Milton Friedman, one of the most influential economists of the 20th century, died today in San Francisco, confirmed Robert Fanger, director of communications for the Milton and Rose D. Friedman Foundation. He was 94.
David G. Booth, chairman, CEO, president and CIO of Dimensional Fund Advisors, said: "I think his biggest contribution is connecting civil liberties and capitalism. His thesis is that we cannot have freedom without capitalism. His moral defense of capitalism has been a major factor in counteracting the trend toward collectivism. By the 1960s, nearly all economics departments were advocating the strong intervention measures of Keynesian economics. The University of Chicago school of economics, which was identified most closely with (Mr.) Friedman, fought for market-based solutions and individual freedom. Eventually, the Chicago school won, which partially explains why the U.S. leads the world economy. We should treat Milton Friedman as a hero."
Bruce I. Jacobs, principal, Jacobs Levy Equity Management, said: "Many believe his economic ideas, including his monetarist philosophy and his strong support of free market competition and deregulation, underpinned the robust economic growth and extraordinary stock market gains of the 1980s and 1990s. His monetarist ideas were largely adopted by the Federal Reserve under (Paul) Volcker and (Alan) Greenspan and are credited with getting the spiraling inflation rates of the 1970s under control.
"On a more particularly investing-related note, his early work … on risk aversion, done in the 1940s, contributed to currently accepted notions of investor utility. (Mr.) Friedman realized that, given a choice between two investments with equal expected outcomes, investors would prefer the "safer" choice; that is, people are generally risk averse. Yet he also noted the seeming paradox of the man who will buy a lottery ticket offering a minuscule chance of a huge payoff, while at the same time being willing to pay for insurance to cover the possibility of small losses. That is, investors can be risk-seeking and risk-averse at the same time."
Mr. Fanger said no immediate decisions have been made regarding funeral services or memorials.
