Two weeks ago, one of the great figures of the 20th century passed on. Milton Friedman, the Nobel Prize-winning economist, perhaps influences our way of thinking about the economy more than anyone else. The ideas he promoted, such as free markets, low inflation and low taxes, are generally accepted by both sides of the ideological chasm today.
For most of his career, Friedman was swimming upstream against prevailing economic wisdom. The Great Depression was largely blamed on "market failure," or the unrestrained excesses of capitalism. For the first three decades of the post-war period, the nearly unquestioned economic philosophy was Keynesism, which argued for government to take an active role in the planning of the economy. Its advice was the standard economic program in practically every country in the world in the '50s, '60s and '70s.
Friedman argued that the real cause of the Great Depression was not "market failure" but the failure of the Federal Reserve to print enough money to prevent deflation. Once Friedman undermined the founding belief of Keynesian economics, there were few legs to support the dogma. By the late '70s, the general malaise of the world economy spelled the end of Keynesism. And when leaders such as Margaret Thatcher and Ronald Reagan reformed their lagging economies, both consulted Friedman for advice.
All of his achievements are extraordinary in themselves, but what made Friedman so influential and powerful was his ability to communicate very complex ideas to the average person. Other economists had preached the free market gospel before Friedman, which he had learned from. Friedman had the greatest impact because of he was a public figure who relished defending what were unpopular ideas for most of his career. His most famous texts were books that could be evaluated on a scholarly basis and be understood by a non-economic person.
His ideas have a far-reaching effect on the world today. Friedman consulted with the Chinese government under Deng Xiaoping in the late '70s when China looked to reform its Stalinist economy into a new, workable economy. Twenty-five years later, China is now growing by leaps and bounds. Its policies pull a million people a month out of poverty. China's free market reforms wouldn't have been possible if not for Friedman's power of persuasion over the economic world. It is of great irony that a man who was described many times as a cold-hearted capitalist has led far more people out of poverty than all the foreign aid and do-gooders combined.
Chris Palko is a sophomore in the School of Public Affairs and is the public and media relations director of the AU College Republicans.
