Universidad del Valle.

Universidad
del Valle

Lectura de textos Académicos III ENGLISH III Session 5 Business management

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We have government of the people, by the bureaucracy, for the bureaucracy.

Milton Friedman was born in New York City, the fourth child and only son of working-class Jewish immigrants from a
Hungarian community in what is now Ukraine. When he was a year old, the family moved to Rahway, New Jersey,
where Friedman’s parents kept a dry-goods store. Although their financial position was precarious, and no member of the
family had been to university before, it was decided early that Milton would attend college. He read voraciously, enjoyed
school and showed a particular talent for mathematics. He earned a degree in mathematics from Rutgers University,
graduating in 1932 during the very depths of the Great Depression. Although scholarships covered his tuition costs, he
worked throughout his student years to meet his living expenses.

In 1937, Friedman joined the research staff of the National Bureau of Economic Research in New York City. With a steady
income finally assured, Milton Friedman and Rose Director were married in 1938. They have collaborated on many books
and projects over the years. Friedman’s studies of income from independent professional practice served as his doctoral
dissertation for Columbia University, but publication of his dissertation was delayed until after World War II. In
1940, Friedman accepted a job at the University of Wisconsin but was forced to resign within a year. Friedman had
fallen into conflict with other members of the faculty over America’s entry into World War II, which Friedman favored
and others opposed. During World War II, he worked in the Treasury Department, where he helped create the federal
withholding tax system. Prior to that time, Americans had paid their taxes in a single lump sum each year. During the last
years of the war, he suspended economic research and was employed as a mathematical statistician by a special projects
group at Columbia University, concentrating on problems of weapons design, military tactics and metallurgical
experiments.

After the war, Friedman’s dissertation was finally published, and he was awarded his Ph.D. from Columbia University. The
resulting book, Incomes from Independent Professional Practice, introduced the concepts of permanent and transitory
income. This study of professional income, integrated with his prior work on consumer budgets, served as the basis of his
landmark Theory of the Consumption Function. After one year at the University of Minnesota, Friedman accepted an
appointment at the University of Chicago, where he taught for the next 30 years, while simultaneously maintaining a staff
position with the Bureau of Economic Research.

At the bureau, Friedman conducted a long-term study of the role of money in the business cycle. At the university, he
established a “Workshop in Money and Banking,” which led a revival of interest in monetary studies in the United
States. Friedman made a name as one of the university’s exponents of neoclassical economics, opposed to the Keynesian
economics then in favor at most universities in Europe and America. Within the larger grouping of the Chicago School,
Friedman and like-minded colleagues are regarded as monetarists. They see money supply as the major determinant in the
business cycle and inflation, and regard it as the most effective instrument of government economic policy. Rather than the
fine-tuning of Keynesian fiscal policy, Friedman recommended that central banks such as the Federal Reserve adopt a
general rule of controlling the money supply to suppress inflation and allow prices to find their natural level. Friedman long
argued that most other forms of government intervention in the economy are not only counterproductive in economic terms,
but are fundamentally contrary to the values of a free society.

The success of his works with the general public brought him into a more prominent role in public policy debate. Friedman
served as an informal economic advisor to the 1964 presidential campaign of Senator Barry Goldwater. Goldwater was
defeated, but Friedman’s ideas were reaching a wider audience. From 1966 to 1983, he wrote a regular column for
Newsweek magazine.

Friedman advised the successful presidential campaign of Richard Nixon in 1968. During the Nixon presidency, Friedman
served on a committee to study the feasibility of returning to an all-volunteer armed force for the first time since before
World War II; the recommendations of this committee led to the abolition of the military draft in 1973. Despite his
interest in public policy, Friedman consistently refused appointments to full-time government
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positions, preferring to concentrate on his scientific work and to promote his public policy beliefs outside of government.

In 1975, Friedman made a controversial visit to Chile during the military dictatorship of General Augusto
Pinochet to give a series of lectures on economics. Other University of Chicago professors and graduates later served as
advisors to the Chilean government. Although Friedman never advised the regime directly, he believed the adoption of
free-market policies helped prepare the country for its eventual return to democratic rule. Friedman gave similar lectures
in South Africa and Rhodesia (now Zimbabwe) in the 1970s. He was later to travel as far as China to speak on his free-
market ideas.

Friedman’s earlier scientific work now received international recognition. He was awarded the 1976 Nobel Prize in
Economics “for his achievements in the fields of consumption analysis, monetary history and theory and for his
demonstration of the complexity of stabilization policy.” That year, he retired from the University of Chicago, although he
retained the title of Paul Snowdon Russell Distinguished Service Professor Emeritus of Economics at the university. From
1977 until his death he was a senior research fellow at the Hoover Institution on War, Revolution and Peace at Stanford
University.

In 1980, Milton Friedman’s ideas were featured in a ten-part public television series, Free to Choose. Friedman and his
wife, Rose, published a popular companion volume to the series; it became the bestselling nonfiction book of the year.
That same year, Friedman advised presidential candidate Ronald Reagan, whose views closely reflected Friedman’s
laissez-faire philosophy. In the first year of the Reagan administration, Friedman served as a member of the President’s
Economic Policy Advisory Board.

The 1980s were a watershed decade for the acceptance of Friedman’s ideas. His views of monetary policy, taxation,
privatization and deregulation informed the policy of governments around the globe, especially the administrations of
Ronald Reagan in the United States and Margaret Thatcher in the United Kingdom. His ideas were studied throughout the
world, and played a major role in the transformation of China’s economy. At the same time, his libertarian views on social
issues such as the decriminalization of drugs sometimes put him at odds with conservative admirers of his economic
thinking. Many of his magazine essays decrying activist government were collected in the 1983 book Bright Promises,
Dismal Performance.

A second television series and accompanying book by the Friedmans, Tyranny of the Status Quo, appeared in 1984. In
1988, Friedman was awarded the National Medal of Science and the Presidential Medal of Freedom. In that year of honors,
Milton and Rose Friedman published a joint memoir of their life together, Two Lucky People. In later years, the Friedmans
made their home in San Francisco, where Milton Friedman died in 2006, at age 94.
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Universidad del Valle.

Universidad
del Valle Lectura de textos Académicos III ENGLISH III
NAME: CODE:

VOCABULARY
Word Part of speech Meaning in Spanish
WORDS IN THE CONTEXT (4 POINTS)
1. Living (line 8 ) N V ADJ ADV OTHER
2. withholding (line 18) N V ADJ ADV OTHER

3. Resulting (line 24) N V ADJ ADV OTHER

4. Grouping (line 35 ) N V ADJ ADV OTHER

5. Returning (line 50) N V ADJ ADV OTHER

6. Fine tuning (line 38) N V ADJ ADV OTHER

7. Decrying (line 83) N V ADJ ADV OTHER

A. COMPREHENSION QUESTIONS (20 points) .

Answer the following questions, based upon the text, by marking the best answer with an “x.”

1. What is the reading about?(2 points) NOMINALIZE

2. What is the author’s intention? (2 points)

3. What do Friedman’s detractors complain about? (2 points) Nominalize.

4. Why was he forced to leave Wisconsin University? (2 points) English Nominalize

5. What did his PHD focus on? (2 points)

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6. What does monetarism consist of? Nominalize (2 points)

8. What does Friedman suggest to central banks? (2 points)

9. Why can we name Friedman as one of the most relevant exponents of neoliberalism? (2 points)

10. What can be inferred from Friedman’s visit to Chile and China?

11.What were Friedman’s main contributions? (2 points)

12. What does the author conclude? (2 points)

Language Study
Nominalize the timelines presented on the text. (10 points)

Year or date Fact or event

1912

1932
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1937

1938

1964

1966-1983

1968

1973

1976

1978

1980’s

1983

1988

REFERENCES & COHESION ELEMENTS (5 points)

What do they refer to?
a. their (line 3):
b. Which (line16) :
c. This study (line 25) :
d. They (line 37):
e. It (line 39) :

CONNECTORS. (6 points) Connect the following ideas. NOMINALIZE

Connector: although(line 7) Type:

Idea 1:

Idea 2:

Connector: while (line 28). Type:

Cause:

Effect:
Connector: (despite 52) type:
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Idea 1:

Idea 2: