Capitalism and Freedom

Nobel laureate Milton Friedman is quite possibly the most brilliant economist in the world today and a man on the cutting edge of libertarian (classical liberal) thought. And in "Capitalism and Freedom" he lays out a basic political philosophy in the classical liberal tradition in the first two chapters of the book and alternately defends and expands upon that premise for the remainder of the work. In much the same way that F. A. Hayek - an ideological predecessor - spelled out his basic thesis in one concise book and then fleshed it out in another, Friedman provides the basics here and fleshes them out in the larger (and somewhat better written) "Free to Choose". In addition, while not wishing to rehash some of the detailed support for his assertions, he does - through footnotes - provide the reader with opportunity to delve deeper. Given the nature of the subject matter and the expertise of the author, the writing can be dry and may appear difficult to approach, particularly in the initial chapters, but the reader who sticks with it will be well rewarded. Subsequent chapters, largely adapted from lectures by the author, are easier reads. And Friedman avoids, for the most part, the economic jargon that can make works such as this hopelessly confusing to the layman. Friedman is often tagged with the "monetarist" or "supply-side" labels (if you don't believe me, read some of the other reviews), largely because he believes that these methods of economic manipulation are infinitely preferable to the fiscal manipulation that has been the norm in this country. Those who actually READ this book will find that he advocates intervention by neither means, preferring instead stable monetary growth removed from the hands of either fiscal or monetary interventionists. He provides one of the most succinct explanations of the monetary actions (of the Fed) that created and worsened the Great Depression that I have ever come across, though mentioning only briefly the fiscal policies that subsequently lengthened it considerably: the New Deal and, to a much lesser extent, Smoot-Hawley. This alone makes the work valuable. He goes on to examine a number of things that are now taken for granted in this country (the Welfare State, Social Security, public education, licensing requirements) and asks the question, "Have these government actions made things better or worse?" The record is less than stellar (especially in the subsequent 40 years since this was written). And he proposes some alternatives such as the negative income tax and other alternative roles for government that are, arguably, less intrusive on the liberty of the citizenry. And he uses examples that are easy to follow and understand including one about men stranded on desert isles that is NOT as presented in another review. As an economist, I would say that this work has aged remarkably well. The analysis has clearly not become dated as have those of Galbraith and, to a certain extent Keynes. [Keynes WAS a genius, providing the mathematical and econometric bases for much of current economic thought, but, contrary to the assertion by another reviewer, much of what he proposed should be done by the state has been discredited.] Friedman, for example, was one of the first to advocate a school voucher system, which is only now receiving serious attention. It is noteworthy that a number of economists from the left have criticized Friedman in general and this work in particular. But those attacks (by Krugman, Herman and Diesing, among others) have proven to be, for the most part, without merit. If you accept the basic premise that freedom is vitally important and that the actions of the state should be viewed from that point of view, you will find this work to be invaluable. If not, you will certainly not be pleased. And if you believe the utter nonsense that capitalism is in any way "oppressive", well, if you can't see reality...

I loaned this book to someone so, of course, I had to buy it again. It's a fantastic book! I recommend this book to anyone interested in economics and/or Libertarian thought. Milton Friedman is a great teacher because he has a very natural way of laying things out. It doesn't read like a dry textbook at all.

Five decades on, Friedmans thoughts of the functioning of the economic and political life, are still mind-blowing. Written in a clear and powerful language, the points are well made after logical discussions of some important issues facing all societies. The main theme in the book is the close link between democracy and capitalism, or political freedom and economic freedom. Without the latter the former is very difficult. The Hollywood blacklist threatened the freedom of many film workers. However, the movie companies desires to make money gave them incentives to hire the blacklisted writers, producers and actors, and the workers got to work because of capitalism. Conversely, Winston Churchill never got to speak against Hitler on the government owned BBC between 1933 and the outbreak of WWII. Throughout the book, Friedmans belief in the individual and his abilities to take care of himself stands as a lighthouse. However, because man is imperfect, and cares mostly of himself and the closest ones, often disregarding others, power should be dispersed as much as possible. Those two propositions are the bedrock of the conservative ideology (Friedman calls it liberal, furious that the left has stolen the term), and of this book and its attacks on ICC (a regulating body turning into a lobby organization), Social Security (why is the government monopolizing saving), counter-cyclical economic policy (impossible), corporate social responsibility (not a corporate issue), the Medical Association (modern guild restricting the education of doctors) and a range of other organizations and institutions. In general, I think Friedman is giving to little weight on neighborhood effects, or public goods as it is called now. Nor is the fact that most human beings are irrational shortsighted, and therefore better off forced to save for later, touched upon. At last, information problems make several markets, among them education, far from perfect. Still, its one of my best reads of the year.

I became vaguely aware of Milton Friedman in the 1980s, when he was often referred to as the favourite economic guru of Thatcher and Reagan, the founder of "monetarism" as a new school of economics. He was disliked by the left, and there were dark mutterings about his involvement with some of the less pleasant South American regimes of the period. More recently I was referred to some excellent video clips of Milton Friedman on YouTube, and became interested in how his views fitted into economic thinking as a whole. I also became aware of economic libertarianism, expounded by such organisations as The Cato Institute (publishers of some of the sceptical volumes on man-made global warming theory, but with a much wider range of interests than that) and The Von Mises Institute, that seems to have quite an extreme view as to how limited the role of the state should be. Private justice, anyone? Capital and Freedom was Friedman's seminal popular work, published in 1962 and based on a series of lectures that Friedman had delivered in the mid to late 1950s. Other popular works include Free to Choose, written jointly with his wife and published in 1980. He doubtless wrote scores of more technical papers in between. Friedman's economic hypothesis is that free market capitalism is the most effective mechanism for organising economic activity and growth, and that it thrives best when the government intervenes in it as little as possible. This economic hypothesis is allied to a strong personal conviction for individual liberty, that men should as far as possible be left to do as they choose so long as their actions to not have injurious effects on others - a philosophy stated emphatically by the founding fathers of the United States. Milton Friedman argues his case clearly and effectively, and most of it is as apposite today as it was in 1955. Often it is only when he refers to numbers of dollars that one remembers that this book is nearly 50 years old - there always seems to be one or two noughts missing from the end of average salaries. There is quite a lot of historical detail - he devotes a chapter to the Great Depression, and his hypothesis that it was caused not by a failure of the market but by incompetent government intervention. Friedman believed that the market would have suffered less badly, and recovered more quickly, if the government had left well alone. As the Federal Reserve and the Bank of England intervene to deal with the current "credit crunch" banking crisis we have to hope that they will get it right - Friedman seemed to believe that by concentrating the power - and the responsibility - for managing the market even into highly intelligent and well-intentioned hands, you created the conditions for a major upset that the market, left to its own devices, would have avoided by the separate actions of thousands of individual participants acting in their own interests. We shall see! The problem with Friedman's brand of economic liberalism (and he deliberately stuck to the word "liberal" in an attempt to win it back from left of centre state-interventionists - later he gave up and accepted the description "libertarian") - and with the Thatcherism and Reaganomics that it spawned - was that it can seem harsh and uncaring. Friedman argues passionately against the public provisions of housing, minimum wages, agricultural support, state provided old age pensions and much compulsory attempts to redistribute wealth. He does so on the basis that they interfere with individuals' freedom, concentrate power in government (which often operates inefficiently, and that most such schemes are ultimately counterproductive. He does also argue against the abuse of power by big corporations, through cartels and government lobbying, and expresses concern that the tax laws that allow corporations' retained profit to suffer a lower rate of taxation than income a disadvantages small companies against big ones, and that this, even in the early 1960s, had artificially supported the development of massive corporations. Friedman was, it seems, a small company man, a believer in enterprise on a human scale. Friedman believed above all in Liberty. His belief in equality - egalitarianism - was more qualified. He believed in equality of rights under the law and of opportunity, but not that the state should attempt to achieve "equality of outcome" - i.e. equality of material wealth. That should be left to individuals to resolve through interaction with others and in accordance with their talents and inclinations. Equality of opportunity, of course, is easily said, and not an issue that Friedman resolves. For example, in arguing for a limited role for government in education, (though a much greater one that some present day libertarians might argue) opportunity for a high quality education would at the least be much easier for those born of rich parents than poor - one point at which I find myself unconvinced by him. In short, though, Friedman thought that men should be free to be unequal. Whether or not you subscribe to Friedman's ideas, this book represented a major reassertion of the principles of classic, free market economics in the face of progressively more state-directed economies not just in the Eastern-bloc but in the US and Western Europe too. That school of thought had been dominated by John Maynard Keynes, and the latter's "General Theory" shall be my next project. This is an excellent, thought provoking and easily absorbed book.

Before reading this, I would describe myself as a free market capitalist. Though I could never properly articulate why. I love that Milton shows the historical and present-day tremendous economic growth under capitalism. He helped me understand this is not really created, but it is more akin to an evolutionary framework. Freedom of the individual is at the basis of this framework. Laissez-faire

Un libro obbligatorio per capire il mondo.

Milton Friedman foi um dos grandes defensores da liberdade individual. Mostrando a forma liberal de ser ver o mundo com diversos exemplos da vida real, Friedman consegue ilustrar que poder, por que se tenham boas intenções, acabam gerando consequências não intencionais de privilégios que acabam por reduzir a liberdade individual em prol do coletivismo.

For its times it was excellent. Nowadays free market economics in both the Austrian and Chicago School have evolved and improved past what is exposed in the this book. Never the less it was one of best books I read early in my search for understanding economics and a springboard into other books on radical capitalism