Friedman was too high the idea of freedom

Will that Milton Friedman Rarely economist will be generated as much controversy. And also long: American economist died Thursday at the age of quatre-vingt-quatorze last after having caused decades of intellectual battles around the world. He had certainly received the Nobel Prize in 1976. But, in France, he felt the sulphur. Friedman was too high the idea of freedom. It had undermined the Keynesian economics. He insisted on the currency, as to be nicknamed "the Pope of monetarism." He had advised Ronald Reagan and visited Pinochet's Chile. And yet, even in France, it has inspired reforms! Milton Friedman will remain in history as the most influential economist of the end of the 20th century, after the reign of the thinking of John Maynard Keynes.

To understand the importance of Friedman, he must first return to the front-Keynes. At this time where the economy was only a matter of balance. When one of these equilibria (labour, goods, capital...) adventure was broken, the market was supposed to restore, provided that the State does not have the bad idea to intervene. The great depression of the 1930s and John Maynard Keynes challenge this vision. Yes, there may be sustainable imbalances. Yes, the State can help reduce them operating budget or monetary lever to support consumption. This is the "Keynesian revolution". The developed world postwar imagine the economic and political progress hand in hand towards the happiness of humanity. In the United States, the Kennedy Presidency embodies this myth. In France, technocracy rising is fed to the Keynesian milk, which justifies its role. These beautiful dreams will be destroyed by Friedman and the sudden fall of growth accompanied by a surge of inflation from the first oil shock in 1973.

Born into a poor family of Hungarian immigrants in Brooklyn, Milton takes the social elevator of the University by first noted by statistician talents. In 1946, he became professor at the University of Chicago. In his "theory of the consumption function", which was published in 1957, he destroyed one of the pillars of the Keynesian temple. For the English Economist, State can revive consumption by increasing public spending. For the American, it is otherwise. Households decide not their level of purchase based on their current incomes, but their "permanent income", as they anticipate in the long term. Fiscal policy is therefore inoperative.

In the 1960s, the Professor of Chicago tackles a more important pillar. In his "general theory of money", Keynes argued that the interest rate determines the "liquidity preference". When the rent of money down, individuals want to reduce their savings, which reported them less. They are therefore more. Not at all, argues Friedman in his "monetary history of the United States" written with Anna Shwartz! Each individual still wants to hold the same amount of money. If the Central Bank makes more money, this monetary creation will supply not demand but inflation after a certain period of time (which is still the subject of relentless discussions). There is no more arbitration between inflation and unemployment. And if the Central Bank decides instead to reduce the quantity of money, it fuels the decline in prices, which can turn to deflation. This is what happened in the 1930s. The great depression is not the result of an imbalance of that State to overcoming market, but instead of a terrible error of judgment of the Central Bank! The quantitative theory of money is in Majesty.

The essence of the "counter-revolution" led by Milton Friedman is: the State is harmful. And enemy of freedom. It is the subject of "Capitalism and freedom" (1962) and "Free choice" (1980), that he wrote with his wife, Rose. In the first, he explains including: "the existence of a free market does obviously not eliminate the need for a Government." On the contrary, it is essential, and as a forum where the "rules of the game" are set, and as a referee who interprets and enforces these rules. The market, however, greatly reduces the scope of issues which must be given of policy responses, and therefore minimizes the extent to which it is necessary that public authorities are directly involved in the game. "Alone, this last sentence summarizes a quarter century of economic reform, the deregulation of air transport in the United States until the opening of the EDF capital!

Milton Friedman is the father of the independence of central banks: the money is too precious to be left in the hands of the Government. The monetary authorities reason with its concepts, such as the "natural rate of unemployment". Recently Recalling the importance of the currency, the President of the European Central Bank, Jean-Claude Trichet, was clearly part of the friedmanienne line.

Beyond the monetary theory, Friedman has launched full of concrete proposals to promote individual freedom. Some have had little success, as the deletion of the licence or the legalization of drugs. Others have more: the end of conscription, the negative taxation for low paid employees, which is in France of the premium for the employment created by Lionel Jospin, Prime Minister of the left and by Dominique de Villepin, one of his successors of right. Or the "voucher", this education cheque given to families so they can choose their children's school. One finds the trace in the individual right to training employees established in France two years ago.

"We are now all Keynesians", explained Milton Friedman more than twenty years ago. He wanted to say that we use all the macroeconomic concepts of Keynes: savings, demand, consumption. But he immediately stated: "In another sense, no one is Keynesian (...)." We no longer accept the initial conclusions of Keynes. "With the work of Friedman, is just the opposite. Its categories and methods remain very debated. But some of his conclusions are subject to a broad consensus on the importance of the currency or individual choices. We've all got something friedmanien.