SAN FRANCISCO (Reuters) - Milton Friedman, one of the most influential economists of the past century and a champion of free markets, died on Thursday morning of heart failure at age 94, a family spokeswoman said.
The winner of the 1976 Nobel Prize for economics, Friedman preached free enterprise in the face of government regulation and advocated a monetary policy involving steady growth in money supply, ideas that played pivotal roles in the governing philosophies of former British Prime Minister Margaret Thatcher and former U.S. President Ronald Reagan.
“Milton Friedman revived the economics of liberty, when it had been all but forgotten,” Thatcher said in a statement. “He was an intellectual freedom fighter. Never was there a less dismal practitioner of ‘the dismal science’ (economics).”
“If you had to ask people across the world to name an economist, by far his name would be the most common,” Gary Becker, who won the 1992 Nobel Prize for economics, told Reuters. “He could express the most complicated economic ideas in the most simple language.”
Federal Reserve Chairman Ben Bernanke said in a statement the “direct and indirect influences of his thinking on contemporary monetary economics would be difficult to overstate. Just as important, in his humane and engaging way, Milton conveyed to millions an understanding of the economic benefits of free, competitive markets, as well as the close connection that economic freedoms bear to other types of liberty.”
Former Fed Chairman Alan Greenspan added: “He had been a fixture in my life both professionally and personally for a half century. My world will not be the same.”
St. Louis Federal Reserve Bank President William Poole said much of modern central bank thinking stemmed from Friedman’s work and his most important contribution was to bring theoretical economic thinking to bear on public policy issues.
“You look at what Reagan did, it was what Milton had been advocating for a long time,” said Martin Anderson, a Hoover Institution fellow and domestic and economic policy adviser to the Republican Reagan. “What Milton did was to confirm what he (Reagan) thought and make it more confident, and that became ‘Reaganomics.’”
While Friedman found favor among conservatives, he was most interested in obtaining practical results by tapping markets, said Robert Reich, a labor secretary in the Democratic Clinton administration. “He was more experimental than doctrinaire.”
Ken Livingstone, London’s left-wing mayor, credited Friedman for inspiring his flagship “congestion charge” policy to reduce traffic by charging drivers for entering the city’s center.
“The biggest effect Milton Friedman had was making inflation unacceptable,” said Tom Campbell, a graduate student under Friedman and dean of the Haas School of Business at the University of California, Berkeley. “We don’t talk about the risk of inflation in the 10, 12, 20 percent range anymore because people won’t stand for it.”
In 1976, Friedman’s years of teaching and nearly two dozen books were recognized with the Nobel Prize for economic science. Friedman, however, was not without controversy.
His work was not initially popular, emerging at a time when government spending and intervention were widely credited with helping end the worldwide depression of the 1930s. His Nobel ceremony in Stockholm prompted a large turnout of demonstrators who criticized him for economic advice he provided the government of Augusto Pinochet, who led Chile’s 17-year dictatorship in which some 3,000 leftists were killed.
“He tried not to let the political composition of the government interfere with things he thought would be better for the people in the country,” said Allan Meltzer, an economist at Carnegie Mellon University.
Later, Friedman raised his profile further as a columnist and contributing editor for Newsweek magazine and through frequent television appearances.
In a retrospective on his work, the Brooklyn-born Friedman traced his roots and those of the so-called Chicago school of economics back to 18th-century Scottish economist Adam Smith. He moved to California in 1977, when he became a senior research fellow at Stanford University’s Hoover Institution.
Additional reporting by Alister Bull in Washington