Free To Choose: A Personal Statement By Milton And Rose Friedman
The book, Free to Choose: A Personal Statement by Milton and Rose Friedman is one which embodies, not only the personal views of one of history’s most influential economic authorities, but also provides a practical guide for understanding economics, as a whole. In the work, Friedman and his wife advocate laissez faire or “let do” economics, which advocates the idea that markets function most efficiently when free from government control and taxation. The book was also made into a popular television mini-series for PBS in 1980, each of the ten chapters being covered by an individual episode. Throughout the work, the Friedmans cite examples throughout history and the world to support the assertion that free markets promote economic progress and that attempts to control markets inhibit it. Chapter one introduces the reader to the idea of free trade. Dr. Friedman cites examples from his experience in Hong Kong, the United States, and Scotland to support this view. He claims that in order for markets to truly be considered free, they must be completely devoid of government
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interference in an individual’s privileges to trade goods and services with whomever they want, buy as them cheap as possible, and sell them at the highest price possible. He points out, citing, the essay I, Pencil by Leonard E. Read, that even a product as simple as a pencil requires the cooperation of thousands of people, largely unknown to each other. This cooperation is not made possible by governments, but by individual and economic freedom, which is tightly linked to promoting economic progress, in turn reinforcing individual freedoms. The next Chapter focuses on the fact that markets with less government control tend to develop more rapidly than those with centralized planning and control. Citing examples from Japan, India and the United States, Friedman, points out that, even though these policies may intend to help, they actually retard growth by limiting necessary competition. He argues, citing, Adam Smith’s Wealth of Nations that free market economies must be based on an individual’s ability to pursue their personal self-interests. Friedman warns the reader to be wary of “public” or “special interest” advocates, stating that special interests usually prevail at the expense of society. Chapters four and five deal with the economic crisis, which affected the entire world, known as the Great Depression. Friedman explains that The Great Depression changed the public’s opinion about laissez faire economics, because it was seen as a failure of the capitalist system. Many began to view the free market as essentially unstable after the market crashed in the late 1920s. This prompted a shift towards socialist thinking, which advocated government playing an active role in balancing the economy. People began to think of money as mattering less, rather than as a powerful tool. They also adopted the notion of equality as more important than freedom. He argues that this is still the dominant view today, despite the fact that The Depression actually resulted from a failure of government, not free enterprise. We see evidence of this control in The Social Security Act and government welfare systems, which, although, meaning well, actually have negative side affects. He bases this on the simple fact that people tend to spend their own money more wisely. Friedman suggests that a better solution for helping the poor of society might be through a negative income tax and concludes that a society that gives a higher importance to freedom rather than equality will ultimately gain more of both. Friedman goes on to argue that the dominant view favoring centralization has had a profound impact on the quality of our schools. Since this centralization, he contends that power has been transferred from children’s parents to the schools’ authorities. Because these “school bureaucracies,” as Friedman calls them, have priorities far different from individuals, the quality of education has declined. Friedman recommends that the education system be revamped, based on a voucher system. This plan would give parents the freedom to choose schools, actively involving them in their children’s education. This would cause higher quality schools to thrive and sub par schools to dwindle and disappear. The next topic deals with whether or not consumers need protection.
Most people would contend that the answer to this question is overwhelmingly “yes”. The Federal government has been chosen to provide this protection. Dr. Friedman disputes these common notions that consumers need protection from the government or that these actions on behalf of the government actually cause persons to be better off. Again, he argues that consumer’s problems are actually caused by the government’s interference and that the best protection for a consumer is found within a totally free market. This is because of the fact, that when people are offered alternative choices, poor quality goods and services are weeded out, leaving only higher quality ones. The armor this freedom of choice provides is sufficient for consumers and attempts by government to protect consumers actually worsen their
conditions. Friedman also applies the issue of protection to the worker. The development of unions and other groups dedicated to protecting workers rights because people have often felt vulnerable to their employers’ authority over them. Friedman states that these organizations actually, do very little to protect workers. Union advocates argue that today’s higher wages have come as a result of their bargaining power with companies. Friedman points out that these wage increases have come at the expense of nonunion workers. He also states that the most successful unions are those with the most highly skilled workers. Others ague that workers have gained benefits from action on behalf of the government. Friedman, on the other hand, suggests that regulations have reduced the amount of skilled workers in the marketplace and that minimum wage laws have worsened the position of some groups in society, such as African Americans. He says that the best solution for worker protection is simply the existence of a free market where individuals are allowed to compete based on their skills. Friedman now defines and explains the economic phenomenon of inflation. Most people understand what inflation is but have little to no idea of what causes it. Friedman explains that, despite what many people think, it is actually the government’s exclusive control of the nation’s money supply. The key to solving the inflation problem is to, therefore slow down the rate at which the nation’s currency is printed. Because inflating the currency causes tax rates to rise, people are bumped to higher income tax brackets. Inflation is essentially a way for the government to increase taxes without having to go through the trouble of passing new legislation. However, the temporary side effects of slowing down the printing of money are increase in unemployment and reduced growth of the economy. Friedman says that inflation has the potential to destroy free society if unregulated for long periods of time because it divides society. The final topic of Free to Choose deals with what society needs to do in order to assure we can continue in a free market society. Since the Great Depression, society has struggled with the notion of an unrestricted capitalist environment. Friedman asserts that this myth that government control is desirable and necessary is the most destructive enemy of a free market society. The only solution to the problem is widespread recognition of this fact. The public is far more informed today than they were in past decades about public issues and is more willing to take a stand against government involvement in the economy. Friedman argues that the most effective approach would be to remove discretionary budget power from the Federal government through the passage of an amendment to the constitution forcing the government to work within a specific budget. He ends with saying that we must recognize that voluntary cooperation is a far better way to solve our economic problems than turning to the government. I enjoyed this book and learned a great deal about economics while reading it. The Friedmans’ ability to put economics into both a historical timeline and geographical perspective allowed me to see not only the importance of a free market economy, but also opened my eyes to the effect of government involvement in ways I had never thought of before. I agreed with almost 100% of the Friedman’s assertions, especially the precept that the foundation of a free market economy must be based on individual freedoms. The book was well-written, extremely informative with strong supporting evidence and gave me a new found respect for one of history’s most influential economists. I would definitely be interested in viewing the television series as well.
interference in an individual’s privileges to trade goods and services with whomever they want, buy as them cheap as possible, and sell them at the highest price possible. He points out, citing, the essay I, Pencil by Leonard E. Read, that even a product as simple as a pencil requires the cooperation of thousands of people, largely unknown to each other. This cooperation is not made possible by governments, but by individual and economic freedom, which is tightly linked to promoting economic progress, in turn reinforcing individual freedoms. The next Chapter focuses on the fact that markets with less government control tend to develop more rapidly than those with centralized planning and control. Citing examples from Japan, India and the United States, Friedman, points out that, even though these policies may intend to help, they actually retard growth by limiting necessary competition. He argues, citing, Adam Smith’s Wealth of Nations that free market economies must be based on an individual’s ability to pursue their personal self-interests. Friedman warns the reader to be wary of “public” or “special interest” advocates, stating that special interests usually prevail at the expense of society. Chapters four and five deal with the economic crisis, which affected the entire world, known as the Great Depression. Friedman explains that The Great Depression changed the public’s opinion about laissez faire economics, because it was seen as a failure of the capitalist system. Many began to view the free market as essentially unstable after the market crashed in the late 1920s. This prompted a shift towards socialist thinking, which advocated government playing an active role in balancing the economy. People began to think of money as mattering less, rather than as a powerful tool. They also adopted the notion of equality as more important than freedom. He argues that this is still the dominant view today, despite the fact that The Depression actually resulted from a failure of government, not free enterprise. We see evidence of this control in The Social Security Act and government welfare systems, which, although, meaning well, actually have negative side affects. He bases this on the simple fact that people tend to spend their own money more wisely. Friedman suggests that a better solution for helping the poor of society might be through a negative income tax and concludes that a society that gives a higher importance to freedom rather than equality will ultimately gain more of both. Friedman goes on to argue that the dominant view favoring centralization has had a profound impact on the quality of our schools. Since this centralization, he contends that power has been transferred from children’s parents to the schools’ authorities. Because these “school bureaucracies,” as Friedman calls them, have priorities far different from individuals, the quality of education has declined. Friedman recommends that the education system be revamped, based on a voucher system. This plan would give parents the freedom to choose schools, actively involving them in their children’s education. This would cause higher quality schools to thrive and sub par schools to dwindle and disappear. The next topic deals with whether or not consumers need protection.
Most people would contend that the answer to this question is overwhelmingly “yes”. The Federal government has been chosen to provide this protection. Dr. Friedman disputes these common notions that consumers need protection from the government or that these actions on behalf of the government actually cause persons to be better off. Again, he argues that consumer’s problems are actually caused by the government’s interference and that the best protection for a consumer is found within a totally free market. This is because of the fact, that when people are offered alternative choices, poor quality goods and services are weeded out, leaving only higher quality ones. The armor this freedom of choice provides is sufficient for consumers and attempts by government to protect consumers actually worsen their
conditions. Friedman also applies the issue of protection to the worker. The development of unions and other groups dedicated to protecting workers rights because people have often felt vulnerable to their employers’ authority over them. Friedman states that these organizations actually, do very little to protect workers. Union advocates argue that today’s higher wages have come as a result of their bargaining power with companies. Friedman points out that these wage increases have come at the expense of nonunion workers. He also states that the most successful unions are those with the most highly skilled workers. Others ague that workers have gained benefits from action on behalf of the government. Friedman, on the other hand, suggests that regulations have reduced the amount of skilled workers in the marketplace and that minimum wage laws have worsened the position of some groups in society, such as African Americans. He says that the best solution for worker protection is simply the existence of a free market where individuals are allowed to compete based on their skills. Friedman now defines and explains the economic phenomenon of inflation. Most people understand what inflation is but have little to no idea of what causes it. Friedman explains that, despite what many people think, it is actually the government’s exclusive control of the nation’s money supply. The key to solving the inflation problem is to, therefore slow down the rate at which the nation’s currency is printed. Because inflating the currency causes tax rates to rise, people are bumped to higher income tax brackets. Inflation is essentially a way for the government to increase taxes without having to go through the trouble of passing new legislation. However, the temporary side effects of slowing down the printing of money are increase in unemployment and reduced growth of the economy. Friedman says that inflation has the potential to destroy free society if unregulated for long periods of time because it divides society. The final topic of Free to Choose deals with what society needs to do in order to assure we can continue in a free market society. Since the Great Depression, society has struggled with the notion of an unrestricted capitalist environment. Friedman asserts that this myth that government control is desirable and necessary is the most destructive enemy of a free market society. The only solution to the problem is widespread recognition of this fact. The public is far more informed today than they were in past decades about public issues and is more willing to take a stand against government involvement in the economy. Friedman argues that the most effective approach would be to remove discretionary budget power from the Federal government through the passage of an amendment to the constitution forcing the government to work within a specific budget. He ends with saying that we must recognize that voluntary cooperation is a far better way to solve our economic problems than turning to the government. I enjoyed this book and learned a great deal about economics while reading it. The Friedmans’ ability to put economics into both a historical timeline and geographical perspective allowed me to see not only the importance of a free market economy, but also opened my eyes to the effect of government involvement in ways I had never thought of before. I agreed with almost 100% of the Friedman’s assertions, especially the precept that the foundation of a free market economy must be based on individual freedoms. The book was well-written, extremely informative with strong supporting evidence and gave me a new found respect for one of history’s most influential economists. I would definitely be interested in viewing the television series as well.