Capitalism and Freedom: Fortieth Anniversary Edition

"Capitalism and Freedom" dispels the myths about capitalism that have become so prevalent in our society: that the free-market caused the depression (it was actually a tyrannical Federal Reserve), that socialism can be democratic, and others. Milton's prose is clear and the book is good for those who haven't majored in economics. He gives an unwavering defense of personal freedom and individual autonomy from a minimalist government perspective.

This book is an important contribution to public discourse and although written about 40 years ago, still has relevance today.

Friedman discusses public education, roads, minimum wage laws (which he calls, "the most anti-black law on the statute books," and rightfully so as you'll see if you read this book), as well as the how so-called "progressive" tax system and welfare actually hurt the poor.

Friedman's other great contribution is "Free to Choose," which was written about 20 years ago and expounds on the ideas in "Capitalism and Freedom" in a bit more depth. But this is a good, short, concise book to start with that'll get you asking questions.


CLASSIC ECONOMICS, FRIEDMAN'S BEST   August 13, 2004
Denis Benchimol Minev (Manaus, Amazonas, Brazil)
91 out of 108 found this review helpful

Milton Friedman is one fo the strongest proponents of freedom in society as the only way towards development (a concept later expanded by Amartya Sen). This book is not an economics textbook, since he does not spend much time on the basic concepts of economics such as price theory. He assumes a bit of knowledge and uses it to make the case for many different economic ideas ranging from macroeconomics (monetarism) to microeconomics (school vouchers).

For a book that was written in the 60s, it is amazing how current his ideas remain. It is perhaps the most important book on the libertarian philosophy, focusing on preventing the accumulation of power by any individual or group of individuals in society.

Overall, it is a great read for someone familiar with economics and social sciences, it will definitely expand your horizons of thought. However, if you are looking for an introduction to interesting eocnomic ideas, I would suggest you read Free to Choose, which Friedman wrote a dozen years later to reach a more general audience.


Best Single Book on Economics available   March 21, 2000
51 out of 61 found this review helpful

No other book anywhere is more important for the student of economics. Compared to other books on economics, it is very concise and well written. You will gain more insight per minute of time expended than from almost any other text.

The book is timeless because the principles Professor Friedman explains are bedrock foundations of the Capitalist economic system. In almost all universities you are taught a system of thought that inevitably leads to an emphasis and reliance upon Government and the State, basically, socialism as a solution to our economic problems. Professor Friedman clearly spells out better solutions in which markets can solve our problems more efficiently than Government and Socialism. More important, Friedman shows that only Capitalism is consistent with the concepts of Liberty that motivated the Founding Fathers of the United States, principles that led to the drafting of the Constitution. The book Captialism and Freedom has stood the test of time, and still represents the single best source to obtain an understanding of economic markets and how they work, without jargon or mathematics. Instead, Friedman goes directly to the essence of market economics, and liberty, in a simple and straightforward manner. This book will show you how you can use the economic system to make yourself an independent person, capable of taking advantage of the liberty that free markets promote.

This book will help you understand why the institutions of Government, such as the public schools, the Post Office, and the Federal Reserve Board, inevitably become inefficient and problematic compared to private enterprise solutions. At present, Professor Friedman heads up a foundation which promotes free enterprise within the public school system, referred to as School Choice and Vouchers. The intellectual foundations for this suggested improvement in our public schools were laid in Captialism and Freedom. Finally, Professor Friedman spells out the intellectual foundation for the results of his study of the history of monetary policy and the inevitable problems of the Federal Reserve Board. The problems of the Federal Reserve that were discussed in Professor Friedman's Monetary History of the United States are problems that are inherent in government enterprise, issues that are discussed in Capitalism and Freedom.

This book is a must read for any serious student of Politics or Economics. Also, because the book is written in a simple and straightforward manner, any lay person without training in economics will gain fundamental insight into the structure of the Capitalist system and the inevitable problems of Socialism.


Excellent, brief articulation of Friedman's beliefs   July 16, 2002
62 out of 75 found this review helpful

Friedman's critics and fellow travelers in the libertarian fold rightfully viewed Capitalism and Freedom as a landmark book in 1962. The author brilliantly, if albeit briefly, articulated his theories of human behavior, which stood in contrast to the prevailing Keynesian ideology. The book has stood the test of time, and has become a classic part of libertarian literature. Like Marx's Das Kapital, the book has become a common point of reference for review in many college courses for members of the Left and the Right.

Some quick notes. The book was not written as an exhaustive economics treatise that purported to evaluate every single possible component of economics. Friedman did not present every single ideological permutation's view of price supports for farm products, as an example. Anyone looking for Every Possible Libertarian Opinion on a Given Economic Question, much less the contrasting viewpoints of Marxists/Neo-Keynesians/Flat Earth Society proponents, will need to look elsewhere (Keynesian Paul Samuelson's classic work, "Economics", is recommended for as a starting point). Friedman's reputation in the economics profession was not earned from this book, but his other works, especially his "Monetary History of the United States".

As for Paul Krugman's criticisms of Milton Friedman, the potential reader should heed the old axiom, "consider the source". Krugman is a brilliant economist, who after being exposed for decades to a mass of information on the failings of government meddling in the economy, persistently recommends a watered down version of the same failed policies that didn't work in the past. Interestingly enough, he belongs to that peculiar breed of economist who stridently defends "free" trade between nations, but somehow believes that individual entrepreneurs in a national economy require "guidance" from Big Brother (regulate, baby, regulate).

Krugman, like many economists of all political preferences, carefully chooses data that conforms to his preconceived opinions (monetarism under Thatcher and the early Volker years in the US), while excluding any information that might challenge his assumptions. Krugman fails to mention that in 1979, with 21% interest rates and 13.5% CPI in the US, his fellow Keynesians were recommending as a "cure" an increase in inflationary spending, higher marginal tax rates, and increased spending by the government. Some cure. Which is exactly why so many people anxiously embraced the monetarist creed at the time. Equally bogus is his claim that Volker's altered policies in the mid-1980s were a reversion to Keynesian monetary doctrine. Krugman's analysis of supply-side economics, which Friedman never supported, contains many of the same "ignore the facts" approach.

Final note. Many of the same economists who criticize Friedman for his lack of intellectual rigor slam Robert Lucas, another University of Chicago Nobel Prize Winner, for being too rigorous and dependent on advanced mathematical models that don't reflect the "real world".


Fifty years old and still truly refreshing   August 8, 2004
Øystein Sjølie (Oslo, Norway)
15 out of 16 found this review helpful

Five decades on, Friedmans thoughts of the functioning of the economic and political life, are still mind-blowing. Written in a clear and powerful language, the points are well made after logical discussions of some important issues facing all societies.

The main theme in the book is the close link between democracy and capitalism, or political freedom and economic freedom. Without the latter the former is very difficult. The Hollywood blacklist threatened the freedom of many film workers. However, the movie companies desires to make money gave them incentives to hire the blacklisted writers, producers and actors, and the workers got to work because of capitalism. Conversely, Winston Churchill never got to speak against Hitler on the government owned BBC between 1933 and the outbreak of WWII.

Throughout the book, Friedmans belief in the individual and his abilities to take care of himself stands as a lighthouse. However, because man is imperfect, and cares mostly of himself and the closest ones, often disregarding others, power should be dispersed as much as possible. Those two propositions are the bedrock of the conservative ideology (Friedman calls it liberal, furious that the left has stolen the term), and of this book and its attacks on ICC (a regulating body turning into a lobby organization), Social Security (why is the government monopolizing saving), counter-cyclical economic policy (impossible), corporate social responsibility (not a corporate issue), the Medical Association (modern guild restricting the education of doctors) and a range of other organizations and institutions.

In general, I think Friedman is giving to little weight on neighborhood effects, or public goods as it is called now. Nor is the fact that most human beings are irrational shortsighted, and therefore better off forced to save for later, touched upon. At last, information problems make several markets, among them education, far from perfect. Still, its one of my best reads of the year.