Serfdom is the status of peasants under feudalism, specifically relating to manorialism. It was a condition of bondage or modified slavery which developed primarily during the High Middle Ages in Europe and lasted in some countries until the mid-19th century.

Serfs who occupied a plot of land were required to work for the Lord of the Manor who owned that land, and in return were entitled to protection, justice and the right to exploit certain fields within the manor to maintain their own subsistence. Serfs were often required not only to work on the lord's fields, but also his mines, forests and roads. The manor formed the basic unit of feudal society and the Lord of the Manor and his serfs were bound legally, economically, and socially. Serfs formed the lowest social class of feudal society.

The decline of serfdom in Western Europe has sometimes been attributed to the Black Death, which reached Europe in 1347,^[1], although the decline had begun before that date. Although serfdom became increasingly rare in most of Western Europe after the Renaissance, it grew strong in Central and Eastern Europe, where it had previously been less common (this phenomenon was known as "later serfdom").

In Eastern Europe the institution persisted until the mid-19th century. It persisted in Austria-Hungary till 1848 and was abolished in Russia in 1861.^[2] In Finland, Norway and Sweden feudalism was not established, and serfdom did not exist. But serfdom-like institutions did exist in both Denmark (the stavnsbånd, from 1733 to 1788) and its vassal Iceland (the more restrictive vistarband, from 1490 until 1894).

According to Joseph R. Strayer, the concept of feudalism can also be applied to the societies of ancient Persia, ancient Mesopotamia, Egypt (Sixth to Twelfth dynasty), Muslim India, China (Zhou Dynasty, and end of Han Dynasty) and Japan during the Shogunate. James Lee and Cameron Campbell describe the Chinese Qing Dynasty (1644–1912) as also maintaining a form of serfdom.^[3]

Tibet is described by Melvyn Goldstein^[4][5] to have had serfdom until 1959, but whether or not the Tibetan form of peasant tenancy qualified as serfdom was widespread is contested.^[6][7] Bhutan is described by Tashi Wangchuk, a Bhutanese civil servant, as abolishing serfdom officially by 1959, but Wangchuk believes less than or about 10% of poor peasants were in copyhold situations.^[8]

Etymology[link]

Costumes of slaves or serfs, from the sixth to the twelfth centuries, collected by H. de Vielcastel from original documents in European libraries.

The word "serf" originated from the Middle French "serf", and can be traced further back to the Latin servus, meaning "slave". In Late Antiquity and most of the Middle Ages, what we now call serfs were usually designated in Latin as coloni (sing. colonus). As slavery gradually disappeared and the legal status of these servi became nearly identical to that of coloni, the term changed meaning into our modern concept of "serf". The term "serfdom" was coined in 1850.

Dependency and the lower orders[link]

Serfs had a specific place in feudal society, as did barons and knights: in return for protection, a serf would reside upon and work a parcel of land within the manor of his lord. There was thus a degree of reciprocity in the manorial system.

One rationale was that a serf "worked for all," while a knight or baron "fought for all" and a churchman "prayed for all"; thus everyone had a place. The serf was the worst fed and paid, but at least he had his place and, unlike slaves, had certain rights in land and property.

A lord of the manor could not sell his serfs as a Roman might sell his slaves. On the other hand, if he chose to dispose of a parcel of land, the serf or serfs associated with that land went with it to serve their new lord, benefitting him from their long-acquired knowledge of practices suited to the land. Further, a serf could not abandon his lands without permission, nor did he possess a saleable title in them.

Becoming a serf[link]

A freeman, that is to say one whose feudal land tenure was freehold, became a serf usually through force or necessity. Sometimes freeholders or allodial owners were intimidated into dependency by the greater physical and legal force of a local magnate. Often a few years of crop failure, a war or brigandage might leave a person unable to make his own way. In such a case a bargain was struck with a lord of a manor. In exchange for protection, service was required, in cash, produce or with labour, or a combination of all. These bargains were formalized in a ceremony known as "bondage" in which a serf placed his head in the lord's hands, akin to the ceremony of homage where a vassal placed his hands between those of his overlord. These oaths bound the lord and his new serf in a feudal contract and defined the terms of their agreement.^[9] Often these bargains were severe. A 7th century Anglo Saxon "Oath of Fealty" states:

"By the Lord before whom this sanctuary is holy, I will to N. be true and faithful, and love all which he loves and shun all which he shuns, according to the laws of God and the order of the world. Nor will I ever with will or action, through word or deed, do anything which is unpleasing to him, on condition that he will hold to me as I shall deserve it, and that he will perform everything as it was in our agreement when I submitted myself to him and chose his will."

To become a serf was a commitment that encompassed all aspects of the serf’s life.

Moreover, the condition of serfdom was inherited at birth. By taking on the duties of serfdom, serfs bound not only themselves but all of their future progeny.

Serfdom's class system[link]

The social class of peasant was often broken down into smaller categories. These distinctions were often less clear than suggested by their different names. Most often, there were two types of peasants, freemen, whose tenure within the manor was freehold, and villeins. Lower classes of peasants, known as cottars, generally comprising the younger sons of villeins^[10][11] or bordars in the British Isles, and slaves, made up the lower class of workers.

Freemen[link]

Freemen, or free tenants held their land by one of a variety of contracts of feudal land tenure and were essentially rent-paying tenant farmers who owed little or no service to the lord, and had a good degree of security of tenure and independence. In parts of 11th century England freemen made up only 10% of the peasant population, and in the rest of Europe their numbers were small.

Villeins[link]

A villein (or villain) was the most common type of serf in the Middle Ages. Villeins had more rights and higher status than the lowest serf, but existed under a number of legal restrictions that differentiated them from freemen. Villeins generally rented small homes, with or without land. As part of the contract with the landlord, the lord of the manor, they were expected to spend some of their time working on the lord's fields. The requirement often was not greatly onerous, contrary to popular belief and was often only seasonal, for example the duty to help at harvest-time. The rest of their time was spent farming their own land for their own profit.

Like other types of serfs, they were required to provide other services, possibly in addition to paying rent of money or produce. Villeins were tied to the land and could not move away without their lord's consent and the acceptance of the lord to whose manor they proposed to migrate to. Villeins were generally able to hold their own property, unlike slaves. Villeinage, as opposed to other forms of serfdom, was most common in Continental European feudalism, where land ownership had developed from roots in Roman law.

A variety of kinds of villeinage existed in Europe in the Middle Ages. Half-villeins received only half as many strips of land for their own use and owed a full complement of labour to the lord, often forcing them to rent out their services to other serfs to make up for this hardship. Villeinage was not, however, a purely uni-directional exploitative relationship. In the Middle Ages, land within a lord's manor provided sustenance and survival, and being a villein guaranteed access to land, and crops secure from theft by marauding robbers. Landlords, even where legally entitled to do so, rarely evicted villeins because of the value of their labour. Villeinage was much preferable to being a vagabond, a slave, or an unlanded labourer.

In many medieval countries, a villein could gain freedom by escaping from a manor to a city or borough and living there for more than a year; but this action involved the loss of land rights and agricultural livelihood, a prohibitive price unless the landlord was especially tyrannical or conditions in the village were unusually difficult.

Bordars and cottagers[link]

In England the Domesday Book, of 1086, uses bordarii (bordar) and cottarii (cottager) as interchangeable terms, cottager being derived from the native tongue whereas bordar being derived from the French.^[12]

The status of bordar or cottager ranked below a serf in the social hierarchy of a manor, holding a cottage, garden and just enough land to feed a family. In England, at the time of the Domesday Survey, this would have been between about 1 and 5 acres (0.4 to 2 hectares).^[13] Under an Elizabethan statute, the cottage had to be built with at least 4 acres (0.02 km²; 0.01 sq mi) of land.^[14] However, the later Enclosures Act, removed the cottagers right to any land, "before the Enclosures Act the cottager was a farm labourer with land and after the Enclosures Act the cottager was a farm labourer without land".^[15]

The bordars and cottagers did not own their draught oxen or horses. The Domesday Book showed that England comprised 12% freeholders; 35% serfs or villeins: 30% cotters and borders: and 9% slaves.^[13]

Slaves[link]

The last type of serf was the slave. Slaves had the fewest rights and benefits from the manor. They owned no tenancy in land, worked for the lord exclusively and survived on donations from the landlord. It was always in the interest of the lord to prove that a servile arrangement existed, as this provided him with greater rights to fees and taxes. The status of a man was a primary issue in determining a person's rights and obligations in many of the manorial court cases of the period. Also, runaway slaves could be beaten if caught.

The serf's duties[link]

The usual serf (not including slaves or cottars) paid his fees and taxes in the form of seasonally appropriate labour. Usually a portion of the week was devoted to ploughing his lord's fields held in demesne, harvesting crops, digging ditches, repairing fences, and often working in the manor house. The residue of the serf’s time was devoted to tending his own fields, crops and animals in order to provide for his family. Most manorial work was segregated by gender during the regular times of the year; however, during the harvest, the whole family was expected to work the fields.

A major difficulty of a serf's life was that his work for his lord coincided with, and took precedence over, the work he had to perform on his own lands: when the lord's crops were ready to be harvested, so were his own. On the other hand, the serf of a benign lord could look forward to being well fed during his service^{[citation needed]}; it was a lord without foresight who did not provide a substantial meal for his serfs during the harvest and planting times. In exchange for this work on the lord's demesne, the serf had certain privileges and rights, including for example the right to gather deadwood from their lord’s forests, an essential fuel source.

In addition to service, a serf was required to pay certain taxes and fees. Taxes were based on the assessed value of his lands and holdings. Fees were usually paid in the form of agricultural produce rather than cash. The best ration of wheat from the serf’s harvest often went to the landlord. Generally hunting and trapping of wild game by the serfs on the lord’s property was prohibited. On Easter Sunday the peasant family perhaps might owe an extra dozen eggs, and at Christmas a goose was perhaps required too. When a family member died, extra taxes were paid to the lord as a form of feudal relief to enable the heir to keep the right to till what land he had. Any young woman who wished to marry a serf outside of her manor was forced to pay a fee for the right to leave her lord, and in compensation for her lost labour.

Often there were arbitrary tests to judge the worthiness of their tax payments. A chicken, for example, might be required to be able to jump over a fence of a given height to be considered old enough or well enough to be valued for tax purposes. The restraints of serfdom on personal and economic choice were enforced through various forms of manorial customary law and the manorial administration and court baron.

It was also a matter of discussion whether serfs could be required by law in times of war or conflict to fight for their lord's land and property. In the case of their lord's defeat, their own fate might be uncertain, so the serf certainly had an interest in supporting his lord.

Rights of serfdom[link]

Within his constraints, a serf had some freedoms. Though the common wisdom^{[citation needed]} is that a serf owned "only his belly" — even his clothes were the property, in law, of his lord^{[citation needed]} — a serf might still accumulate personal property and wealth, and some serfs became wealthier than their free neighbours, although this was rare. A well-to-do serf might even be able to buy his freedom.

A serf could grow what crop he saw fit on his lands, although a serf's taxes often had to be paid in wheat. The surplus he would sell at market.

The landlord could not dispossess his serfs without legal cause and was supposed to protect them from the depredations of robbers or other lords, and he was expected to support them by charity in times of famine. Many such rights were enforcible by the serf in the manorial court.

Variations[link]

Forms of serfdom varied greatly through time and region. In some places serfdom was merged with or exchanged for various forms of taxation.

The amount of labour required varied. In Poland, for example, it was commonly a few days per year per household in the 13th century; one day per week per household in the 14th century; four days per week per household in the 17th century and six days per week per household in the 18th century. Early serfdom in Poland was mostly limited on the royal territories (królewszczyzny).

"Per household" means that every dwelling had to give a worker for the required number of days.^[16] For example, in the 18th century, six people: a peasant, his wife, three children and a hired worker might be required to work for their lord one day a week, which would be counted as six days of labour.

Serfs served on occasion as soldiers in the event of conflict and could earn freedom or even ennoblement for valour in combat. Serfs could purchase their freedom, be manumitted by their generous owners, or flee to towns or newly-settled land where few questions were asked. Laws varied from country to country: in England a serf who made his way to a chartered town (i.e. a borough) and evaded recapture for a year and a day obtained his freedom and became a burgher of the town.

"Galician slaughter" 1846, by Jan Lewicki (1795-1871); "directed against manorial property (for example, the manorial prisons) and rising against serfdom;^[17] Galician, mainly Polish, peasants killed over 1000 noblemen and destroyed 500 manors in 1846."

Grain pays

Grain doesn't pay. Those two pictures illustrate the notion that agriculture, once extremely profitable to the nobles (szlachta) in the Polish-Lithuanian Commonwealth, became much less profitable from the second half of seventeenth century onwards

History of serfdom[link]

Social institutions similar to serfdom were known in ancient times. The status of the helots in the ancient Greek city-state of Sparta resembled that of the medieval serfs. By the 3rd century AD, the Roman Empire faced a labour shortage. Large Roman landowners increasingly relied on Roman freemen, acting as tenant farmers, instead of slaves to provide labour.^[18]

These tenant farmers, eventually known as coloni, saw their condition steadily erode. Because the tax system implemented by Dioclecian assessed taxes based on both land and the inhabitants of that land, it became administratively inconvenient for peasants to leave the land where they were counted in the census.^[19] In 332 AD Emperor Constantine issued legislation that greatly restricted the rights of the coloni and tied them to the land. Some see these laws as the beginning of medieval serfdom in Europe.

However, medieval serfdom really began with the breakup of the Carolingian Empire^{[citation needed]} around the 10th century. The demise of this empire, which had ruled much of western Europe for more than 200 years, was followed by a long period during which no strong central government existed in most of Europe.

During this period, powerful feudal lords encouraged the establishment of serfdom as a source of agricultural labor. Serfdom, indeed, was an institution that reflected a fairly common practice whereby great landlords were assured that others worked to feed them and were held down, legally and economically, while doing so.

This arrangement provided most of the agricultural labour throughout the Middle Ages. Slavery persisted right through the Middle Ages,^[20] but it was rare, diminishing and largely confined to the use of household slaves.^{[citation needed]} Parts of Europe, including much of Scandinavia, never adopted many feudal institutions, including serfdom.

In the later Middle Ages serfdom began to disappear west of the Rhine even as it spread through eastern Europe. This was one important cause for the deep differences between the societies and economies of eastern and western Europe.

In Western Europe, the rise of powerful monarchs, towns, and an improving economy weakened the manorial system through the 13th and 14th centuries, and serfdom was rare following the Renaissance.

Serfdom in Western Europe came largely to an end in the 15th and 16th centuries, because of changes in the economy, population, and laws governing lord-tenant relations in Western European nations. The enclosure of manor fields for livestock grazing and for larger arable plots made the economy of serfs’ small strips of land in open fields less attractive to the landowners. Furthermore, the increasing use of money made tenant farming by serfs less profitable; for much less than it cost to support a serf, a lord could now hire workers who were more skilled and pay them in cash. Paid labour was also more flexible since workers could be hired only when they were needed.

At the same time, increasing unrest and uprisings by serfs and peasants, like Tyler’s Rebellion in England in 1381, put pressure on the nobility and the clergy to reform the system. As a result serf and peasant demands were accommodated to some extent by the gradual establishment of new forms of land leases and increased personal liberties.

Another important factor in the decline of serfdom was industrial development — especially the Industrial Revolution. With the growing profitability of industry, farmers wanted to move to towns to receive higher wages than those they could earn working in the fields, while landowners also invested in the more profitable industry. This also led to the growing process of urbanization.

Serfdom reached Eastern European centuries later than Western Europe — it became dominant around the 15th century. Before that time, Eastern Europe had been much more sparsely populated than Western Europe, and the lords of Eastern Europe created a peasantry-friendly environment to encourage migration east^{[citation needed]}. Serfdom developed in Eastern Europe after the Black Death epidemics, which not only stopped the migration but depopulated Western Europe.

The resulting large land-to-labour ratio combined with Eastern Europe's vast, sparsely populated areas gave the lords an incentive to bind the remaining peasantry to their land. With increased demand for agricultural produce in Western Europe during the later era when Western Europe limited and eventually abolished serfdom, serfdom remained in force throughout Eastern Europe during the 17th century so that nobility-owned estates could produce more agricultural products (especially grain) for the profitable export market.

Such Eastern European countries included Prussia (Prussian Ordinances of 1525), Austria, Hungary (laws of the late 15th and early 16th centuries), the Polish-Lithuanian Commonwealth (szlachta privileges of the early 16th century) and the Russian Empire (laws of the late 16th and first half of the 17th century). This also led to the slower industrial development and urbanisation of those regions. Generally, this process, referred to as 'second serfdom' or 'export-led serfdom', which persisted until the mid-19th century, became very repressive and substantially limited serfs' rights. Before the 1861 abolition of serfdom in Russia, a landowner's estate was often measured by the number of "souls" he owned.

In many of these countries serfdom was abolished during the Napoleonic invasions of the early 19th century. Serfdom remained in force in most of Russia until the Emancipation reform of 1861, enacted on February 19, 1861, though in Russian Baltic provinces it had been abolished at the beginning of the 19th century. According to the Russian census of 1857, the number of private serfs in Russia was 23.1 million.^[21] Russian serfdom was perhaps the most notable Eastern European institution, as it was never influenced by German law and migrations, and serfdom and the manorial system were enforced by the crown (Tsar), not the nobility.

The decline of serfdom[link]

End of serfdom: a German „Freilassungsbrief“ (Letter for the End of a serfdom) from 1762.

This unreferenced section requires citations to ensure verifiability.

Serfdom became progressively less common through the Middle Ages, particularly after the Black Death reduced the rural population and increased the bargaining power of workers. Furthermore, the lords of many manors were willing (for payment) to manumit ("release") their serfs.

In England, the end of serfdom began with the Peasants' Revolt in 1381. It had largely died out in England by 1500 as a personal status, and was fully ended when Elizabeth I freed the last remaining serfs in 1574.^[22] Land held by serf tenure (unless enfranchised) continued to be held by what was thenceforth known as a copyhold tenancy, which was not completely abolished until 1925 (although it was whittled away during the 19th and early 20th centuries). There were native-born Scottish serfs until 1799, when coal miners previously kept in serfdom gained emancipation. However, most Scottish serfs had been freed before this time.

Serfdom was de facto ended in France by Philip IV, Louis X (1315), and Philip V (1318).^[23][22] With the exception of a few isolated cases, serfdom had ceased to exist in France by the 15th century. In Early Modern France, French nobles nevertheless maintained a great number of seigneurial privileges over the free peasants that worked lands under their control. Serfdom was formally abolished in France in 1789.^[24]

In other parts of Europe, there had been peasant revolts in Castille, Germany, northern France, Portugal, and Sweden. Although these were often successful, it usually took a long time before legal systems were changed.

Era of the French Revolution[link]

The era of the French Revolution (1790s to 1820s) saw serfdom abolished in most of Western Europe, while its practice remained common in Eastern Europe for another century or more. In France, serfdom had been in decline for at least three centuries by the start of the Revolution, replaced by various forms of freehold tenancy. The last vestiges of serfdom were officially ended on August 4, 1789 with a decree abolishing the feudal rights of the nobility.

It removed the authority of the manorial courts, eliminated tithes and manorial dues, and freed those who still remained bound to the land. However, the decree was mostly symbolic, as widespread peasant revolts had effectively ended the feudal system beforehand; and ownership of the land still remained in the hands of the landlords, who could continue collecting rents and enforcing tenant contracts.

In German history the emancipation of the serfs came in 1770-1830, beginning with Schleswig in 1780. Prussia abolished serfdom with the "October Edict" of 1807, which upgraded the personal legal status of the peasantry and gave them ownership of half or two thirds of the lands they were working. The edict apply to all peasants whose holdings were above a certain size, and included both Crown lands and noble estates. The peasants were freed from the obligation of personal services to the lord and annual dues; in return and land owners were given ownership of 1/3 to 1/2 of the land. The peasant owned and rented the lands that were deeded to the old owners. The other German states imitated Prussia after 1815.^[25]

In sharp contrast to the violence that characterized land reform in the French Revolution, Germany handled it peacefully. In Schleswig the peasants, who had been influenced by the Enlightenment, played an active role; elsewhere they were largely passive. Indeed, for most peasants, customs and traditions continued largely unchanged, including the old habits of deference to the nobles whose legal authority remains quite strong over the villagers. The old paternalistic relationship in East Prussia lasted into the 20th century. what was new was that the peasant could now sell his land, enabling him to move to the city, or buy up the land of his neighbors.^[26]

The land reforms in northwestern Germany were driven by progressive governments and local elites. They abolished feudal obligations and divided collectively owned common land into private parcels and thus created a more efficient market-oriented rural economy. It produced increased productivity and population growth. It strengthened the traditional social order because wealthy peasants obtained most of the former common land, while the rural proletariat was left without land; many left for the cities or America. Meanwhile the division of the common land served as a buffer preserving social peace between nobles and peasants.^[27] East of the Elbe River, the Junker class maintained large estates and monopolized political power.^[28]

The eradication of the feudal system marks the beginning of an era of rapid change in Europe. The change in status following the enclosure movements beginning in the later 18th century, in which various lords abandoned the open field farming of previous centuries and, essentially, took all the best land for themselves in exchange for "freeing" their serfs, may well have made serfdom seem more desirable to many peasant families. 

In his book Das Kapital, in Chapter 26 entitled "The Secret of Primitive Accumulation" and Chapter 27, "Expropriation of the Agricultural Population from the Land", Marx claimed that the feudal relationships of serfdom were violently transformed into private property and free labour: free of possession and free to sell their labour force on the market. Being liberated from serfdom meant being able to sell one's land and work wherever one desired. "The so-called primitive accumulation, therefore, is nothing else than the historical process of divorcing the producer from the means of production. It appears as primitive, because it forms the pre-historic stage of capital and of the mode of production corresponding with it."

In a case history of England, Marx described how the serfs became free peasant proprietors and small farmers, who were, over time, forcibly expropriated and driven off the land, forming a property-less proletariat. He also claimed that more and more legislation was enacted by the state to control and regiment this new class of wage workers. In the meantime, the remaining farmers became capitalist farmers operating more and more on a commercial basis; and gradually, legal monopolies preventing trade and investment by entrepreneurs were broken up.

Taxes levied by the state took the place of labour dues levied by the lord. Although serfdom began its decline in Europe in the Middle Ages, it took many hundreds of years to disappear completely. In addition, the struggles of the working class during the Industrial Revolution can often be compared with the struggles of the serfs during the Middle Ages. In parts of the world today, forced labour is still used. Serfdom is an institution that has always been commonplace for human society; however, it has not always been of the same nature.

Dates of emancipation from serfdom in various countries[link]

See also[link]

References[link]

Notes[link]

Bibliography[link]

• Backman, Clifford R. The Worlds of Medieval Europe Oxford University Press, 2003.
• Blum, Jerome. The End of the Old Order in Rural Europe (Princeton UP, 1978) * Coulborn, Rushton, ed. Feudalism in History. Princeton University Press, 1956.
• Bonnassie, Pierre. From Slavery to Feudalism in South-Western Europe Cambridge University Press, 1991 excerpt and text search
• Freedman, Paul, and Monique Bourin, eds. Forms of Servitude in Northern and Central Europe. Decline, Resistance and Expansion Brepols, 2005.
• Frantzen, Allen J., and Douglas Moffat, eds. The World of Work: Servitude, Slavery and Labor in Medieval England. Glasgow: Cruithne P, 1994.
• Gorshkov, Boris B. "Serfdom: Eastern Europe" in Peter N. Stearns, ed,, Encyclopedia of European Social History: from 1352-2000 (2001) volume 2 pp 379–88
• Kahan, Arcadius. "Notes on Serfdom in Western and Eastern Europe," Journal of Economic History March 1973 33:86-99 in JSTOR
• Scott, Tom, ed. The Peasantries of Europe (1998)
• Vadey, Liana. "Serfdom: Western Europe" in Peter N. Stearns, ed,, Encyclopedia of European Social History: from 1352-2000 (2001) volume 2 pp 369–78
• White, Stephen D. Re-Thinking Kinship and Feudalism in Early Medieval Europe (2nd ed. Ashgate Variorum, 2000
• Wright, William E. Serf, Seigneur, and Sovereign: Agrarian Reform in Eighteenth-century Bohemia (U of Minnesota Press, 1966).
• Wunder, Heide. "Serfdom in later medieval and early modern Germany" in T. H. Aston et al., Social Relations and Ideas: Essays in Honour of R. H. Hilton (Cambridge UP, 1983), 249-72

External links[link]

• Serfdom, Encyclopaedia Britannica.
• Peasantry (social class), Encyclopaedia Britannica.
• An excerpt from the book Serfdom to Self-Government: Memoirs of a Polish Village Mayor, 1842–1927.
• The Causes of Slavery or Serfdom: A Hypothesis, discussion and full online text of Evsey Domar (1970), "The Causes of Slavery or Serfdom: A Hypothesis", Economic History Review 30:1 (March), pp. 18–32.

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Milton Friedman

Chicago School of Economics
Born	(1912-07-31)July 31, 1912 Brooklyn, New York
Died	November 16, 2006(2006-11-16) (aged 94) San Francisco, California
Nationality	American
Institution	Hoover Institution (1977–2006) University of Chicago (1946–77) Columbia University (1937–41, 1943–45, 1964–65) NBER (1937–40)
Field	Economics
Alma mater	Columbia University (Ph.D.), 1946, University of Chicago (M.A.), 1933 Rutgers University (B.A.), (1932)
Opposed	John Maynard Keynes, John Kenneth Galbraith, Murray Rothbard
Influences	Adam Smith, Irving Fisher, Frank Knight, Murray Rothbard, Jacob Viner, Harold Hotelling, Arthur Burns, Friedrich Hayek, Homer Jones, Ludwig von Mises, Henry Simons, George Stigler
Influenced	Margaret Thatcher, Alan Greenspan, David D. Friedman, Anna J. Schwartz, Ben Bernanke, Gary Becker, Thomas Sowell, Harry Markowitz, Chicago Boys, William F. Buckley, Jr., Cato Institute
Contributions	Price theory, Monetarism, applied macroeconomics, floating exchange rates, volunteer military, Permanent income hypothesis, Friedman test
Awards	John Bates Clark Medal (1951) Nobel Memorial Prize in Economics (1976) Presidential Medal of Freedom (1988) National Medal of Science (1988)
Signature

Milton Friedman (July 31, 1912 – November 16, 2006) was an American economist, statistician, and author who taught at the University of Chicago for more than three decades. He was a recipient of the Nobel Memorial Prize in Economic Sciences, and is known for his research on consumption analysis, monetary history and theory, and the complexity of stabilization policy.^[1] As a leader of the Chicago school of economics, he influenced the research agenda of the economics profession. A survey of economists ranked Friedman as the second most popular economist of the twentieth century behind John Maynard Keynes,^[2] and The Economist described him as "the most influential economist of the second half of the 20th century…possibly of all of it."^[3]

Friedman's challenges to what he later called "naive Keynesian" (as opposed to New Keynesian) theory^[4] began with his 1950s reinterpretation of the consumption function, and he became the main advocate opposing activist Keynesian government policies.^[5] In the late 1960s he described his own approach (along with all of mainstream economics) as using "Keynesian language and apparatus" yet rejecting its "initial" conclusions.^[6] During the 1960s he promoted an alternative macroeconomic policy known as "monetarism". He theorized there existed a "natural" rate of unemployment, and argued that governments could increase employment above this rate (e.g., by increasing aggregate demand) only at the risk of causing inflation to accelerate.^[7] He argued that the Phillips curve was not stable and predicted what would come to be known as stagflation.^[8] Friedman argued that, given the existence of the Federal Reserve, a constant small expansion of the money supply was the only wise policy.^[9]

Friedman was an economic adviser to conservative President Ronald Reagan. His political philosophy extolled the virtues of a free market economic system with minimal intervention. He once stated that his role in eliminating U.S. conscription was his proudest accomplishment, and his support for school choice led him to found The Friedman Foundation for Educational Choice. In his 1962 book Capitalism and Freedom, Friedman advocated policies such as a volunteer military, freely floating exchange rates, abolition of medical licenses, a negative income tax, and education vouchers.^[10] His ideas concerning monetary policy, taxation, privatization and deregulation influenced government policies, especially during the 1980s. His monetary theory influenced the Federal Reserve's response to the global financial crisis.^[11]

Milton Friedman's works include many monographs, books, scholarly articles, papers, magazine columns, television programs, videos, and lectures, and cover a broad range of topics of microeconomics, macroeconomics, economic history, and public policy issues. His books and essays were widely read, and have had an international influence, including in Communist countries.^{[12][13][14][15]}

Early life[link]

Friedman was born in Brooklyn, New York, to recent Jewish immigrants Jenő Friedman and Sára Landau from Beregszász in Austria-Hungary (now Berehove in Ukraine), both of whom worked as dry goods merchants. Shortly after Milton's birth, the family relocated to Rahway, New Jersey. A talented student, Friedman graduated from Rahway High School in 1928, just before his 16th birthday.^[16][17]

Friedman graduated from Rutgers University in New Jersey, where he specialized in mathematics and initially intended to become an actuary. During his time at Rutgers, Friedman became influenced by two economics professors, Arthur F. Burns and Homer Jones, who convinced him that modern economics could help end the Great Depression. After graduating from Rutgers in 1932, Friedman was offered two scholarships to do graduate work; one being Mathematics at Brown University and the other being Economics at the University of Chicago.^[18]Friedman chose the latter, thus earning an M.A. in 1933. He was strongly influenced by Jacob Viner, Frank Knight, and Henry Simons. It was at Chicago that Friedman met his future wife, economist Rose Director. During 1933–34 he had a fellowship at Columbia University, where he studied statistics with renowned statistician and economist Harold Hotelling. He was back in Chicago for 1934–35, spending the year working as a research assistant for Henry Schultz, who was then working on Theory and Measurement of Demand. That year, Friedman formed what would prove to be lifelong friendships with George Stigler and W. Allen Wallis.^[19]

Public service[link]

Friedman was initially unable to find academic employment, so during 1935, he followed his friend W. Allen Wallis to Washington, where Franklin D. Roosevelt's New Deal was "a lifesaver" for many young economists.^[20] At this stage, Friedman said that he and his wife "regarded the job-creation programs such as the WPA, CCC, and PWA appropriate responses to the critical situation," but not "the price- and wage-fixing measures of the National Recovery Administration and the Agricultural Adjustment Administration."^[21] Foreshadowing his later ideas, he believed price controls interfered with an essential signaling mechanism to help resources be used where they were most valued. Indeed, Friedman later concluded that all government intervention associated with the New Deal was "the wrong cure for the wrong disease," arguing that the money supply should simply have been expanded, instead of contracted.^[22] In the publication Monetary History of the United States by Friedman and Anna Schwartz, they argue that the Great Depression was caused by monetary contraction, which was the consequence of poor policymaking by the Federal reserve and the continuous crises of the banking system.^[23]

During 1935, he began work for the National Resources Committee, which was then working on a large consumer budget survey. Ideas from this project later became a part of his Theory of the Consumption Function. Friedman began employment with the National Bureau of Economic Research during autumn 1937 to assist Simon Kuznets in his work on professional income. This work resulted in their jointly authored publication Incomes from Independent Professional Practice, which introduced the concepts of permanent and transitory income, a major component of the Permanent Income Hypothesis that Friedman worked out in greater detail in the 1950s. The book hypothesizes that professional licensing artificially restricts the supply of services and raises prices.

During 1940, Friedman was appointed an assistant professor teaching Economics at the University of Wisconsin–Madison, but encountered antisemitism in the Economics department and decided to return to government service.^[24][25] Friedman spent 1941–43 working on wartime tax policy for the Federal Government, as an advisor to senior officials of the United States Department of the Treasury. As a Treasury spokesman during 1942 he advocated a Keynesian policy of taxation. He helped to invent the payroll withholding tax system, since the federal government badly needed money in order to fight the war.^[26] He later said, "I have no apologies for it, but I really wish we hadn't found it necessary and I wish there were some way of abolishing withholding now."^[27]

Academic career[link]

Early years[link]

In 1943, Friedman joined the Division of War Research at Columbia University (headed by W. Allen Wallis and Harold Hotelling), where he spent the rest of World War II working as a mathematical statistician, focusing on problems of weapons design.^[28]

During 1945, Friedman submitted Incomes from Independent Professional Practice (co-authored with Kuznets and completed during 1940) to Columbia as his doctoral dissertation. The university awarded him a Ph.D. during 1946. Friedman spent the 1945–46 academic year teaching at the University of Minnesota (where his friend George Stigler was employed). On February 12, 1945, his son, David D. Friedman was born.

University of Chicago[link]

University of Chicago

During 1946, Friedman accepted an offer to teach economic theory at the University of Chicago (a position opened by departure of his former professor Jacob Viner to Princeton University). Friedman would work for the University of Chicago for the next 30 years. There he helped build an intellectual community that produced a number of Nobel Prize winners, known collectively as the Chicago School of Economics.

At that time, Arthur Burns, who was then the head of the National Bureau of Economic Research, asked Friedman to rejoin the Bureau's staff. He accepted the invitation, and assumed responsibility for the Bureau's inquiry into the role of money in the business cycle. As a result, he initiated the "Workshop in Money and Banking" (the "Chicago Workshop"), which promoted a revival of monetary studies. During the latter half of the 1940s, Friedman began a collaboration with Anna Schwartz, an economic historian at the Bureau, that would ultimately result in the 1963 publication of a book co-authored by Friedman and Schwartz, A Monetary History of the United States, 1867–1960.

Friedman spent the 1954–55 academic year as a Fulbright Visiting Fellow at Gonville and Caius College, Cambridge. At the time, the Cambridge economics faculty was divided into a Keynesian majority (including Joan Robinson and Richard Kahn) and an anti-Keynesian minority (headed by Dennis Robertson). Friedman speculates that he was invited to the fellowship because his views were unacceptable to both of the Cambridge factions. Later his weekly columns for Newsweek magazine (1966–84) were well read and increasingly influential among political and business people.^[29] From 1968 to 1978, he and Paul Samuelson participated in the Economics Cassette Series, a biweekly subscription series where the economist would discuss the days' issues for about a half hour at a time.^[30]

Friedman was an economic adviser to Republican presidential candidate Barry Goldwater during 1964.

Nobel memorial prize and retirement[link]

In 1976 Friedman won the Nobel Memorial Prize in Economics "for his achievements in the fields of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilization policy."^[1] During the banquet speech he made a reference to “the Prize in Economic Sciences in Memory of Alfred Nobel”. In that he was the first recipient to do so, and it wasn’t until 2006 that a recipient of the prize called it by its proper name.^[31] During 1977, at age 65, Friedman retired from the University of Chicago after teaching there for 30 years. He and his wife moved to San Francisco where he became a visiting scholar at the Federal Reserve Bank of San Francisco. From 1977 on, he was affiliated with the Hoover Institution at Stanford University. During the same year, Friedman was approached by the Free To Choose Network and asked to create a television program presenting his economic and social philosophy. The Friedmans worked on this project for the next three years, and during 1980, the ten-part series, titled Free to Choose, was broadcast by the Public Broadcasting Service (PBS). The companion book to the series (co-authored by Milton and his wife, Rose Friedman), also titled Free To Choose, was the bestselling nonfiction book of 1980 and has since been translated into 14 foreign languages.

Friedman served as an unofficial adviser to Ronald Reagan during his 1980 presidential campaign, and then served on the President's Economic Policy Advisory Board for the rest of the Reagan Administration. During 1988, he received the National Medal of Science and Reagan honored him with the Presidential Medal of Freedom. Milton Friedman is known now as one of the most influential economists of the 20th century.^[32][33] Throughout the 1980s and 1990s, Friedman continued to write editorials and appear on television. He made several visits to Eastern Europe and to China, where he also advised governments. He was also for many years a Trustee of the Philadelphia Society.^[34][35][36]

Scholarly contributions[link]

Economics[link]

Friedman 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. Monetarism is the set of views associated with modern quantity theory. Its origins can be traced back to the 16th-century School of Salamanca or even further; however, Friedman's contribution is largely responsible for its modern popularization. He co-authored, with Anna Schwartz, A Monetary History of the United States (1963), which was an examination of the role of the money supply and economic activity in U.S. history. A striking conclusion of their research was one regarding the role of money supply fluctuations as contributing to economic fluctuations. Several regression studies with David Meiselman during the 1960s suggested the primacy of the money supply over investment and government spending in determining consumption and output. These challenged a prevailing but largely untested view on their relative importance. Friedman's empirical research and some theory supported the conclusion that the short-run effect of a change of the money supply was primarily on output but that the longer-run effect was primarily on the price level.

Friedman was the main proponent of the monetarist school of economics. He maintained that there is a close and stable association between price inflation and the money supply, mainly that price inflation should be regulated with monetary deflation and price deflation with monetary inflation. He famously quipped that price deflation can be fought by "dropping money out of a helicopter."^[37]

Friedman's arguments were designed to counter popular claims that price inflation at the time was the result of increases in the price of oil, or increases in wages: as he wrote,

Inflation is always and everywhere a monetary phenomenon.

—Milton Friedman, 1963.^[38]

Friedman rejected the use of fiscal policy as a tool of demand management; and he held that the government's role in the guidance of the economy should be restricted severely. Friedman wrote extensively on the Great Depression, which he termed the Great Contraction, arguing that it had been caused by an ordinary financial shock whose duration and seriousness were greatly increased by the subsequent contraction of the money supply caused by the misguided policies of the directors of the Federal Reserve.

The Fed was largely responsible for converting what might have been a garden-variety recession, although perhaps a fairly severe one, into a major catastrophe. Instead of using its powers to offset the depression, it presided over a decline in the quantity of money by one-third from 1929 to 1933 ... Far from the depression being a failure of the free-enterprise system, it was a tragic failure of government.

—Milton Friedman, Two Lucky People, 233

Friedman also argued for the cessation of government intervention in currency markets, thereby spawning an enormous literature on the subject, as well as promoting the practice of freely floating exchange rates. His close friend George Stigler explained, "As is customary in science, he did not win a full victory, in part because research was directed along different lines by the theory of rational expectations, a newer approach developed by Robert Lucas, also at the University of Chicago."^[39]

Friedman was also known for his work on the consumption function, the permanent income hypothesis (1957), which Friedman himself referred to as his best scientific work.^[40] This work contended that rational consumers would spend a proportional amount of what they perceived to be their permanent income. Windfall gains would mostly be saved. Tax reductions likewise, as rational consumers would predict that taxes would have to increase later to balance public finances. Other important contributions include his critique of the Phillips curve and the concept of the natural rate of unemployment (1968). This critique associated his name, together with that of Edmund Phelps, with the insight that a government that brings about greater inflation cannot permanently reduce unemployment by doing so. Unemployment may be temporarily lower, if the inflation is a surprise, but in the long run unemployment will be determined by the frictions and imperfections of the labor market.

Friedman's essay "The Methodology of Positive Economics" (1953) provided the epistemological pattern for his own subsequent research and to a degree that of the Chicago School. There he argued that economics as science should be free of value judgments for it to be objective. Moreover, a useful economic theory should be judged not by its descriptive realism but by its simplicity and fruitfulness as an engine of prediction. That is, students should measure the accuracy of its predictions, rather than the "soundness of its assumptions. His argument was part of an ongoing debate among such statisticians as Jerzy Neyman, Leonard Savage, and Ronald Fisher.^[41]

Statistics[link]

One of his most famous contributions to statistics is sequential sampling. "Friedman did statistical work at the Division of War Research at Columbia. He and his colleagues came up with a sampling technique, known as sequential sampling, which became, in the words of The New Palgrave Dictionary of Economics, 'the standard analysis of quality control inspection.' The dictionary adds: 'Like many of Friedman’s contributions, in retrospect it seems remarkably simple and obvious to apply basic economic ideas to quality control; that however is a measure of his genius.'"^[42]

Public policy positions[link]

Federal reserve[link]

Friedman believed that if the money supply was to be centrally controlled (as by the Federal Reserve) that the preferable way to do it would be with a mechanical system that would keep the quantity of money increasing at a steady rate. However, instead of government involvement at all, he was open to a "real," non-government, gold standard where money is produced by the private market: "A real gold standard is thoroughly consistent with [classical] liberal principles and I, for one, am entirely in favor of measures promoting its development." He did however add this caveat, "Let me emphasize that this note is not a plea for a return to a gold standard.... I regard a return to a gold standard as neither desirable nor feasible—with the one exception that it might become feasible if the doomsday predictions of hyperinflation under our present system should prove correct."^[43] He said the reason that it was not feasible was because "there is essentially no government in the world that is willing to surrender control over its domestic monetary policy." However, it could be done if "you could re-establish a world in which government's budget accounted for 10 percent of the national income, in which laissez-faire reigned, in which governments did not interfere with economic activities and in which full employment policies had been relegated to the dustbin..."^[43]

He was critical of the Federal Reserve's influence on the economics profession. In a 1993 letter to University of Texas economics professor and former House Banking Committee investigator Robert Auerbach, Friedman wrote:

I cannot disagree with you that having something like 500 economists is extremely unhealthy. As you say, it is not conducive to independent, objective research. You and I know there has been censorship of the material published. Equally important, the location of the economists in the Federal Reserve has had a significant influence on the kind of research they do, biasing that research toward noncontroversial technical papers on method as opposed to substantive papers on policy and results.^[44]

School choice[link]

In his 1955 article "The Role of Government in Education" Friedman proposed supplementing publicly operated schools with privately run but publicly funded schools through a system of school vouchers.^[45] Reforms similar to those proposed in the article were implemented in, for example, Chile in 1981 and Sweden in 1992.^[46] In 1996 Friedman, together with his wife, founded the The Foundation for Educational Choice to advocate school choice and vouchers.

Conscription[link]

Milton Friedman was a major proponent of a volunteer military, stating that the draft was "inconsistent with a free society."^[47][48] In Capitalism and Freedom, he argued that conscription is inequitable and arbitrary, preventing young men from shaping their lives as they see fit.^[49] During the Nixon administration he headed the committee to research a conversion to paid/volunteer armed force. He would later state that his role in eliminating the conscription in the United States was his proudest accomplishment.^[9] Friedman did, however, believe a nation could compel military training as a reserve in case of war time.^[49]

Libertarianism and the Republican party[link]

He served as a member of President Reagan's Economic Policy Advisory Board during 1981. During 1988, he received the Presidential Medal of Freedom and the National Medal of Science. He said that he was a libertarian philosophically, but a member of the U.S. Republican Party for the sake of "expediency" ("I am a libertarian with a small 'l' and a Republican with a capital 'R.' And I am a Republican with a capital 'R' on grounds of expediency, not on principle.") But, he said, "I think the term classical liberal is also equally applicable. I don't really care very much what I'm called. I'm much more interested in having people thinking about the ideas, rather than the person."^[50]

Public goods and monopoly[link]

Friedman was supportive of the state provision of some public goods that private businesses are not considered as being able to provide. However, he argued that many of the services performed by government could be performed better by the private sector. Above all, if some public goods are provided by the state, he believed that they should not be a legal monopoly where private competition is prohibited; for example, he wrote:

There is no way to justify our present public monopoly of the post office. It may be argued that the carrying of mail is a technical monopoly and that a government monopoly is the least of evils. Along these lines, one could perhaps justify a government post office, but not the present law, which makes it illegal for anybody else to carry the mail. If the delivery of mail is a technical monopoly, no one else will be able to succeed in competition with the government. If it is not, there is no reason why the government should be engaged in it. The only way to find out is to leave other people free to enter.

—Milton Friedman, Friedman, Milton & Rose D. Capitalism and Freedom, University of Chicago Press, 1982, 29

Welfare[link]

Friedman made newspaper headlines by proposing a negative income tax to replace the existing welfare system, and then opposing a bill to implement it because the bill proposed to supplement the existing system rather than replace it.

Drugs[link]

Friedman also supported libertarian policies such as legalization of drugs and prostitution. During 2005, Friedman and more than 500 other economists advocated discussions regarding the economic benefits of the legalization of marijuana.^[51]

Economic freedom[link]

Michael Walker of the Fraser Institute and Friedman hosted a series of conferences from 1986 to 1994. The goal was to create a clear definition of economic freedom and a method for measuring it. Eventually this resulted in the first report on worldwide economic freedom, Economic Freedom in the World. This annual report has since provided data for numerous peer-reviewed studies and has influenced policy in several nations.

Along with sixteen other distinguished economists he opposed the Copyright Term Extension Act and filed an amicus brief in Eldred v. Ashcroft.^[52] He supported the inclusion of the word "no-brainer" in the brief.^[53]

Friedman argued for stronger basic legal (constitutional) protection of economic rights and freedoms in order to further promote industrial-commercial growth and prosperity and buttress democracy and freedom and the rule of law generally in society.^[54]

Honors, recognition, and influence[link]

Friedman allowed the Cato Institute to use his name for its biannual Milton Friedman Prize for Advancing Liberty beginning in 2001. A Friedman Prize was given to the late British economist Peter Bauer during 2002, Peruvian economist Hernando de Soto during 2004, Mart Laar, former Estonian Prime Minister during 2006 and a young Venezuelan student Yon Goicoechea during 2008. His wife Rose, sister of Aaron Director, with whom he initiated the Friedman Foundation for Educational Choice, served on the international selection committee. Friedman was also a recipient of the Nobel Prize in Economics.

Hong Kong[link]

Friedman once said, "If you want to see capitalism in action, go to Hong Kong."^[55] He wrote in 1990 that the Hong Kong economy was perhaps the best example of a free market economy.^[56]

One month before his death, he wrote the article "Hong Kong Wrong – What would Cowperthwaite say?" in the Wall Street Journal, criticizing Donald Tsang, the Chief Executive of Hong Kong, for abandoning "positive noninterventionism."^[57] Tsang later said he was merely changing the slogan to "big market, small government," where small government is defined as less than 20% of GDP. In a debate between Tsang and his rival, Alan Leong, before the 2007 Chief Executive election, Leong introduced the topic and jokingly accused Tsang of angering Friedman to death.

Chile[link]

During 1975, two years after the military coup that ended the government of Salvador Allende, the economy of Chile experienced a severe crisis. Friedman accepted the invitation of a private foundation to visit Chile and speak on principles of economic freedom. He spent seven days in Chile giving a series of lectures. One of the lectures was entitled "The Fragility of Freedom," and according to Friedman, "dealt with precisely the threat to freedom from a centralized military government."^[58] Friedman encapsulated his philosophy in a lecture at Universidad Católica de Chile, saying: "free markets would undermine political centralization and political control."^[59]

Friedman also met with military dictator President Augusto Pinochet during his visit. He never served as an adviser to the Chilean government, but did write a letter to Pinochet outlining what Friedman considered the two key economic problems of Chile. The letter listed a series of monetary and fiscal measures deemed a "shock program" to end hyperinflation and promote a market economy.^[60] His letter suggested (among other, more specific prescriptions) that a brief period of cutting government spending would reduce its fiscal deficit and thus reduce the rate of increase of the quantity of money in the country that was driving inflation. The economist did however admit his knowledge of Chile was "too limited to enable [him] to be precise or comprehensive" and that the measures he outlined were "to be taken as illustrative."^[60] Friedman felt that there might be a brief period ("measured in months") of higher unemployment, followed by recovery once inflation was tamed. His letter also suggested that cutting spending to reduce the fiscal deficit would result in less transitional unemployment than raising taxes to do so. Later, Friedman said he believed that market reforms would undermine Pinochet.^[61] Chilean graduates of the Chicago School of Economics and its new local chapters had been appointed to important positions in the new government soon after the coup, which allowed them to advise Pinochet on economic policies in accord with the School's economic doctrine.

According to his critics, Friedman did not criticize Pinochet's dictatorship at the time, nor the assassinations, illegal imprisonments, torture, or other atrocities that were well known by then.^[62] In his 1980 documentary Free to Choose, he said the following: "Chile is not a politically free system, and I do not condone the system. But the people there are freer than the people in Communist societies because government plays a smaller role. ... The conditions of the people in the past few years has been getting better and not worse. They would be still better to get rid of the junta and to be able to have a free democratic system."^[63][64] In 1984 Friedman stated that he has "never refrained from criticizing the political system in Chile."^[58]

Friedman defended his activity in Chile on the grounds that, in his opinion, the adoption of free market policies not only improved the economic situation of Chile but also contributed to the amelioration of Pinochet's rule and to the eventual transition to a democratic government during 1990. That idea is included in Capitalism and Freedom, in which he declared that economic freedom is not only desirable in itself but is also a necessary condition for political freedom. He stressed that the lectures he gave in Chile were the same lectures he later gave in China and other socialist states.^[65] During the 2000 PBS documentary The Commanding Heights (based on the book), Friedman continued to argue that criticism over his role in Chile missed his main contention that freer markets resulted in freer people, and that Chile's unfree economy had caused the military government. Friedman suggested that the economic liberalization he advocated caused the end of military rule and a free Chile.^[66]

Iceland[link]

Friedman visited Iceland during the autumn of 1984, met with important Icelanders and gave a lecture at the University of Iceland on the "tyranny of the status quo." He participated in a lively television debate on August 31, 1984 with socialist intellectuals, including Ólafur Ragnar Grímsson, who later became the president of Iceland.^[67] When they complained that a fee was charged for attending his lecture at the University and that hitherto, lectures by visiting scholars had been free-of-charge, Friedman replied that previous lectures had not been free-of-charge in a meaningful sense: Lectures always have related costs. What mattered was whether attendees or non-attendees covered those costs. Friedman thought that it was fairer that only those who attended paid. In this discussion Friedman also stated that he did not receive any money for delivering that lecture.

Estonia[link]

Although Friedman never visited Estonia, his book Free to Choose exercised a great influence on that nation's then 32-year-old prime minister, Mart Laar, who has claimed that it was the only book on economics he had read before taking office. Laar's reforms are often credited with responsibility for transforming Estonia from an impoverished Soviet Republic to the "Baltic Tiger." A prime element of Laar's program was introduction of the flat tax. Laar won the 2006 Milton Friedman Prize for Advancing Liberty, awarded by the Cato Institute.^[68]

United Kingdom[link]

Milton Friedman influenced the thinking of Alan Walters and Patrick Minford, two of Margaret Thatcher's main macroeconomic advisers. See the book Margaret Thatcher's Revolution: How it Happened and What it Meant, edited by Subroto Roy & John Clarke, Continuum 2005

Criticism[link]

Keynesian criticism[link]

During the financial crisis of 2007–2010, several Keynesian economists such as James Galbraith and Joseph Stiglitz blamed the free market philosophy of Friedman and the Chicago school for the economic turmoil.^[69]

After Friedman's death in 2006, Keynesian Nobel laureate Paul Krugman, praised Friedman as a "great economist and a great man," but criticized him by writing that "he slipped all too easily into claiming both that markets always work and that only markets work. It's extremely hard to find cases in which Friedman acknowledged the possibility that markets could go wrong, or that government intervention could serve a useful purpose."^[70]

Austrian school criticism[link]

In 1971, libertarian economist Murray Rothbard criticized Friedman's efforts to make the government more efficient as detrimental to individual liberty, concluding "...as we examine Milton Friedman’s credentials to be the leader of free-market economics, we arrive at the chilling conclusion that it is difficult to consider him a free-market economist at all."^[71] Friedman's position on governmental control of money changed since 1971 when this criticism was made.^[72] In a 1995 interview in Reason magazine he said the "difference between me and people like Murray Rothbard is that, though I want to know what my ideal is, I think I also have to be willing to discuss changes that are less than ideal so long as they point me in that direction." He said he actually would "like to abolish the Fed," and points out that when he has written about the Fed it is simply his recommendations of how it should be run given that it exists.^[9]

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Other criticism[link]

In her book The Shock Doctrine: The Rise of Disaster Capitalism, journalist and author Naomi Klein criticized Friedman's ideology and the principles that guided the economic restructuring that followed the military coups in countries such as Chile and Indonesia, drawing analogies between the way that Friedman proposed using the social "shock" of the coups to create an economic "blank slate" with Ewen Cameron's controversial medical experiments that used electroshock therapy to create a mental "blank slate" in patients with mental disorders.^[73] Based on the extent to which the application of neoliberal policies has contributed to income disparities and inequality,^[74] both Klein and Noam Chomsky have suggested that the primary role of neoliberalism was as an ideological cover for capital accumulation by multinational corporations.^[75] Chilean economist Orlando Letelier asserted that Pinochet's dictatorship resorted to oppression because of popular opposition to Chicago School policies in Chile.^[76] Klein's book has been criticized. In the October 2008 issue of Reason magazine, Swedish historian Johan Norberg called her book a "disastrous ... polemic" and criticized the book as exaggerating some facts and ignoring others, subjecting Friedman to "the most malevolent distortions of a thinker's ideas in recent history." Norberg states that "Friedman's view was the opposite of what Klein claims" and "twists [the] relationship [between Friedman and Pinochet's regime] beyond recognition," concluding that "Klein is dead wrong about Friedman."^[77] Tom Redburn wrote that Klein "accuses Friedman of being the godfather of a Mafia-like gang", stated that "her argument constantly overreaches because her goal is not really to tame capitalism so much as to taunt it", and that Klein is "blind to the necessary role of entrepreneurial capitalism in overcoming the inherent tendency of any established social system to lapse into stagnation."^[78]

Personal life[link]

According to a 2007 article in Commentary magazine, his "parents were moderately observant [Jews], but Friedman, after an intense burst of childhood piety, rejected religion altogether."^[79] He described himself as an agnostic.^[80]

Friedman wrote extensively of his life and experiences, especially in 1998 in his memoirs with his wife Rose, titled Two Lucky People. He died of heart failure at the age of 94 years in San Francisco on November 16, 2006.^[81][82] He was survived by his wife (who died on August 18, 2009) and their two children, David, who is a philosopher and anarcho-capitalist economist, and Janet. David's son, Patri Friedman, is the executive director of the Seasteading Institute.^[83]

See also[link]

liberalism portal

• Works of Milton Friedman
• Friedman–Savage utility function
• Friedman rule
• Friedman's k-percent rule
• Friedman test
• List of economists
• List of Jewish Nobel laureates
• List of notable Presidential Medal of Freedom recipients
• History of economic thought

Notes[link]