Published by EH.Net (June 2024).

Jennifer Burns. Milton Friedman: The Last Conservative. New York: Farrar, Straus and Giroux, 2023. x + 578 pp. $35 (hardcover), ISBN 978-0374601140.

Reviewed for EH.Net by Lanny Ebenstein, University of California, Santa Barbara.


Probably the most important aspect of Jennifer Burns’s outstanding biography of Milton Friedman, at least for contemporary economists, is her discussion of his later views on monetary theory and policy. Yet, as her book shows, there are other reasons why Friedman remains the most famous recent economist in the world. He was an extraordinarily great thinker and person. I had the opportunity to get to know him through personal interviews and correspondence between 1996 and 2006 as I was working on my biographies of Friedrich Hayek and Friedman himself. Brilliant and possessed of a terrific sense of humor, with a super memory (even in his nineties), instantaneous fluid expression, and exceptional warmth, Friedman was easy to love, irrespective of political or scholarly differences.

When, in 2005, I asked him what he thought the epigram of his career should be, he replied, “Inflation is always and everywhere a monetary phenomenon.” At the same time, as Professor Burns well notes, this is not, at least not currently, the perspective of most economists. Rather, in contrast to Friedman’s quantity of money theory of inflation, most economists today, following John Maynard Keynes, subscribe to what might be termed the “interest rate theory of inflation”—that interest rates are the primary element in determining monetary policy and inflation.

The current interest rate theory of inflation was most assuredly not Friedman’s view. He wrote in a 1997 op-ed: “After the US experience during the Great Depression, and after inflation and rising interest rates in the 1970s and disinflation and falling interest rates in the 1980s, I thought the fallacy of identifying tight money with high interest rates and easy money with low interest rates was dead. Apparently, old fallacies never die.” Professor Burns provides the best explication of Friedman’s late monetary views. Delving into the correspondence between Friedman and Alan Greenspan after Greenspan became Chairman of the Federal Reserve Board in 1987, she writes:

“Looking at the United States, he [Friedman] rediscovered the correlation between M2 and inflation…. He shared his findings with Greenspan, explaining that he had ‘been trying to understand the apparent breakdown during the 1970s and 1980s in the timing relations between money and inflation.’ After much frustration, returning to basics with ‘more elementary tools’ had yielded a finding: ‘The close relation is alive and well, apparently recovered from its breakdown during the earlier ’80s.’ Greenspan agreed that ‘the long-run relationship between M2 and prices seems quite strong'” (p. 455).

Professor Burns also cites Friedman’s late comments in an interview at the American Economic Association annual meeting:

“‘From about 1985 on the earlier demand function with M2 is reestablished, but not with M1 or the base, they are very unstable … If you eliminate the perturbations and you look at the general direction over the period from 1980 to 1985 in every country in the world, aggregate monetary growth has come way down and with it has come [down] inflation … So I think that the experiment in all of the countries of the world has been enormously confirmatory of the proposition that inflation is a monetary phenomenon'” (p. 455).

Friedman was a monetarist to the end.

Professor Burns’s summaries of economic thought from the beginning of Friedman’s career to its end are outstanding and a significant contribution in their own right—apart from the light they shed on his work. She elucidates the movement of economic thought during the twentieth century in a more revealing manner than this reviewer has seen anywhere else. Historians of the development of economic thought will find much grist in her work. It should be said as well that her discovery of many facets of Friedman’s early life are, heretofore, unknown in the literature.

Milton Friedman: The Last Conservative hits its stride in the second half of the book. The incredible emergence of Friedman on the academic and popular stages, starting in the 1950s and reaching its initial peak in the late 1960s, is a story that can be told of no other economist. He was on the cover of Time magazine, regularly the subject of stories and interviews in leading magazines and newspapers, authored a multitude of articles on diverse subjects in academic journals and popular outlets, lectured throughout the United States and even world, testified before congressional committees, and was regularly invited to the White House to proffer his advice. When he underwent heart surgery in 1972, President Richard Nixon telephoned Friedman to inquire how he was. As time went on, Friedman’s fame grew internationally, and no economist became more identified with the turn to economic conservatism in the United States in the 1980s than he.

There were really two phases in Friedman’s career. In the second, popular phase, he forcefully advocated abolition of the draft and legalization of drugs, developed and significantly promoted the concept of school vouchers, and came to focus on tax reduction as the best way to reduce government spending. Notwithstanding this reviewer’s great admiration for Friedman’s work in academic economic theory and history—including his important work in flexible international exchange rates—it is possible to adopt a very different view of much of his work in his long, popular phase, which became predominant on his retirement from the University of Chicago in 1976 and continued until, if not beyond, his death in 2006.

As Professor Burns notes, Friedman “minimiz[ed] the potential harm of deficits” as an adviser to the Reagan administration. This approach has led to trillions of dollars of federal debt. Similarly, Friedman’s position that he was for any tax cut, anytime, for any reason is hardly a way to attain good public policy. It is possible to maintain that many taxes should be cut without simultaneously putting forward that it hardly matters at all (or even does not matter) what or how taxes are reduced, or that some particular taxes may appropriately be raised within an overall strategy of reducing taxation in the aggregate. Moreover, his position that deficits lead to less government spending is empirically in error. Government spending—and overall taxation as well—appears to be minimized when budgets are balanced or nearly balanced than when deficits are maximized. Friedman was mistaken on an important point in what he elsewhere called positive (or factual) economics.

It should be said as well, as Professor Burns discusses, that he did not endorse the supply-side economics position that tax cuts more than pay for themselves through increased productivity. She ferrets out a 1979 interview in which Friedman commented: “I think it’s misleading to suppose that you’re going to be able to reduce taxes and increase spending—that is a contradiction in terms” (p. 401). Friedman was not a philosophical supporter of supply-side economics, though he endorsed its policy of cutting taxes for exactly the opposite reason: that it would lead to less government spending.

Professor Jennifer Burns, in sum, has greatly added to our knowledge and understanding of Milton Friedman and his times, especially economic discussion and policymaking in his times. With only one aspect of her biography does this reviewer cavil—that is, with her subtitle of The Last Conservative. This is not accurate. On the crucial conservative issue of religion, Friedman was an atheist-leaning agnostic (he did not think there is a God, but could not be sure, so he identified himself as agnostic). With respect to macro-policy orientation, he considered himself a radical who sought to overturn the status quo. He staunchly promoted, as noted above, abolition of the draft and drug legalization, hardly conservative positions. He was pro-choice on abortion, favored stem cell research, and was moderately progressive on gay rights. Though many others favored little or no government before him, a better subtitle for this work would be The First Libertarian.


Friedman, Milton. “Rx for Japan: Back to the Future.” The Wall Street Journal. December 17, 1997.


Lanny Ebenstein is a Lecturer in the Department of Economics at the University of California, Santa Barbara. He is the author of ten books and many articles on economic and political history, the history of economic thought, and public policy, including the first biography of Milton Friedman.

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