Friedman probably was not mentioned in this course. The role of money was hardly mentioned since the model suggested that the real economy was unaffected by the money supply and inflation was entirely explained by excess aggregate demand. The course emphasized the Keynesian model and how this model made it possible to moderate the business cycle with fiscal policy.
The older of us can more fully appreciate Friedman’s contributions today because we can recall that his ideas were either unheard of or dismissed as ridiculous when put forth in Capitalism and Freedom.įor example, I majored in economics in college and took my first principles course (macroeconomics) in 1960. Whether or not these younger people agreed with Friedman’s policy recommendations, most knew they were being taken seriously by important people. Friedman’s proposals for relying less on government coercion and more on market incentives and freedom to address problems have not been shockingly outrageous to those who came of age at the beginning of the Reagan administration or later. It is difficult for younger people (those who reached college age after 1980) to fully appreciate Milton Friedman’s contributions in his 1962 book, Capitalism and Freedom.
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