A fantastic piece of literature. The concise nature of the book belies the depth of knowledge and purpose of Friedman's writings, but then that is what he intended. I find I take more out of the book each time I read it. A must for any serious economist and to any one willing to gain a clearer picture of the political economy and the forces at play.
Do yourself a big favour and read this and if are a socialist then be warned, the truth will hurt! (If Mises's work has not already done that)

the title above says it all.

something missing in his considerations.

perhaps should include a chapter on human character and the greed that appears to run rampant in the higher levels of the economic ladder.

excellent read and should be a must for all college freshmen also should read "free to choose" by milton and rose friedman

I literally almost vomitted reading this book for class. This father of Neoliberalism, the murderer Pinochet's pal, has caused immense suffering and destruction in the world with his proven-to-fail free market capitalism. Thank goodness he's dead. Lets pray there won't be another one as evil as him around for a while.

Reading this book gave me a whole new perspective about life, economics and individual responsibility. It's a must for everyone, even if you are not a student of economics.

A strong case for limited government and for reducing government's place in a free market economy. Even though 50 years old, it remains timely and thought-provoking.

One of the "readers" complained about the failures of the free market...I say 'readers' in quotations because the free market has never failed. There has never been a 100% free market in America, but instead a Mixed Economy...just as there has never been a free market in Africa or anywhere else. There have always been elements of Government control.

The perceived failures of the free market have always come from special favors given by Government to businessmen...thankfully this book does Capitalism justice by refuting the very notion that Socialism resembles a valid political/economic system.

I picked up this book because I wanted to learn about Milton Friedman and also some economics. Most of the information I have gotten about Friedman were usually from third sources. And depending on a person's political persuasion, the critique was either laudable or damning. We live in a very politically polarized time.
What I discovered was a marvel. Friedman's writing and ideas were convincing and logical. There was no tinge of political right-wing rhetoric as I expected and his views were very well explained. Friedman came across as very reasonable and clear. I believe that he would have advocated an economic idea even if it strayed from his own beliefs as long as it worked.
One of his ideas that I did not know much about was school vouchers. One of the ways of understanding school vouchers is to use the G.I. Bill as an example: Soldiers returning from WW2 service were given higher education vouchers so that they could attend any university or college that they wanted to. The G.I. Bill helped educate a generation of Americans. Everyone benefited because having an educated workforce is to everyone's best interest. A skilled and educated workforce means better jobs and a better standard of living. School vouchers would work exactly like the G.I. Bill would have. Like G.I.'s, parents would receive vouchers and they could then decide where to send their children. Interestingly, many of my progressive friends get fired up against vouchers. But I believe it is because they think that it means that all schools would be privatized. Not so. Taxes would still be collected for public education but instead of funds going to a bureaucracy, it would go to parents instead.
Another piece of information that I found fascinating was Friedman explaining the cause of the Great Depression. I always thought that it was due to the stock market crash but this is only half the story. The stock market crash was bad but the biggest problem was the lack of action by the Fed. It constricted the amount of money in the economy and it also failed to act when banks started to fail: A role that it is supposed to take up and the reason that it was created in the first place.
The last big point that sticks out about this book is Friedman's careful warning about the dangers of crony capitalism. Friedman advises against government subsidies or tax breaks for select industries. Inevitably, these sorts of practices are not only unfair and onerous to taxpayers but they encourage monopoly and are always harmful to free-market forces and to consumers.
There are many, many subjects covered in this small book. Friedman packs more erudite learning into 200 pages than most others could in 500 pages. I feel like I have really learned something after reading this book. I highly recommend that you pick up and read this book if you are interested in economics and Milton Friedman. Don't depend on other sources when it comes to Friedman because as I have found out, they tend not to know about his ideas or are skewered by their political viewpoints.

While I believe Milton Friedman was an intelligent person with some views that are highly intellectually stimulating even when I disagree with them, this is definitely not his best work. Capitalism and Freedom is unnecessarily brief and therefore, the arguments Friedman makes come off as overly simplistic and lacking any real depth. If you're looking for a better read by Milton Friedman, read Free to Choose. The arguments in Free to Choose are much more detailed and therefore, more convincing.

"A government big enough to give you everything you want, is strong enough to take everything you have." Thomas Jefferson (1743-1826)

(There are many topics to comment on in this book. First, I will comment on one general idea and one relevant issue: The stimulus package.)


Friedman, like many of our country's founders, did not trust the collective ability of government to avoid building concentrated power for itself. It is in its nature to aggrandize power by limiting the liberty of those that it is meant to serve. "Economic power is joined to political power, concentration seems inevitable...if economic power is kept in separate hands from political power, it can serve as a check and a counter to political power." (Page16) It is in governments political will to strengthen its power by pandering to populist sentiment and convincing enough of the people to forgo their liberties for guarantees and safety nets. "Underlying most arguments against the free market is a lack of belief in freedom itself." (Page 15) Playing on the misconception that large collective power is great enough to surmount all obstacles economic and otherwise. Or that government can take on a paternalistic role, treating citizens like lost children needing a strong hand to guide. Big and unwieldy governments inevitably give way to crony capitalism as it attempts to choose and favor some industries over others; an imbalance is struck that distorts the market making it unfavorable for those who do not have the resources to exploit the discrepancies: "Monopoly...arises from government support or from collusive agreements among individuals...the problem is either to avoid governmental fostering of monopoly or to stimulate the effective enforcement of rules such as those embodied in our anti-trust laws." (Page 28)
Therefore, government should remain as rule maker and umpire. Its role should be limited to overseeing that all elements should have the same rules applied appropriately across the economy. No favorites. Government should stick to enforcing laws and not using it as political patronage. In the long run, those groups and industries that allow its intervention and coercive tendencies will be undermining their own economic well-being for a short period of favoritism or paternalism.

Although this book was written decades ago, it still highlights issues that are relevant to us today. Our congress passed a stimulus package in the amount of $168 billion dollars several weeks ago. Many of our citizens believe that this "stimulus package" will ease the financial duress due to the slowing economy. The politicians that pushed for this package either really believe in its benefits or are simply buying populist votes: "Each recession, however minor, sends a shudder through politically sensitive legislators and administrators with their ever present fear that perhaps it is the harbinger of another 1929-33. They hasten to enact federal spending programs of one kind or another." (Page 76) Friedman addresses the issue of government "priming the pump" or attempting to serve as a "balance wheel" to offset reduced private expenditure: Reduce unemployment and get the economy going again by temporarily increasing government expenditures. By resorting to such poor measures, Friedman offers us a glimpse of our own likely economic outcome. More public debt and less likelihood of reduced taxes with no real long term solutions.

Throughout this book, Friedman details his observations on just how efficient a free private enterprise exchange economy can be. The subjects touched upon are free-trade, the role of government in education, social welfare, fiscal policy and other still relevant topics.

Milton Friedman's economic philosophy of free-markets, free-trade, and capitalism naturally extends itself into a more piercing discourse of the philosophy of freedom. Of course, Friedman is an economist and he sees, feels, and analyzes freedom through the devices that the discipline provides him. Except for a few notable exceptions there have been very few economists in the 20th century (and into the 21st) that have been able to use these tools with such magnificent skill and insight as Milton Friedman.

I picked up this book as a beginning of an attempt to self-educate myself on the topic of economics. Maybe it is not the best place to start for a novice, but I did thoroughly enjoy the book. Dr. Friedman makes a compelling case for capitalism, which has been under so much assault by academia, popular culture and the media. Friedman explains why capitalism works, as opposed to government intervention in the economy, in a compelling and concise book. At times, some of the concepts went over my head, but for the most part this was attainable for the beginner. I strongly recommend this book and intend to take a shot at more of Friedman's books.

This is not the most readable book that Friedman wrote (Read "Free to Choose") but it still highlights his passion for freedom.
In this book Friedman warns us of the dangers of corporations and industries aided by governments: the social ills and the displacement of workers that will always arise from too much concentrated central power. Friedman warns us of letting Capitalists operate in an environment without sufficient rule of law or in an environment where the state favors (with subsidies or mandates) one group over another: Friedman is very clear that government does have a role to play in a free economy:

"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 `rules of the game' and as an umpire to interpret and enforce the rules decided on."

Friedman was not an anarchist. He understood that anti-trust law enforcement is a principle role of government. Otherwise, monopolies would sprout and lessen choices, diversity and freedom. This wonderful book is still relevant after all these years. Today, we still face many of the challenges that Friedman worked so hard to address in a clear and concise manner. If only we would heed his call.

Highly recommended

Yes, there's nothing quite like reading about the Absence of Freedom written by a privileged white male because, really, who else in American society is less free than white men? Funny, isn't it, how the very same people who rally their readers with calls for "Freedom!" are the very same people advocating for a return to the most inhibiting form of capitalism available. How is this relevant, given its monumental failures throughout South America during the 70's and across the world in the past two decades?


Cut taxes? Trickle-down economics? Deregulate and let the rich create more jobs with their excessive wealth? Why didn't it work after Reagan cut the highest tax bracket by a whopping 20 percent? Why did the number of charitable contributions by the wealthiest Americans drop during this time? Why did the middle class begin dropping out? Why are free market capitalists so unwilling to relate any of these questions to the exact same occurances in Chile during the 70's when Pinochet put Friedman's disciples in charge of his economic policy?

Do yourself a favor and pick up a copy of Naomi Klein's "Shock Doctrine." Educate yourself on the massive failures of the free market system that have already occurred. This is nothing new. Free Market capitalism is a tired re-tread of laissez-faire capitalism, with the exact same results.

I was just re-reading this book and find Friedman's arguments to be rigorous and logical. Friedman mercilessly questions the assumptions of the rigid ideologues of the left and of progressive-liberalism, and offers a program for change. When Friedman wrote this book in the 1960s, his ideas were ridiculed. Today, they are widely known and respected, but sadly still ignored by both major political parties. Were every prescription Friedman offers adopted, there would be much less income inequality; the country would be several times wealthier; there would be much more innovation; and the country have much greater economic stability. There would be far more job opportunities for the young, and far greater economic security for the old. It is truly a tragedy that Friedman's ideas have been read, misunderstood and largely ignored in favor of the rigidly ideological opinions of our reactionary progressive-liberals.

This book is the first I had ever read by the late great economist Milton Friedman. I had first heard about him in an article by Ben Buranke I had to read for my economics class that had to do with monetary factors and the Great Depression. I had little idea that as I read more of what he wrote that he would have such a great impact on my way of thinking. It would be a stretch for me to see he changed my way of thinking. I have always been for free markets. However, I had always thought of capitalism as simply a means toward material prosperity while it was democratic political institutions and certain rights such as freedom of speech and of the press that were the sole means of measuring how free a society was.

In this book, Friedman explains that while democracy and civil rights are necessary for a free society, they aren't sufficient. This is especially true for the democracy part. He explains using many examples how capitalism is the best means available for achieving both material prosperity and human freedom.

The most striking example from this book is the hollywood blacklist case. Here were people that were discriminated against by the government because they were communists yet it was the economic system they seeked to destroy that allowed them to find work and continue to live free. Communists also were able to publish their works since the publisher only cared about making profit. He then asks how someone favoring capitalism could have published their views given the state is dominant over every aspect of life in a communist country. The book has some flaws but these are corrected in his more mature work Free to Choose.

An absolute classic work in the areas of Laissez Faire economics and libertarianism. While not everyone in the libertarian movement idolizes Dr. Friedman, his work was written in such a clear and accessible way that it introduced classical liberalism to a generation of people in the 1960's, who were big government Keynesians. Friedman fought for individual liberty, and while he wasn't an anarcho-capitalist by any means and sometimes uses government to solve problems, he is still the godfather of the libertarian movement and the libertarian movement would not be where it is today without Dr. Friedman.

I hate to be so outspoken on a review of a book. But I find this gentleman elemental, childish and silly. On top of all of that I do not believe that he is entirely sincere. This man was a statistician and "accountant" not a theoretician. He actually won the Nobel Prize. This I find very hard to believe. I have not given up on him though. But I have yet to find anything that he has written that I can get past the introduction. The more I read of what he has to say the worse it gets.

Clearly he overlooks the basic concepts of political economy in an effort to advocate for capitalist societies. Moreover, he fails to confront the basic questions of inequality which is characteristic in capitalist societies.

Friedman asserts that communism and socialism are mere tools of totalitarian regimes as if he's even attempted to study marx. This book is extremely lopsided and narrow in its praise for a system that has accounted for much pain in the world.

If your looking for a balanced intellectual perspective, look else where. However, I will recommend this book after gaining a true foundation on the study of political economy; try Adam Smith, Karl Marx, John Locke, James Mill, Keynes, Proudhon, Ricardo, Owen, Engels, etc.

Overview / Review: Milton Friedman, like him or hate him, is an essential economic theorist to tackle if one is interested in that field or in theories of economic justice. Having a progressive bias, I disagree strongly with many Friedman's theories. Having said that, for anyone interested in getting the essentials of his "liberal" (used in the older, more classic sense) economic views would do well to read this book. Friedman is opposed to state intervention in individual freedom, so many see Friedman as a modern counterpart to Adam Smith. Friedman advocates a free-market economy, with minimal taxation and government interference, because he believes the free market approach assures the greatest measure of freedom, justice, and overall affluence. Many modern conservatives have echoed the arguments he makes herein.
Friedman is actually convincing in his review on a few counts - the abuse of licensure, the problems of tax loopholes, and the fact that there are frequent shortcomings of the well-intended social welfare state. Having said that, however, Friedman does seem unduly biased in favor of a society so individualistic it is therefore almost atomistic, with little to no social cohesion. Some of his arguments are more assertions and claims than full-blown arguments, and one wishes he had addressed major issues in more detail (perhaps he does elsewhere). The book's virtue is that it is brief, but its weakness is also that its arguments are often too brief, and too compact. Karl Marx for example, has many faults in his theory that can be found, but Friedman too casually blows off Marx in about one page of analysis (Chapter 10, p. 167-8). Friedman's argument for a very limited government, and against socialism/communism, would have been more convincing if he had devoted a full chapter to Marx for one, and more attention to other matters of social justice, inequality, and oppression.
In a nutshell: this book encapsulates Friedman's "liberal" or laissez-faire approach to a wide range of issues on economics, government, and capitalism. The free individual is given utmost importance, and government that governs best is that which governs (or interferes) least in his Friedman's view. Not convincing from the standpoint of those interested in progressive social justice (Niebuhr's views on selfishness and power are more cogent), but essential to read and analyze if one is interested in economics and ethics.

Friedman was America's preeminent economists that explained the connection between Political and Economic freedom without the signature econo-techno-babble that is the vernacular of lesser economists. This book should be REQUIRED reading for all high school, or at the very least, college students. I enjoyed it immensely and will be wary of "too many dollars chasing too few goods"!

This is essential reading for all people who wish to live in freedom. There is no one alive today with his insight, intelligence, and charm to promote the fundamental ingredients that go into being free and the advantages that come from it. The arguement is not simple. Those that believe in scarcity (i.e., Marx) have a much easier time. Indeed, most people today find the limits to grow thesis to be much more compelling. The fact that history has shown that it is almost always wrong seems to change few minds. It is through great books like this that people can learn.

Gandhi, "No society can possibly be built on a denial of individual freedom."

Gandhi, "... an increase in the power of the State ... does the greatest harm to mankind by destroying individuality which lies at the heart of all progress..."

Even though it's been a while since this book was written it still is important and its views are quite good. Maybe a bit fundamentalistic on liberal thoughts but once you read it you really understand why freedom is such an important value.

This was my first economics book, and I have been fascinated with political economy and political philosophy ever since. Friedman has always appealed to me because his libertarianism is grounded in pragmatism instead of a dogmatic idealism. Unlike many of the reviewers, I prefer this book to his later work (Free to Choose) because it delves into the philosophy behind his political economy.

but he was well regarded by the wonderful folks at the Ivy League schools. I would have given 4 stars but he spent his latter years on the webite of that unpatriotic lunatic Michael W Hodges.

Verdict: a little too hippie

I did not like this book much. I liked his other books more. It has many of the downfalls of dry, boring academic writing. He wrote this book a long time ago and was not a very good writer yet. Also, Friedman makes rigidly-ideological attacks which, in retrospect, are clearly distorted and embarrassing, hurting his otherwise great economic ideas.

Milton Friedman's best book for general readers is "Free to Choose: A Personal Statement." He wrote this book late in his career and, mercifully, gets straight to his message is that book. Friedman's best academic book for scholars is, by far, his "Monetary History." Indeed, it is his best book, period. It was responsible for his winning the Nobel Prize in economics. Although a little outdated, it made an lasting impact on economics.

Just my two cents.

"Capitalism and Freedom" is one of a series of books that Milton Friedman wrote with a more general audience in mind, as part of his battle against the pre-1980 economics consensus. Freidman was a believer in freedom, and to him, the free market was an essential part in ensuring that freedom. Today, his beliefs form the basis of most non-Marxist economic theory. Yet, when he wrote "Capitalism and Freedom", the consensus view following World Wars and economic disasters was that government intervention in the economy was not only beneficial, but was necessary. The world had seemed too complex, to uncertain for anything other than a heavily taxed and heavily regulated economy. The only disagreement was over the level of government intervention - a Keynesian state, an economy heavily directed by a Galbreaithian "new class" or a Marxian economy where the role of the private sector was practically non-existent.

Milton Friedman was one of a band of economists who challenged these views, not only in economics faculty lounges, but, more importantly, in the court of public opinion.

While this book is well written and persuasive, it is not as relevant today as some of his other works. This book was written at a time of a very different economy. For example, the book spends much time discussing the effect of the old standard on economics and trade, something which has no relevance today.

In short, read the book for its historic value. If you want a Friedman book that is relevant for today, read "Free to Choose."

It is easy to see Mr. Friedman's influence on today's economy and politics (Democrates and Republicans). In recent interviews, he makes the point that most Americans were not ready to accept his ideas when this book was written over forty years ago, since most needed to have the experience of living with defective economic principles to actually realize their full negative impact on their lives. What is more amazing is the fact that many of Mr. Friedman's other recommendations have not been realized. Mr. Friedman makes the best case I've seen so far for school vouchers. A great book to read for those with open minds, a healthy fear of big government/business and a desire to see our economy fully prosper and meet the needs of its people.

Everyone should read this book whatever your political opinions. Even if you disagree with his positions, it will make you think. Friedman's Arguments are always clear, original, and thought-provoking. An excellent read, and surprisingly a page turner.

This book (like Hayek's Road to Serfdom) will require you to frequently turn back to the publication information to convince yourself that it wasn't published in the last few years. It remains very topical, but is no longer the radical prescription it once was -- by force of will and arguement, Friedman has begun to revolutionize society.

This book is a terrific presentation of economic truths. As a minor note, this book was written many decades ago in the post WWII era and there is a bit of content that addresses the ridiculous laws that were in effect at that time. Specifically, it was against the law for private citizens to own gold bullion at that time. Friedman does take liberty with the notion of how counterproductive such laws are from an economic point of view. As someone that wasn't alive during that era (I was born in 61), it was a bit strange reading a book that referenced so much that was so alien to me.

Excellent read and certainly a true classic in economic understanding.

I have seen some old interviews with Milton Friedman and read a couple of his books; including this one.

Not only is the content of this book interesting and enlightening, but the presentation is well done too.

There have been very few authors and public speakers that have caught my attention as thoroughly as Milton Friedman. I highly recommend this book.

This book well deserves to be a classic, but it does not present any of the problems with Capitalism, so don't expect a balanced view. Via capitalism, we are like a bacterial colony on a dead squirrel. Bacteria metabolize all of the useful nutrients, and then there is a mass die-off. This works for the bacterial genetics because some of the bacteria will be blown or otherwise transported to another dead squirrel or such, and the cycle will continue. We, on the other hand, only have one "dead squirrel" (planet Earth), and no alternative ecosystems are within reach. So capitalism is betting all of our marbles that science will save our collective butts. For the science of rational selection that is economics, the end-game dependency on hope shows its non-rational weakness.

I purchased this book because I wanted to know more about economics, but other than a few rudimentary courses, I did not know much and I had heard Milton Friedman was good at explaining economic concepts to non-economists. Indeed, Friedman is very good at explaining the concepts he discusses at a level for lay people. That does not mean you will easily get all the concept in this book, I did need to reread passages to understand some of his points. What I found surprising and refreshing in this book is that the ideas are opposite of what I've been taught throughout my schooling (like the great depression was caused by the stock market crash). Whether you think his ideas are good or not, or whether you agree with him, I think the truly intellectual mind should be able to consider his ideas - and the basic tenet that capitalism, even though it has a number of problems, insures the greatest freedom and that government reduces freedom. I would have, until reading this book, assumed without thinking too hard, that public schooling was necessary and that doctors need to be liscensed. This book challenges you to think about what government's purpose is, and whether it regulations are helpful or hurtful and how best to achieve freedom. I found this book so interesting I purchased Free to Choose, which is basically and expansion of the ideas in this book, with a few extra topics and easier to understand examples. I would recommend this book strongly and intend to purchase more books by Milton Friedman in the future.

At a current time of cynicism towards Democracy, (especially within the U.S. , with its liberal left wing professors teaching our college students to criticize capitalism, instead of helping them to understand how ideally it functions in preserving our individual freedoms), this book is a brilliant reminder that if we veer towards Socialism, as the Democratic party always does, it will lead to less incentive and less personal freedom, to create ones own life and successes, rather than having the government (strangers) redistribute our wealth. If strangers in the government decide for us how to regulate our wealth (sound like China with the starving farmers, or Russia with an undeveloped economy, comrades?), then we are less free to do with it as we please, or to develop freely and invest it in our own interests. Hence, less freedom, more servitude to a centralized government.
College students who are struggling to keep communist/socialist (left wing democrat) professors from turning them into weak, mindless,conformists and altruists, should read this book in their own spare time (as well as Ayn Rand) to continue to think for themselves and allow our system to reward and elevate those who do so, without taxing them more than those who do not.

By far the best book ever written on the topics of political thought and personal freedom; explaining clearly and intelligently the necessity of having a capitalistic, free-market economy in order to achieve a free and prosperous society.

Written in the context of the Cold War, the author emphasizes the need for free markets and an open society for a society to property function. It stresses the importance of the individual and the needs of the individual against the backdrop of an "ask not what your country can do for you; ask what you can do for your country" era and the basic economic honesty of selfishness in general. There are several ideas in the book that probably need to be revisited (which is why you should read it) since they are becoming issues again in today's world.

Milton Friedman is one of the great economic thinkers of the 20th century. Based out of the University of Chicago, this Nobel Prize winner in Economics has consistently and cogently argued for the benefits of capitalism over any other form of economic organization. This, along with "Free to Choose" are his two major works establishing and explaining his beliefs. Within it, he argues against many established policies in the US federal government such as the minimum wage, subsidies, rent controls, and licensing requirements for practice in fields such as medicine and law. Likewise, he argues for many market-orientated alternatives to today's arrangements, such as increasing the use of school vouchers.

The author argues that the concepts of capitalism are very similar to the concepts of democracy, and that the spread of one helps the spread of the other, and hence both should go hand-in-hand in terms of public policy. This book, along with his other writings, are the bedrock of modern-day economic conservatism and its creations such as health-care savings accounts, school vouchers, tradeable pollution emission allowances, etc... By reading this book, one gains a very thorough understanding of modern-day American conservatism.

Unfortunately, the book minimizes the power of corporations and financial markets - speculators. The book also does not pay enough attention to the mining and energy industries, two sectors of the economy which often produce scandal and disasters when given over to the rule of free-market forces; i.e. Enron... Last, the author misses one key difference between democracy and capitalism. In democracy, one person gets one vote. In capitalism, this is rarely the case; some individuals will end up having more dollars (more votes) than other individuals.

Overall, a good book, though not a great one. The book's arguments are well made and warrant understanding, though they are by no means universally correct.

It is amazing how little has changed in our political dialogue in the 40+ years since this book was written. Friedman had chapters about social responsibility of business, taxes and incentives, free trade, vouchers and the role of government in the education system, and "fair" distributions of income, and trade protectionism to protect domestic industries and workers from "unfair foreign competition."

Friedman compellingly argues that Capitalism is the best means of promoting freedom man has yet devised. He observes that "underlying most arguements against the free market is a lack of belief in freedom itself." People who speak of failures of the market are generally actually referring to market outcomes that are inconsistent with their views of propriety.

He makes the telling point that politics forces conformity in decision making. Some form of majority decides issues, making that decision binding on all. Market forces "reduce strain on the social fabric by rendering conformity unecessary." It seems obvious then that the more decisions we leave to individuals, the more free we will be as a society.

I found it interesting that much that Friedman is criticized for is done on fallacious grounds. He very clearly sees a role for government. Government should do the things the market can not do for itself. The most important of which is enforce the rules of the game and adjudicate disputes over the interpretation of those rules. Further, government can be profitably involved when neighboorhood effects, or externalities are present. He rightly cautions against the continued extension of neighboorhood effects, often just an excuse for a group looking for a special dispensation.

He cautions us that one of the things we should fear most is the concentration of power. This is especially relevant today, given the continuing expansion of our Federal Government.

He makes the interesting point that high marginal tax rates are impediments to becoming wealthy rather than a tax on being wealthy. This is right on the money and may help to explain why Americans of all income groups are opposed to very high marginal tax rates on income groups above their own. This is something the left should take note of. I also found his point that very high tax rates caused the wealthy to be much more risk averse to be quite revealing. The wealthy of the time properly perceived that with high marginal tax rates the wealth they had was all the wealth they would ever have. When Washington took 91% of your marginal income the odds were low that you would ever recoup a significant capital loss. I don't think it is a coincidence that as those rates have dropped the American economy has grown faster and become the premier innovator and new business developer in the world.

Finally he has some interesting observations on the motivations of the egalitarians in society. He draws a great distinction between equality of rights and equality of outcome. The left insists on the latter, he feels the focus should be on the former. The conversion of the American intellectuals to communism/socialism has always puzzled me. How could people seemingly so intelligent espouse a system that has never been effective anywhere it has been tried. Friedman suggest that the "conversion of the intellectuals was achieved by a comparison between the existing state of affairs, with all its injustices and defects, and a HYPOTHETICAL state of affairs as it might be (emphasis mine). The actual was compared with the ideal." It now seems fairly well proven that the ideal is unattainable and also undesirable.

For those of a libertarian bent this will be a great read. For those of a collectivist bent but an open mind this is well worth the time and may change your mind just a bit.

About an hour away from san francisco, in the towns of the central valley a way is going on right now. A war between the union grocery stores and the non-union grocery stores. Guess who's winning the war?

Save mart, A union grocery store, has shut down 5 stores in the stockton and is going to shut down even more in the central valey and in the south bay, while a whopping 40+ non-union big box stores have opened shop.

Savemart, safeway and the like will continue to lose this war because they are paying an overwhelmingly high cost of 35 dollars in wages and health benefits to their workers. Wall-mart, food-for-less, and winco on the other hand, pay all their workers 9-13 dollars maximum.

The people of the central valley, mostly low income, are offering a signal to the grocery industry. You see, the people have decided that union workers aren't worth the cost of paying 2 dollars for a loaf of bread (as opposed to wal-mart's 79cents). They'd rather wait in long lines at non-union big box super centers than pay an extra 30% more on groceries. This leaves only a select few to now shop at union stores, and they include the rich or the bourgeoisie as your ilk like to call them. very soon there won't be many union grocery stores.

Those on the left will be quick to blame wal-mart or "evil" corporations for this "wiping away" of inefficient firms, but it is complete and utter idoitic ignorace to so blindly fail to see that the consumer created this "evil". The consumer's desire to purchase more for less created wal-mart, food-4-less and winco foods. Big box stores only exists because union labor created large scale inefficiencies in the grocery industry--inefficiencies that led to higher prices.

I don't have an economics degree. i'm just casual observer of politcal and social events. In fact, I'm pretty low on the social ladder because I work as a grocery clerk for a union Grocery store; One that is about to shut-down for good. It's sad, and It's hard to see why our store would close. Everyone at my store is nice, and all of the costumers like us. However, over the years I saw many of customers disapear. I see them at outside of work, and i'm constantly told, from the customers themselves, that they just can't afford to shop at our store anymore. That's a nice excuse , but their incomes hadn't changed; prices had changed, and it just didn't make anymore sense to shop at our noticably more expensive store. Automatically, I always repond to them, "shop at are store! we're union!", but Instead of the reaction that hope for, I always a get silent apologetic smile in return indicating that their shopping habits will not change.

this might seem like a messy rant but What i'm trying to say is this: Parecon, or anything remotely like it is built on a idealogy that refuses to deal with the reality of human nature. That refuese to ultimately concede that corporations exist because PEOPLE want them and the products they make to exist. The people don't care about how the products are made. If two people can bring a product to the market and offer a price cheaper than a company owned by 1000 workers, then, in the end, two people will be working and 1000 people will be unemployed. In order for something like parecon to work, not only would the government control how firms chose to make products, but it would also have to control what the people chose to buy, and This takes governmental powers to an alarming level. A level that few people are willing to accept. I think this is why free-trade is becoming an easy target in the mainstream media. Free-trade gives consumers more choices, and these chioces could lead to union workers like myself losing our jobs. This is very bad for me. I'm old and I can't go back to school. America, however, is built on a ideal of freedom, and i don't think I could ever be so selfish as to put my personal well-being above other people's rights to pursue happiness--something that this country was built on.

"Personally I'm in favor of democracy, which means that the central institutions in the society have to be under popular control. A democracy where people have a say over decisions TO THE EXTENT they are affected by those decisions.
Now, under capitalism we can't have democracy by definition. Capitalism is a system in which the central institutions of society are in principle under autocratic control. Thus, a corporation or an industry is, if we were to think of it in political terms, fascist; that is, it has tight control at the top and strict obedience has to be established at every level -- there's a little bargaining, a little give and take, but the line of authority is perfectly straightforward.

Just as I'm opposed to political fascism, I'm opposed to economic fascism. I think that until major institutions of society are under the popular control of participants and communities, it's pointless to talk about democracy. Participatory economics (PARECON) is the way to go.I'd love to see centralized power eliminated, whether it's the state or the economy, and have it diffused and ultimately under direct control of the participants. Moreover, I think that's entirely realistic. Every bit of evidence that exists (there isn't much) seems to show, for example, that workers' control increases efficiency.

A corporation is a form of private tyranny. Its directors have a responsibility to increase profit and market share, not to do good works. If they fail that responsibility, they will be removed. They have some latitude for public relations purposes, and the talk about corporate responsibility falls within that territory. But it makes no sense to regard them as benevolent institutions, freed from their institutional role. It is a public responsibility to enforce decent behavior.
What is called "globalization" is a specific form of international integration, designed and instituted for particular purposes. There are many possible alternatives. This particular form happens to be geared to the interests of private power, manufacturing corporations and financial institutions, closely linked to powerful states. Effects on others are incidental. Sometimes they happen to be beneficial, often not.

What is called "free trade" has highly protectionist elements. What is at issue are investor rights agreements, not free trade. The protestors, including the AFL-CIO, have good reasons to oppose investor rights agreements that insist on very high protection for property rights (often resulting, in fact, from taxpayer subsidy), but little or no protection for the rights of flesh-and-blood people, including rights of working people -- both in the US and in other countries. That's not oppostion to "free trade." It is worth remembering that the press has refused even to permit the official positions of the labor movement to appear. Thus during the NAFTA debate, the labor movement had a clearly developed position, not opposed to a NAFTA, but opposed to this particular version. Its analysis and proposals happened to be rather similar to those of Congress's own research bureau, the Office of Technology Assessment. But while the labor movement was constantly berated on false grounds, its actual position was never reported. The observation generalizes.

There was a brief experiment, a very brief experiment, with something more or less like capitalism, not really but partially, really free markets, and it was such a total catastrophe that business called it off because it couldn't survive, and there were moves in the late 19th century to overcome these radical market failures and they led to various forms of concentration of capital: trusts, cartels, and others, and the one that emerged was the corporation in its modern form. Soon after corporations were granted rights by the courts. They gave them the rights of persons, meaning they have the right of freedom of speech, they can propagandize freely, advertise, they run elections and so on, and they have the protection from inspection by the state authorities which means that just as the police technically can't go into your apartment and read your papers, the public can't find out what's going on inside these totalitarian entities.
They're mostly unaccountable to the public. Of course they are not real persons, they are immortal, they are collectivist legal entities. In fact they are very similar to other organizational forms we know and are one of the forms of totalitarianism that developed in the 20th century. The others were destroyed, these still exist, and later they were required by law to be what we would call pathological in the case of real human beings.So they are required legally to maximize power and profit no matter what effect that has on anyone else. They are required to externalize costs, so if they can get the public or future generations to pay their costs, they are required to do that. It would be illegal for corporate executives to do anything else.
By now, in what are called trade agreements, which have nothing much to do with trade, corporations are granted rights that go way beyond the rights of persons. They are granted the right of what's called "national treatment." Persons don't have that right. Like if a Mexican comes to New York, he can't claim national treatment, but if General Motors goes to Mexico, it can claim national treatment. In fact corporations can even sue states, which you and I can't do.So they're granted rights way beyond persons.
They are immortal, they are extraordinarily powerful, they are pathological by legal requirement, and that's the contemporary form of totalitarianism. They are not truly competitive, they are linked to one another. So Siemens and IBM and Toshiba carry out joint projects. They rely heavily on state power; the dynamism of the modern economy comes mostly out of the state sector, inot the private sector. Almost every aspect of what's called the "New Economy" is developed and designed at public cost and public risk: computers, electronics generally, telecommunications, the internet, lasers, whatever...Take radio. Radio was designed by the US Navy.
Mass production, modern mass production was developed in armories. If you go back to a century ago, the major problems of electrical and mechanical engineering had to do with how to place a huge gun on a moving platform, namely a ship, designing it to be able to hit a moving object, another ship, so naval gunnery.
That was the most advanced problem in metallurgy, electrical and mechanical engineering, and so on. England and Germany put huge efforts into it, the United States less so. Out of associated innovations comes the automotive industry, and so on and so forth. In fact, it's very hard to find anything in the economy that doesn't rely critically on the state sector.
People like Friedman often talk about how "things have improved" under capitalism. One could say the same thing about slavery. A slave in 1850 was better off than a slave in 1750.Is that a justification for slavery?
After 1917 Russia underwent very significant economic growth, is that a justification for bolshevism?
Throughout the 30's Hitler was probably the most popular leader in German history. He understood (like the US during WW2) that massive state expenditures can rescue a morbid capital economy from collapse. The economy was booming and Germans were living a lot better. Is that a justification for fascism?"

It's obvious that you know very little about economic facts. In a free market with private property rights (which themselves are nothing more than a natural extension of personal property and individual rights), businesses and all individuals only make a profit from providing people's wants and needs. Corporations may have a duty to shareholders, but that duty is ultimately to create good products that people will actually buy with their own hard-earned money. Capitalism (which itself is nothing more than a system of individual rights) as a result is democratic, because those companies that help the most people are the ones that get a profit. Compare this to all other forms where people are forced to pay and work for someone or something irregardless of whether hold up their end of the bargain (like how Americans are forced to huge taxes to public school systems despite a constantly iferior performance when compared to private "capitalist" schools that spend far less on each student, yet perform a superior job). Capitalism works by trade and consumer demand. Not the other way around. And businesses can't drive a competitor out who may provide for consumers more, unless it has the government impose regulations and other such things upon the competitors.

You're right that many free trade agreements aren't really "free trade", but this is the fault of the state the those that often do democratically elect them (kind of like how people democratically elected Bill Clinton twice, who actually signed the NAFTA), not of the actual free market. Consumers acting freely often have greater control over the economy than participants in a democracy. Plus, participants in a democracy aren't often aware of the things that a business has to cope with, such as the actual transaction costs, scarcity, and other things. If workers' directly controlling a business actually was more efficient, then they would be far more successful and famous than Wal-Mart, Ford, and others (due to consumer demand), but the simple fact is that all humans aren't created equal. Sure we should have equal treatment under the law, but we all have different skills, abilities, knowledge of certain costs that relate to decisions, different ways of organizing our time, etc.

Also, fascism (an offshoot of socialism) destroyed much of the German economy during the 1930's and 40's. The reason Hitler was so popular was because he was able to find a scapegoat in many groups, including Jews (many of whom were capitalist businessmen) rather than the State itself. Also, while Milton Friedman is right in many respects, it was largely incomplete. The Austrians tended to fare better and those of you decrying things like the WTO, IMF, and other such things that have caused economic instability the world over, those things are State, not market institutions. They are a result of interventionism, not laissez-faire.

Personally I'm in favor of democracy, which means that the central institutions in the society have to be under popular control. A democracy where people have a say over decisions TO THE EXTENT they are affected by those decisions.
Now, under capitalism we can't have democracy by definition. Capitalism is a system in which the central institutions of society are in principle under autocratic control. Thus, a corporation or an industry is, if we were to think of it in political terms, fascist; that is, it has tight control at the top and strict obedience has to be established at every level -- there's a little bargaining, a little give and take, but the line of authority is perfectly straightforward.

Just as I'm opposed to political fascism, I'm opposed to economic fascism. I think that until major institutions of society are under the popular control of participants and communities, it's pointless to talk about democracy. Participatory economics (PARECON) is the way to go.I'd love to see centralized power eliminated, whether it's the state or the economy, and have it diffused and ultimately under direct control of the participants. Moreover, I think that's entirely realistic. Every bit of evidence that exists (there isn't much) seems to show, for example, that workers' control increases efficiency.

A corporation is a form of private tyranny. Its directors have a responsibility to increase profit and market share, not to do good works. If they fail that responsibility, they will be removed. They have some latitude for public relations purposes, and the talk about corporate responsibility falls within that territory. But it makes no sense to regard them as benevolent institutions, freed from their institutional role. It is a public responsibility to enforce decent behavior.
What is called "globalization" is a specific form of international integration, designed and instituted for particular purposes. There are many possible alternatives. This particular form happens to be geared to the interests of private power, manufacturing corporations and financial institutions, closely linked to powerful states. Effects on others are incidental. Sometimes they happen to be beneficial, often not.

What is called "free trade" has highly protectionist elements. What is at issue are investor rights agreements, not free trade. The protestors, including the AFL-CIO, have good reasons to oppose investor rights agreements that insist on very high protection for property rights (often resulting, in fact, from taxpayer subsidy), but little or no protection for the rights of flesh-and-blood people, including rights of working people -- both in the US and in other countries. That's not oppostion to "free trade." It is worth remembering that the press has refused even to permit the official positions of the labor movement to appear. Thus during the NAFTA debate, the labor movement had a clearly developed position, not opposed to a NAFTA, but opposed to this particular version. Its analysis and proposals happened to be rather similar to those of Congress's own research bureau, the Office of Technology Assessment. But while the labor movement was constantly berated on false grounds, its actual position was never reported. The observation generalizes.

There was a brief experiment, a very brief experiment, with something more or less like capitalism, not really but partially, really free markets, and it was such a total catastrophe that business called it off because it couldn't survive, and there were moves in the late 19th century to overcome these radical market failures and they led to various forms of concentration of capital: trusts, cartels, and others, and the one that emerged was the corporation in its modern form. Soon after corporations were granted rights by the courts. They gave them the rights of persons, meaning they have the right of freedom of speech, they can propagandize freely, advertise, they run elections and so on, and they have the protection from inspection by the state authorities which means that just as the police technically can't go into your apartment and read your papers, the public can't find out what's going on inside these totalitarian entities.
They're mostly unaccountable to the public. Of course they are not real persons, they are immortal, they are collectivist legal entities. In fact they are very similar to other organizational forms we know and are one of the forms of totalitarianism that developed in the 20th century. The others were destroyed, these still exist, and later they were required by law to be what we would call pathological in the case of real human beings.So they are required legally to maximize power and profit no matter what effect that has on anyone else. They are required to externalize costs, so if they can get the public or future generations to pay their costs, they are required to do that. It would be illegal for corporate executives to do anything else.
By now, in what are called trade agreements, which have nothing much to do with trade, corporations are granted rights that go way beyond the rights of persons. They are granted the right of what's called "national treatment." Persons don't have that right. Like if a Mexican comes to New York, he can't claim national treatment, but if General Motors goes to Mexico, it can claim national treatment. In fact corporations can even sue states, which you and I can't do.So they're granted rights way beyond persons.
They are immortal, they are extraordinarily powerful, they are pathological by legal requirement, and that's the contemporary form of totalitarianism. They are not truly competitive, they are linked to one another. So Siemens and IBM and Toshiba carry out joint projects. They rely heavily on state power; the dynamism of the modern economy comes mostly out of the state sector, inot the private sector. Almost every aspect of what's called the "New Economy" is developed and designed at public cost and public risk: computers, electronics generally, telecommunications, the internet, lasers, whatever...Take radio. Radio was designed by the US Navy.
Mass production, modern mass production was developed in armories. If you go back to a century ago, the major problems of electrical and mechanical engineering had to do with how to place a huge gun on a moving platform, namely a ship, designing it to be able to hit a moving object, another ship, so naval gunnery.
That was the most advanced problem in metallurgy, electrical and mechanical engineering, and so on. England and Germany put huge efforts into it, the United States less so. Out of associated innovations comes the automotive industry, and so on and so forth. In fact, it's very hard to find anything in the economy that doesn't rely critically on the state sector.
People like Friedman often talk about how "things have improved" under capitalism. One could say the same thing about slavery. A slave in 1850 was better off than a slave in 1750.Is that a justification for slavery?
After 1917 Russia underwent very significant economic growth, is that a justification for bolshevism?
Throughout the 30's Hitler was probably the most popular leader in German history. He understood (like the US during WW2) that massive state expenditures can rescue a morbid capital economy from collapse. The economy was booming and Germans were living a lot better. Is that a justification for fascism?

It's obvious that you know very little about economic facts. In a free market with private property rights (which themselves are nothing more than a natural extension of personal property and individual rights), businesses and all individuals only make a profit from providing people's wants and needs. Corporations may have a duty to shareholders, but that duty is ultimately to create good products that people will actually buy with their own hard-earned money. Capitalism (which itself is nothing more than a system of individual rights) as a result is democratic, because those companies that help the most people are the ones that get a profit. Compare this to all other forms where people are forced to pay and work for someone or something irregardless of whether hold up their end of the bargain (like how Americans are forced to huge taxes to public school systems despite a constantly iferior performance when compared to private "capitalist" schools that spend far less on each student, yet perform a superior job). Capitalism works by trade and consumer demand. Not the other way around. And businesses can't drive a competitor out who may provide for consumers more, unless it has the government impose regulations and other such things upon the competitors.

You're right that many free trade agreements aren't really "free trade", but this is the fault of the state the those that often do democratically elect them (kind of like how people democratically elected Bill Clinton twice, who actually signed the NAFTA), not of the actual free market. Consumers acting freely often have greater control over the economy than participants in a democracy. Plus, participants in a democracy aren't often aware of the things that a business has to cope with, such as the actual transaction costs, scarcity, and other things. If workers' directly controlling a business actually was more efficient, then they would be far more successful and famous than Wal-Mart, Ford, and others (due to consumer demand), but the simple fact is that all humans aren't created equal. Sure we should have equal treatment under the law, but we all have different skills, abilities, knowledge of certain costs that relate to decisions, different ways of organizing our time, etc.

This book is extremely important! Together with another classical von Hayek's "Road to Serfdom" and Amartya Sen's "Development as Freedom" it gives a basic argument for thinking about politics and economics.

In today's Russia both common people and scientists/politicians are involved in post-planned economy discourse. They look at the free markets as something chaotic, uncotrolled and therefore - bad. They are thinking in terms of state intervention and paternalism and that's a big mistake.

This book won't give concrete recipies for recovey in transitional or developing countries. But it will give a framework for thinking about resource allocation, taxation and spending, monetary policy and other stuff from the right point. A point where free society stands.

Whether one agrees with his views or not they must acknowledge that Friedman presents new and solid ideas (and examples) to support his argument. Friedman clearly defines the central idea of the book and lays out his point in an interesting and knowledgeable way, unfortunatley (or fortunatley) this book leaves you wanting more because of the interest it stimulates. I purchased the 40th Anniversary Edition and I must say that there would be no need for a 40th Anniversary Edition if this book were not a classic.

Referring to one of the previous reviews of this book, yes, it indeed is still relevant after 40 years. Every socialist lie that people have accepted as truth just because it sounds great is blown to bits in this book. If you want to know what real freedom means and how to achieve it, this book is a great start. Just like the other great economists of the 20th century, whose words and ideas keep on reappearing as new long after their death (Hayek, Hazlitt, Nock, Fisher), this book is one for the ages.

Although he never uses the term, Milton Friedman would probably be considered a libertarian with his view of a very limited Federal government. The main responsibilities of the Fed would be establishment and enforcement of laws, resolving property rights and maintaining the monetary system. Mr. Friedman considers himself a defender of `classical' liberalism which is essentially the liberalism of the 17th century that concerned itself with the distribution of power, protection of property rights and freedom of individuals.

As the heir apparent to Fredrick A. Hayek, Mr. Friedman takes up the battle against socialism, central planning and the concentration of power. Unlike his predecessor, however, Milton Friedman is extremely specific about the changes he would like to see in the way the U.S. government governs. He would like to see the elimination of rent control, minimum wage, the FCC, Social Security, most business regulations, tariffs on imports, public housing and national parks. Friedman was also an early proponent of school vouchers. In fact he goes so far as to call for the complete `denationalization' (privatization) of public education. The main thrust of Mr. Friedman's argument is that when the government attempts to solve social problems through central planning it invariably causes more problems than it solves, restricts individual freedoms and consolidating power in central planners.

There is an almost mystical reverence in this book for market forces and their ability, if left alone, to solve practically any social ill including racism. The problem is that Friedman presupposes that business will be forced to act in a rational and benevolent manner in order to maximize profits and survive in a competitive marketplace. Unfortunately this is often not the case. Businesses in the south were more than willing to forgo money offered by blacks. As a pro-business liberal Mr. Friedman sees regulations that force shops to hire blacks as unfair and damaging to those businesses that "[serve] a neighborhood inhabited by people who have a strong aversion to being waited on by a Negro clerk". However, Mr. Friedman's argument can be turned around as unfair and anti-capitalistic to blacks who offer their services and are denied based on race. This would apply to anyone barred from the marketplace, not just blacks.

Milton Friedman is so pro-business that he advocates a complete elimination of corporate taxes. In his mind business owes nothing to society and even says, "there is one and only one social responsibility of business - to use its resources and engage in activities to increase its profits". He then goes even further stating that, "Few trends could so thoroughly undermine the very foundation of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible". Not only does Friedman encourage unbridled greed he makes it the number one corporate responsibility in order to protect "free society". Once a person accepts that the relentless pursuit of self interest is the best thing a person can do for society he or she can justify just about anything.

One part of the book that seems particularly dated is Friedman's claim that Capitalism reduces wealth disparity. In fact he holds up the United States as a model for wealth equality. If only this were true. He completely ignores the real and growing threat to freedom brought on by the concentration of wealth because he doesn't see it as a problem. The average voting age citizen is welcome to vote for whichever party they choose at which point the parties in power will adjust policy to the needs of wealthy donors. The Bush administration has turned this it into an art form. Friedman also expresses concern that, "a large fraction of the public scrimps in their productive years to provide themselves with a higher standard of living in old age than they ever enjoyed in the prime of life". Mr. Friedman should be pleased to know that 40+ years after the books publication a large percentage of American's have more debt than assets.