Thinker · TH-0296
Milton Friedman
Milton Friedman was an American economist who spent most of his career at the University of Chicago and received the Nobel memorial prize in…
1912 – 2006 · New York; Chicago; Stanford (Hoover Institution), United States
Traditions: American
Schools: Liberalism
Milton Friedman was an American economist who spent most of his career at the University of Chicago and received the Nobel memorial prize in economics in 1976. A leading defender of free markets and monetarism, he argued in a 1970 essay that the social responsibility of business is to increase its profits within the rules of the game. In 'The Methodology of Positive Economics' he held that theories should be judged by their predictions, not by the realism of their assumptions.
Key ideas
- Managers are agents of the shareholders; spending their money on social causes without consent is a kind of taxation without representation.
- Business should pursue profit within the rules of the game, that is, open and free competition without deception or fraud.
- An economic theory is to be judged by the accuracy of its predictions, not by whether its assumptions are realistic.
- Economic freedom is a necessary condition for political freedom.
Major works
- Essays in Positive Economics (1953)
- Capitalism and Freedom (1962)
- A Monetary History of the United States, 1867–1960 (1963, with Anna Schwartz)
- The Social Responsibility of Business Is to Increase Its Profits (1970)