The 12 Economists of Christmas: Milton and Rose Friedman

The holidays are a time for people to gather with family and give thanks for the blessings of the past year. For those of us living in market economies, we have much to be thankful for, including the work of a group of famous economists who have done much to shape our understanding of wealth creation and prosperity.

From now until Christmas, we will look at the economic lessons of twelve of these economists, and examine how their ideas tie in to our holiday celebrations. Today, we begin the series by featuring a brief look into the work of the dynamic husband-and-wife duo of Milton and Rose Friedman.

Few other economists popularized the good news about market economies and bottom-up growth more than the Friedmans. At a time when many economists were urging governments and the public to embrace central planning, the Friedmans extolled the virtues of free enterprise, voluntary exchange, and open trade. Their popular book and television series, Free to Choose, clearly articulated how our high standard of living is tied to our capitalist system, and just what we have to lose should we stray from liberal attitudes towards trade and entrepreneurship.

Comparing modern Americans to their recent ancestors, they write: “Hardly any worker today engages in the kind of backbreaking labor that was common a century or so ago and that is still common over most of the globe. Working conditions are better; hours of work are shorter; vacations and other fringe benefits are taken for granted. Earnings are far higher, enabling the ordinary family to achieve a level of living that only the affluent few could earlier enjoy.”

In clear and compelling ways, the Friedmans argue that it is thanks to free enterprise that Americans enjoy the fruits of prosperity. They also point out the many policies that still prevent people from engaging in free commerce and thereby hold them back from meeting their full potential—such as regulations on wages and professional licensing requirements. But even with these regrettable limits, they argue, when we compare our outcomes to those of the more state-dominated societies of the past and even the present, the benefits of open exchange are clear.

The holiday season is a good time to appreciate the cornucopia of good things the market provides. From toys under the tree or next to a Menorah to the ability to affordably travel far distances to visit loved ones, people of all walks of life can easily find something about free markets to both celebrate and be grateful for at this time of year.

Friedman echoed this sentiment, writing that “the great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.”  

Let’s give thanks that we are free to choose to celebrate the holidays however we please, and hope that even more societies follow in the path that the Friedmans outlined.