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Economist Milton Friedman Dies at 94

MELISSA BLOCK, host:

He was a Nobel Laureate, an advisor to presidents and he certainly welcomed the kind of economic liberalization that's taken place in Vietnam over the last few years. Economist Milton Friedman died today. He was 94.

Friedman was born in New York. He went on to become a leader of what was known as the Chicago School and he was one of the most influential economists of the last century. NPR's Elaine Korry has this remembrance.

ELAINE KORRY: Milton Friedman defied the economic establishment of his day and turned it on its head. In the late 1940s when Friedman began teaching at the University of Chicago, Keynesian economics dominated. Followers of John Maynard Keynes believed government should intervene to fine-tune the economy. But Friedman railed against government interference. And according to David Boaz, vice president of the libertarian Cato Institute, he promoted liberty in all human spheres.

Mr. DAVID BOAZ (Vice President, Cato Institute): He was the academic who did the most to promote human freedom around the world during the 20th century and I think, aside from his academic work, you can look at a whole range of issues, the volunteer army, school choice, drug prohibition, sound money in which Milton Friedman is either the most important scholar, the most effective public advocate or both.

KORRY: Friedman wrote more than a dozen books and scores of articles. He advised Republican presidents Richard Nixon and Ronald Reagan plus the governments of Chile, China and Peru. And in 1976, the Bank of Sweden awarded Friedman the Nobel Prize in economics.

(Soundbite of trumpets)

Unidentified Announcer: Praise, silence for Professor Milton Friedman.

(Soundbite of applause)'

KORRY: In his acceptance speech before a crowd filled with central bankers, Friedman displayed the sly humor that disarmed even some of his intellectual foes.

Mr. MILTON FRIEDMAN (Economist; Nobel Laureate): My monetary studies have led me to the conclusion that central banks could profitably be replaced by computers.

(Soundbite of laughter)

Mr. FRIEDMAN: Geared to provide a steady rate of growth in the quantity of money. Fortunately, for me personally, that conclusion has had no practical impact, else there would have been no Central Bank of Sweden to have established the award I am honored to receive.

KORRY: Friedman may have been foremost a scholar of such arcane theories as price stabilization and the role of the money supply but he was also a policy maker, with his finger in all sorts of pies. He argued forcefully for school vouchers to give parents more choice in education. He favored decriminalizing prostitution. And Friedman helped spearhead the shift to a paid all-volunteer army. According to Grover Norquist, president of the anti big government group, Americans for Tax Reform, that position won him some unlikely supporters.

Mr. GROVER NORQUIST (President, Americans for Tax Reform): He was one of the central characters in driving to get rid of the draft which of course attracted a whole different group of individuals who go oh, you mean the guys who want you to be free to have contracts and own property and run businesses also want you to be free from being kidnapped by the military for two years? I get it. He was consistently for freedom.

KORRY: In 1980, he hosted a ten-part PBS series called Free to Choose based on a best-selling book he wrote with his wife Rose, also an economist. The series opened in New York City, where Friedman made the case that America's greatness sprang from its climate of freedom which brought waves of immigrants, including his own parents, to U.S. shores.

Mr. FRIEDMAN: There were few government programs to turn to and nobody expected them. But also, there were few rules and regulations. There were no licenses, no permits, no red tape to restrict them. They found, in fact, a free market and most of them thrived on it.

KORRY: In extolling the virtues of free enterprise, Friedman argued that its benefits outweighed the hardships workers had to endure, as in this scene set in a crowded garment factory in New York's Chinatown.

Mr. FRIEDMAN: The irony is that this place violates many of the standards that we now regard as every worker's right. It's poorly ventilated, it's overcrowded, the workers accept less than the union rate. It breaks every rule in the book, but if it were closed down, who would benefit? Certainly, not the people here.

KORRY: And that's where many of Friedman's critics part company with him. They say he took a sensible argument - markets are good, markets are efficient - to an illogical extreme - free markets can do no wrong. And according to Robert Kutner, that's nonsense.

Mr. ROBERT KUTNER (Co-editor, American Prospect Magazine): We know that when markets are allowed to run wild, all kinds of things go haywire.

KORRY: Kutner, is co-editor of the American Prospect magazine. He says a brand of capitalism that protects workers and invests in society also expands human liberty, a story Milton Friedman chose not to tell.

Mr. KUTNER: If you think about it, job security offers a kind of freedom, the freedom to know that you're not going to be destitute next week, the freedom to know that if you've worked 20 years faithfully on a job, they're not going to throw you out with the trash tomorrow morning. So, it's a more complicated story, I dare say.

KORRY: But Friedman was an absolutist who made no apologies for his views, and he remained a steadfast free-market radical to his final days. Elaine Korry, NPR News. Transcript provided by NPR, Copyright NPR.

Elaine Korry is an NPR contributor based in San Francisco. From August 2004-June 2007 she worked as an NPR senior reporter covering social policy for NPR, with a focus on education, and on the lives of the nation's most vulnerable citizens — the homeless, those living in poverty, working in low wage positions, and trying to find their way to a more stable life.