[Milton Friedman] Capitalism and Freedom

Friedman: Capitalism and Freedom(1962);

  • Title: Capitalism and Freedom
  • Author: Milton Friedman
  • Published: 2002
  • Publisher: University of Chicago Press
  • ISBN: 0-226-26421-1

Capitalism and Freedom is Friedman’s most influential book of neoliberalism. The main theme of this book is to argue how to maximize freedom through free market and small government.

Main Ideas

  • Restrict the role of the government (the smaller, the better)
    • Policing, National defense, and protection of private property are the only roles of the government; all others are not necessary
    • Against the Keynesian Economic spending
  • Free Market can solve all problems including labor and schooling


Friedman argues that his idea is based on freedom and results in the ideal democratic society. But his experiments in South American countries turned out disastrous.

All economic models are restrictive – deal with limited variables and ignore others-. Friedman’s idea lacks the most important factor “human beings“. He regards a human just like a $1 bill. It is rather an intellectual deception and nothing but an elitism. As Noam Chomsky mentions, he just wants the profit of a few over population.

The most serious problem of this book is that it have been so popular despite of its logical pitfalls of most of the claims. Friedman’s argument is out of context or deceptive in general. One example is his preference of a flat tax rate over progressive tax rates; Friedman argues that by adopting a proper flat tax, the whole tax revenue can be increased. But the point of the progressive tax rate is not the amount of collected tax money but the redistribution of income. I don’t think Friedman did not know this simple fact.

There are 2 important arguments that need to be mentioned.

  1. Adopting free market might cause the short-term problem but will result in long-term benefits.
    • History shows the opposite as we can see in the South American countries. You can find a lot of examples in Naomi Klein’s “The shock doctrine“.
  2. Development of Asian Tigers (Taiwan, South Korea, … , and  even Japan) were due to the capitalism and free market policies.
    • In his book “Bad Samaritans“, Ha-Joon Chang shows that Asian tigers had developed their economy through protectionism and government-led industries.

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