MILTON FRIEDMAN

 

 

Excerpts from
 

CAPITALISM AND FREEDOM
 
By MILTON FRIEDMAN
 
 

"So long as effective freedom of exchange is maintained, the central feature of the market organization of economic activity is that it prevents one person from interfering with another in respect of most of his activities. The consumer is protected from coercion by the seller because of the presence of other sellers with whom he can deal. The seller is protected from coercion by the consumer because of other consumers to whom he can sell The employee is protected from coercion by the employer because of other employers for whom he can work, and so on. And the market does this impersonally and without centralized authority. Indeed, a major source of objection to a free economy is precisely that it does this task so well. It gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself." (p. 14)

"The great advantage of the market,...is that it permits wide diversity. It is, in political terms, a system of proportional representation. Each man can vote, as it were, for the color of tie he wants and get it; he does not have to see what color the majority wants and then, if he is in the minority, submit. It is this feature of the market that we refer to when we say that the market provide economic freedom. But this characteristic also has implications that go far beyond the narrowly economic. 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. By removing the organization of economic activity from the control of political authority, the market eliminate this source of coercive power. It enables economic strength to be a check to political power rather than a reinforcement."(p. 15)

 

"One feature of a free society is surely the freedom of individuals to advocate and propagandize openly for a radical change in the structure of the society--so long as the advocate is restricted to persuasion and does not include force or other forms of coercion. It is a mark of the political freedom of a capitalist society that men can openly advocate and work for socialism." (p. 16)

"Radical movements in capitalist societies... have typically been supported by a few wealthy individuals who have become persuaded by a Frederick Vanderbilt Field, or an Anita McCormick Blaine, or a Corliss Lamont, to mention a few names recently prominent, or by a Friedrich Engels, to go farther back. This is a role of inequality of wealth in preserving political freedom that is seldom noted-the role of the patron. In a capitalist society, it is only necessary to convince a few wealthy people to get funds to launch any idea, however strange, and there are many such persons, many independent foci of support. And, indeed, it is not even necessary to persuade people or financial institutions with available funds of the soundness of the ideas to be propagated. It is only necessary to persuade them that the propagation can be financially successful; that the newspaper or magazine or book or other venture will be profit-able. The competitive publisher, for example, cannot afford to publish only writing with which he personally agrees; his touch-stone must be the likelihood that the market will be large enough to yield a satisfactory return on his investment." (p. 17)

 

A "... striking example, reported in the January 1959 issue of Time, has to do with the ‘Blacklist Fadeout’. Says the Time story, The Oscar-awarding ritual is Hollywood’s biggest pitch for dignity, but two years ago dignity suffered. When one Robert Rich was announced as top writer for the The Brave One, he never stepped forward. Robert Rich was a pseudonym, masking one of about I50 writers . . . blacklisted by the industry since I947 as suspected Communists or fellow travelers. The case was particularly embarrassing because the Motion Picture Academy had barred any Communist or Fifth Amendment pleader from Oscar competition. Last week both the Communist rule and the mystery of Rich’s identity were suddenly rescripted. Rich turned out to be Dalton (Johnny Got His Gun) Trumbo,-one of the original "Hollywood Ten" writers who refused to testify at the 1947 hearings on Communism in the movie industry. Said producer Frank King, who had stoutly insisted that Robert Rich was "a young guy in Spain with a beard": "We have an obligation to our stockholders to buy the best script we can. Trumbo brought us The Brave One and we bought it" "In effect it was the formal end of the Hollywood black list. For barred writers, the informal end came long ago. At least 15% of cur-rent Hollywood films are reportedly written by blacklist members. Said Producer King, "There are more ghosts in Hollywood than in Forest Lawn. Every company in town has used the work of black-listed people. We’re just the first to confirm what everybody knows." (pp. 19-20)

 

"One may believe, as I do, that communism would destroy all of our freedoms, one may be opposed to it as firmly and as strongly as possible, and yet, at the same time, also believe that in a free society it is intolerable for a man to be prevented from making voluntary arrangements with others that are mutually attractive because he believes in or is trying to promote communism. His freedom includes his freedom to promote communism. Freedom also, of course, includes the freedom of others not to deal with him under those circumstances. The Hollywood blacklist was an un free act that destroys freedom because it was a collusive arrangement that used coercive means to prevent voluntary exchanges. It didn’t work precisely because the market made it costly for people to preserve the blacklist. The commercial emphasis, the fact that people who are running enterprises have an incentive to make as much money as they can, protected the freedom of the individuals who were blacklisted by providing them with an alternative form of employment, and by giving people an incentive to employ them." (p. 20)

"Another example of the role of the market in preserving political freedom, was revealed in our experience with McCarthyism. Entirely aside from the substantive issues involved, and the merits of the charges made, what protection did individuals, and in particular government employees, have against irresponsible accusations and probing into matters that it went against their consequence to reveal? Their appeal to the Fifth Amendment would have been a hollow mockery without an alternative to government employment. Their fundamental protection was the existence of a private-market economy in which they could earn a living. Here again, the protection was not absolute. Many potential private employers were, rightly or wrongly, averse to hiring those pilloried. It may well be that there was far less justification for the costs imposed on many of the people involved than for the costs generally imposed on people who advocate unpopular causes. But the important point is that the costs were limited and not prohibitive, as they would have been if government employment had been the only possibility. It is of interest to note that a disproportionately large fraction of the people involved apparently went into the most competitive sectors of the economy-small business, trade, farming-where the market approaches most closely the ideal free market. No one who buys bread knows whether the wheat from which it is made was grown by a Communist or a Republican, by a constitutionalist or a Fascist, or, for that matter, by a Negro or a white. This illustrates how an impersonal market separates economic activities from- political views and protects men from being discriminated against in their economic activities for reasons that are irrelevant to their productivity-whether these reasons are associated with their views or their color." (pp. 20-21)

 

 

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