I’ve never been an academic economist, so I’m in no position to make a proper assessment of Milton Friedman’s legacy to the development of economic theory. But for 14 years I was Governor of a central bank and for almost five years a politician. And I have no doubt that no economist in the second half of the 20th century had a greater influence than Milton Friedman both on the way monetary policy is now practised and on the way we see a very wide range of other issues, from education to welfare to international trade.
It’s not so much that central bankers are all focused on some definition of the money supply – increasingly they are not. But almost all central bankers – and certainly all the good ones – now accept that the most constructive thing they can do to foster economic growth is to use monetary policy to keep inflation low and stable, and that widespread acceptance is very much a result of Friedman’s influence.
More broadly, the book and TV series entitled “Free to Choose”, by Milton and Rose Friedman, had an enormous influence on the way not just highly educated policy-makers but also the general public saw a very wide range of issues. Even people who think they disagree with Friedman and deplore what they wrongly label “monetarism” have been hugely influenced by Milton and his wife.
I had the privilege of hosting the first visit of the Friedmans to New Zealand in 1981, and chairing several major meetings at which Milton spoke. People who heard him speak at that time still remember his insights, and I have little doubt that those insights helped New Zealand to embark on a far-reaching and much-needed process of economic liberalization three years later.
Copyright © 2024 Don Brash.