MILTON FRIEDMAN 1912-2006

Maverick Economist's Teachings Helped Lead 'Reagan Revolution'

In one of his last interviews, with the Mercury News in late October,
Milton Friedman, the Nobel Prize-winning economist, smiled and
laughed frequently, reflecting with satisfaction that many of his
once-maverick ideas seemed to have been validated by history,
including the fall of the Soviet Union and the rise of free markets
around the globe.

"I started out being a very small minority," the San Francisco
resident said. "I now have a lot of company. People learn from
history, from experience."

Friedman died Thursday at the age of 94, a giant in the field of
economics whose groundbreaking scholarship at the University of
Chicago and provocative free-market advocacy made him one of the most
influential American thinkers of the 20th century.

An intellectual guru to political leaders ranging from Barry
Goldwater to Arnold Schwarzenegger, Friedman helped develop the
arguments that powered the "Reagan revolution" of the 1980s and its
promotion of lower taxes, less government and freer markets.

Friedman also transcended academic and political realms to become an
unlikely celebrity in the 1970s and '80s through his best-selling
books, a Newsweek column, speaking engagements and a 10-part
television documentary titled "Free to Choose." His philosophy
equated laissez-faire capitalism with personal liberty, and his
persona, as one admirer put it, was that of a "happy warrior."

"Milton Friedman was arguably the greatest economist of the 20th
century," said John Raisian, director of Stanford University's Hoover
Institution, Friedman's intellectual home since he retired from the
University of Chicago in 1977. "He contributed to the notion that
ideas have meaning; no economist could claim that phrase more than he could."

Friedman died in San Francisco, where he had lived since coming west,
said Robert Fanger, a spokesman for the Milton and Rose D. Friedman
Foundation in Indianapolis. He did not know the cause of death.

He is survived by 95-year-old Rose Director Friedman, a fellow
economist and his frequent collaborator. They were married 68 years,
had two children, four grandchildren and three great-grandchildren,
and titled their joint autobiography "Two Lucky People."

Raisian described Rose Friedman as her husband's "intellectual
partner. . . . Indeed, the only time I saw Milton pause on an
analytic point was when Rose was his interrogator."

Milton Friedman essentially had two careers: one as a scholar, the
second as a policy advocate. As a scholar, his ideas usually
prevailed. His record as an activist was mixed.

In the 1970s, he was a leading advocate for the abolition of the
military draft. At one hearing, Friedman became annoyed with a
general who likened those in an all-volunteer military to
"mercenaries." Friedman told the general that if he insisted on using
that term, he would liken draftees to "slaves." The general made a
rhetorical retreat.

Friedman was also a leading advocate for school vouchers as means to
break up what he called the public school "monopoly," but he had far
less success there. The Milton and Rose Friedman Foundation continues
to push the cause. And in the recent interview, Friedman expressed
optimism that progress was being made, noting a few states could give
vouchers a serious test.

Friedman was a genial host in his 19th-floor home on Russian Hill,
displaying his cheerful charisma as he expounded on a libertarian
philosophy often too radical for the political mainstream. For
example, he advocated the legalization of all drugs and prostitution.

Friedman's extraordinary life bracketed the rise and fall of the
communist ideology he loathed. Born in Brooklyn in 1912 and raised in
modest circumstances in Rahway, N.J., Friedman as a young man had
aspired to be an insurance actuary but found his calling in
economics. As a graduate student at the University of Chicago, he met
Rose Director, his future wife. (In addition to her, he is survived
by daughter Janet and son David, an economics professor at Santa
Clara University.)

Friedman, at 5-feet-2 often the shortest man in a crowded room, began
to stand out in the 1940s because of his bold thinking as a young
professor at the University of Chicago. He became a leader of the
"Chicago School," which bucked the orthodoxy of economist John
Maynard Keynes, who believed fiscal policy -- that is, government
taxing and spending -- was the best way to manage the economy.

Friedman argued for a robust free market and said that monetary
policy -- controlling the money supply -- was better.

At a 90th birthday tribute to Friedman, Ben Bernanke, then a Federal
Reserve Board governor and now its chairman, saluted Friedman's
"paradigm-shifting" monetary research. In one seminal study, Friedman
had showed that Fed actions had actually exacerbated economic woes in
the 1930s. Bernanke said: "Regarding the Great Depression. You're
right, we did it. We're very sorry. But thanks to you, we won't do it again."

Friedman's popular works resonated with an Austrian bodybuilder
turned movie star. In 1980, Schwarzenegger, who grew up under
socialism, gave copies of "Free to Choose" to several liberal
friends. After Newsweek reported the Hollywood tidbit, the producer
of the documentary version arranged for Schwarzenegger to meet the Friedmans.

As described in "The People's Machine: Arnold Schwarzenegger and the
Rise of Blockbuster Democracy" by Joe Mathews, Schwarzenegger and the
Friedmans went out to a tiny French restaurant and talked for three
hours. Friedman and the movie star stayed in touch, and
Schwarzenegger later taped an introduction to a re-release of the documentary.

Gov. Schwarzenegger would put Friedman on his Council of Economic
Advisers and on Thursday recalled some of this personal history in a
press statement. Friedman, the governor said, "was a constant source
of inspiration and insight. The world has lost a true giant, a
tireless advocate for freedom, and I have lost a great friend."