Honoring Economist Milton Friedman

Friedman and his wife, Rose, also a renowned economist, explained that inflation was not caused by full employment and wage demands pushing prices higher. Instead, they demonstrated that inflation was a monetary problem.

It increased when the Federal Reserve, the nation's central bank, created too much money or credit. The past two decades have shown that you can have strong economic growth, the lowest unemployment rate in history, a bull market in stocks -- and low inflation, if the Fed keeps a stern watch on the appropriate level of money supply.

Leo Melamed, chairman emeritus of the Chicago Mercantile Exchange, recalls the importance of Friedman's endorsement of a financial futures market. Says Melamed about his late good friend: "His greatest contribution worldwide was to prove that you cannot run an economy in a command form, that a government can't dictate pricing ... he convinced a generation of policymakers and average citizens that market forces of supply and demand can be the only determinant of fair market value so that an economy can function and succeed."

Friedman didn't just concentrate on financial markets to demonstrate the importance of choice. His belief that government intervention created waste and poor performance led him to support school choice. He pointed out that the worst schools were in poor neighborhoods, where parents could not afford alternatives. And he was early in decrying the welfare system -- later changed under President Clinton -- that kept generations trapped in dependence on the government.