Capitalism and Freedom Summary – Junee 2022

Author: Milton Friedman

Short Summary
Capitalism and Freedom (1962) advocates a classical liberal approach to the economy by the economic scholar Milton Friedman. In the Capitalism and Freedom summary, you will find the ways to economic and political freedom that can be chosen by a government and the nation.
capitalism and freedom summary
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Detailed Summary

Friedman states that economic freedom is a precursor for political freedom. In Capitalism and Freedom, he discusses the role of government in a capitalist as well as a communist society. Friedman writes at length about the fiscal and monetary policies, and the government’s role in education, health, and discrimination. Friedman talks against decentralized governments saying that concentrated power does more damage than it appears to do.

Government should distribute the power among its masses so that they can have individual freedom and benefits. The government has plenty of places to indulge in rather than trades and businesses such as public housing and social security. The free market has the ability to generate great revenue and economic benefit and it should be promoted.

Capitalism and Freedom Summary Key Points

Decentralized Governments are Good for the Benefit of People

Friedman argues that governments are excessively powerful. They have the power to make or break the fate of the nation. If they decide they can work against the best interests of the people. This is why he speaks against a central government that has power over the whole state. If a government has that much power they take away individual freedom from the people and the people are forced to follow the government’s order even in the little matters of their lives. Such governments as George Orwell puts it acts as ‘big brothers’. They are always watching the individuals take control of their minds through newspapers, media, brainwashing jobs, and absurd rules, and soon the people would start the following everything by the government without even realizing it. In short, a centralized government holds immense power over the individuals of the nation and is not appreciated by the author.

Capitalism Allows Economic Freedom

Capitalism is a way of carrying out trades and businesses in which the profit is controlled by the owners of these trades and businesses and not by the state. Such a healthy private economy according to Friedman will eventually be beneficial for the state but the government would not be running after the profits in the first case. Take the example of Jews in ancient times who were prosecuted but thrived because they were allowed to carry out private trades on their own making their survival possible. Also, if a market is free there is no racial or geographic bias. Everyone is welcome to trade and grow their business. As Friedman notes that in an open market you would not care if the wheat available is grown by a black, brown, or white man. This ensures a variety of products in the market and allows the contribution of every person.

Communist Societies Mostly Benefit the Governments

If a society is capitalist, it limits the government’s functions. It will be responsible that the people abide by property laws, and enforce contracts and laws. On the other hand, in a communist society, the government can directly benefit from trade. It can decide to take as much of the money it wants and divide the rest among its people. In the past, people might have argued that an individual is weak and needs corporate help from their government but instances like Great Depression where the markets completely failed are speaking examples of the fact sometimes the economy collapses when it completely relies on the government. A stable monetary system is the responsibility of the government and it should be taken seriously. While many people see Great Depression as the failure of markets caused by the markets themselves Friedman says that it was solely the government’s own mismanagement. The government’s Federal Reserve system did not increase the money and supply in the wake of the bank collapse. The government therefore should be focused on creating stability rather than focusing on meddling with the markets.

There are plenty of Other Things for the Government to do

Friedman states that just because it is not always good for the government to mix up with the local trade and markets it does not mean that the government has nothing to do. A government can ensure the stability of its people and state by creating school systems, hospitals, legitimate security, creating dams, and laws that help the people. Many laws in the United States of America hinder success and according to Friedman, the people are succeeding despite the laws, not with the help of laws. Working on such aspects can not only benefit the people but will steer the country in a forward way.

Capitalism and Freedom Quotes

“The preservation of freedom is the protective reason for limiting and decentralizing governmental power.” –Milton Friedman

“History only suggests that capitalism is a necessary condition for political freedom. Clearly, It is not a sufficient condition.” –Milton Friedman

Capitalism and Freedom Summary Review

Capitalism and Freedom summary is a fascinating read that combines economy with politics. This book might take an ample amount of time but it will teach you concepts that will stick with you for a lifetime. It describes the areas where a government’s involvement can benefit its people and also points out ways in which people can work for the state’s benefit. A fascinating read that will require your attention for you to fully grasp the ideas of capitalism and communism.

To Whom I Would Recommend Capitalism and Freedom Summary

  • To the twenty-two-year-old student who is interested in knowing how the economy affects politics.
  • The nationalist is in a big position and wants to do good for his state.
  • And to everyone who might be interested in the true happenings of the Great Depression.

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