Money, liberty--and lunch

Hard to believe, but Playboy magazine was where millions of Americans first encountered the little economist whose ideas about money and liberty were changing their world. In 1973, the University of Chicago's Milton Friedman explained to the skin mag's interviewers the tectonic shift that was quaking old notions of the federal government as the great fixer and tweaker of America's economy.

"There are faint stirrings and hopeful signs," Friedman told Playboy. "Even some of the intellectuals who were most strongly drawn to the New Deal in the '30s are rethinking their positions, dabbling just a little with free-market principles. They're moving slowly and taking each step as though they were exploring a virgin continent. But it's not dangerous. Some of us have lived here quite comfortably all along."

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Friedman died Thursday in San Francisco at age 94. He takes with him the satisfaction of the iconoclast who lives to see his once-revolutionary ideas prevail--and his enemies surrender.

Friedman spent his career nudging the world of economics toward the realization that the free choices each of us makes daily have more power to deliver prosperity than the elaborate plans and infernal tinkering of government officials.

That was an unwelcome, even radical philosophy when Friedman began popularizing it--in 17 years of Newsweek columns, in best-selling books and in television programs devoted to free-market capitalism. It's a measure of Friedman's intellectual firepower that he had his greatest influence in the big-government 1960s and '70s: More than any force save Ronald Reagan, who echoed his theories, Friedman weaned a generation away from the notion of the nanny state as supreme enabler and protector.

Over the decades, Friedman's career largely repudiated the work of Britain's John Maynard Keynes, the other larger-than-life economist of the 20th Century. Boiled to their essences: Keynes saw government as the architect of economic policies; Friedman said people who felt responsible for themselves, and to themselves, would make the best economic choices on their own. Markets free of government interventions--price and wage controls, for example--would solve inflation and other problems.

In the '70s, Keynesian thinking had as bad a decade as Friedman had a good one. Keynesians believed that if government accepted a high inflation rate, good times would flow as Americans bid up goods and services--and thus created jobs. The eroding value of your dollars? Too bad. But years of corrosive stagflation--robust inflation plus unemployment--argued for Friedman's view that, over time, loose federal monetary policy only drives up prices and doesn't much help anyone land a job.

Friedman was a gracious victor in this struggle with the ghost of Keynes: This year he told a Wall Street Journal interviewer, "Keynes was a great economist. In every discipline, progress comes from people who make hypotheses, most of which turn out to be wrong, but all of which ultimately point to the right answer."

Among Friedman's right answers: He argued early and often that the American welfare state penalized aid recipients by cutting their benefits if they earned income. That disincentive didn't do much "to end the relentless rise of the welfare rolls by giving people on welfare both opportunity and incentive to become self-supporting." Friedman wrote those words in 1970--a quarter-century before a Republican Congress and Democratic president parlayed Friedman's thinking into welfare reform based on those priorities.

That was one among many stands that made Friedman a soulmate of Adam Smith, the 18th Century advocate of liberating markets from government fiddling. In Friedman, the U. of C. had a public face for the so-called "Chicago School" of laissez-faire economics. Thus did the U. of C. become a counterweight to more liberal believers in government activism at two rival econ powerhouses, Harvard and the Massachusetts Institute of Technology.

Friedman lived to see the spread of free-market (or freer-market) economics to the former communist bloc in Europe, to much of Latin America, to China--to nation upon region where aspiration unleashes personal initiative that heavy-handed governments can't replicate.

Friedman leaves us an embarrassment of rich thoughts. He was a conservative. But he was advancing bold ideas across the ideological spectrum--from the left's beloved earned-income tax credits to the right's school vouchers--decades before they went mainstream. Friedman even left his own epitaph: "There's no such thing as a free lunch." Government inefficiency, pork-barrel projects, runaway inflation, well-intentioned subsidies--they all have costs. Guess who pays.

The fact that you reflexively know the answer--your grandparents probably didn't--demonstrates how persuasive, how influential, Milton Friedman really was.