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Milton Friedman

An enduring legacy
Nov 17th 2006 From Economist.com

One of the most influential economists of the 20th century has died
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MILTON FRIEDMAN won the John Bates Clark Medal, awarded to an outstanding American economist under the age of 40, in 1951. Many consider it harder to win than a Nobel Prize. One of the measures of his greatness is that when he got it, he still had not done any of the work for which he would become most famous. Still to come were the permanent-income hypothesis, his groundbreaking “A Monetary History of the United States” (co-written with Anna Schwartz) and the proposal of a natural rate of unemployment. These works revolutionised the conduct of central banks around the world. But to noneconomists Mr Friedman’s great achievement is not his challenge to Keynesian demand management but the popular writings that challenged a consensus favouring ever-greater state intervention in the economy. This work, too, came long after his peers had recognised him as a leading light. At the time of his death on Thursday November 16th, the 94-year-old economist was still working to spread his ideas about free markets, this time through a documentary for American public television. It is another mark of his greatness that so many of the ideas that seemed crazy when he came up with them—from blaming the Depression on bad central-bank policy, to school vouchers and the volunteer army—have gained mainstream acceptance. But Mr Friedman always recognised that his success was fragile; free markets and stable money have lots of enemies, particularly among politicians. He has left us a staggering legacy of economic theory and public-policy prescriptions—but is that inheritance growing or shrinking?

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Certainly, on the monetary side,