Friedman not only had powerful ideas, he possessed an unerring ability to communicate them, both to economic scholars and the public at large. As a result, he became an icon for believers in economic freedom, including a generation of economists at the Dallas Fed.

Like many others, Dallas Fed President Richard Fisher considers Friedman “a giant in the history of economic thought” whose “contributions to monetary theory fundamentally changed the way central banks contemplate monetary policy."

“He was a champion of economic freedom and used his remarkable ability to communicate to further the principles that made America the exemplar of capitalism and progress,” Fisher said. “We consider him the patron saint of the Dallas Fed.”

Fifty years ago, when Friedman set out to change how the world thinks about economics, the theories of John Maynard Keynes were the accepted norm.

The Keynesian orthodoxy that Friedman challenged held that: (a) fiscal policy was a more useful countercyclical tool than monetary policy; (b) policymakers could easily fine-tune economies to smooth business-cycle ups and downs; and (c) there was a long-run trade-off between inflation and unemployment that could be exploited to lower unemployment. Through the power of his ideas, Friedman eventually won on all three counts.

Not that it was easy. In remarks at the 2003 Dallas Fed conference, Friedman himself noted the difficulty of convincing the world of free enterprise’s superiority over state-dominated economic systems.

"I think historically, over long periods of time, there's a long lag between changes in opinion and changes in fact...I think the election of Reagan, the election of Margaret Thatcher, was really evidence of a turning point in the tide of opinion. And by now," Friedman said, "everybody in the world is in favor of free markets; everybody knows that capitalism works, and communism and collectivism doesn't... Socialism is dead, but Leviathan is not. But I think that's a sign of the lag of opinion. It takes 20, 30, 40 years before the opinion really gets to affect practice.”

At the Dallas Fed conference, Friedman's impact on economic thought was recognized by Ben Bernanke, now chairman of the Federal Reserve: “I am reminded of the student first exposed to Shakespeare who complained to his professor: ‘I don't see what's so great about him. He has hardly anything original at all. All he did was string together a bunch of well-known quotations.’ The same issue arises when one tries to assess Milton Friedman's contributions. His thinking has so permeated modern macroeconomics that the worst pitfall in reading him today is to fail to appreciate the originality and even revolutionary character of his ideas, in relation to the dominant views at the time that he formulated them.”

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