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Summary:
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.
Customer Reviews:
Average Customer Rating:
Capitalism and Freedom
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Friedman gives some interesting counter-arguments on the welfare state and sometimes socialist economy that exists in the U.S. and why capitalism is the best system.
A truly fantastic book on economics, law, and government
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This book is not only a great economics book, but it is also a great book on law and government as well, because it discusses the unintended consequences of laws.
If you are torn between reading Free to Choose or Capitalism and Freedom, I strongly recommend the latter. Not only is this book shorter than Free to Choose, but Friedman does a better job of arguing his case in Capitalism and Freedom. Both Greg Mankiw and Larry Summers recommend Capitalism and Freedom as their top econ book. I do too.
...... common sense applied .....
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very easy to read and understand , clear, structured and: very telling !
The economic freedom is the best guarantee of personal freedom
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The link between economic and political freedoms has been supported for a long time, and Milton Friedman's "Capitalism and Freedom" is one of the more important texts in that intellectual tradition. The central thesis of this book is that the private ownership and enterprise, rather than the government controlled services, is the true guarantor of personal freedoms. Friedman acknowledges that there are indeed certain activities that a government has a legitimate role in (like the arbitration and the enforcement of the laws), but those tend to be exceptional and require a special set of circumstances in order to be justified. In the second chapter he gives a non-exhaustive list of fourteen activities that the government has asserted an exclusive role in for which there is no good justification. It is interesting to note that as we approach the fourteenth anniversary of the publication of this book, only a couple of those are still not in effect (there is no universal draft during a peacetime and the Post Office does not have an exclusive right to distribute mail any more).
The chapter on monetary policy is very interesting. Friedman considers monetary policy to be one of those activities over which a government can exercise a legitimate monopoly. This has however been disputed in recent years by more libertarian thinkers - even when it comes to printing and distributing money, there is no good a-priory reason why a private entity wouldn't be able to accomplish this as well. In fact, I would probably have more trust in money issued by some well established corporations or banks than that issued by 90%+ of governments around the world. In this chapter Friedman also goes at length expounding on pros and cons of the gold standard, which nowadays is not all that in vogue at all.
The chapter on discrimination is also one of the more interesting ones. Friedman outlines what would now be considered a consistently libertarian position: although he personally finds all sorts of discrimination based on race, gender, or religion particularly abhorrent, he doesn't think that it is the role of government to impose any sorts of measures that would amount to enforced "inclusiveness." He has a problem with the very notion of "discrimination." In many instances one man's discrimination is another man's right to exercise a taste preference. Whatever it is, Friedman thinks that the best and most effective way of dealing with discrimination is again through allowing the existence of free market. In a perfectly free market discrimination against individuals or groups will have immediate and very deleterious consequences for any purveyor of goods or services. Here again the case is made that capitalism is the best guarantor of personal freedom. This is not just an abstract argument - time and again the experience has shown that whenever a group was allowed to freely compete in the marketplace, the discrimination and the prejudice against that group has diminished.
Another topic that gets into Friedman's crosshairs is that of overregulation of all sorts of trades and professions. The supposed aim of most of these regulations, licensing and certifications is the protection of the public. However, it is a plain empirical fact that almost all of those regulations are imposed on the request of the regulated industries, rather after an outcry from the public. What these regulations in fact do is create barriers to entry and shielding of the industry insiders form the competition. Friedman argues that this is yet another form of limitation of freedom that is imposed through the prevention of the existence of a free market. He argues that this is seldom justified, and that market would create a much more efficient way of weeding out the incompetent products and services, even in the case of medical industry. One can't help think that of the present debates over the medical insurance in the US, and wonder how much of it could be solved by simple deregulation of the whole industry.
As it may be clear from the examples above, Milton Friedman is a very insightful thinker with ideas that were many decades ahead of his time. His works deserve to be continuously read by all who wish to implement a fully functioning free market economy. That is the surest guarantee of the personal freedom that we can ever hope to implement.
Borderline Useless Neoliberal Arguments
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Let me start out by saying Milton Friedman is a compelling figure who truly wishes for freedom and equal opportunity. Also, I realize that 'Capitalism and Freedom' was not an academic work in economics but rather a political manifesto for laymen. That being said...
'Capitalism and Freedom' is worthless in both an economic and political sense. It's imploded ideas still linger on among conservatives and libertarians. Constant errors in logic and empirical evidence plague the book. As soon as he begins discussing economic theory it becomes obvious he places personal ideology over academic integrity.
A perfect example would be his explanation of the Keynesian Multiplier in his chapter on 'Fiscal Policy'. When he 'refutes' Keynes and then goes into further detail on what Keynes supposedly did not even mention is bewildering. Not because he presents a clearly superior argument, his argument is just a restatement of classical theory, but because of his complete lack of understanding regarding chapter 10 of Keynes' GT. Every point he makes is clearly dealt with by Keynes and sharply criticized. I was so surprised by his comments I went back and reread chapter 10 just to be sure. I have no idea why he would write something so misleading and inaccurate. Significant errors in economic theory are rampant throughout this work.
Schlocky logic continues throughout nearly every one of the applied chapters because they are directly based on defunct economic theory. His last ~7 chapters read like a 20th century continuation of Book 5 in Adam Smith's 'Wealth of Nations'.
With all of Friedman's faults the occasional gem does appear. His analysis of floating exchange rates and fiscal lag periods are still relevant today (but not by as much as he thinks).
'Capitalism and Freedom' is an example of a man trying to help mankind but stumbling because of placing ideology above reality.
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