Free to Choose by Dr. Milton Friedman and Rose Friedman

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	• Free to Choose: A Personal Statement Milton Friedman, Rose Friedman Harvest Books, 1990 - 360 pages average customer review:based on 78 reviews view larger image
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highly recommended

Changed my outlook

I was a Democrat before I read this book. I now lean Libertarian. This book cannot but change at least some of your views on public policy.
Having said that, Friedman and the Libertarian party overestimate the wisdom and knowledge of the public. There is no shortage of stupid people out there who need the state to tell them what they can or cannot do. Freedom is great but is subordinate to personal well-being.

Economic Common Sense

With "Free to Choose", Milton Friedman has achieved an easy to understand and common sense guide to understanding economics. Mr. Friedman answers questions such as: What is price and how does price convey information in a free vs. socialist market? What are the implications of legislation artificially controlling price? What drives commodity prices such as oil? How do economic and political freedoms coincide? What alternatives are there to a better public education? What should be the role of government in a free society? Mr. Friedman provides lucid answers and alternatives to issues that are commonly attacked by an appeal to the emotions of the masses. To really understand the concepts, this book must be studied. Taking time to understand Mr. Friedman's concepts can help clear many misconceptions and confusion about the economy as well as our day-to-day lives. The knowledge gained from this book is invaluable and may forever change the way you think.

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Free to Choose by Dr. Milton Friedman and Rose Friedman

The authors, Dr. Freidman and wife Rose, marvelled that the free market price system marries buyers and sellers without central
direction. This is done by transmitting only the important information consumers must know without the burden of government interference or excessive record-keeping. In the USA, the major
productive resource is personal productive capacity which is
human capacity. This human capital takes the form of compensation to employees in the form of wages, salaries and supplements.

The authors believe that common ownership will not provide the requisite incentives to maintain and improve property on an ongoing basis. For this reason,many structures in the old Soviet Union require extensive repair within a year or so of being built.

The book points to Hong Kong as the modern exemplar of the free market devoid of excessive government control. Accordingly, free trade (by the authors) should be offered everywhere. The book discusses the advent of growing underemployment and unemployment in the welfare states. In education, the authors prefer a voucher system to preserve freedom of choice in the inner city schools. The current mayor of NYC is attempting to provide free choice by opening a series of competitive "small schools" with admission by formal examination or prior scholastic excellence.

At the Agency level, the authors have called for deregulation to
simplify business operations and recordkeeping. The remaining
question involves the mechanism for doing this without losing
total control. Too much free market has created some problems
with Enron and other corporate entities. Clearly, exclusive
self-monitoring does not operate to make every corporation
do the right thing by the stockholders and the general public.
The current challenge is how to have less Agency oversight
without endangering the public's need for consumer protection
on an ongoing basis. In addition, some readers seem to be
looking for a perfect economic system or philosophy. In
implementation, such a business utopia does not exist. There
will be imperfections in every system due to the nature of
human beings and behavior.

The work draws heavily upon Adam Smith's Wealth of Nations
which combined the best of political freedoms with the individual
right to pursue the extensive collaboration necessary to exchange
food, clothing, services and housing voluntarily. Even in the
old Soviet Union-Gosplan , voluntary cooperation was needed to resolve intractable central planning problems and rigidities, according to the authors.

In the People's Republic of China, the neighborhood work leagues have slowly absorbed some of the free-market organizational superstructures. When H. Ross Perot visited China,
he noted brand new factories and facilities on a 30-mile
industrial highway . The challenge for the People's Republic is
to incorporate the western management organizational designs and
theories without losing the rigid governmental superstructure.
These two goals are at considerable odds. Ultimately, Chinese
consumers will come to demand greater freedoms, as more information becomes available from the World-Wide-Web and
cultural exchanges with Western universities, global professional
organizations, customers and consulting think-tanks.

Overall, the work is a classic. The contents are tempered by
the consumer's need for protection against corporate greed
and the stockholders' interest in enforcing accountability
from management and the Board of Directors. In addition,
consumers need the environmental protection against the
excesses of industrial pollution. The authors provide a service
in calling for the abolition of unnecessary regulations which
interfere with the operational throughput of business transactions. No-one is saying that all regulation should be
abolished.

Some reviewers have criticized Dr. Friedman's call for a freer
market in the implementation of business systems. These criticisms should be placed in a practical context. The author
is not calling for a total abolition of the quasi-governmental
structures of the Federal Reserve and other governmental agencies. He is calling for a more meaningful regulation.
Clearly, the reviewers' criticisms must be counterbalanced
against the excesses of Goshplan and the large unemployment or
underemployment in some socialist systems.

On the other hand, capitalism needs rigorous oversight by the private and public sector to forestall the conditions which brought about the Great Depression, sweat shops, child labor exploitation and fiduciary malfeasance in the investment community. The private sector cannot monitor itself exclusively due to client opinion-shopping and the non-cooperation of some managements with internal auditing. There is still a need for an independent Board of Directors with a powerful and independent audit oversight function. The existence of government agencies will complement this effort by the private sector. Recently,
the Securities Exchange Commission has strengthened controls
in favor of protecting investors.

The Quasi-Reorganization in Bankruptcy provides an independent
mechanism for a company to start over . In this situation,
the retained earnings is dated- usually for a period of a decade.
In addition, there is a fair financial disclosure of the
events which precipitated the bankrupt condition. During the
period of a re-start, the company can examine both profitable
and unprofitable operations. This dispassionate self-analysis
should lead to the company emphasizing strength areas and
shedding the less profitable ventures.

The volume should be read by a wide constituency of business
people and academic researchers-everywhere. Clearly, Dr.Friedman
has produced a considerable scholarship even after winning the
Nobel Prize in Economics. A strength of the presentation is that
it is understandable to the average American consumer. The overall gist of the book is that the free market is color-blind
in the conduct of economic transactions across the USA and the
world. Since the free market is color-blind, it is a good
forum for conducting business transactions.

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A Classic Work

Milton Friedman clearly defines his ideology in this classic work. He provides plenty of evidence of the problems he's trying to correct. Any good book of this nature takes the time to do more than criticize the competition though. Milton lays out proposed solutions every step of the way along with detailed support for why they will work. Probably the most impressive aspect is the amount of compromise found within his proposals. He may write at length about abolishing mandatory schooling and public schools in general but his solution (voucher programs) allows for public funding and could be used within a mandatory schooling environment (for one example).

As with any ideological book, you'll find plenty of 1-star reviews from people who disagree. It's a shame there's no way to rank down the conclusions while providing the due credit that this Nobel-prize winning economist deserves. Love or hate the ideas, they're well presented.

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Thank You Milton

The absolute best thing about this economics book is that it is easy to read. If you ever wanted to know the conservative (or classic liberal) point of view on the topics of the day (social security, welfare, minimum wage, etc.), but did not feel like trudging through "The Wealth of Nations", this is the book for you. Whether you agree or disagree with the arguments, they are proposed in easily accessible language.

I think that the most important chapter is the one which gave the history of bank runs and the creation of the Federal Reserve. I knew about what the Fed did/did not do up until the crash, but did not know about all of the prior bank runs. If you do not know this history, learn about it here or from other sources because it will change the way you view the Fed and their ability to manipulate the economy.

This book is dated so be forewarned. However, the overall approach of synthesizing policy, thesis and antithesis is a fantastic. For those without any background in this area, it will be an "Atlas Shrugged" kind of reading.

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reviews: 1, 2, 3, 4, 5, page 6, 7, 8, 9, 10, 11, 12, 13, 14, 15

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