Milton Friedman summary

How did a small-town boy from New Jersey rise to become one of the most influential economists of the twentieth century?

Among his classmates in Rahway during the late 1920s, Milton Friedman stood out as exceptionally gifted across a range of subjects. But it was economics that would ultimately captivate his intellect and propel his rise.

Friedman was born to Jenő Saul Friedman and Sára Ethel, two working-class Jewish immigrants from Hungary. The couple had established a successful family-owned dry goods store in Rahway. They quickly integrated into the close-knit Jewish community there while creating a nurturing environment for Milton and his three older sisters.

But tragedy struck when Friedman’s father suddenly passed away during the boy’s senior year of high school. Friedman’s grief was profound, but it didn’t derail his ambition. He enrolled at Rutgers College and set his sights on becoming an actuary. 

In his sophomore year, Friedman took an introductory economics course. Two of Friedman's professors, Arthur Burns and Homer Jones, helped draw him into economics and swayed him toward the University of Chicago for graduate studies.

Friedman’s camaraderie with Burns and Jones played out in the darkening context of the Great Depression. In 1932, the University of Chicago economics department was a hotbed of intellectual ferment stirred by the Depression. As America confronted bread lines and mass unemployment, pressing economic questions took on new urgency. 

Milton Friedman arrived in Chicago that fall with unformed ideas and wavering plans. His classmate Rose Director had a deeper connection to the department thanks to her brother Aaron, who was already on the faculty. But Rose, too, was unsure whether to continue her studies or seek employment. 

Friedman’s professors, including the intimidating Jacob Viner and the biting Frank Knight, were engaged in urgent debates over the causes and cures for the deepening economic crisis. The department placed great emphasis on “price theory,” the elegant mathematical analysis of supply, demand, and market equilibrium pioneered by earlier neoclassical economists. 

Against this backdrop, Friedman and Director excelled in their coursework. Becoming friends, they often studied late together – and feelings grew between the future couple. 

Armed with a one-year fellowship, Friedman soon headed off to pursue his doctoral studies at Columbia University. There, he’d begin formulating his own distinct ideas about the causes of and cures for economic depression.