Capitalism And Freedom

The classical liberal understands the relationship between capitalism and freedom and the proper role of the free market, according to Friedman. That is why Friedman belongs to this school of thought and promotes its views throughout the book. He depicts the classical liberal as rational, knowledgeable, and devoted to the nation’s well-being, in part because this increases the book’s persuasive power: Friedman wants readers to consider adopting this perspective and supporting policies liberals favor, especially measures that decentralize the government, shrink its size, and limit its power.

The defining characteristic of a liberal, according to Friedman, is a strong desire to protect individual freedom, a goal best achieved by minimizing government intervention and allowing the market to function as freely as possible. Friedman describes other fundamental beliefs of the classical liberal as well. These include beliefs that coercion is evil, that voluntary cooperation is good, and that unanimity or consensus should be pursued whenever possible in decision-making. The liberal recognizes that not all people have equal abilities and thinks some abilities deserve more compensation than others. Friedman proclaims that:

[the] heart of the liberal philosophy is a belief in the dignity of the individual, in his freedom to make the most of his capacities and opportunities according to his own lights, subject only to the proviso that he not interfere with the freedom of other individuals to do the same” (195).

In other words, being able to pursue what one wants to pursue is more important than treating everyone equally.

Friedman recognizes that defenders of equality will take issue with some of the liberal’s positions, but doesn’t fully acknowledge that justifying unequal treatment have the effect of limiting someone’s freedom. He also doesn’t grapple with the issue of measuring talent, as measuring talent—and assigning value based on that talent—can be a subjective matter, and even when it isn’t, sometimes the people making decisions aren’t properly equipped to assess someone’s skills and abilities. A talented person won’t be properly compensated if that talent goes unrecognized.

Though the classical liberal is wary of government intervention, there are some situations where he will allow it for the sake of expediency, or because there seems to be no better option. This is sometimes the case when monopolies and neighborhood effects arise. In this way, the liberal is practical. He is not so tethered to his principles that he won’t make compromises when it makes sense to do so. And like every other kind of person, the liberal is flawed, according to Friedman. His approach may be the best, but sometimes he will make mistakes in applying this approach to the real world.

The socialist conceives of freedom as a political issue and material well-being as an economic one, a distinction Friedman describes as flawed. In a socialist system, there tends to be a high degree of government involvement in the market and other aspects of the economy. Public or collective ownership of the economy’s means of production is common.

For the most part, Friedman thinks socialist perspectives are at odds with liberal perspectives. His argument against socialism seems more fervent than his argument against other philosophies that conflict with his own. Friedman uses strong language to indicate that the socialist has serious problems with logical reasoning, at least when it comes to economics and politics. In Chapter 1, Friedman says key socialist beliefs are a “delusion,” which suggests that the socialist is more dangerous and detached from reality than someone who’s simply misguided (8). Instead of just attacking socialist positions he opposes, he points out ways the socialist hurts others. For instance, Friedman doesn’t stop at saying that the socialist undervalues freedom; rather, he argues that the socialist harms others by limiting their freedom in a host of ways.

The socialist is also characterized as unwise. Friedman notes how trade restrictions and other types of government intervention prevent people in a socialist society from entering a full range of voluntary trade agreements, and how financial resources are typically distributed with the goal of increasing equality rather than rewarding merit, creativity, or efforts to meet the market’s demands. And despite placing great value on equality, the socialist can be unfair in the sense that he prevents free discussion of different ideas, especially minority opinions. Friedman notes that it’s difficult, sometimes even dangerous, to advocate and disseminate ideas that differ from the official stance of the government in a socialist system. He thinks this high level of government control opens the floodgates to corruption as well.

Friedman even hints that socialists aren’t completely honest about their failures and inconsistencies, and that they have a propensity for misinterpreting historical events and trends. He says socialism is often described as a system where resources are distributed equally, but in reality, there “probably would be men in the socialist society with large incomes” (17). If this is true, the socialist isn’t as committed to equality as he purports to be, or isn’t willing to acknowledge his system’s shortcomings.

The egalitarian places a premium on the value of equality and cares a great deal about equal status and equal treatment in a society. For many egalitarians, equal treatment manifests itself in policies such as equal distribution of income and wealth. In Chapter 12, Friedman argues that the egalitarian finds it acceptable to redistribute wealth “on the grounds of ‘justice,’” even though such redistribution could have negative consequences for the market, and notes that “equality comes sharply into conflict with freedom” (195). When such a conflict arises, a person must decide which of these two goals matters more. The egalitarian will choose equality, while the liberal will choose freedom.

In some cases, Friedman suspects the egalitarian does not think freedom is capable of achieving the best outcomes for a society. Other times, he simply criticizes the egalitarian for having a misaligned hierarchy of principles. Overall, Friedman seems to see the egalitarian as confused, rather than evil or dense. He also recognizes some areas where liberals and egalitarians share common ground. One is the belief that every individual has “an equal right to freedom” (195).

The paternalist believes that some people can’t care for themselves or make their own decisions. Therefore, someone else—typically the government—should be responsible for their care and make decisions on their behalf. Friedman often depicts the paternalist as arrogant; this seems to suggest that paternalists are prone to personality flaws. He decries paternalist perspectives at several points in Capitalism and Freedom, complaining that they underestimate people’s abilities and deny individuals of dignity and respect.

Despite criticizing many applications of paternalism, Friedman sees a role for this philosophy in the education of children and the care of the severely mentally ill. Friedman thinks it’s clear that these groups can’t handle the responsibility that comes with freedom. His willingness to recognize some positive applications of paternalism makes him seem fair, rational, and open to debate, not zealous, unquestioning, and unwilling to consider alternative viewpoints.