Although the quantum change in economic debates towards neoclassical, anti- Keynesian assumptions was not solely his achievement — Friedrich Hayek and Robert Lucas were also among a group who influenced the shift over several decades — it was Friedman who by 1980 supplanted Keynes as the world’s most influential economist.

He became better known than his peers less because of his academic contribution (which was certainly substantial) than from his promotion by right-wing political lobbyists as a credible pundit to validate their cause. With postwar Keynesianism (recommending expansionary policy to maintain full employment) discredited by economic crisis, a neo-classical alternative (warning that governments could do little to boost economic fortune) had become easier to advance.

But it needed a non-political, intellectual champion. This role Friedman amply filled. The chance to challenge Keynesianism had been evident from the mid-1960s, when simultaneously rising inflation and unemployment were countering previously held assumptions that a trade-off existed between the two negative indicators. Friedman emphasised research also being undertaken by his fellow economist, Edmund Phelps, and claimed that the commonly held inflation/unemployment trade-off was in the long run false.

Instead of people being “fooled” by greater government spending or an expanded money supply into greater economic activity and thus the creation of jobs, Friedman argued that they would anticipate higher inflation and demand higher wage rates — and in so doing leave output and employment unchanged, with inflation higher. As chance had it, the early 1970s brought unusually strong labour union wage demands and a quadrupling of world oil prices, resulting in historically high inflation and unemployment — vindicating Friedman’s denial that a trade-off existed between the two variables.

With the efficacy of expansionary policies doubted, Friedman’s prescription comprised the monetarist understanding that price rises were a function of money growth in the economy. If governments announced limits on that growth they would reduce inflationary expectations and wage demands — and thus reduce inflation itself. Unemployment would remain at its Natural Rate — Friedman’s earlier hypothesis — and could only be reduced by supply side measures such as those improving productivity.

So ran the theory. It was, however, Friedman’s homespun, plain-speaking capacity as a marketable populist, not economic detail, that brought him international fame. As the 1970s progressed new movements on the political Right began to finance his lecture tours and provided audiences for his opinions — a way for them to combat the Keynesianism espoused by established luminaries such as the elegantly patrician J. K. Galbraith.

Further popularisation came in a significant TV series, Free to Choose (1980). Accessible and irrepressible, with a verbal skill that resonated with Main Street America, Friedman provided great comfort to Galbraith’s many bitter enemies within the American Right, now beginning a final push to restore power to ideological conservative hands. Friedman’s justification of the case for private, not public, affluence played a significant influence on political debates — and certainly aided Ronald Reagan’s accession to the presidency in 1980.

But one political alignment had already involved him in virulent controversy. In 1973 the freshly installed Pinochet military regime in Chile sought his advice on reducing hyper- inflation, running at more than 350 per cent. Friedman recommended a shock treatment of budget cuts and monetary contraction — which he claimed improved the economy. But they were accompanied by massive increases in unemployment and bankruptcies, and a painful drop in food supplies.

His leftwing critics seized on Chile — “the laboratory of Friedmanism” — as proof of the impracticality and cruelty of his ideas. The bitterness erupted into violence in 1976, when demonstrations marred the ceremony marking his winning the Nobel Prize. But, as George Soros recalled, the decisive twin events which gave Friedman’s career such historical significance were the elections of Margaret Thatcher and Ronald Reagan to government in 1979 and 1980. As Soros put it, the “market fundamentalism” unleashed in UK and US economic policy- making now put Friedman’s reputation to the most awkwardly visible of tests.

But it also initiated his decline. Enacted beyond his control, the flawed attempts to target monetary aggregates in leading economies soon ended in failure. In Britain the chosen main money aggregate, M3, overshot almost immediately, boosted by companies and households easily sidestepping moves to prevent them borrowing. The US Federal Reserve had already long attempted to target its primary aggregate, M1, without success. In 1979 the US authorities toughened measures to limit the money in circulation. Unemployment soared in both countries. Critics slammed the “motorway madness” of policymakers’ eerily over-credulous implementation of untried economic theories.

Pragmatism soon prevailed. The decline of monetarism was highlighted first by the Bank of England’s Charles Goodhart coining a much-cited new economic law, namely that the moment an economic indicator — say a monetary aggregate — was cited for targeting, the public would adjust its behaviour, making the stated target useless as a policy tool.

Next, Friedman himself — previously a well-noted visiting adviser at Downing Street — dramatically distanced himself from Thatcher’s economic record.

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