So wrote economist Joseph Schumpeter upon the death of his teacher, Eugen von Bohm-Bawerk in 1914. The words apply equally well to another great master who has left us, Milton Friedman. Unquestionably the most important and influential economist of the second half of the 20th century, Friedman's work will live on for as long as the field of economics continues to be studied.Friedman was born on July 31, 1912 in Brooklyn, New York. His path toward economics began at Rutgers University, from which he graduated in 1932. There, he came under the influence of Arthur Burns, an important economist who became chairman of the Federal Reserve Board under Richard Nixon. Friedman later called Burns the "guiding influence of my subsequent career."
Friedman started his graduate work at the University of Chicago, completing it at Columbia University. During World War II, he worked on tax policy at the U.S. Treasury Department in Washington. Following the war, Friedman joined the economics department at the University of Chicago, where he became the dominant expositor of what came to be called the Chicago School of Economics.
The 1950s were the high point of Friedman's scientific work in economics. His main accomplishment during this period was to resurrect the role of monetary policy in the economy. At that time, economists generally followed the theories of British economist John Maynard Keynes, who believed that fiscal policy (taxing and spending) was government's most powerful tool for influencing growth, inflation and business cycles. In the Keynesian model, the Federal Reserve's monetary policy (credit and interest rates) was essentially passive, with little direct economic impact.
Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.
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