The following is an excerpt from Jennifer Burns’ new book, “Milton Friedman, The Last Conservative,” out November 14.

Unexpectedly, it was another joint production that would provide the rocket fuel for Friedman’s public reputation and career. After more than a decade of research, he and Schwartz were ready to publish their monumental study of money. Clocking in at 860 pages, bedecked with footnotes, tables, and several graphs so large they folded out of the text like a children’s pop-up book, A Monetary History of the United States, 1867–1960, was an unlikely launching pad for fame and fortune. But appearing as Goldwater began his presidential campaign, it became just that.

From an insider’s perspective, the book was old news. “The presentation supports what we know to be his general position,” concluded The Journal of American History, while a reviewer in The Journal of Finance wrote that “it adds little fuel to the long-lived controversy over the exact role of money…it is not likely to change anyone’s mind.” It was true that Friedman’s views on money were well known within the economics profession, thanks to the money and banking workshop and Studies in the Quantity Theory of Money. In follow-up writings like A Program for Monetary Stability he had continued to refine his emerging paradigm.

But this work paled in comparison to the force and impact of A Monetary History of the United States. What had begun as a favor to Arthur Burns had become a book that would turn the conventional wisdom of academic economists, policymakers, and politicians alike upside down. The American Historical Review put it simply: “This is one of the most important books of our time.” Friedman and Schwartz presented voluminous data on nearly a century of U.S. history; but beyond piling up facts, they also advanced a theory of how money worked in the economy.

How did money affect business cycles? Friedman and Schwartz had an answer they considered definitive: money mattered. It was the hidden force behind the ups and downs, the breadlines and the bubbles. Friedman knew the book would make an impact. He knew it was the best work he had ever done, or would ever do. He knew that for all his deviationist politics, for all the force of Keynesian assumption, for all the habitual scorn heaped upon the quantity theory of money, their book would have to be answered. It would compel conversation.

The book’s centerpiece was its stunning analysis of the Great Depression. Friedman and Schwartz’s data showed a precipitous 33 percent decline in the quantity of money during what they called “the great contraction.” They convincingly argued that this lack of money transformed an unremarkable dip in the business cycle into a crisis of global proportions. Here was a provocative new explanation for a disaster that continued to cast its shadow across the century. But threaded through the economic argument was another thesis. In 1914, the United States had created a central bank system designed expressly to stabilize the economy. As the lender of last resort, the Federal Reserve Board could have opened the spigots and flooded the economy with cash. Why did it fail to do so?

The answer lay not in economic theory but in personality. A Monetary History of the United States dwelled with the intensity of a psychologist upon the differences between the New York bankers George L. Harrison and Benjamin Strong Jr., men depicted as holding the power to redirect history itself. The absent hero was Strong, who died just before the crash. Examining Strong’s earlier career, Friedman and Schwartz argued that he would have reacted to the liquidity crisis with “strenuous and appropriate measures to head it off.” Beyond financial acumen, Strong had “the personal force to make his own views prevail, and also the courage to act upon them.” By contrast, his successor, Harrison, was a cautious bureaucrat who “placed great value on conciliating opposing points of view and achieving harmony.” Unwilling to dominate others or push his views, Harrison acquiesced to a policy of masterly inactivity. The Fed stood by as money drained from the banking system and the economy collapsed. What appeared to be a failure of markets was in fact a failure of men.

Presented as Greek drama with a tragic hero and epic catastrophe, A Monetary History of the United States had broad appeal to political pundits and the chattering class. Here was history as decisionmakers and their courtiers imagined it to be: brimming with critical moments, tough calls, and choices that could resound into millions of lives. “A masterful work   which deserves to be read and reread,” summarized The Washington Post in a laudatory review.

Schwartz deserved much of the credit for the book’s success, particularly its reverberation beyond academic economics. Left to his own devices, Friedman would have created a compendium of charts and graphs. It was Schwartz who dove into Confederate money, anchoring the narrative in the Civil War era. And it was Schwartz who dug into the archives and pulled out the compelling human stories that brought the book to life.

Yet still she got no respect. As their book neared publication, the campaign to keep her from becoming Dr. Schwartz reached absurd heights. The newest wrinkle, she reported, was that because her “dissertation” was now in bound galleys, she could not incorporate feedback from her committee members, and therefore could not qualify for a degree. It was ludicrous enough to break through Friedman’s naivete. Finally, he grasped that she was up against something more insidious than academic bureaucracy.

Friedman had reached the mountaintop. To his credit, he wanted Schwartz there, too. He roared as much in a phone call to the chair of Columbia’s economics department, which was trying to hire him away from Chicago. A sharp letter followed. “The one thing I am clear about is that by any standards whatsoever she has demonstrated her qualifications for the PhD degree, that her getting a degree at this stage has no great advantage for her and will honor Columbia more than it will help her,” Friedman wrote. Schwartz finally had what apparently every woman in economics needed: a powerful male patron. Within a year, she had her doctorate, too. Now Columbia as well as Chicago could claim some connection to a book that would resound into economic thinking and global monetary policy.

A Monetary History of the United States would not convert all its readers to the quantity theory, but it would permanently alter thinking about the Great Depression. The terrible years of the 1930s—still a living memory to many policymakers—now appeared not as a natural disaster but as preventable human error. Even economists who resisted Friedman’s larger policy analyses, such as James Tobin, largely accepted Friedman and Schwartz’s account of the Great Depression. In turn, this led to a reassessment of money’s role in the economy overall. Paul Samuelson began to hedge, noting he now believed “contrary to some of my own earlier views…monetary and credit policies have great potency to stimulate, stabilize, or depress a modern economy.” As Business Week summarized, it was “difficult to find one intellectually prepared to destroy Friedman’s arguments.” A book twelve years in the making could not be easily rebutted.

A Monetary History of the United States forever changed the status of monetary policy, stripping away the bureaucratic anonymity the Fed had enjoyed. Friedman and Schwartz painted a vivid portrait of an error-prone agency tasked with overseeing monetary forces powerful enough to cause enormous social and political upheaval. The Washington Post made the book’s relevance clear: “It is unsparing in its criticism of both the men and ideas that have been identified with the monetary establishment…Officials of the Federal Reserve System will hardly welcome this stout volume.” Friedman had long banged away at the Fed in articles, speeches, and expert testimony. After the publication of A Monetary History of the United States, he could no longer be dismissed as a crank ideologue. For the moment, the Fed was speechless. “You don’t fire at the king unless you are sure you can kill him,” one insider remarked.

The book captured the attention of Goldwater, who was emerging as a serious contender for the GOP presidential nomination. “I have just finished the advance manuscript of your coming book and I want you to know that I think it is superb,” he raved in a personal letter. He particularly appreciated the book’s academic pedigree yet accessible format. “Professors sometimes have the habit of writing only for other professors,” Goldwater noted, “but your book is written in a way that the man on the street will understand and get your message.” Grasping the importance of the book to the conservative cause, he promised to plug it in his syndicated column.

Why was Goldwater so taken with A Monetary History of the United States? As Business Week explained, focusing on money undermined the Keynesian case for spending. “If Friedman is right in thinking that the U.S. can avoid serious recessions through monetary policy alone,” the magazine noted, “the strongest and most appealing argument for giving government a big role tumbles to the ground.” Indeed, this was exactly how Friedman himself saw the book. More than an economic theory, it was a vindication of capitalism itself. A Monetary History of the United States was “a documented refutation of the view that the deficiencies of free enterprise are responsible for economic instability,” he chastised The Wall Street Journal after it published a tepid review. Friedman was livid that the Journal, of all places, had missed his achievement.

Excerpted from “MILTON FRIEDMAN: The Last Conservative” by Jennifer Burns. Published by Farrar, Straus and Giroux. Copyright © 2023 by Jennifer Burns. All rights reserved.

Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.

For more on Milton Friedman, read ProMarket’s collection of essays, “Milton Friedman: 50 Years Later.”