Capitalism and Freedom: a Critical Review

Friedman: There is every reason to adjust the rules of the game " P. 176

Note: Again Friedman acknowledges a role for government regulation. He of course would lean toward regulation that in his opinion "frees" the market of imperfections as opposed to regulations that place restrictions upon it.

Friedman: " we might all of us be willing to contribute to the relief of poverty, provided everyone else did. P. 191

Note: Isn't this precisely what a government program can accomplish for us that private charity cannot? If we are all required to pay a tax for this purpose, then we are all contributing. For better or worse, we will never get one hundred percent participation in voluntary private charities. This seems to me to actually be a point in favor of government, rather than private, action.

I did identify one statement that seemed to imply that unions can perform a useful role.

Friedman: The possibility of co-ordination through voluntary cooperation rests on the elementary - yet frequently denied - proposition that both parties to an economic transaction benefit from it, provided the transaction is bi-laterally voluntary and informed. P. 13

Note: This is why unions are essential. Individuals cannot voluntarily agree to wage rates. Many transactions are based on economic and other necessities of the less powerful party, and are not therefore truly voluntary.

Several statements envisioned the fee market operating in a manner totally unrestricted by regulation or other disturbing forces. These statements struck me as being so out of touch with the realities of our marketplace that I labeled them "Utopian."

Friedman: In its simplest form, such a society consists of a number of independent households " P. 13

Note: Utopian description ignores 1) differences in power and 2) differences in urgency of need.

Friedman: " any form of coercion is inappropriate. P. 22

Note: In the real life marketplace, an endless number of inequalities create coercion.

The disastrous consequences, in country after country, of imposing "Chicago school" economic policies has been documented comprehensively by Naomi Klein in The Shock doctrine, The Rise of Disaster Capitalism. This seminal work led me to the "manifesto" of the intellectual father of this school: Capitalism and Freedom, by Milton Friedman.

I was amazed upon reading the latter to discover a significant number of items that I regard as major academic and philosophical flaws: the use of biased language instead of scientific objectivity, statements that I believe are contradicted by known facts, an approach to issues of race relations that offended me, and a description of his "ideal" free market that is so simplified as to merit the label "utopian."

I was further amazed to discover a side of Friedman that his fervid followers seem never to mention: an acknowledgement that government has a regulatory role to play, creating a "level playing field" and enforcing adherence to the regulations it establishes. In his analysis of economic affairs in the 1930's he faulted the government (the FED specifically) not for intervening too much, but for intervening too little and thereby failing to prevent runs on banks. Furthermore, he cited his intellectual forebears in Europe as being equally concerned about the concentration of power in private hands as in government.

I found it more understandable that some of his conclusions seem outdated today. In particular, he argued that a socialistic government could never create conditions of freedom of thought to oppose itself, partly because there would be no mechanism to generate the funding necessary to campaign against it. We have all recently seen vast amounts of money raised via the Internet and through direct mail campaigns for example. And now, post-"Citizens United" we see the opposite problem: unrestricted capitalism can direct such vast sums into political campaigns that participatory democracy appears endangered.

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