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Milton and Rose Friedman, Capitalism and Freedom (1962)Milton and Rose Friedman, Capitalism and Freedom (1962)

 

Milton Friedman (pictured right) was an American Nobel prize winning economist (pictured right) famous for his support of:

  • individual freedom.
  • free market capitalism (with minimal government controls of business). Milton and Rose Friedman, Capitalism and Freedom (1962)
  • monetarism (the belief that increases in prices and production are caused by increasing the money supply - the amount of money in circulation).   

His policies were supported by Ronald Reagan and Margaret Thatcher (pictured right together in 1981) in the 1980’s.

Friedman was greatly helped in his work by his wife, Rose (pictured right below), also a professor at the University of Chicago.Milton and Rose Friedman, Capitalism and Freedom (1962)

They both died in 2009.

 

See also...

Milton Friedman in the Management Gurus section. 

 

 

Book summary

 

Long live Adam Smith!Milton and Rose Friedman, Capitalism and Freedom (1962)

Adam Smith  (pictured right) was right - the interests of people and society are best served by: 

  • individuals and businesses pursuing their own self-interest, rights and moral responsibilities.
  • a competitive free market capitalist economy.

 

How a government must serve its people

 Milton and Rose Friedman, Capitalism and Freedom (1962)

1. Minimize its spending and taxes

A government must restrict its spending to things individuals and businesses can't do for themselves like defence.

 

2. DevolutionMilton and Rose Friedman, Capitalism and Freedom (1962)

Giving power to individuals and local communities.

 

3. Freedom

Giving people the freedom to choose how they:

  • live  (only responsible people, not governments, can solve ethical problems).
  • work (earning the market rate according to their performance). 
  • spend their moneyMilton and Rose Friedman, Capitalism and Freedom (1962)

 

4. Support success

Individual success should be encouraged, so higher taxes for the rich are wrong.

 

5. Attack unions

Labour (or trade) unions are bad, because they increase the pay of their members, leading to:Milton and Rose Friedman, Capitalism and Freedom (1962)

  • lower wages for other people. 
  • higher prices. 
  • lower demand.
  •  higher unemployment.

 Milton and Rose Friedman, Capitalism and Freedom (1962)

6. Maximize people's equality of opportunity

This must be done through:

  • better education.
  • making the economy more competitive and market driven.

 

What about corporate social responsibility?

A company’s only responsibility is to maximize its profits (legally in a competitive market).

 

Key quotes on government

To the free man, the country is the collection of individuals who compose it

Freedom is a tenable objective only for responsible individuals.

The great threat to freedom is the concentration of power.

 

Key quote on corporate social responsibility

There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it...engages in open and free competition, without deception or fraud.

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