Milton Friedman’s influence on the economics profession has been enormous. In part, his
success was due to political forces that have made neoliberalism the dominant global
ideology, but Friedman also rode those forces and contributed to them. Friedman’s
professional triumph is testament to the weak intellectual foundations of the economics
profession which accepted ideas that are conceptually and empirically flawed. His
success has taken economics back in a pre-Keynesian direction and squeezed
Keynesianism out of the academy. Friedman’s thinking also frames so-called new
Keynesian economics which is simply new classical macroeconomics with the addition
of imperfect competition and nominal rigidities. By enabling the claim that
macroeconomics is fully characterized by a divide between new Keynesian and new
classical macroeconomics, new Keynesianism closes the pincer that excludes old
Keynesianism. As long as that pincer holds, economics will remain under Friedman’s
shadow.