The Essence of Friedman

This collection of essays presents a sampling of the significant contributions to twentieth-century economic thought and practice by Nobel Prize-winner Milton Friedman.

Friedman is widely regarded as the leader of the Chicago school of economics, which stresses the importance of the quantity of money as an instrument of governmental policy and as a major determinant of business cycles and inflation. Making an early impact on the economics profession was his analysis of economics as an empirical science, and in particular, his conclusion that the only relevant test of the acceptability of economic hypotheses is the conformity of the predictions they generate with observation. His permanent income theory of consumption, his restatement of the quantity theory of money, and his hypothesis of natural rate of unemployment have by now become part of received economic doctrine.

Outside the economic profession, Friedman is best known for his outspoken statements on public policy, particularly his consistent belief that a free-enterprise system with minimum governmental intervention in the economic process will best preserve and extend both human freedom and economic prosperity. A number of the essays reprinted here are eloquent expressions of his commitment to everyone's freedom to choose.

In 1976 Friedman was awarded the Nobel Prize in Economic Science for his achievements in the fields of consumption analysis and monetary history and theory, and for his demonstration of the complexity of stabilization polivy.

The book includes selections from:

• Essays in Positive Economics
  
• A Theory of the Consumption Function
  
• Capitalism and Freedom
• A Monteary History of the United States, 1867–1960 (with Anna J. Schwartz)
• Price Theory
• Free to Choose (with Rose D. Friedman)
• Monetary Trends in the United States and the United Kingdom (with Anna J. Schwartz)
• Bright Promises, Dismal Performance (with William R. Allen)

Milton Friedman graduated from Rutgers University in 1932 with a bachelor's degree in mathematics and economics. At the University of Chicago, influenced by Frank Knight and Jacob Viner, he narrowed his focus and received his master's degree in economics in 1933. After completing his doctorate at Columbia University, working in New York for the National Bureau of Economic Research and for the federal government in Washington, D.C., and teaching at several universities, he returned to the University of Chicago, where his teaching career spanned three decades. He retired from active teaching in 1977 as the Paul Snowden Russell Distinguished Service Professor of Economics. Friedman's scholarly and innovative research in economics brought him the Nobel Prize in 1976. in the 1960s and 1970s he also moved into the greater public arena by becoming an informal advisor to Barry Goldwater and Richard Nixon, and a columnist for Newsweek magazine. In 1981, he was named a member of the President's Economic Policy Advisory Board.

Friedman has authored, alone or with collaborators, many book and literally hundreds of journal articles, research studies, and newspaper and magazine columns. After retiring from the Chicago faculty, he became a senior fellow at the Hoover Institution, Stanford University. Since then, he also served as the presenter of the ten-part PBS television documentary, "Free to Choose", which first aired in 1980. A book of the same name based on that documentary and written with his wife, Rose, was the best-selling nonfiction book in the United States in 1980. Friedman continues his research, his writing, and his speaking engagements.

Kurt R. Leube is a visiting scholar at the Hoover Institution. He edited, with Thomas Gale Moore, The Essence of Stigler (Hoover Institution Press, 1986) and with Chiaki Nishiyama, The Essence of Hayek (Hoover Institution Press, 1985).

Anna J. Schwartz is an economic historian at the National Bureau of Economic Research in New York. She has collaborated with Milton Friedman for 30 years on a series of books and articles, including the landmark A Monetary History of the United States, 1867–1960 (Princeton University Press, 1963).