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July 30, 2004

Freedom’s Friend

“Few people in human history have contributed more to the achievement of human freedom than Ronald Wilson Reagan.” By Milton Friedman.


I first met Ronald Reagan in 1967, shortly after he had become governor of California. We talked about his plans for higher education in the state. He clearly understood the economics of higher education—a system in California whereby the residents of Watts subsidized the college education of the children from Beverly Hills—and was determined to do something about it.

I first realized what a truly extraordinary person he was in early 1973 when I spent an unforgettable day with him barnstorming across California to promote his Proposition 1—an amendment to the state constitution that would set a limit to the amount the state could spend in any year. We flew in a small private plane from place to place and at each stop held a press conference. In between, Governor Reagan talked freely about his life and views. By the time we returned to our final press interview in Los Angeles, I was able to give an enthusiastic yes to a reporter’s question as to whether I would support Reagan for president. And, I may say, I have never been disappointed since.


Proposition 1 was narrowly defeated, but it started a movement that is still very much alive, as evidenced by the recent passage of a “Prop 1” look-alike in Colorado. Moreover, it was only one way of achieving one major component of his policy from the beginning of his career: holding down non-defense government spending as a way to limit the size of government. Defense spending was another thing. It financed a—or the—basic function of the federal government, and he used it for his great achievement of winning the Cold War by outspending the Soviet Union without having to outfight it on a bloody battlefield.

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President Reagan had extraordinary success in changing the course of non-defense spending (see figure 1). The trend before Reagan is one of galloping socialism. Had it continued, federal non-defense spending would be more than half again what it is now. Reagan brought the gallop to a literal standstill. He did so in three ways:

• First, by slashing tax rates and so cutting Congress’s allowance.

• Second, by being willing to take a severe recession to end inflation. In my opinion, no other post-war president would have been willing to back the Volcker Fed in its tough stance in 1981–82. I can testify from personal knowledge that Reagan knew what he was doing. He understood that there was no way of ending inflation without monetary restraint and a temporary recession. As in every area, he stuck to his principles and looked at the long term.

• Third, and in some ways the least recognized, by attacking government regulations. Figure 2 tells as remarkable a story as Figure 1. It plots the number of pages added to the Federal Register each year. The Federal Register records the thousands of detailed rules and regulations that federal agencies churn out in the course of a year. They are not laws and yet they have the effect of laws and like laws impose costs and restrain activities. Here too, the period before President Reagan was one of galloping socialism. The Reagan years were ones of retreating socialism, and the post-Reagan years, of creeping socialism.

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To Reagan, of course, holding down government spending was a means to an end, not an end in itself. That end was freedom, human freedom, the right of every individual to pursue his own objectives and values so long as he does not interfere with the corresponding right of others. That was his end in every phase of his remarkable career.

We still have a long way to go to achieve the optimum degree of freedom. But few people in human history have contributed more to the achievement of human freedom than Ronald Wilson Reagan.


Click here to see the Hoover project showcasing the works of Milton and Rose Friedman.

Milton Friedman, recipient of the 1976 Nobel Memorial Prize for economic science, was a senior research fellow at the Hoover Institution from 1977 to 2006. He passed away on Nov. 16, 2006. He was also the Paul Snowden Russell Distinguished Service Professor Emeritus of Economics at the University of Chicago, where he taught from 1946 to 1976, and a member of the research staff of the National Bureau of Economic Research from 1937 to 1981.


This essay appeared in the Wall Street Journal on June 11, 2004.