Capitalism and freedom by Milton Friedman - Summary

Review

Friedman does an excellent job at explaining that free enterprise/markets are the means to achieve prosperity for everyone in society. Not only that, he brings numerous examples to the table and illustrates with them that more often than not good intentions by governments result in bad outcomes.

Index

Introduction

What can I and my compatriots do through government?

The relation between economic freedom and political freedom

History suggests only that capitalism is a necessary condition for political freedom.

[..] both parties to an economic transaction benefit from it, provided the transaction is bi-laterally voluntary and informed.

The role of government in a free society

To the liberal, the appropriate means are free discussion and voluntary co-operation, [..]

In practice, monopoly frequently, if not generally, arises from government support or from collusive agreements among individuals.

The control of money

There is also widespread recognition that control over money can be a potent tool for controlling and shaping the economy. Its potency is dramatized in Lenin's famous dictum that the most effective way to destroy a society is to destroy its money.

Money is much too serious a matter to be left to the Central Bankers.

-- paraphrasing of Clemenceau

Read Friedmans': A program for Monetary Stability

International financial and trade agreements

There is much experience to suggest 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 [rates].

Instead of making grants to foreign governments in the name of economic aid - and thereby promoting socialism - while at the same time imposing restrictions on the products they succeed in producing - and thereby hindering free enterprise - we could assume a consistent and principled stance. We could say to the rest of the world: We believe in freedom and intend to practice it. No once can force you to be free. That is your business. But we can offer you full co-operation on equal terms to all. Our market is open to you. Sell here what you can and wish to. Use the proceeds to buy what you wish to. Use the proceeds to buy what you wish. In this way co-operation among individuals can be world wide yet free.

Fiscal policy

The role of government in education

Capitalism and discrimination

Monopoly and the social responsibility of business and labor

Occupational licensure

[..] licensure has reduced both the quantity and quality of medical practice; that it has reduced the opportunities available to people who would like to be physicians, forcing them to pursue occupations they regard as less attractive; that it has forced the public to pay more for less satisfactory medical service, and that it has retarded technological development both in medicine itself and in the organization of medical practice.

The distribution of income

"To each according to what he and the instruments he owns produces."

People at the same economic level pay very different taxes depending on the accident of the source of their income and the opportunities they have to evade the tax.

Social welfare measures

Those of us who believe in freedom must believe also in freedom of individuals to make their own mistakes.

Alleviation of poverty

Conclusion

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