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Author: tabs101 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 23781  
Subject: Week 4- Friedman's Capitalism and Freedom Date: 8/25/2012 8:59 AM
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For week four, I am going to focus on chapter 1 of Milton Friedman’s classic “Capitalism and Freedom”. (sorry, it took me a few posts to choose a reading. I learned a lesson. Stick with the classics!)

http://books.cat-v.org/economics/capitalism-and-freedom/chap...

Can any kind of political arrangement lead to material prosperity? Is it possible to combine successfully a political system that focuses on liberty with an economic system that does not? In pargraph one of chaptet one, Friedman calls the views of those who advocate for “democratic socialism” a “delusion”. He continues to assert that “a society which is socialist cannot also be democratic”.

One of the themes highlighted by my reading of Locke and Bentham is that freedom for the individual living in society cannot be absolute. What constraints can be placed on individual freedom without making life in society worse than life outside of society?

In this text, Friedman is going to argue for the least restrictive political and economic environment. In paragraph two, he makes the point that when government tries to place economic restrictions on people, it often does so by severely restricting the liberty that remains.

In the debates this summer over the Affordable Care Act, this type of thinking was expressed regularly by critics of the law. To some, this law represented a violation of their “essential freedom.” But, as Bentham illustrated, vague language illustrates vague thinking. What is an essential freedom? Who decides?

Friedman argues that economic restrictions are the same as political restrictions. Again, he claims, those who make this distinction are misguided.

When an American is forced by law to save for retirement in a government run savings plan, is he restricted differently than if he were told he could not practice certain aspects of his religion? This “deprivation”, one economic and one religious, is equivalent, he states. Yet, many are willing to allow economic liberty to be sacrificed when they are repulsed by civil or political restrictions on their personal freedoms. Why is there a difference?

A writer such as Friedman is often going to use language that is loaded with assumptions about human nature and the role of government (nothing wrong with that). One of my key tasks, as a critical reader, is to identify these assumptions and articulate them.

When a person is told by the government she cannot practice a certain profession without a license, Friedman says, she is “deprived an essential part of her liberty.” How does he know this? Up to this point he has made no reference to the US Constitution, so when he makes statements like this, he is expressing values, first principles. They are his core beliefs. Beliefs that he derives his conclusions from.
His largest point, so far, is that economic restrictions are no different than political restrictions. Constraints on liberty ought not to be treated as comprising various categories, some acceptable and others repulsive. (Surely, all restrictions on liberty cannot be avoided. We will give Friedman a chance to clarify his thinking on this point)

Economics, he states, is a means to an ultimate end, political freedom. This is a clear statement. A society cannot have political freedom (although, what does that actually mean?) unless the society has the proper economic system. The proper economic systems Friedman calls “competitive capitalism.”

Competitive capitalism promotes political freedom “because it separates economic power from political power.” Stated this way, we can view Friedman’s thesis as part of a larger discussion of separation of powers. By separating economic power from those who possess political power, a major check on government power is established. If a government does not possess the means to tell people what kind of work to perform or how to perform their jobs, then the opportunity to restrict individual freedoms is greatly curtailed.

Friedman says he knows of no example from history where a people with significant political freedom did not also organize their economy in accordance with free market principles. He provides no additional details, examples. (In the next paragraph he refers to Greece and early Rome as examples. For the point he is making, are these accurate examples?)

Again, referring to history, Friedman uses the next paragraph to remind the reader how rare it is for people to live in a largely free society, a fact which he thinks we take for granted. This historical norm is “tyranny, servitude, and misery.”

Capitalism, he asserts, is a necessary prerequisite for political freedom. It does not, however, cause political freedom. Fascist Italy and Germany, he explains, were not politically free, but they were largely free market economies.

Capitalism and private property provide a check on government power.
Friedman mentions Bentham, among others, as part of a group of philosophical radicals who argued that if you give people the vote, they would choose what was best for them….(more to come)
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