If he were still alive today, what would Milton Friedman think of his disciple, Ben Bernanke? This is a matter of some concern to the Fed chairman, who is reported as saying to colleagues on Saturday: “I grasp the mantle of Milton Friedman…I think we are doing everything (he) would have us do.”

With libertarian economists tending to be among those most critical of QE2, Mr Bernanke is relying on Friedman’s halo effect to enhance the legitimacy of the Fed’s recent actions. Friedman’s friends say that his opinions were unpredictable, which is what made them interesting. But some some free market economists, like Allan Meltzer, claim that Friedman would have strongly disapproved of QE2. Are they right?

Mr Bernanke’s admiration for Milton Friedman goes a long way back. In this famous speech, made in honour of Friedman’s 90th birthday in 2002, Mr Bernanke described his hero in simple but glowing language:

“Among economic scholars, Friedman has no peer.”

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