Merton Miller and modern finance

In this keynote address to the 2000 Financial Management Association Intern ational Annual Meeting, I consider Merton Miller contributions to the field of finance. I argue that his most important contribution is to have made a rbitrage arguments the cornerstone of modern finance. The arbitrage proof o f Proposition I introduced a new standard in finance, namely that any resul t the finance profession takes seriously must have the critical property th at it cannot be undermined by clever arbitrageurs. I show how arbitrage is a constant theme in Merton Miller career from his work in corporate finance to his analyses of financial innovation, financial crashes, and crises.