Milton Friedman dies aged 94

Financial Times story.

Milton Friedman may well have been one of the most important people in the last half of the twentieth century. He will be missed.

Some of the best thinking being done in the world today is being done by economists. Mr. Friedman was a modern pioneer of that trend.

Far be it from me to speak ill of the dead, but haven’t pretty much half his theories turned out to be empirically wrong? Monetarism was a disaster.

Edit: on review of wikipedia, it looks like his scholarly stuff was good, but his political economy stuff not so much.

I enjoyed reading his stuff in university, especially since the economics and economic history that we were taught in high school was overwhelmingly, suffocatingly, Keynesian.

The NY Times obit emphasizes Friedman’s unpopular but correct prediction in the 60’s that high inflation and unemployment were on their way.

Almost any non-trivial theory turns out to be “wrong.” Such is the nature of science. We don’t sneer at Newton because it turns out the world doesn’t run according to Newtonian mechanics.

Friedman wasn’t famous in economics circles because of his penchant for wearing his libertarianism on his sleeve. He was famous because he changed the way we think about a number of issues. The permanent income hypothesis in particular was a methodological revalation. Today, theory routinely explicitly takes into account how decisions play out over time, but when Friedman wrote theory was almost entirely static, considering only a snapshot in time. The mathematical methods required to more formally develop the ideas he proposed wouldn’t be developed by mathematicians for several more years, and wouldn’t be exported to economics for a few more years after that. Similarly, the ideas underpinning his macroeconomic theories were also prescient, even if theory has progressed in the decades following to show that some of them are “wrong.”

Friedman was a great scholar.