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Capitalism and Freedom

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Selected by the Times Literary Supplement as one of the "hundred most influential books since the war"

How can we benefit from the promise of government while avoiding the threat it poses to individual freedom? In this classic book, Milton Friedman provides the definitive statement of his immensely influential economic philosophy—one in which competitive capitalism serves as both a device for achieving economic freedom and a necessary condition for political freedom. The result is an accessible text that has sold well over half a million copies in English, has been translated into eighteen languages, and shows every sign of becoming more and more influential as time goes on.

208 pages, Paperback

First published January 1, 1962

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About the author

Milton Friedman

205 books1,350 followers
Milton Friedman was an American Nobel Laureate economist and public intellectual. He made major contributions to the fields of economics and statistics. In 1976, he was awarded the Nobel Prize in Economics for his achievements in the fields of consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy. He was an advocate of economic freedom.

According to The Economist, Friedman "was the most influential economist of the second half of the 20th century...possibly of all of it". Former Federal Reserve Board chairman Alan Greenspan stated, "There are very few people over the generations who have ideas that are sufficiently original to materially alter the direction of civilization. Milton is one of those very few people."

Source: Wikipedia

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Profile Image for Trevor.
1,293 reviews21.7k followers
December 10, 2010
This book is an interesting case of modern day sophistry – where the worse argument is made to appear the better. If one needed proof that much of modern economics is an exercise in ideology and self-interested appeals on behalf of the obscenely wealthy then this book provides ample evidence.

The French Revolution was fought under a flag of three colours and for three causes, Liberté, égalité, fraternité – Freedom, Equality and Brotherhood. Friedman is only interested in what he refers to as freedom. He rails against equality as all liberals (in the traditional definition of that term) tend to. It is hard to imagine anything more mean-spirited than such a person. Naturally, this freedom he is so fond of generally equates to a freedom for the majority to have less while the few are given much more. He says the opposite, of course, but decades of the applications of his prescriptions have turned America into a grossly and increasingly unequal society. Should a theorist be held responsible for the consequences of their theories? If Marx is to be held responsible for Soviet Russia then Friedman is much more responsible for the state of current day America. Even the so called ‘left’ – as in the Democrats in the US, the Labour Party in Britain and the Labor Party in Australia all look to ‘market-based’ solutions to problems.

Neo-liberals and neo-conservatives will complain that Friedman’s ideas have never been fully implemented and that this is why we have so much trouble today – if you ever want to create a utopian vision splendid my suggestion is to follow Plato’s example in the Republic – make the society you envision so impossible to implement that your followers can always claim some vital element has been left out and so never properly applied. Here we have a government whose sole role is supplying the police and army – both mostly to protect the interests of property. All other government activity (even printing money and registering doctors) is either fundamentally wrong and needs to be done by the private sector or should be presumed dangerous and in need of constant vigilance.

I was keen to see what he might say about monopolies – given he appears obsessed with ‘competition’ I thought he might discuss the benefits of anti-trust laws, for example. But how foolish of me. The only monopolies he was actually concerned about are those of trade unions. Individuals are all that matter, while trade unions are an example of ‘collectivism’ and therefore enough to have him fuming and spitting fire.

It is remarkable how rarely he supports any of his assertions with anything other than the boldness of his claims. One of my favourite examples was towards the end where he discusses the effect of government subsidies in the US on cotton growers overseas – I won’t go into the details of the argument, it is even one of the few I would tend to agree with him on, but he says, “The list of similar cases could be multiplied.” Well, yes, obviously – given that he gave but one example they could hardly be divided.

Here is yet another commentator who presents himself as a scientist and his social theories as self-evident truths, rather than the ideological sophistry they really are. I hadn’t realised just how radical this guy was – no wonder he disliked being called a conservative. There is little he is seeking to conserve and much he is seeking to overturn.
Profile Image for Mario the lone bookwolf.
795 reviews3,619 followers
October 19, 2020
One of the most destructive books ever written

Officer Barbrady: „Yes, at first I was happy to be learning how to read. It seemed exciting and magical, but then I read this: Atlas Shrugged by Ayn Rand. I read every last word of this garbage, and because of this piece of s**t, I am never reading again.“
No, of course, I will keep on reading forever, don´t worry.

Most of why it´s so stupid has been/will be described in my reviews of books by Naomi Klein, David Graeber, others, and the rants about Hans Roslings´ Factfulness and Steven Pinkers´ Enlightenment now.

It´s one of those evil books one might ask to how many people it brought suffering, poverty, and a terrible life until an unnecessary, early death. Let´s make a thought experiment:

Let´s say that the Keynesian model stayed and established stable, fair democracies all over the world, strong Nordic model utopias where everybody is happy. Influenced by that, natural destruction, poverty in the Southern hemisphere, climate change, and all the other problems we are facing right now are not nearly as bad and can be solved. So how many people live better lives in such an alternate universe?

I would really like to do the math, but it´s a bit tricky, so let´s say that this idiotic economic, political, and social systems keep running for some more years, close to the 22nd century, when there will possibly be up to an 11-digit number of people on the planet. Even if we just take a small amount of these, just one percent of 10 billion, 100.000.000 people that have horrible existences, it´s a crime against humanity of unimaginable dimensions. But we are right now, at this moment, accepting and ignoring that billions of people are dying, suffering, and despairing without any other purpose than to make the rich richer.

All politics is part of the problem at the moment, the only change can come from the civil society and NGOs, only engagement in those is useful, real democracy doesn´t exist anymore.

The freaking maddest thing about this bonkers ideology faith bad science nightmare is that nobody talks, debates, analyses, thinks,... openly about Hayek and his fanatic soldier Friedman, that the foundation of the corpocracy we are all living in is nothing to openly quarrel about, because it´s like law, it´s like faith, it´s a total dogma that has infected and weakened close to all Western puppet democracies for decades and is at the moment destroying the whole nature of this only earth at a never before seen speed while boiling it at the same time.

Because of much talk and discussion about the replication crisis with friends and in general, I will add these thoughts to all following nonfiction books dealing with humanities in the future, so you might have already seen it.

Sorry folks, this is one of my last rants, I am sick and tired of this and want to focus on true science and great fiction instead, not this disturbed fairytales for adults who never had the chance to built a free opinion because most of the media they consume to stay informed and get educated avoids any criticism of the current economic system.

Without having read or heard ideas by Chomsky, Monbiot, Klein, Ken Robinson, Monbiot, Peter Singer, William McDonough, Ziegler, Colin Crouch, Jeremy Rifkin, David Graeber, John Perkins, and others, humans will always react to people like me, condemning the manipulation Friedman was practicing with terrifying success, with anger and refusal.

These authors don´t hide aspects of the truth and describe the real state of the world that should be read instead of epic facepalms like this. They don´t predict the future and preach the one only, the true way, ignoring anything like black swans, coincidences or the, for each small child logical, fact that nobody knows what will happen, and collect exactly the free available data people such as Friedman wanted to ignore forever.

Some words about the publication crisis that even have some positive points at the end so that this whole thing is not that depressing.

One could call the replication crisis the viral fake news epidemic of many fields of science that was a hidden, chronic disease over decades and centuries and has become extremely widespread during the last years, since the first critics began vaccinating against it, provoking virulent counterarguments. I don´t know how else this could end than with nothing else than paradigm shifts, discovering many anachronisms, and a better, fact- and number based research with many control instances before something of an impact on the social policy gets accepted.

A few points that led to it:

I had an intuitive feeling regarding this for years, but the replication crisis proofed that there are too many interconnections of not strictly scientific fields such as economics and politics with many humanities. Look, already some of the titles are biased towards a more positive or negative attitude, but thinking too optimistic is the same mistake as being too pessimistic, it isn´t objective anymore and one can be instrumentalized without even recognizing it.

In natural sciences, theoretical physicists, astrophysicists, physicians… that were friends of a certain idea will always say that there is the option of change, that a discovery may lead to a new revolution, and that their old work has to be reexamined. So in science regarding the real world the specialists are much more open to change than in some humanities, isn´t that strange?

It would be as if one would say that all humans are representative, similar, that there are no differences. But it´s not, each time a study is made there are different people, opinions, so many coincidences, and unique happenings that it´s impossible to reproduce it.
Scandinavia vs the normal world. The society people live in makes happiness, not theoretical, not definitive concepts.
One can manipulate so many parameters in those studies that the result can be extremely positive or negative, just depending on what who funds the study and does the study wants as results.

One could use the studies she/ he needs to create an optimistic or a pessimistic book and many studies about human nature are redundant, repetitive, or biased towards a certain result, often an optimistic outcome or spectacular, groundbreaking results. Do you know who does that too? Statistics, economics, politics, and faith.

I wish I could be a bit more optimistic than realistic, but not hard evidence based stuff is a bit of a no go if it involves practical applications, especially if there is the danger of not working against big problems by doing as if they weren´t there.

A few points that lead away from it:

1. Tech
2. Nordic model
3. Open data, open government,
4. Blockchains, cryptocurrencies, quantum computing, to make each financial transaction transparent and traceable.
5. Points mentioned in the Wiki article
6. It must be horrible for the poor scientists who work in those fields and are now suffering because the founding fathers used theories and concepts that have nothing to do with real science. They worked hard to build a career to just find out that the predecessors integrated methods that couldn´t work in other systems, let's say an evolving computer program or a machine or a human body or anywhere except in ones´ imagination. They are truly courageous to risk criticism because of the humanities bashing wave that won´t end soon. As in so many fields, it are a few black sheep who ruin everything for many others and the more progressive a young scientist is, the more he is in danger of getting smashed between a hyper sensible public awareness and the old anachronism shepherds, avoiding anything progressive with the danger of a paradigm shift or even a relativization of the field they dedicated their career to. There has to be strict segregation between theories and ideas and applications in real life, so that anything can be researched, but not used to do crazy things.

The worst bad science practice includes, from Wikipedia, taken from the article about the replication crisis:

1. The replication crisis (or replicability crisis or reproducibility crisis) is, as of 2020, an ongoing methodological crisis in which it has been found that many scientific studies are difficult or impossible to replicate or reproduce. The replication crisis affects the social sciences and medicine most severely.[
2. The inability to replicate the studies of others has potentially grave consequences for many fields of science in which significant theories are grounded on unreproducible experimental work. The replication crisis has been particularly widely discussed in the field of psychology and in medicine, where a number of efforts have been made to re-investigate classic results
3. A 2016 poll of 1,500 scientists reported that 70% of them had failed to reproduce at least one other scientist's experiment (50% had failed to reproduce one of their own experiments).[8] In 2009, 2% of scientists admitted to falsifying studies at least once and 14% admitted to personally knowing someone who did.
4. „Psychological research is, on average, afflicted with low statistical power."
5. Firstly, questionable research practices (QRPs) have been identified as common in the field.[18] Such practices, while not intentionally fraudulent, involve capitalizing on the gray area of acceptable scientific practices or exploiting flexibility in data collection, analysis, and reporting, often in an effort to obtain a desired outcome. Examples of QRPs include selective reporting or partial publication of data (reporting only some of the study conditions or collected dependent measures in a publication), optional stopping (choosing when to stop data collection, often based on statistical significance of tests), p-value rounding (rounding p-values down to 0.05 to suggest statistical significance), file drawer effect (nonpublication of data), post-hoc storytelling (framing exploratory analyses as confirmatory analyses), and manipulation of outliers (either removing outliers or leaving outliers in a dataset to cause a statistical test to be significant).[18][19][20][21] A survey of over 2,000 psychologists indicated that a majority of respondents admitted to using at least one QRP.[18] False positive conclusions, often resulting from the pressure to publish or the author's own confirmation bias, are an inherent hazard in the field, requiring a certain degree of skepticism on the part of readers.[2
6. Secondly, psychology and social psychology in particular, has found itself at the center of several scandals involving outright fraudulent research,
7. Thirdly, several effects in psychological science have been found to be difficult to replicate even before the current replication crisis. Replications appear particularly difficult when research trials are pre-registered and conducted by research groups not highly invested in the theory under questioning.
8. Scrutiny of many effects have shown that several core beliefs are hard to replicate. A recent special edition of the journal Social Psychology focused on replication studies and a number of previously held beliefs were found to be difficult to replicate.[25] A 2012 special edition of the journal Perspectives on Psychological Science also focused on issues ranging from publication bias to null-aversion that contribute to the replication crises in psychology.[26] In 2015, the first open empirical study of reproducibility in psychology was published, called the Reproducibility Project. Researchers from around the world collaborated to replicate 100 empirical studies from three top psychology journals. Fewer than half of the attempted replications were successful at producing statistically significant results in the expected directions, though most of the attempted replications did produce trends in the expected directions.
9. Many research trials and meta-analyses are compromised by poor quality and conflicts of interest that involve both authors and professional advocacy organizations, resulting in many false positives regarding the effectiveness of certain types of psychotherapy
10. The reproducibility of 100 studies in psychological science from three high-ranking psychology journals.[44] Overall, 36% of the replications yielded significant findings (p value below 0.05) compared to 97% of the original studies that had significant effects. The mean effect size in the replications was approximately half the magnitude of the effects reported in the original studies.
11. Highlighting the social structure that discourages replication in psychology, Brian D. Earp and Jim A. C. Everett enumerated five points as to why replication attempts are uncommon:[50][51]
12. "Independent, direct replications of others' findings can be time-consuming for the replicating researcher"
13. "[Replications] are likely to take energy and resources directly away from other projects that reflect one's own original thinking"
14. "[Replications] are generally harder to publish (in large part because they are viewed as being unoriginal)"
15. "Even if [replications] are published, they are likely to be seen as 'bricklaying' exercises, rather than as major contributions to the field
16. "[Replications] bring less recognition and reward, and even basic career security, to their authors"[52]
17. For these reasons the authors advocated that psychology is facing a disciplinary social dilemma, where the interests of the discipline are at odds with the interests of the individual researcher
18. Medicine. Out of 49 medical studies from 1990–2003 with more than 1000 citations, 45 claimed that the studied therapy was effective. Out of these studies, 16% were contradicted by subsequent studies, 16% had found stronger effects than did subsequent studies, 44% were replicated, and 24% remained largely unchallenged.[58] The US Food and Drug Administration in 1977–1990 found flaws in 10–20% of medical studies
19. Marketing is another discipline with a "desperate need" for replication.[64] Many famous marketing studies fail to be repeated upon replication, a notable example being the "too-many-choices" effect, in which a high number of choices of product makes a consumer less likely to purchase.[65] In addition to the previously mentioned arguments, replication studies in marketing are needed to examine the applicability of theories and models across countries and cultures, which is especially important because of possible influences of globalization.

Continued in comments
Profile Image for Stephen.
1,516 reviews11k followers
August 6, 2011
Live and (hopefully) Learn...Before reading this book, I thought I was a fairly strong proponent of both free markets and limited government. TURNS OUT...I WAS WRONG!! Uncle Milt believed down to his very core in the rightness of free markets and after reading his passionate treatise on the benefits of same, I find I am not quite as far along the boulevard of laissez faire as I originally thought.

Despite being under 250 pages, this is a dense, meaty work designed to summarize the arguments in favor of encouraging free markets and minimal government intervention by raising questions and presenting ideas formulated over Friedman’s extensive career as a Nobel Prize winning economist. Given the number of topics Friedman discusses, each one is addressed more in “survey” fashion, with references to additional works in which the ideas are discussed at greater length. That said, there is certainly enough detail provided by Friedman to provide a persuasive description of his core values and the merits of the ideas under-pinning them.

While very well written, this is certainly not in the category of a pleasure read and it was at times a slog to get through. However, I found many of the ideas interesting and even when I couldn’t see myself getting to where Friedman wanted me to go, I could still understand where he was coming from and he always gave me cause to pause and re-evaluate. That’s really all I ever ask for in a work like this?

One big plus for me and one of the things I do want to praise about this book is its tone. Friedman, while confidant and passionate about his beliefs, is never derogatory or mean-spirited towards those who feel differently. The quickest way to get me to turn off of any book is to personally attack the other side (e.g., political hit pieces by the likes of Ann Coulter and Al Franken). Whenever I hear rabid, political trash talk like that, my first thought is that the author either is not smart enough to defend their position or their position doesn’t have much of a defense and so they simply foam at the mouth and make loud noises.

Well Friedman, to his credit, is respectful and argues issues, not people. Granted, he clearly thinks those that advocate “centralized power” and “big government” are wrong and that their policies are disastrous. However, he assumes them to be “men of good will” and tries to persuade with the power of his ideas, rather than resort to meaningless personal attacks. Well done, sir. Well done.

As I mentioned above, there are 12 Chapters in the book (not counting the intro and the conclusion) so I thought I would identify and briefly describe each one so you can see the breadth of ideas/concepts Friedman discusses, many of which I did not anticipate going in.

Chapter 1: The Relation between Economic Freedom and Political Freedom

Oddly enough, this was my least favorite chapter in the book and had me off to a kind of meh start with Uncle Milt. In it, Friedman makes the case that “economic freedom,” in addition to be necessary for its own sake, is a vital, necessary component of “political freedom.” He argues that if the government controls the means of production, real dissent and the free exchange of ideas are impossible because dissenting groups can’t overcome the government’s ability to withhold the means by which their ideas are disseminated. While I find merit in Friedman’s statements, this was one of the few instances where he doesn’t provide evidential support for his position and so I didn’t find the case he made very strong.

Bonus Quote from Chapter 1
Political freedom means the absence of coercion of a man by his fellow men. The fundamental threat to freedom is power to coerce, be it in the hands of a monarch, a dictator, an oligarchy, or a momentary majority. The preservation of freedom requires the elimination of such concentration of power to the fullest possible extent and the dispersal and distribution of whatever power cannot be eliminated -- a system of checks and balances.
Chapter 2: The Role of Government in a Free Society

This is probably the chapter that would likely feel the most to the casual reader. It is a restatement of the foundation of the liberal (NOTE: that’s the 19th century usage of the term) position in favor of limited government. Friedman states that government’s role should limited to: (i) establishing and enforcing rules of a level playing field while protecting individual freedom and property rights; (ii) preventing, and if necessary eliminating, monopolies as they are coercive and destroy freedom; and (iii) performing functions necessary to avoid “neighborhood” effects. These “neighborhood” effects are instances where the action of one individual (e.g., company dumping toxic waste in river) imposes a significant cost on other individuals for which a “voluntary” or “free market” exchange/compensation is not feasible. As you can imagine, this latter aspect can be very tricky because it becomes a matter of “where do you draw the line.” However, Friedman, to his credit, does an excellent job of providing policies that would prevent this from becoming a slippery slope.

Bonus Quote from Chapter 2
Fundamental differences in basic values can seldom if ever be resolved at the ballot box; ultimately they can only be decided, though not resolved, by conflict. The religious and civil wars of history are a bloody testament to this judgment. The widespread use of the [free] market reduces the strain on the social fabric by rendering conformity unnecessary with respect to any activities it encompasses.
Chapter 3: The Control of Money

Here Uncle Milt lays out the case that the Federal Reserve, established in 1913 with the best of intentions, has done far more harm than good. Given the most recent economic downturn and the huge government bailout following the banking crisis, this idea has gained a lot of traction lately. Friedman, writing in 1962, uses the Great Depression and the Stock March Crash of 1929 as representative example of how the Federal Reserve and government intervention in the market in the form of the New Deal, actually prolonged and exacerbated the country’s financial problems. While this chapter was well done, it felt like a bit of a rehash for me since I had recently read Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and the Government Bailout Will Make Things Worse, which goes through a similar analysis in greater detail. You can see my review of the book here: My review

Chapter 4: International Financial and Trade Arrangements

Friedman really impressed me with this chapter. Written in 1962, Friedman proposes a list of 7 policy directives that he thought should be implemented in regard to currency exchanges and international trade. At the time they were proposed, they were a plea for floating exchange rates and a complete repudiation of the then existing Bretton Woods system of currency control. Well, beginning just 9 years later, all 7 of Friedman’s policy directives were eventually adopted and today floating exchange rates are the norm throughout most of the world.

Chapter 5: Fiscal Policy

This chapter is a pretty scathing rebuke (though politely done) of the Keynesian position that government spending should be used to eliminate unemployment and “keep the economic engines” humming. The Keynesian approach is to view the government as a way to balance or “even out” spending from the private sector. In other words, as private expenditures fall, government spending should rise to offset the drop and when private expenditures rise, government spending should be reduced. While government has bee great about increasing spending, I am less confident in its ability to subsequently reduce those expenditures leading me to agree with Friedman when he says, ” Nothing is so permanent as a temporary government program.

The philosophy of encouraging government spending is rooted in the belief of the Keynesian “multiplier” effect of government spending. This holds (or at least held in 1962) that for every $100 in government spending, national income would rise by approximately $300. Friedman’s analysis contradicts this theory and I found it well stated and convincing. He finishes his argument with the following:
What we need is not a skillful monetary driver of the economic vehicle continuously turning the steering wheel to adjust to the unexpected irregularities of the route, but some means of keeping the monetary passenger who is in the back seat as ballast from occasionally leaning over and giving the steering wheel a jerk that threatens to send the car off the road.
Chapter 6: The Role of Government in Education

Ah….vouchers. Clearly, one of the most divisive words in American politics over the last few election cycles. The mere mention of the word is enough to start an expletive laden political cat fight in which, of course, nothing gets accomplished. Well, whatever side of the issue you are on, it was refreshing to read Friedman’s thoughtful, non-vitriolic explanation of his position. Obviously, as a “free market” guy, he was strongly in favor of vouchers and his reasons (whether you agree or disagree) are well stated and create a sound basis for reasonable debate. This is one of those areas that I am not sure where exactly I come out, but I always appreciate reasoned discourse on the subject.

I did disagree with at least one aspect of his discussion. In discussing the bureaucratic nature of the teaching industry he says:
With respect to teachers' salaries, the major problem is not that they are too low on the average…but that they are too uniform and rigid. Poor teachers are grossly overpaid and good teachers grossly underpaid.
I think salaries for teachers are not too low on average and I think that is part of the reason it is so tough to find enough good people to take up that profession. However, this was written back in 1962 and maybe the disparity wasn’t as pronounced then.

Chapter 7: Capitalism and Discrimination

This was one of the most intriguing chapters (along with the Chapter 9 on occupational licensure below) and yet it is a difficult one to summarize without giving the wrong impression. Friedman discusses how he believes the free market should deal with racism and discrimination and opposes, consistent with his free market ideals, government actions like “fair employment practices” and “right to work laws” because he believes they do more harm than good and violate the principles of freedom. He compares the requirement of considering criteria like race, color and religion as analogous in principle to the Nuremburg laws enacted by the Nazi’s during World War II.
He further argues that “As a general rule, any minority that counts on specific, majority action to defend its interests is short-sighted in the extreme.”

Friedman argues that the correct approach is to persuade our fellow man to be of like mind and win the battle in the marketplace of ideas where all truths eventually find expression if the freedom to express them is protected. I didn’t agree with everything that Friedman said and can’t ride along with him completely, but I thought he made his case very well and that his arguments were founded on principles of rightness and justice and so provide excellent food for thought.

Chapter 8: Monopoly and the Social Responsibility of Business and Labor

This is a very dry chapter on the evils of both monopolies and coercive trade unions and that the proper role of government should be to prevent both as they impinge upon the freedom of citizens. According to Friedman, most monopolies come about as a result of “favorable treatment by government” towards one group (he used the railroads as an example) and that without government interference or generous handouts, monopolies would be for more rare. Food for thought.

Chapter 9: Occupational Licensure

This is Friedman at his most radical and I found this to be incredibly interesting to read even though I found I could not completely agree with his proposals. Friedman begins by laying out the 3 forms of government barrier to practicing in a particular occupation. The least restrictive is registration, which is simply putting your name on a list. For example, anyone who wants to sell firearms must be identified on a government list. This is purely informational and Friedman did not have a real issue with this because it does not act as a barrier.

The second level is “certification” which, though more restrictive, is completely voluntary. It allows a person practicing in a particular industry to obtain a certification following enhanced training that they can advertise to their customers. This would include the CPA certification for accountants. Again, Friedman, with some reservations, is generally okay with this so long as the certification remains voluntary.

The third, and most restrictive is “licensure” which requires a state license in order to practice. This includes the medical and legal professions among others. Friedman is fervently against all form of licensure and in order to try and prove his case he uses the medical profession as it is the one that would seem to call for licensure more strongly. I give him credit for this as it would have been easier to set up a straw man for this proposition.

I can’t say he sold me on his ideas here, but I was surprised at how much “room for discussion” there was when he was done. I certainly did not think he was off his rocker when he was done (a thought that did occur to me early on in the chapter). Definitely, an interesting discussion.

Chapter 10: Distribution of Income

Nothing new or ground-breaking here by today’s standards. However, considering it was written in 1962 when the top tax bracket was 91%, Friedman’s arguments in favor of a flat tax and a removal of “corporate welfare” were pretty out there.

Chapter 11: Social Welfare Measures

Chapter 11 and 12 really go hand in hand. Here is Chapter 11, Friedman argues that most of the government programs designed to help are inefficient, bureaucratically intensive and end up costing more and doing less good then they should. He argues there are more effective ways of getting “assistance” to those that need it (see Chapter 12). He also takes particular aim at Social Security as a horribly unfair system. Not a whole lot that I found I disagreed with here are least in so far as the wasteful nature of government spending in these areas.

Chapter 12: Alleviation of Poverty

This is Friedman’s solution to the problems he exposes in Chapter 11. He proposes a “negative income tax” for people under a certain “threshold” of income. Under a negative income tax scheme, anyone earning less than “X” would receive a lump sum from the government bringing them up to an agreed upon “minimum income level.” Rather than a whole host of wastefully run government programs (subsidized housing, welfare, food stamps, etc.), that cost Billions a year “just to operate,” these funds (along with tax receipts) could be redirected into cash payments that would provide greater assistance to those who need it.

I don’t know enough about the implications of such a program to know whether it is a truly workable system or whether there are significant drawbacks that would make it less attractive, but when I heard it….I …..LOVED…..IT It seems like a simple, elegant solution and an appealing way to streamline government bureaucracy and still help those less fortunate to maintain a minimum standard of living.


Overall, this has to be considered one of the giant works of advocacy for both free markets and limited government. I found Friedman thoughtful throughout (even when I did not agree with him) and found this to be a work that can be viewed by people across the political spectrum without raising undo ire. I am giving this 4.0 stars overall, but certainly think a few of the chapters are 5 star worthy, including the final chapter.

Profile Image for Andrea.
Author 6 books177 followers
November 10, 2011
Friedman has constructed an airtight bubble of neoliberal thought where freedom is the greatest value, and everything makes sense and fits together rationally only because it has no connection whatsoever to any kind of historical context, much less the current social and political realities of our time. None. Period. It is as though neither history nor reality as it is experienced by the poor exist, an astonishing tour de force to explain why those with extreme wealth should feel happy and content and not the least bit guilty because exploitation really is to the benefit of all.

It depressed me to read this, and made me go back and give Hayek another star. Much as I disagreed with him and was saddened by his reduction of all socialist thought to what was essentially Stalinism, I could at least see him grappling with the very real issues of our world with some kind of integrity.

There is no integrity here I'm afraid. Instead Friedman says absurd things like

"This is a role of inequality of wealth in preserving political freedom that is seldom noted -- the role of the patron." [17] With these ideas he'll never lack one.

"children are at one and the same time consumer goods and potentially responsible members of society" [33] Consumer goods...I don't even have a comeback to that one. Luckily I don't need one.

"It is hard to see that discrimination can have any meaning other than a 'taste' of others that one does not share." [110] Good god, don't get me started on his views on race and why white people shouldn't have to interact with a Negro in their local store if they don't want to.

How unions harm the world at large [124]. The end of child labour and the 8 hour day are enough to start with as a riposte I think...

The evils of requiring medical doctors to be licensed. [149] Yep. Apparently one in a thousand quacks is actually on to something, and licensing reduces their abilities to experiment [157]. But now I begin to see why we need a large pool of really poor people.

And of course, the old familiar and expected standbys lifted directly from this book into attempts at policy -- the evils of public housing, minimum wage causing poverty (and sadly not in the correct sense that in the US working for minimum wage leaves you under the poverty line), social security as an invasion of our lives...and etc. To be fair, I did expect the unions are evil bit. But the rest was an enlightening surprise.

To cap it all off he writes "Humility is the distinguishing virtue of the believer in freedom..." [188]

Believe me, the last thing this book is characterised by is humility.
Profile Image for C.
170 reviews149 followers
September 2, 2013
Friedman is a good marketer. It's pretty clear why people without a deep logical background, or analytic training, would believe this book has something to say about freedom. Friedman slyly uses the terms free, freedom, and free enterprise, in every three sentences. Eventually the weary subconscious relents, and accepts that the man must be talking substantively about issues of freedom, why else is the word so omnipresent!? Of course he's not really. For Friedman, freedom is negative liberty, the liberty not to be interfered with, and he takes his starting point of analysis to be the individual (which rarely holds since he'll quickly talk about net economic effects that are never started by an individual, nor realized by them either). But capitalism is a lot like the old Chinese proverb about the butterfly effect, except far more potent. To start with the individual, in a system that is so necessarily interconnected, inter-impacting, globalized, and omnipresent, is as silly as to start with the atom in analyzing the relationship between the Milky Way and the Andromeda galaxy. Both in economics and in astronomy, little progress will be made!

But what about this idea of negative liberty - that freedom is in essence not to be interfered with. Well given the necessary butterfly effect of the economy, it is an obvious absurdity, since your job choices, prospects of employment, educational venues, duration of employment, financial stability, etc., are all frequently impacted by sources outside your control. But even if they were not, is freedom really negative liberty? That seems dubious, and fortunately philosophers are finally coming around to the idea that freedom is actually realizing your fullest potential, not being left alone. We are social species, and we realize are fullest potential in social relationships. Friedman is right to promote voluntary co-operation, but he’s wrong that capitalism is the best outlet for this expression.

Okay, so how does all this really play out in the book? Can 200 pages really be objected to by just rejecting negative liberty out of hand? Maybe not.

Friedman has one argument that if accepted justifies almost all his conclusions throughout the book, but if rejected, undermines the entire text. He attempts to show that capitalism really is the best expression of negative liberty. Here it is:

"As in that simple model [of a non-coerced barter economy], so in the complex enterprise and money exchange economy, co-operation is strictly individual and voluntary provided: A) the enterprises are private, so that the ultimate contracting parties are individuals and B) that individuals are effectively free to enter or not to enter into any particular exchange, so that every transaction is strictly voluntary."

The first problem with this position is that the barter economy he refers to is qualitatively different than free-market corporate capitalism. He's comparing apples to oranges, or at the very least a game of catch to the NFL. But even if he weren't, the privatization of the means of production into a few hands, (which is A), undermines B. Individuals that do not own means of production are not free to enter or not into particular exchange, for if they do not enter the exchange (of selling their labor power), they will starve to death. If one cannot avoid the exchange all together, then one cannot reasonably be said to be free to enter into it. If one wants a more detailed explanation as to why this is the case, I would recommend reading CB Macpherson on Friedman.

Anyone that reads my reviews knows I am a socialist, so finding problems with this book was bound to happen. And anyone who doesn’t know my views is going to read this review and think it sucks because Friedman showed that socialism and freedom do not go together. The problem is for Friedman there’s only one kind of socialism, the USSR. Instead of a few capitalist owning the means of production, the state does. That’s it for Friedman. Two possible modes of production. He never once deals with the argument as to whether the workers should own the means of production democratically. I recently saw a debate with Friedman and Samuel Bowles where this question was raised. Instead of answering it, the host quickly changed the subject. So Friedman knows this ‘possibility’ exist, but refuses to address it.

So before the naysayer reads this review and wants to spit fire at me and accuse me of being a tyrant, go pick up Richard Wolff’s “Democracy at Work”. It’s a very short read. It’s well argued. And anyone of average intelligence can understand it. If, and only if, after you’ve understood what a Workers Self Directed Enterprise is, you still have problems with my advocacy of socialism against Friedman’s warped cold-war dichotomy, will I engage in a critical discussion.
Profile Image for Riku Sayuj.
653 reviews7,022 followers
September 19, 2014

Friedman is definitely one of the most eloquent economists ever to have ventured into public discourse and also one of the most influential. And his arguments are powerful and almost impossible to argue against without stripping oneself of intellectual integrity. No doubts about that. But the imaginary debating partner cannot help but wonder if staking a claim to the moral high ground in an argument is not exactly the most liberal way of conducting one. Friedman puts a lot of stock into how true liberalism must be determined and the gist is that it is about letting people choose what is best for them. Now, having agreed with that, the imaginary debating partner would begin to feel slightly discomfited as Friedman begins to assert that given everything else his school has the right to define how this 'freedom' of expression should be exercised and defined.

This second definition feels discomfiting because the imaginary debater cannot quite get how Friedman can claim the authority to dictate that the natural tendency of all democracies towards being welfare states is not really in keeping with the best interests of people. The imaginary debater tries to argue that with universal franchise, surely we can allow the economic system to explore its welfare limits and see how it works, just as we have explored mercantile limits earlier. But Friedman takes no note and sticks to the stand that his school knows best what 'freedom' really is and how it is to be best expressed.

The imaginary debater makes one last attempt to try and point out that this is in contrast to Friedman's basic philosophy in life that underpins all his theories - a basic distrust of all authority.

Seeing the futility, the debate ends.

Disclaimer: The book is a great read (as reflected in the rating). The reviewer is not to be held responsible for random debates that ensues in the reading.
Profile Image for Jason Furman.
1,172 reviews772 followers
February 8, 2019
I last read Capitalism and Freedom as a teenager. Rereading it I was surprised about how contemporary and undated it is, even if the lectures it is based on were delivered more than 60 years ago. The lack of being dated is partly because much of the world has not changed (e.g., we still have occupational licensing—in fact more of it—and farm supports), Milton Friedman was prescient (e.g., the shift to floating exchange rates and lower top marginal tax rates), Friedman helped shape our thinking (see the previous), and many of the same often wrong ways of thinking and canards Friedman are still alive and well (e.g., a larger welfare state will make us unfree politically).

Friedman’s book is a combination of a normative worldview and a set of positive statements all applied to a variety of areas of economic policy. The normative worldview is one of “liberalism” in the classical sense, the idea that people should have maximum freedom from coercion by the state—or “negative liberty” to use Isaiah Berlin’s terminology (as compared to “positive liberty” which is more like the right to an education, healthcare and the like). He argues: “Government is necessary to preserve our freedom, it is an instrument through which we exercise our freedom; yet by concentrating power in political hands, it is also a threat to freedom.”

Friedman argues that the genius of the market is to let everyone express their own views and tastes through what they purchase while government requires a majority to impose its views on all. The problem of government, her argues, is compounded by the lack of a mechanism to correct problems—it is hard to move cities, even harder to move states, and harder still to move countries—as compared to the market where you can simply stop buying the offending product.

Friedman makes two sets of positive claims. The first is quite broad: “a system of economic freedom” is a “necessary condition for political freedom.” He is arguing that the more the government interferes with economic choices, the more likely it is to become like the Soviet Union without political freedoms. His two arguments for this proposition are: (1) a thought experiment about how if the government owns all of the means of production it is impossible for dissenters to, for example, hire a printer to print their dissenting newspaper and (2) a set of syllogisms of the form “the Soviet Union is not a market economy, the Soviet Union is a dictatorship, therefore if you are not a market economy you are a dictatorship.”

This broad claim may well be true in the limit, the situation that both the thought exercise and syllogism apply to. But sixty years of data have proven very unkind to it absent that limiting case. The National Health Service in the UK, for example, may be a good or a bad idea but by moving some fraction of the way to nationalization it has not exactly impeded freedom and liberty. The Scandanavian countries have much larger governments but also do not display systematically less freedom. There are arguments for and against larger state involvement in the economy but to say it is The Road to Serfdom (as Friedman, drawing on Friedrich Hayek, argues) is not helpful.

(Friedman’s views about the links between economic policies and political freedom reach an almost self parodying extreme when he argues that any form of exchange rate management is “the most serious short-run threat to economic freedom” and that “the most effective way to convert a market economy into an authoritarian economic society is to start by imposing direct controls on foreign exchange.”)

The second set of positive claims that Friedman makes are around a lot of specific economic policies arguing that in almost every case good intentions have perverse results and even judged by the moral standard he attributes to intellectuals (a sort of paternalistic, equal outcomes, interventionists mindset) they are failures. He argues this is true of countercyclical macroeconomic (it introduces instability and worsens the business cycle), anti-monopoly legislation (it can entrench monopolies), progressive taxation (in some ways it increases income inequality, housing projects (it destroys the housing supply), and the minimum wage (it increases unemployment and makes the poor worse off).

No doubt some of these are right, like housing projects where the emphasis of policy has appropriately shifted towards housing vouchers and reducing barriers that complain housing supply—ideas that are along the lines of what Friedman is arguing. Some of these are almost certainly wrong, the increased stability of the macroeconomy—including the fact that the Great Recession was much milder than the Great Recession—is thanks to the fact that policymakers, especially in Central Banks, have ignored Friedman’s mechanistic and disastrous proposal for monetary policy to simply increase the growth of the money stock with no regard to anything else in the economy.

What I find suspicious is that that contrary to the rigorous, hard-headed thinking Friedman claims to espouse much of this reads more like wishful thinking. Friedman essentially wants to have his cake (a classical liberal view of justice) and eat it to (if you follow his normative philosophy you’ll get better outcomes even measured on your different normative philosophy). For example, progressive taxation isn’t just a violation of liberty, it also can make the distribution of income even worse. This is the type of too-good-to-be-true wishful thinking that he would rightfully decry in other circumstances. And it means he avoids some of the tough tradeoffs one would have to consider about whether one prioritizes liberalism as a philosophy or outcomes because they will not both line up.

In Friedman’s defense, he does have a reason—other than pure coincidence—that his normative and positive views line up so closely. Specifically, he argues that public policies are not done randomly or by wise policy mandarins but instead systematically shaped by self-interested parties. These policies can persist because they have a small number of highly visible winners and many invisible losers. He would argue the minimum wage has this feature, being pushed by labor unions to help their members, creating a bunch of visible winners receiving higher wages, and many more people without jobs who may not even realize it was because of the higher minimum wage. (I am not endorsing his view, just describing it—the evidence since his book has, at the very least, cast substantial doubt on this particular argument.)

All of that said, anyone who cares about public policy should think very hard about the imperfections of government, the distortions of rent seekers and regulatory capture, the role of incentives, and unintended consequences. You do not need to agree with Friedman’s every prescription to benefit from better understanding all of these issues and factoring them in to your evaluation of public policy going forward.
Profile Image for Gary.
941 reviews205 followers
October 13, 2019
I have always opposed Communism because I have thought it worships an idea, and puts the idea before human life and the individual. I decided iwhen I was young. Lately I have come to the realization that libertarian neoliberal free market capitalist ideology does exactly the same. People like Ludwig von Mises , Ayn Rand, Milton Friedman, Yaron Brook. etc are not less fanatic and contemptuous of actual life than fanatics on the other end of the spectrum like Stalin, Mao, Pol Pot, Honecker, Ceucescu etc.
It is no less doctrinaire , no less dogmatic , no less totally contemptuous of any life that gets in the way of the almighty market!
The results have caused immense suffering in all the countries neoliberal economics have been applied. But only to the lower rungs of society so the privileged oh so successful perfect ones would not care,
In Britain for example benefit cuts and super credit have destroyed countless lives. Also you cannot call yourself a real patriot if you are willing to sacrifice your nation's culture and traditions to the almighty dollar.
This is all nothing to do with freedom or respect for the individual. It is idolatory , worship of the golden calf of free market capitalism and Darwinian survival of the fittest. Hitler believe in survival of the racial ''fittest and the extermination of the racially inferior'. People like Von Mises , Rand and Friedman see survival of the economic fittest as the goal and extermination of the socially and economically weaker.
The older I get the more I realize how evil and cruel unfettered , rampant capitalism underpinned by extreme libertarian ideology is. It has no pity, and no respect for life. It has nothing to do with freedom and it as doctrinaire and uncompromising .

Profile Image for Wick Welker.
Author 5 books338 followers
January 12, 2022
The fairy tale that destroyed the world

I always wondered what my first one star review would be. I should've guessed it would be something by Milton Friedman. The audacious mix of arrogance and niavetee within these pages makes Capitalism and Freedom one of the most catastrophic books written in recent memory. I listened to the audiobook while driving in my car while mostly shouting obscenities and screaming a la Matthew McConaughey inside a black hole yelling at the business leaders in the 1970s to throw this book in the garbage where it belongs instead of implementing its ideologies.

Friedman believes a fairy tale. He believes so emphatically in the morality and infallibility of “free markets” that he insists on abolition of government social programs, licensure, public schools and taxation amongst many others. He is a puritan who is so convinced of his own theories that anything contrary to them is ludicrous to even consider. Friedman is the father of neoliberalism: broad privatization, slash social programs, weaken the labor class and complete deregulation of business. The philosophy might even be sound when heard in a vacuum: trust the efficiency and innovation of the free market and more equity will follow. This is how freedom is defined by neoliberals: unfettered business practice. By moralizing this ideology, asserting that it would help abolish poverty, neoliberalism became a highly potent ideology primed to take over the political zeitgeist in the 1970s. We are now suffering the disastrous consequences 50 years later.

The promise of neoliberalism and TRICKle down economics has never been realized. Trusting in the myth of free markets has only resulted in vast wealth concentration. The last 40 years have only shown severe wage stagnation for the majority of Americans and the rise of multinationals and globalization—basically a competing form of government that is the antithesis of democracy. Friedman and Hayak’s ideas resulted in a corporate authoritarianism that has metastasized to state collusion resulting in consolidated power and complete subjugation of the labor class.

The mistake is believing in free markets to begin with. Free markets have never existed. They are always controlled. Whether state-controlled or corporatocracy, they are controlled and manipulated. If you are foolish enough to surrender freedom to the markets, it will always result in monopolization and consolidation of power. And we’re suffering today with this foolish and reckless ideology.

Friedman is proof that there is nothing more dangerous than an economist who is a puritan of ideology. The world is a worse place because of him and this book. You don't need to read this book.
Profile Image for Phil.
1,621 reviews104 followers
February 13, 2023
Another Reread, 2/22. Reread 2/21 I have read this several times; first in grad school, and then as a text I have assigned in advanced public policy and political economy seminars. Why? If anything else, this is the 'bible' of neoliberal thinking, promoting an idealized version of the 'free market' as basically the solution to most if not all social woes. No one would really care today about Friedman's arguments except that most politicians in the USA seem to utilize it has their policy handbook. Hence, Friedman's attack on the expansion of the role of the government in economic life during and post New Deal eras has, over time, become something of a rationale behind contemporary public policy-- aka, Neoliberalism.

Let me be clear-- I really do not like this book, in fact, I really hate this book. Yet, given that it has become a 'bible' for neoliberal thinking, it is still an important book to struggle through.

The entire premise of his argument is predicted upon a few simple ideas. First, 'freedom' is a 'fragile flower' that needs to be nurtured where ever it arises. What is freedom for Friedman? Simply the freedom to choose without coercion. His ideal 'free market utopia' is also argued to be a necessary prerequisite for political freedom, e.g., democracy. Secondly, Friedman juxtaposes just two types of societies-- socialist (by which he constantly raises the flag of the USSR) versus 'capitalist' (by which he connotes his 'free market utopia'). Any 'infringements on capitalism involve some sort of coercion by definition, and, like Hayek, take us on the misguided road to serfdom.

One key flaw of his entire argument arises in how he defines capitalism-- a system of completely voluntary transactions. Market transactions are always free, never coerced, unlike anything the government does, which always involves some form of coercion. If you 'buy' that initial premise, you will love this book; if not, it will probably make you scream.

How does Friedman argue the market always involves voluntary transactions? Well, you are never forced into a transaction. What about needed income to survive in a market economy? After all, without money, people cannot buy what they need to live. Friedman 'solves' that by stating the following: "Since the household always has the alternative of producing directly for itself, it need not enter into any exchange unless it benefits from it. Hence, no exchange will take place unless both parties do benefit from it" (p13). What tripe! Give me any household in any modern economy that has the option of 'producing directly for itself' and can then thumb it nose at the marketplace. Yet, however insidious a statement, Friedman needs it here to further make his argument that the market is always voluntary; lose the 'produce for itself' and then the market becomes coercive, does it not? If you _have_ to, say, sell your labor power to earn the income you need to survive, you are not 'free to choose', you are forced to sell for any amount possible. His entire argument hinges on this point.

If, and that is a big if, you buy the above premise, that some of his supporting arguments logically follow, but by no means all. Here we start to dive into the 'free market optimist' or 'ideal' land where the market always provides ideal outcomes while state action always involves coercion, and, at least according to Friedman, fails in its policy agenda to boot. I am not going to go through this book blow by blow, but just provide a few examples of why the 'free market' always provides better outcomes than state coercion.

Worried about discrimination? Why, that just reflects the preferences of people in a given time and location. How can we rectify such an egregious practice? Let the market work. After all, if women can do the same job as men and as well, than _some_ enterprising capitalist will start hiring more women as they 'cost less' but produce the same, so our capitalist can undercut the competition on price. People do not care how the product was made after all, they just want the best price. Any old stuffy bigot who is running a firm will eventually be bankrupted by the competition or start hiring women! More people hiring women will push up their value! As long as women can do the same job as men _and_ work for less, they will be the ideal employees. You can substitute race for gender her and get the same result.

Each an every chapter concerns a hot topic-- income inequality, minimum wage laws, occupational licensure (e.g., certified doctors, lawyers, etc.), social welfare measures, fiscal and monetary policy. At least Friedman is consistent-- he finds no, and I mean no, case where any governmental action can outperform the 'free market'. The only role for the government comes down to enforcing contracts, law and order, and maybe some public goods like roads.

What is so disturbing about this book is how much of the democratic party has bought into such tripe while at the same time distancing themselves from the New Deal. The same could be said of the Labor party of England. Neoliberalism continues to thrive among policy makers will income inequality explodes and the richest nation in the history of the world cannot even manage to send relief checks to a population suffering dire effects from the pandemic. Any relief must be 'means tested' after all; cannot just give things away. Enough.
111 reviews53 followers
June 17, 2020
No longer using this website, but I'm leaving up old reviews. Fuck Jeff Bezos. Find me on LibraryThing: https://www.librarything.com/profile/...

I read this book as part of a class on Political Thought. I had food poisoning at the time that this book was assigned, but I would have been puking even if I hadn't had those undercooked pancakes that day. This book is so full of ruling class whitewash that it is truly difficult to read.

The text, essentialized, was as follows: Capitalism offers rich people choices. These choices can be redefined as freedom. Therefore Capitalism offers freedom.

Left out is what to do if you don't have the luxury of being able to buy choices. Left out is how these choices in fact necessitate others' oppression and their lack of freedom. Left out is any semblence of understanding of what it is to work for those choices to be available to some.

Actually, let me rephrase: Friedman mentions these points specifically on several occaisions. He then explains that it is not anyone's business how to answer these questions, all policy is to be made between stock holders and companies itself, no matter who else is affected.

When Milton Friedman died, I gave everyone I knew a high-five.
6 reviews
December 31, 2007
An important book to read for any student of economics - this is the basis of most American economic policy - but it's WRONG and I think Adam Smith would roll in his grave to hear how people like Friedman are using his theories to make their friends richer while the masses struggle.
Profile Image for Public Scott.
624 reviews12 followers
April 14, 2017
Inequality is one of the most pressing issues facing the US today. Milton Friedman’s philosophy played a substantial role in creating the political environment that has allowed inequality to grow over the last four decades.

Friedman’s philosophy has currency to this day not because he was so smart or so right but because his ideas are so useful to those in power – those who have wealth and those who benefit from supporting those who have wealth.

My primary question as I read this book for the first time: Was Friedman explicit in his goal of helping the rich concentrate and consolidate more power and wealth for themselves? The answer is no, unfortunately he did not identify this as the ultimate goal of his philosophy. That would have made my job too easy.

However, just because he never said it doesn’t mean that consolidating power for the wealthy wasn’t part of the plan all along. Consider his support for a flat tax, his hatred for Social Security or public housing, or his passionate support for school vouchers – all supported by the reactionary rich to this day. The rich feel the same way about these things because they stand to profit by them.

There is one innovation that keeps Friedman relevant to this day: equating economic freedom with political freedom.

Economic freedom essentially means the ability to participate in the economy – to freely and fairly produce or trade or consume any good or service without coercion. Sounds good, right? I don’t think there are many who would say they have a problem with that. Fine.

What is a problem is economic freedom is not the same as political freedom – freedom of speech, freedom to vote, and so on. To recognize the distinction between these two concepts consider the difference between “one person one vote” and “one dollar one vote.” Freidman was an early advocate for what became known as maximizing shareholder value, so it’s natural that he might support one dollar one vote. In a publicly traded company every shareholder gets one vote for every share of stock they own.

With one dollar one vote the billionaire gets put their money where their mouth is, so to speak, to support the candidate of their choice. The US Supreme Court has essentially affirmed that this expression of freedom is valid with the Citizens United decision and Buckley/Valeo and others. But the corollary to one dollar one vote is *no* dollar *no* vote. We are all free to influence elections by spending however much money we want buying campaign ads and funding political action committees. But if you can’t afford to spend money in that game you don’t get to participate.

Contrast this to the political ideal of one person one vote, every citizen gets a single vote. In that case we are all equal on Election Day. My vote has the same value as yours and so on.

But Friedman recognizes no such distinction. The power of his argument lies in blurring these differences. By equating economic freedom with political freedom any move to infringe upon the marketplace becomes an attack on liberty itself. It’s a neat trick.

If there’s one thing Americans love it’s freedom. By wrapping the interests of those with money in the flag and declaring any challenge to laissez faire economics a challenge to freedom Friedman forged a powerful tool for the rich to use against the rest of us. Trade barriers to protect American workers? That is an attack on freedom. Social Security benefits for old people? By forcing people to save for retirement you take their freedom.

This moral philosophy is the lodestone upon which the entire neoliberal economic outlook is based. Because taking money or imposing regulations is tantamount to taking freedom, low taxation, deregulation, and privatization become a way to preserve freedom. I suppose we’re supposed to think it’s a coincidence that low taxation, deregulation, and privatization also heavily favor the rich.

Friedman’s justification for this viewpoint is the free market. By extending Adam Smith’s notion of the “invisible hand” of the market, society gets maximum benefit when everyone acts in their own self-interest. His ideas build off Friedrich Hayek and others who argue that any government intervention into the economy is the road to serfdom. This logical slippery slope says that any intervention made for the social benefit of a nation by a government is a step towards totalitarianism – and the elimination of political freedom.

Friedman argues that the government has no role in society beyond acting as an impartial umpire that stands to the side so the magic of the market can do its work. The market always does a better job. Self-interest always provides the best social outcome. The individual is superior to the collective.

However this idea of pitting the individual against the collective is fundamentally undemocratic. In democratic government the people are the sovereign and majority rules. The public is supposed to have a say determining what is best for the society. To say that individual freedom is more important than the will of the public is anti-democratic.

Wealth and power go hand in hand. The wealthy don’t need special consideration or more freedom to get what they want. Articulating a philosophy that puts economic liberty - the power of wealth - in equal standing with political freedom is so wrong. Don’t fall for it.
Profile Image for akemi.
420 reviews119 followers
February 13, 2018
Commonsensical capitalist rhetoric so deeply entrenched in itself that it not only misrepresents socialism, but betrays liberalism as well.

Freedom becomes a freedom from responsibility, from context, from existence itself. The individual becomes an autonomous abstraction, existing only to partake in fleeting and narrow economic exchanges. Damned be the social, cultural or environmental consequences, because it is only the individual that matters. How many sociologists, psychologists, evolutionary biologists and anthropologists have countered this?

Supposedly one is free from coercion, for one "always has the alternative of producing directly for [themselves], [they] need not enter into any exchange unless [they] benefits from it." Friedman is so detached from reality that it seems he has missed hundreds of years of history, whilst simultaneously becoming blind to the present. Who owns all the grain fields? Capitalism necessarily involves coercion for one must enter into a contract for mere subsistence. These are not contracts with other individuals; they are contracts with enterprises, vessels that subsume all productive output from the individual.

What Friedman advocates is a bourgeois utopia. A freedom for the corporates to do as they please, and a freedom for the majority to be exploited, or to starve.
Profile Image for Erik Graff.
5,007 reviews1,117 followers
February 8, 2016
I read this after Milton and Rose Friedman's Free to Choose as a text ancillary to those assigned for Dave Schweickart's course entitled "Capitalism, Socialism, Democracy" and found it less offensive and more thought provoking than that later text.

Personally, I share Friedman's libertarianism in the sense of favoring the freedom of everyone to do as they please so long as their so doing does not restrict the freedom of others. This is a political, not an ethical, claim amounting to the belief that governments should no more interfere with individual liberty than with individual religious preferences. Ethically, there are a whole lot of restrictions on behavior which I advocate and try to practice.

I do not share Friedman's sanguine attitude towards supposed rights of ownership. Some of my concern here is political, some ethical. Politically, a representative system such as ours is radically distorted by the fact that marketing, which costs money, counts more than votes, which don't, in elections. Clearly, this is a matter for law if the principle of free and fair elections is to be maintained. Similarly, other distorting externalities arising from significant differences between incomes and assets would require control. One of these, of course, is the matter of inheritance. Friedman seems to regard individual human organisms as the agents, not families or clans or nations, so it would seem to follow that inheritance should be heavily taxed.

Beyond such political considerations, I have strong ethical objections to two things Friedman advocates: alienated ownership and labor. By "alienated ownership" I mean the legal fictions which allow persons to own properties they don't use and products they don't produce. By "alienated labor" I mean the legal fictions which allow the products of an individual's labor to be owned by others who had nothing to do with its production. Friedman, as I recall after these many years, deals with this by advocating unions--an interesting, ostensible concession to the real world from one normally prone to utopian idealism.

This raises the matter, assuming fundamental values are agreed upon, of how to get from the real to the ideal world wherein such values are instantiated. Is this a proper role for government, or is it more properly a matter for moral exhortation?
Profile Image for Clinton.
73 reviews13 followers
October 12, 2011
Capitalism and Freedom examines the ultimate pursuit of freedom and liberty through the absence of government interference in the market and politics. Although government is warranted in the market yet limited, the market will always prevail in the most efficient use of resources. In a free society, there is a fine line between economic and political freedom.
The role of government should be only limited to law and order, enforcing property rights, and maintaining the monetary system. Friedman is a staunch proponent of eliminating monopolies from government education, occupational licensure, business and labor unions. The tax structure must intake an extensive reform from a current graduated tax rate to a much more universal flat tax rate.
Overall, the book is excellent in logical and rational statements of criticizing government intervention, and Friedman clearly explains the view of the libertarianism, and it is the people who are responsible of preserving freedom and liberty and stray away from tyranny and repression.
130 reviews
May 7, 2012
Reading this book is like looking at a mirror into your own beliefs: how you react to Milton Friedman's philosophy tells you more about yourself than about the validity of the system. Fault lies totally with MF, who does not offer enough evidence to support his worldview, which is to limit government and expand free market in order to maximize 19th-century liberalism (where everyone is free such that one person's freedom doesn't impinge upon another's.) The lack of concrete evidence completely distressed me, especially for a book intended for a lay audience. I'm not expecting a mathematical proof (although that would be nice), but I am expecting some sort of empirical evidence if I am to believe, as MF argues at one point, that we need to abolish licensing of physicians in the US.

To be fair, there are one or maybe two chapters that are well-argued. The one that sticks out in my mind is on education, in which Friedman argues IMO quite successfully, that government should not administer education, but offer vouchers for "approved" schools (n.b. this seems like a form of licensing that later MF argues against). Then there is also the point that people tend to spend less on housing and basic needs in capitalist countries than in non-capitalist ones. And there is the prescient argument that unless the government repeals deductions for corporate charitable giving, we will be led down a slippery slope to a time - now - when corporations are treated as individuals (which runs counter to 19th-century liberal ideals).

Unfortunately, good arguments are few and far between. Ad hominem attacks, such as calling the president a "country banker", replace what could have been great definitions of an exchange or a market, which is important since these ideas are central to Milton Friedman's philosophy. College freshman-style philosophical logic replaces measures readers can look at to evaluate both Friedman's and extant economic systems. And a very weak ethical argument on the ethics of income inequality (basically Milton Friedman claims he can't think of a good one) replaces what should be an attempt at a strong converse to capitalism: that is, an attempt to show that any other economic system, both real and imagined, is worse than capitalism in some way. Any way. I don't need an answer, but at least a good attempt.

I am startled at how little I learned in this book compared to "Thinking Fast and Slow", written by another Nobel-Prize winning economist, Daniel Kahneman (although intellectually he is a psychologist). That book, while also dense, is replete with facts, studies, and definitions, and changed how I viewed the world. "Capitalism and Freedom", on the other hand, made me want to write this letter:

Dear economists,

We are reading your book because we want to learn something. We are willing to struggle in order to understand your point of view, so please don't insult our intelligence by giving us no data or methodology so we can think for ourselves and evaluate your argument. When writing for a "lay" audience, please don't write a pamphlet, write a book.

797 reviews81 followers
January 4, 2011
Friedman is the essence of the Chicago school of conservative/libertarian economics, and some say his is the driving idea behind Reagan's supply side economics.

Whatever you think about Reagan, Friedman is man of no small insight, both into economics and into politics. Some of the rationales for his economic policies sound like they came straight out of the political discussions of The Federalist Papers. Friedman, like Hamilton and Madison before him, realized that any power given to the government would expand over time if unchecked. Why? Because small, focused groups always overcome large, unfocused groups in the long run. That is the reason interest groups wield so much influence. And Friedman really does demonstrate something I've been saying for a long time: capitalism IS freedom.

So, by and large, Friedman is an advocate of using government to enforce contracts, punish criminals, wage war, and prevent monopolies or collusion. The free market can handle everything else. In most ways, he is right. What Friedman did not foresee is how vast some of the forces, especially speculators, could become. So now we find ourselves in a period where speculators can fundamentally distort the functioning of the market according to supply and demand (just like the government can).

Friedman also assumed that every individual was a rational actor, or at least acted like one. In that case, I believe that he entirely underestimated the role of cultural influences, crowd effects, etc.

All in all, great book. I really enjoyed reading it. Many of the situations described in the book have not changed in the last 50 years: Social Security, education, medicine. We aren't making much progress.

The idea I wish we would interject into our current situation: the end of corporate taxes and the progressive tax! Let every dollar of profit be attributed to shareholders, and let them pay taxes on all profit instead of using corporations to shelter income and encourage ridiculous amounts of growth. Also, a flat (i.e., non progressive) tax system is simpler, easier to administer, and fairer than a progressive tax.
Profile Image for Christopher.
734 reviews40 followers
May 10, 2015
The best way to describe Milton Friedman's manifesto is that while it has a laudable goal, the spreading of economic freedom to all, the means by which he would achieve them would ultimately do the opposite and leave people in continual poverty. His first chapter on how important economic freedom is is very good, but all of his arguments employ either strongman arguments that can't be reasonably argued against or straw man arguments that are too easy to knock down. Not only that, but his chapter on how anti-discrimination laws in the workplace would be unnecessary if the free market were allowed to do its work is an appalling argument. Thank God that most of these arguments are falling out of favor due to the current economic hardships and the incompetence of the current administration. In summation, read chapter 1 and skip everything else.
Profile Image for Igor.
51 reviews15 followers
October 15, 2009
If you're looking for a dry and cerebral argument for why markets tend to be a social good, and in most case the option which gives choice, encourages enterprise, is the preferable one -- then this book, though dated, is still relevant and worth taking a look into. Someone who hasn't studied economics at all probably should seek different primers before delving deep into Friedman's zany free market world.

That being said, Friedman delivers a solid utilitarian argument for limited government and free enterprise. Without much talking about the ethical differences in doing things by voluntary economic means vs. coercive political means, Friedman makes a simple pragmatic argument for markets by comparing the actual results (without regard to ideal visions of either) of the market and of government action on creating wealth, prosperity and alleviating social ills - without looking at the motives or intentions of the parties involved. He does this by looking at all the major government initiatives goals to raise living standards for a group or to combat discrimination over the last century, and showing many metrics for their failures. On the other hand, he takes a look at how markets were able to successfully address things like discrimination, poverty, social welfare, etc.

In reading this book, I came away with feeling that having a mixed economy, by that I mean a mix of capitalism and government intervention, lends itself to corrupting almost every forwarded initiative. Powerful economic interests either promote their own economically destructive measures (destructive to society such as legal monopolies, legal barriers to entry, subsidies, etc -- but profitable to the interests) and pervert any kind of initiative the government otherwise put forward. Playing the blame game of is it the special interests of the corruptible bureaucrats who are to blame is not productive. Curbing the effect of economic influence over political action, or somehow making bureaucrats incorruptible seems futile to me - though I laud the efforts of campaign finance reformers who have been able to diagnose one of the symptoms of a state not acting in our best interests. Ultimately, I think that the only way to combat this misuse of power is to eliminate the concentration of power in the state.

In summary, a great read for anyone economically inclined with a good attention span.
Profile Image for Tom.
Author 1 book43 followers
March 13, 2017
This is a brilliant book with a cold, cold heart. I read it this spring for a course on politics taught by Noam Chomsky and Marvin Waterstone at the University of Arizona. They used it to establish the neoliberal argument for the way the world works, or should work. Needless to say, Chomsky and Waterstone’s views collided with Friedman’s in almost every way.

Friedman, who taught at the University of Chicago and won the Nobel Prize for Economics, was an idealist, an advocate for free-market purity. And in the best of all possible worlds, he is absolutely right. Capitalism spurs and ensures freedom. As transactional capitalists, individuals prosper, and society does, too. The role of government, then, is limited: “to protect our freedoms from both the enemies outside our gates and from our fellow citizens: to preserve law and order, to enforce private contracts, to foster competitive markets.” Occasionally, “government may enable us at times to accomplish jointly what we would find it more difficult or expensive to accomplish severally. However,” he warns, “any such use of government is fraught with danger.”

Sound familiar? It’s the basis of the libertarian credo that motivated Barry Goldwater and Ronald Reagan. Vestiges of it still remain in the Republican Party.

In Friedman’s worldview, individuals engaging in voluntary free-market transactions check the powers of government, protecting our other freedoms--of speech, religion and thought.

If only we lived in such a pure state, one without externalities such as pollution and climate change, without white-collar crooks and scam artists, without monopolies and transnational corporations, without the disabled or the disadvantaged. Freidman offers up solutions for these issues but not in a way that convinces me they can work in the real world. Witness Chile after the 1973 coup. At the behest of General Pinochet, Friedman’s acolytes, known as the Chicago Boys, got free rein to apply their free-market policies to Chile’s broken economy. The economy surged, with the nation's wealth concentrating among the elite, until it nearly collapsed, causing extensive deprivation and suffering for the majority. The unhappy dictator removed the Chicago Boys almost as expeditiously as he eliminated Salvador Allende.
Profile Image for Patrick Peterson.
462 reviews187 followers
April 20, 2009
Good, very good, but not great. Several important errors. Read Ludwig von Mises by comparison.
Profile Image for Dr. Tobias Christian Fischer.
648 reviews34 followers
August 15, 2020
The best outcome of the book: if you have less state, people have more choice. Ok ok...it’s no rocket science but I honestly think: I did not think that the book was written for an audience beside academia. And that’s a pity and I hope that the book can be translated in a way that a broader audience likes and understands it. Easily digested!
Profile Image for John.
251 reviews2 followers
July 16, 2014
Audiobook (7 hours) this for yourself before even considering what I think is the atrocious (half read) Atlas Shrugged or condemning Milton and the Chicago school. Most Republicans are only cafeteria Friedmanists at best, which is a truly horrible mix. I'd like to think that I've mentally progressed since I first read most of this formative work for a class sophomore year in college so it was nice to find that it held up so well. That class was taught by my fav professor who would have then and ended up being an Obama voter when the time came. This is an infinitely discussable book/subject so I might as well stop here.

Also, please recommend books that are good rebuttals, The Shock Doctrine and some Krugman have already been digested and however good/great found wanting FYI. The Road to Serfdom is in the hole so it will be interesting to finally compare the two.
Profile Image for John.
35 reviews5 followers
January 24, 2008
A man with an enomorous intellect and education, yet little regard for human beings. He had a vision of a lasseiz faire society that he was only able to see attempted in places like Chile, Argentina etc. Probably the most influential economist save Smith or Keynes. In my opinion a very unfortunate fact.
Profile Image for Mehrsa.
2,234 reviews3,657 followers
June 26, 2016
This is clear and short and full of dogma. Some of it I agree with and some of it I vigorously oppose (i.e. that the government should not at all be involved in enforcing anti-discrimination laws and that the market will figure it out). As the father of neoliberalism, this is a crucial read--even if some of you may hate-read it as I did in parts.
Profile Image for Carlos.
5 reviews4 followers
May 20, 2011
Friedman presents a simple, indeed often simplistic, argument in favor of an economic system characterized by the nearly unfettered operation of the free market coupled with a minimalist state apparatus. Though the book represented a radical position at the time it was written, many of Friedman's positions seem uncontroversial and common sensical today. It is a testament to Friedman's influence that this is so. In the forty or so years since Capitalism and Freedom first appeared, Friedman's thought has played a role in mainstream politics' drift in a direction far more congenial to his laissez faire beliefs than the New Deal Progressivism that still prevailed in the 1960s.

Although many of the specific arguments in the book deserve criticism, the most appalling is the argument against anti-discrimination laws. Friedman devotes a chapter to this topic and he begins it with an emphatic profession of his personal belief that racial discrimination is wrong. Nevertheless, Friedman grits his teeth and launches into a defense of the bigots right to remain a bigot. The defense follows from Friedman's foundational belief in individual rights and one gets the feeling that Friedman wishes he could break with his principles on just this one occasion but is far too stubborn and far too much of a committed ideologue to permit himself the indulgence. Because, for Friedman, individuals are free to do basically anything they want to do with the limited exception that they may not positively interfere with the freedom of other individuals, there is no justification for government to coerce bigots into associating with racial minorities and thus no justification for anti-discrimination in employment laws. Friedman believes that market forces can remedy the problem of racial discrimination in employment because bigoted employers will incur higher costs since they may be unable to hire the most productive employees if those employees happen to be racial minorities. Their bigotry makes them inefficient and their inefficiency will force them out of a competitive market. This view is remarkably naive given the long history of deeply entrenched bigotry in the United States, but Friedman's naiveté could be forgiven as simply that had he rested his opposition to anti-discrimination laws solely on his belief that a free market approach was a more efficient way to end racial discrimination.

Unfortunately, Friedman went a step beyond and argued that there is no principled distinction between the government's power to prohibit discrimination and the government's power to mandate discrimination and thus there is no principled difference between the Civil Rights Act of 1964 on the one hand and the Nuremberg Laws and the Black Codes on the other hand. Friedman is correct that both types of laws presuppose the power of government to infringe on the freedom of individuals to structure their dealings with racial minorities according to their own beliefs, but by conflating the two types of laws he creates a noxious false equivalency between laws that infringe on individual freedom in the service of greater overall freedom and laws that infringe on individual freedom in the service of greater oppression. The Civil Rights Act deprives individual employers of the freedom to make employment decisions on the basis of race, but it does so to increase the overall amount of freedom in American society in general by extending equality of opportunity to millions of racial minorities who would otherwise be relegated to permanent second class citizenship. The Nuremberg Laws and the Black Codes on the contrary deprived individuals of the freedom to treat racial minorities as they saw fit in order to take away even the possibility of freedom for racial minorities. The two things could not be more different and Friedman's failure to recognize that is perhaps the greatest failing of Capitalism and Freedom.
Profile Image for Albert.
16 reviews
July 8, 2013
If you have a chance to read only one book this summer, just one book - this is it!

The introduction and classical liberal approach by Milton Friedman in relations between economic freedom and individual freedom has been a truly enlightening experience for me. At one point I received answers about things I have been thinking about for years, furthermore suddenly many issues regarding government legislations and policies, the effects of these and many others made much more sense than ever before.

Friedman reminds, that governments could do much more by doing much less and to be honest - in many cases government's solutions is just another problem. Estonians could be grateful for their economic development to Milton Friedman and his scholar Mart Laar, who later became the Prime Minister of Estonia and adopted Friedman's outlook on economic matters in his policies. Today Estonia is one of the top ten most liberal economies in the world and is ahead of its Baltic's neighbors.
Profile Image for Esterina Terpollari.
70 reviews2 followers
May 31, 2020
A book about how deep freedom has to be considered.
In the world we live, many is controlled by governments and we fail to think about freedom as a concept where government implication is not as much needed as it is. According to Friedman, we could do better with ‚laissez fair‘ and a less paternalistic attitude towards important topics such as monopoly, distribution of income and poverty.
Maybe we should take more time and groundly rethink the concept of freedom after reading this book. Maybe we find out that we have lost pieces of freedom running towards our own concept of freedom, and we forget to go back to the basic concept of it - why at the end, all we want is to be free and how we can achieve it.
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