Economist Touted Laissez-Faire Policy

His landmark 1962 work, "Capitalism and Freedom," listed common governmental activities in the United States and other Western societies that he considered unjustifiable under his economic principles. These included price supports for agriculture; restrictions on international trade; rent controls; legal minimum wage rates; detailed regulation of industries such as banking or transportation; control of radio and television by the Federal Communications Commission; Social Security (which he called a Ponzi scheme); licensing restrictions on any enterprise, occupation or profession; public housing programs; the military draft; the legal prohibition against carrying mail for profit; and publicly owned and operated toll roads.

"This list is far from comprehensive," Friedman added.

He was a hero to libertarians for advocating the legalization of drugs and prostitution and for promoting the idea of school choice. He also served on a presidential commission that urged Nixon in 1970 to end the military draft.

"No public-policy activity that I have ever engaged in has given me as much satisfaction," he wrote in "Two Lucky People," the 1998 memoir he wrote with his wife. The most dramatic moment, he wrote, was when Gen. William Westmoreland testified that he did not want to command an army of mercenaries. "I stopped him and said, 'General, would you rather command an army of slaves. . . . If they are mercenaries, then I, sir, am a mercenary professor, and you, sir, are a mercenary general, and we are served by mercenary physicians, we use a mercenary lawyer and we get our meat from a mercenary butcher.' "

Milton Friedman was born in Brooklyn, N.Y., on July 31, 1912, the son of Jewish Austro-Hungarian immigrants. He grew up in nearby Rahway, N.J., where his parents ran a garment shop, a dry goods store and an ice cream parlor.

Friedman enrolled in Rutgers University and worked as a waiter, department store clerk and tutor. He started small businesses selling clothes and secondhand books.

After graduating in 1932, he moved to the University of Chicago, where he earned a master's degree in economics in 1933. That's also where he met and later married Rose Director Friedman, his wife of 68 years, who is also an economist and with whom he wrote many books. They had two children, who survive him.

Later, Friedman became a federal employee with the National Resources Committee, a New Deal agency of the kind that he would later criticize so fervently. Part of his work there and at other agencies involved designing the federal withholding tax system.

He received a doctoral degree in economics from Columbia University in 1946 and joined the University of Chicago, where he became known as the leader of the Chicago School of free-market economists. As a believer in the principles espoused by 18th-century economist Adam Smith, Friedman argued vigorously that economic freedom was necessary for political freedom.

Upon retiring in 1977, he became a senior research fellow at Stanford University's Hoover Institution.

The idea of the world's foremost laissez-faire economist living in one of the nation's most liberal cities struck many as unlikely. Asked why he chose San Francisco, he responded with his trademark wit, "Not much competition here."