The Power of Choice

“The power of choice: the life and ideas of Milton Friedman”

. one of Friedman’s most controversial ideas: “flat rate income tax”;

. some of Friendman’s most important thinking is done when work and play can be combined;

. his scientific focus is technical economics - predicting the consequences of public policies;

. He believes that “permanent income” (“The Theory of Economic Consumption”, 1957) begins a counter-revolution (against Keynes’ ideas) through monetarism. “People don’t make their spending decision based on current income or short infusions of cash. They make decisions based on “the permanent income”, what they think they are likely to make over time;

. Another book: “The general theory of employment interest and money”;

. traditional Keynesian belief relies on that enough government spending can creates jobs and triggers spending on goods and services. This, in turn, will create more jobs;

. “A monetary history of the United States (1867 – 1960) published in 1963” with Anna Schwartz. “Most consider this a Friedman’s most influential work”. “It was commonly believed that the Great Depression was caused by the failure of capitalism. Milton argues that the cause was a failure of The Federal Reserve”. “FD should have flooded the country with currency and prevent other banks from failing (to restore confidence). It did nothing of the kind.”;

. (The power of choice in education) “The fully exercise of choice would reinvigorate the public school system (because) competition always have an effect” (Parents should be able to direct their taxes to the schools systems they believe is best for their children);

. advocates minimum government and maximum individual freedom;

. transitioning from government command and control to a free market economy, Chile privatized its pension system and this dramatically raised savings;

. “The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both”.