Editing Milton Friedman (section)

== Academic career ==
=== Early years ===
In 1940, Friedman accepted a position at the University of Wisconsin–Madison, but left because of differences with faculty regarding United States involvement in World War II. Friedman believed the United States should enter the war.<ref name="Achievement.org">{{cite web |url=https://www.achievement.org/achiever/milton-friedman-ph-d/#interview |website=www.achievement.org|publisher=[[American Academy of Achievement]]|title=Milton Friedman Biography and Interview – American Academy of Achievement}}</ref> 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, military tactics, and metallurgical experiments.<ref name="Achievement.org"/><ref>{{cite book |author=Philip Mirowski|title=Machine Dreams: Economics Becomes a Cyborg Science|url=https://archive.org/details/machinedreamseco0000miro|url-access=registration|year=2002|publisher=Cambridge University Press|pages=[https://archive.org/details/machinedreamseco0000miro/page/202 202]–203|isbn=978-0521775267}}</ref>

In 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 PhD in 1946.<ref>{{cite web|title=Milton Friedman|url=http://c250.columbia.edu/c250_celebrates/remarkable_columbians/milton_friedman.html|access-date=March 7, 2019|website=c250.columbia.edu}}</ref><ref name="Harms-2006">{{cite web|last=Harms|first=William|date=November 16, 2006|title=Professor Emeritus Milton Friedman dies at 94|url=http://www-news.uchicago.edu/releases/06/061116.friedman.shtml|access-date=March 7, 2019|website=www-news.uchicago.edu}}</ref> Friedman spent the 1945–1946 academic year teaching at the [[University of Minnesota]] (where his friend George Stigler was employed). On February 12, 1945, his only son, [[David D. Friedman]], who would later follow in his father's footsteps as an economist, was born.<ref>{{Cite journal|last=Block|first=Walter E.|date=2011|title=David Friedman and Libertarianism: A Critique|url=https://heinonline.org/HOL/Page?handle=hein.journals/libpa3&id=721&div=&collection=|journal=Libertarian Papers|volume=3|page=1|url-access=subscription|via=HeinOnline}}</ref>

=== University of Chicago ===
In 1946, Friedman accepted an offer to teach economic theory at the University of Chicago (a position opened by the departure of his former professor [[Jacob Viner]] to [[Princeton University]]). Friedman would work for the University of Chicago for the next 30 years.<ref name="Harms-2006" /> There, he contributed to the establishment of an intellectual community that produced a number of Nobel Memorial Prize winners, known collectively as the [[Chicago school of economics]].<ref name="Doherty-2007" />

At the time, [[Arthur F. Burns]], who was then the head of the [[National Bureau of Economic Research]], and later [[Chair of the Federal Reserve|chairman of the Federal Reserve]], asked Friedman to rejoin the Bureau's staff.<ref>{{Cite web|date=July 22, 2017|title=NBER. Mitchell to Burns about Friedman. 1945|url=http://www.irwincollier.com/nber-mitchell-to-burns-about-friedman-1945/|access-date=May 17, 2021|website=Economics in the Rear-View Mirror|language=en-US}}</ref> 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 history|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''.<ref name="bestofbothworlds" /><ref name="Doherty-2007" />

In 1951, Friedman was awarded the [[John Bates Clark Medal]], which at the time was awarded every other year to the best economist under the age of 40, by the [[American Economic Association]].

===University of Cambridge===
Friedman spent the 1954–1955 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, Baron Kahn|Richard Kahn]]) and an anti-Keynesian minority (headed by [[Dennis Robertson (economist)|Dennis Robertson]]). Friedman speculated 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,<ref>Cato, "Letter from Washington," ''National Review,'' September 19, 1980, Vol. 32 Issue 19, p. 1119</ref> and helped earn the magazine a [[Gerald Loeb Special Award]] in 1968.<ref name="HC-19680522">{{cite news |url=https://newspapers.com/image/370559693/?terms=Nicholas%2BMolodovsky%2BLoeb%2BAward |title='Playboy', 'Monitor' Honored |last=Devaney |first=James J. |date=May 22, 1968 |work=[[Hartford Courant]] |access-date=March 20, 2019 |issue=143 |edition=final |volume=CXXXI |page=36 |via=[[Newspapers.com]]}}</ref> 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.<ref>[https://web.archive.org/web/20130620070153/http://hoohila.stanford.edu/friedman/ecs.php Rose and Milton Friedman]. stanford.edu</ref><ref>[http://library.duke.edu/rubenstein/findingaids/samuelsonpaul/ Inventory of the Paul A. Samuelson Papers, 1933–2010 and undated | Finding Aids | Rubenstein Library] {{Webarchive|url=https://web.archive.org/web/20130112220957/http://library.duke.edu/rubenstein/findingaids/samuelsonpaul/ |date=January 12, 2013 }}. Library.duke.edu. Retrieved on September 6, 2017.</ref>

==== ''A Theory of the Consumption Function'' ====
One of Milton Friedman's most popular works, ''A Theory of the Consumption Function'', challenged traditional Keynesian viewpoints about the household. This work was originally published in 1957 by [[Princeton University Press]], and it reanalyzed the relationship displayed "between aggregate consumption or aggregate savings and aggregate income".<ref name="Friedman-2018">{{cite book|author1=Friedman|first=Milton|url=https://books.google.com/books?id=7_1ZDwAAQBAJ&q=a+theory+of+the+consumption+function+friedman&pg=PP1|title=A Theory of the Consumption Function|publisher=[[Princeton University Press]]|year=2018|isbn=978-0691188485|pages=20–37}}</ref>

Friedman's counterpart [[Keynes]] believed people would modify their household consumption expenditures to relate to their existing income levels.<ref>{{Cite web|title=What Is Keynesian Economics? – Back to Basics Compilation Book – IMF Finance & Development magazine|url=https://www.imf.org/external/pubs/ft/fandd/basics/4_keynes.htm|access-date=May 10, 2021|website=www.imf.org}}</ref> Friedman's research introduced the term "permanent income" to the world, which was the average of a household's expected income over several years, and he also developed the [[permanent income hypothesis]]. Friedman thought income consisted of several components, namely transitory and permanent. He established the formula <math>y=y_p+y_t</math> to calculate income, with ''p'' representing the permanent component, and ''t'' representing the transitory component.<ref>A Theory of Consumption Function, 1957, Friedman, Milton; Princeton University Press, p. 22</ref> Milton Friedman's research changed how economists interpreted the consumption function, and his work pushed the idea that current income was not the only factor affecting people's adjustment household consumption expenditures.<ref>Carlin, Wendy; Soskice, David W. (2014). ''Macroeconomics: Institutions, instability, and the financial system''. US: Oxford University Press. pp. 20–29.</ref> Instead, expected income levels also affected how households would change their consumption expenditures. Friedman's contributions strongly influenced research on consumer behavior, and he further defined how to predict [[consumption smoothing]], which contradicts Keynes' [[marginal propensity to consume]]. Although this work presented many controversial points of view which differed from existing viewpoints established by Keynes, ''A Theory of the Consumption Function'' helped Friedman gain respect in the field of economics. His work on the [[permanent income hypothesis]] is among the many contributions which were listed as reasons for his [[Sveriges Riksbank Prize in Economic Sciences|Sveriges-Riksbank Prize in Economic Sciences]].<ref name="nobel1" /> His work was later expanded on by Christopher D. Carroll, especially in regards to the absence of [[liquidity constraint]]s.<ref>[https://www.aeaweb.org/articles?id=10.1257/jep.15.3.23 "A Theory of Consumption Function, With and Without Liquidity Constraints"], Christopher D. Carroll, 2001, ''Journal of Economic Perspectives'', Vol. 15, No. 3, pp. 23–45, {{doi|10.1257/jep.15.3.23}}</ref><ref>Carroll, Christopher D. (1997). "Buffer-Stock Saving and the Life Cycle/Permanent Income Hypothesis". ''Quarterly Journal of Economics''. '''112''' (1): 1–55</ref>

The [[permanent income hypothesis]] faces some criticism, mainly from [[Keynesian economics|Keynesian]] economists. The primary criticism of the hypothesis is based on a lack of [[liquidity constraint]]s.<ref>Beznoska, Martin; Ochmann, Richard (2012). "Liquidity Constraints and the Permanent Income Hypothesis: Pseudo Panel Estimation with German Consumption Survey Data", EconStar.</ref><ref>Stafford, Frank P. (July 1974). "Permanent income, wealth, and consumption: A critique of the permanent income theory, the life cycle hypothesis, and related theories". ''Journal of Econometrics,'' pp. 195–196</ref>

==== ''Capitalism and Freedom'' ====
His book ''[[Capitalism and Freedom]]'', inspired by a series of lectures he gave at [[Wabash College]],<ref>{{Cite web|last=Schnetzer|first=Amanda|date=2016|title=Reading Friedman in 2016: Capitalism, Freedom, and the China Challenge|url=http://www.bushcenter.org/catalyst/freedom/schnetzer-friedman-in-2016.html|access-date=October 29, 2020|website=George W. Bush Institute|language=en}}</ref> brought him national and international attention outside academia.<ref>{{Cite news|last=Sorkin|first=Andrew Ross|date=September 11, 2020|title=A Free Market Manifesto That Changed the World, Reconsidered|language=en-US|work=The New York Times|url=https://www.nytimes.com/2020/09/11/business/dealbook/milton-friedman-doctrine-social-responsibility-of-business.html|access-date=May 10, 2021|issn=0362-4331|url-access=limited}}</ref> It was published in 1962 by the [[University of Chicago Press]] and consists of essays that used non-mathematical economic models to explore issues of public policy.<ref>{{Cite book|last=Ebenstein|first=Lanny|title=Milton Friedman: A Biography|publisher=St. Martin's Publishing Group|year=2007|isbn=978-0230604094|pages=135–146}}</ref> It sold over 400,000 copies in the first eighteen years and more than half a million since 1962.<ref name="Preface-1982">1982 edition preface of ''Capitalism and freedom'', p. xi of the 2002 edition</ref> ''Capitalism and Freedom'' was translated into eighteen languages.<ref>{{Cite book|last=Friedman|first=Milton|url=https://www.degruyter.com/document/isbn/9780226264189/html|title=Capitalism and Freedom|date=February 15, 2009|publisher=University of Chicago Press|isbn=978-0226264189|language=en|access-date=May 23, 2021|archive-date=May 23, 2021|archive-url=https://web.archive.org/web/20210523003559/https://www.degruyter.com/document/isbn/9780226264189/html|url-status=dead}}</ref> Friedman talks about the need to move to a classically liberal society, that free markets would help nations and individuals in the long-run and fix the efficiency problems currently faced by the United States and other major countries of the 1950s and 1960s. He goes through the chapters specifying an issue in each respective chapter from the role of government and money supply to social welfare programs to a special chapter on occupational licensure. Friedman concludes ''Capitalism and Freedom'' with his [[Classical liberalism|"classical liberal"]] stance that government should stay out of matters that do not need it and should only involve itself when absolutely necessary for the survival of its people and the country. He recounts how the best of a country's abilities come from its free markets while its failures come from government intervention.<ref name="Friedman-1962">{{cite book|url=https://books.google.com/books?id=zHSv4OyuY1EC&pg=PA182|title=Capitalism and Freedom: Fortieth Anniversary Edition|publisher=U. of Chicago Press|year=1962|isbn=978-0226264189|author1=Milton Friedman|author2=Rose D. Friedman}}</ref>