on public officials.

Like Keynes, Friedman developed new theories (and ingenious ways of testing old ones). His work led to an exhaustive reevaluation of the efficacy of fiscal and monetary policy and to a revisionist view of America’s monetary history, especially in relation to the Great Depression. His statistical testing of Keynes’s consumption function resulted in an alternative view of the relation between consumption and income; and his famous Workshop in Money and Banking at the University of Chicago eventuated in a more sophisticated version of the quantity theory of money, a theory that in its more naive formulation had led Keynes and his disciples to underestimate the potency of monetary factors in economic change. These contributions have become part of the modern economist’s vocabulary and way of dealing with economic issues. One chapter of the memoirs is devoted to a lucid discussion of Milton’s scientific scholarly work in a manner that laymen should be able to follow without difficulty. In this illuminating discussion Friedman commands a very simple and straightforward style of saying very complicated things.

But far more important than his abstract theorizing and statistical techniques has been his impact on the agenda of economic debate. There is hardly a major controversy among economists in the post–World War II period that hasn’t taken Friedman’s work as its point of departure: fixed versus flexible exchange rates; the relationship between political and economic freedom; an all-volunteer army versus a conscripted army; positive versus normative economics; the deregulation of industry; fixed rules versus fine-tuning in economic policy; the causes of the Great Depression; a flat tax versus a progressive income tax; the legalization of drugs versus prohibition; a voucher system versus socialized schoolsall of these debates were initiated by a provocative article or book by Friedman. No other economist in his day, or perhaps in the twentieth century, has broken ground in so many areas later tilled by others.

Many of these ideas were developed in collaboration with Rose Director Friedman, his co-thinker and wife, whom he met when both were graduate students at the University of Chicago in the 1930s. One of their professors seated the students alphabetically so that Milton and Rose found themselves next to each otherjust one example of the good luck they have enjoyed throughout their lives, which gave their joint autobiography its title. A friendship developed between Rose and Milton, eventually leading to marriage in 1938. Although a well-trained economist herself, Rose decided from the beginning that Milton’s career should come first. She would be a mother first and an economist second. In Rose’s words, “I have never had the desire to compete with Milton professionally (perhaps because I was smart enough to recognize that I couldn’t). On the other hand, he has always made me feel that his achievement is my achievement” (p. 87). And with good reason. After her children were grown, Rose began collaborating with Milton on some of his most important projects.

The fruit of their first collaboration was published in 1962 (Capitalism and Freedom [Chicago: University of Chicago Press]). It contains the essence of Milton Friedman’s economic policy counsel and shows the interconnection between much of his earlier work in pure theory and his espousal of a coherent classical liberal philosophy that holds individual freedom to be paramount. Because Friedman’s ideas were out of keeping with the left-liberal dominance of economics and politics at the time, the book was not reviewed by any major national publication. Eventually, however, it sold over a half-million copies, was translated into eighteen languages, and became one of a small handful of books that “along with books and writings by Ludwig von Mises and Friedrich Hayek played a major role in spreading and keeping alive an understanding of the meaning of a free society” (p. 340). In the fullness of time the royalties from the book paid for the Friedmans’ hexagonal dream house in rural Vermont, which they named “Capitaf.” (Some of the most delightful parts of their memoirs are descriptions of their life in that idyllic setting).

The academic year 1962–63 gave evidence of astonishing industry on Friedman’s part. In addition to Capitalism and Freedom, he published Price Theory: A Provisional Text (Chicago: Aldine, 1962) and his magnum opus, co-authored with Anna Jacobson Schwartz, A Monetary History of the United States, 1867–1960 (Princeton, N.J.: Princeton University Press, 1963). Those works and the output of the previous decade were beginning to bear fruit all over the world. Consequently he began to have an impact on politics, which changed his life from the relative simple one of a typical academic to that of an international celebrity. He was the subject of a Time cover story in late 1969, and the New York Times Magazine followed with a Friedman cover soon afterward. He became a columnist for Newsweek, was the subject of an interview in Playboy, and appeared regularly on television talk shows. Eventually he hosted his own ten-part TV series called “Free to Choose.” The book that accompanied that project was co-authored with Rose and became a best-seller. Milton’s name and face became instantly recognizable by large segments of the general public.

In 1976 Milton Friedman was awarded the Nobel prize in economics. His fame was to carry the Friedmans around the globe many times. Milton lectured, studied, met with top-notch scholars and high-level government officials the world over, all the while working on material for articles and books.

But the Friedmans always seemed to find time for sight-seeing and recording their impressions in lengthy informative letters to family and friends. Because neither kept a diary, they found those letters invaluable for refreshing their memories for their joint autobiography. Large segments of the book consist of their reactions to many of the people and places they visited. Here the reader will be grateful for the authors’ perceptiveness, their shrewd insights, and their acute generalizations based on keen powers of observation. They record their impressions in a way that makes vivid almost everything of interest that they encountered. Thus, the reader will be treated to fascinating accounts of politicians for whom Milton became an unofficial adviser: Barry Goldwater, Richard Nixon, and Ronald Reagan. Friedman also consulted with foreign leaders, including Margaret Thatcher and Menachem Begin, among others. On a visit to China in 1988 he engaged in a lengthy dialogue with Zhao Ziyang, at the time the general secretary of the Communist Party. That dialogue, along with a memorandum Friedman sent to Zhao, appears as an appendix (pp. 607–16).

The self-confidence that Friedman displayed in his meetings with powerful world leaders helps explain his amazing career. To this factor I would add his seemingly unlimited energy, uncommon brilliance, creative mind, andas he and Rose would insistluck.

To read Two Lucky People is to get on intimate terms with a wholly delightful and wholly admirable couple. Here is a book to savor. Instructive and endlessly entertaining, it brings to life a whole era from the Great Depression to the present day.