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A warning for our times, if a bit late...
Now is the time to get this book. If you wondered about how Big Ideas work in reality first look at communism, then read this book and look around you. Big Ideas do not work!
Capitalism: a prerequisite for freedom
This is a small book so I thought it would be a quick read. However it took me quite a while to get through. There are a lot of concepts and logical arguments that demand you go back and reread.
Free speech, free press, these are the things people think about when talking about freedom. You don't really think about the concept of economic/financial freedom and how limits placed on these by government policy can affect individual freedom. You don't see people protesting for financial freedom but the two are closely tied.
Capitalism and Freedom, written in the early 60's by the famous economist Milton Friedman, provides a novice like me a history on how capitalism has worked in the past and how it is working now. It mainly covers US policy but these are relevant to other capitalist systems. After reading this book you realise that the problems that are around now are the same problems that existed in the past. In the media when you see stories of parents complaining about which state run schools they can send their kids to and the problems with the National Health System for example, you see that freedom encompasses a whole lot more than just freedom of speech. If you're ill, it can prevent you from choosing which hospital you are treated in or the treatment itself, if you have kids which school you are allowed to send them to. Recently in Britain (2009), a parent was in criminal court over fraud charges related to the address she used to register her child in a school (in an attempt to get her child into a good school). Luckily for her the case was dropped.
The book is littered with interesting financial facts from the past; for instance there was prohibition on owning gold bullion in the US and after World War II Brits were not allowed to vacation in the US because of exchange control.
I recommend this book but be warned that it's not an easy read. It is rewarding when you actually understand what is being talked about on the news and you can have an informed opinion about it.
A manifesto for liberty.
This is the work of classical liberal considering how a free society should operate and what role the state has in a free society. To do this he considers some of the cases where the automatic assumption among many is that the government has to regulate, ban or provide services and argues, usually persuasively, that government intervention causes more problems than it can hope to solve.
There are instances where he proposes an idea that seems so extraordinary that it appears that only a madman, an ideologue or someone living in a fantasy world could even consider it, such as the case that abolishing medical licences for doctors would improve patient care, but then after examining the case it great detail the underlying assumptions believing in a need for licensing are demonstrated to be much weaker than initially believed.
The fact that it was written in a time when the intellectual climate was very hostile to classical liberal ideals is reflected in the manner in which he writes to persuade those who disagree with him rather than simply to preach to the converted, as so many current authors do.
As the title suggests capitalism is inextricably intertwined with democracy and that despite the sincere desires of those who wish otherwise, political freedom cannot survive without
This edition of Milton Friedman's seminal advocacy of classical liberalism includes two additional prefaces, one from 1982 and from 2002, in which Friedman discusses how his ideas have developed over the course of the previous 30 and 50 years. When the book was first published the ideas had no takers on the political stage, the age of free markets had died after the Great Depression. Yet by 1982 a few countries had elected government's sympathetic to his ideas and by 2002 some of his policies had been implemented with great success throughout the world. Whilst Friedman credits most of that to the experience of thestatist experiment rather than his advocacy of freedom he is being modest.
Correlating economic freedom with political freedom, as only Friedman could have!
This book, printed in various formats and languages, is some indication of the fact that Milton Friedman's arguments have not lost currency in the 21st century, even though many people hotly contest their rights and wrongs. The old master of economics hardly wastes time in triggering a debate by stating in the very first chapter: "History suggests only that capitalism is a necessary condition for political freedom. Clearly it is not a sufficient condition."
Capitalism and Freedom has been derided, criticised and lauded in equal measure and for Friedmanites it remains the bible. Love him or hate him, the author himself was never one to shy away from controversy. In this book he has pened his thoughts on issues such as the control of money, fiscal policy, role of government in educating the masses, distribution of income, social welfare measures and alleviation of poverty, among others.
Some of his one-liners and thoughts here are hugely engaging. Despite being vehemently opposed to Government intervention in free market economies, he writes that "the existence of a free market does not of course eliminate the need for government. On the contrary, government is essential both as a forum for determining the rule of the game and as an umpire to interpret and enforce the rules decided on."
The book is also packed with what some might interpret as below the belt remarks, if not properly contextualised. For instance, he writes, "With respect to teachers' salaries .... Poor teachers are grossly overpaid and good teachers grossly underpaid. Salary schedules tend to be uniform and determined far more by seniority." (Chapter 6: Role of Education in Government).
Overall, Friedman has made a case for what he construed as competitive and constructive capitalism and I immensely enjoyed reading the Nobel laureate's thoughts. The longevity of his chain of thought is perhaps what makes this book a valuable reference point. That aside, it has been written is an easy to read format which still fans its popularity over forty years after the first edition went to press.
Liberty, Equality, Fraternity - Incompatible Ideals?
I became vaguely aware of Milton Friedman in the 1980s, when he was often referred to as the favourite economic guru of Thatcher and Reagan, the founder of "monetarism" as a new school of economics. He was disliked by the left, and there were dark mutterings about his involvement with some of the less pleasant South American regimes of the period.
More recently I was referred to some excellent video clips of Milton Friedman on YouTube, and became interested in how his views fitted into economic thinking as a whole. I also became aware of economic libertarianism, expounded by such organisations as The Cato Institute (publishers of some of the sceptical volumes on man-made global warming theory, but with a much wider range of interests than that) and The Von Mises Institute, that seems to have quite an extreme view as to how limited the role of the state should be. Private justice, anyone?
Capital and Freedom was Friedman's seminal popular work, published in 1962 and based on a series of lectures that Friedman had delivered in the mid to late 1950s. Other popular works include Free to Choose, written jointly with his wife and published in 1980. He doubtless wrote scores of more technical papers in between. Friedman's economic hypothesis is that free market capitalism is the most effective mechanism for organising economic activity and growth, and that it thrives best when the government intervenes in it as little as possible. This economic hypothesis is allied to a strong personal conviction for individual liberty, that men should as far as possible be left to do as they choose so long as their actions to not have injurious effects on others - a philosophy stated emphatically by the founding fathers of the United States.
Milton Friedman argues his case clearly and effectively, and most of it is as apposite today as it was in 1955. Often it is only when he refers to numbers of dollars that one remembers that this book is nearly 50 years old - there always seems to be one or two noughts missing from the end of average salaries. There is quite a lot of historical detail - he devotes a chapter to the Great Depression, and his hypothesis that it was caused not by a failure of the market but by incompetent government intervention. Friedman believed that the market would have suffered less badly, and recovered more quickly, if the government had left well alone. As the Federal Reserve and the Bank of England intervene to deal with the current "credit crunch" banking crisis we have to hope that they will get it right - Friedman seemed to believe that by concentrating the power - and the responsibility - for managing the market even into highly intelligent and well-intentioned hands, you created the conditions for a major upset that the market, left to its own devices, would have avoided by the separate actions of thousands of individual participants acting in their own interests. We shall see!
The problem with Friedman's brand of economic liberalism (and he deliberately stuck to the word "liberal" in an attempt to win it back from left of centre state-interventionists - later he gave up and accepted the description "libertarian") - and with the Thatcherism and Reaganomics that it spawned - was that it can seem harsh and uncaring. Friedman argues passionately against the public provisions of housing, minimum wages, agricultural support, state provided old age pensions and much compulsory attempts to redistribute wealth. He does so on the basis that they interfere with individuals' freedom, concentrate power in government (which often operates inefficiently, and that most such schemes are ultimately counterproductive. He does also argue against the abuse of power by big corporations, through cartels and government lobbying, and expresses concern that the tax laws that allow corporations' retained profit to suffer a lower rate of taxation than income a disadvantages small companies against big ones, and that this, even in the early 1960s, had artificially supported the development of massive corporations. Friedman was, it seems, a small company man, a believer in enterprise on a human scale.
Friedman believed above all in Liberty. His belief in equality - egalitarianism - was more qualified. He believed in equality of rights under the law and of opportunity, but not that the state should attempt to achieve "equality of outcome" - i.e. equality of material wealth. That should be left to individuals to resolve through interaction with others and in accordance with their talents and inclinations. Equality of opportunity, of course, is easily said, and not an issue that Friedman resolves. For example, in arguing for a limited role for government in education, (though a much greater one that some present day libertarians might argue) opportunity for a high quality education would at the least be much easier for those born of rich parents than poor - one point at which I find myself unconvinced by him. In short, though, Friedman thought that men should be free to be unequal.
Whether or not you subscribe to Friedman's ideas, this book represented a major reassertion of the principles of classic, free market economics in the face of progressively more state-directed economies not just in the Eastern-bloc but in the US and Western Europe too. That school of thought had been dominated by John Maynard Keynes, and the latter's "General Theory" shall be my next project. This is an excellent, thought provoking and easily absorbed book.
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Cafe Hayek: Milton has passed away
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Capitalism and Freedom: Fortieth Anniversary Edition
[ReviewAZON asin="0226264211"]
http://westlife-th.com/capitalism-and-freedom-fortieth-anniversary-edition
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capitalism and freedom: third entry: 41 minutes later
isbn: 0226264211. genre: nonfiction: politics and economics date: 1962, 1982, 2002. pages: 202. page on: 37. time spent reading (so far): 86 minutes. interesting: government: provide rules and a framework for free enterprise. ...
http://briggsreadingjournal.blogspot.com/2007/02/capitalism-and-freedom-third-entry-41.html
capitalism and freedom: eighth entry: 70 minutes later
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capitalism and freedom: tenth entry: 35 minutes later
isbn: 0226264211. genre: nonfiction: politics and economics date: 1962, 1982, 2002. pages: 202. page on: 176. time spent reading (so far): 322 minutes. tax: there should be a new tax system. flat rate (23.5%) on all income above a ...
http://briggsreadingjournal.blogspot.com/2007/02/capitalism-and-freedom-tenth-entry-35.html
