Milton Friedman was an American economist and statistician best known for his strong belief in free-market capitalism and was also known as the father of economic freedom. Friedman lived on the East Coast and was born on July 21st 1912 in New York City and died on November 16 2006 in San Francisco. His subjects of study included money and guaranteed minimum income and he believed economics was not a game, but that it was the key to understanding how the real world works. He won a scholarship to Rutgers University, studied mathematics and economics, and earned a bachelor’s degree there in 1932, attended University of Chicago in 1933, went back to earn his Ph.D in 1946 and later on went on to Columbia. During his time as professor at the University of Chicago, Friedman developed numerous free-market theories that opposed the views of traditional Keynesian economists. He later went on to receive the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory, and the complexity of stabilization and friedman’s contribution is largely responsible for its modern popularization.
His work includes monographs, books, scholarly articles, papers, magazine columns, and even television programs. He co-authored, with Anna Schwartz in A Monetary History of the United States, 1867–1960 (1963), which was an examination of the role of the money supply and economic activity in the U.S. history.
His books and essays had a global impact, including former communist states. He was best known for reviving interest in the money supply as a determinant of the nominal value of output, that is, the quantity theory of money. In Friedman’s restatement of the quantity theory of money, the supply of money is independent of the demand for money. The supply of money is unstable due to the actions of monetary authorities. On the other hand, the demand for money is stable. It means that money which people want to hold in cash or bank deposits is related in a fixed way to their permanent income.
Friedman’s reformulation of the quantity theory of money has brought so much controversy and has led to empirical verification on the part of the Keynesians and the Monetarists. Some of the criticisms levelled against the theory are discussed as a very broad definition of money, does not consider time factor, and his inaccurate representation of money supply and money GNP. Although there are several criticisms, i believe this is a very strong development in monetary theory since its theoretical significance lies in the conceptual integration of wealth and income as influences on behavior and he was able to save millions or billions of people from decades of oppressive statism.