The case for capitalism by one of the brightest economists of modern times

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	• Capitalism and Freedom: Fortieth Anniversary Edition Milton Friedman University Of Chicago Press, 2002 - 230 pages average customer review:based on 121 reviews view larger image
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highly recommended

Freedom's Torch and a Libertarian master

"A government big enough to give you everything you want, is strong enough to take everything you have." Thomas Jefferson (1743-1826)

(There are many topics to comment on in this book. First, I will comment on one general idea and one relevant issue: The stimulus package.)

Friedman, like many of our country's founders, did not trust the collective ability of government to avoid building concentrated power for itself. It is in its nature to aggrandize power by limiting the liberty of those that it is meant to serve. "Economic power is joined to political power, concentration seems inevitable...if economic power is kept in separate hands from political power, it can serve as a check and a counter to political power." (Page16) It is in governments political will to strengthen its power by pandering to populist sentiment and convincing enough of the people to forgo their liberties for guarantees and safety nets. "Underlying most arguments against the free market is a lack of belief in freedom itself." (Page 15) Playing on the misconception that large collective power is great enough to surmount all obstacles economic and otherwise. Or that government can take on a paternalistic role, treating citizens like lost children needing a strong hand to guide. Big and unwieldy governments inevitably give way to crony capitalism as it attempts to choose and favor some industries over others; an imbalance is struck that distorts the market making it unfavorable for those who do not have the resources to exploit the discrepancies: "Monopoly...arises from government support or from collusive agreements among individuals...the problem is either to avoid governmental fostering of monopoly or to stimulate the effective enforcement of rules such as those embodied in our anti-trust laws." (Page 28)
Therefore, government should remain as rule maker and umpire. Its role should be limited to overseeing that all elements should have the same rules applied appropriately across the economy. No favorites. Government should stick to enforcing laws and not using it as political patronage. In the long run, those groups and industries that allow its intervention and coercive tendencies will be undermining their own economic well-being for a short period of favoritism or paternalism.

Although this book was written decades ago, it still highlights issues that are relevant to us today. Our congress passed a stimulus package in the amount of $168 billion dollars several weeks ago. Many of our citizens believe that this "stimulus package" will ease the financial duress due to the slowing economy. The politicians that pushed for this package either really believe in its benefits or are simply buying populist votes: "Each recession, however minor, sends a shudder through politically sensitive legislators and administrators with their ever present fear that perhaps it is the harbinger of another 1929-33. They hasten to enact federal spending programs of one kind or another." (Page 76) Friedman addresses the issue of government "priming the pump" or attempting to serve as a "balance wheel" to offset reduced private expenditure: Reduce unemployment and get the economy going again by temporarily increasing government expenditures. By resorting to such poor measures, Friedman offers us a glimpse of our own likely economic outcome. More public debt and less likelihood of reduced taxes with no real long term solutions.

Throughout this book, Friedman details his observations on just how efficient a free private enterprise exchange economy can be. The subjects touched upon are free-trade, the role of government in education, social welfare, fiscal policy and other still relevant topics.

Milton Friedman's economic philosophy of free-markets, free-trade, and capitalism naturally extends itself into a more piercing discourse of the philosophy of freedom. Of course, Friedman is an economist and he sees, feels, and analyzes freedom through the devices that the discipline provides him. Except for a few notable exceptions there have been very few economists in the 20th century (and into the 21st) that have been able to use these tools with such magnificent skill and insight as Milton Friedman.

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A Program For Change

I was just re-reading this book and find Friedman's arguments to be rigorous and logical. Friedman mercilessly questions the assumptions of the rigid ideologues of the left and of progressive-liberalism, and offers a program for change. When Friedman wrote this book in the 1960s, his ideas were ridiculed. Today, they are widely known and respected, but sadly still ignored by both major political parties. Were every prescription Friedman offers adopted, there would be much less income inequality; the country would be several times wealthier; there would be much more innovation; and the country have much greater economic stability. There would be far more job opportunities for the young, and far greater economic security for the old. It is truly a tragedy that Friedman's ideas have been read, misunderstood and largely ignored in favor of the rigidly ideological opinions of our reactionary progressive-liberals.

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Friedman is an advocate for freedom!!

This is not the most readable book that Friedman wrote (Read "Free to Choose") but it still highlights his passion for freedom.
In this book Friedman warns us of the dangers of corporations and industries aided by governments: the social ills and the displacement of workers that will always arise from too much concentrated central power. Friedman warns us of letting Capitalists operate in an environment without sufficient rule of law or in an environment where the state favors (with subsidies or mandates) one group over another: Friedman is very clear that government does have a role to play in a free economy:

"The existence of a free market does not of course eliminate the need for government. On the contrary, government is essential both as a forum for determining the `rules of the game' and as an umpire to interpret and enforce the rules decided on."

Friedman was not an anarchist. He understood that anti-trust law enforcement is a principle role of government. Otherwise, monopolies would sprout and lessen choices, diversity and freedom. This wonderful book is still relevant after all these years. Today, we still face many of the challenges that Friedman worked so hard to address in a clear and concise manner. If only we would heed his call.

Highly recommended

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The case for capitalism by one of the brightest economists of modern times

I picked up this book as a beginning of an attempt to self-educate myself on the topic of economics. Maybe it is not the best place to start for a novice, but I did thoroughly enjoy the book. Dr. Friedman makes a compelling case for capitalism, which has been under so much assault by academia, popular culture and the media. Friedman explains why capitalism works, as opposed to government intervention in the economy, in a compelling and concise book. At times, some of the concepts went over my head, but for the most part this was attainable for the beginner. I strongly recommend this book and intend to take a shot at more of Friedman's books.

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reviews: 1, page 2, 3, 4, 5, 6, 7, 8, 9, 10, 11

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