Capitalism And Freedom Friedman Summary

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Capitalism and Freedom Review

Milton Friedman is one of the most influential economists in this country’s history. The two main economical ideologies nowadays are traditional and progressive, with the first being a conservative way of thinking and the second being much more liberal. I would say that the bulk of this book takes a more traditional approach to most of the debated issues. Capitalism and Freedom, one of Friedman’s most popular works, was written in 1962 and is still a standard reference for many economists. The version I read has two prefaces written by Friedman after the book was originally published, with one in 1982 and one in 2002. They basically just note how there has been a “dramatic shift in the climate of opinion”
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In this system there was no political freedom, as lords would rule over serfs. Without political freedom, there really wasn’t any economic system (and therefore no freedom), and technology was completely stagnant the entire time. In accordance with Friedman’s theory, England sustained itself for hundreds of years, but never grew. As it slowly shifted toward capitalism and democracy, change in the form of technological innovation was immediately evident, culminating in the Industrial Revolution in the 1700’s. Later, the economic freedom in America motivated citizens to go from colonization to western settlement in under a hundred years by innovating technology. These historic examples support Friedman’s claim that the two freedoms need each other and social growth will come to a stop without …show more content…
Friedman again references the desire to lower unemployment after the Great Depression as an excuse for an expanding government role in economic activities, this time affecting fiscal policies. First, the government would just “prime the pump”, basically just getting the economy going by making various expenditures and then getting out of the way and letting the market handle the rest. When this failed to do the job, it was argued that a permanently high level of government spending because the economy had matured. Even though this idea has since been discredited, according to Friedman, programs and such that were enacted during this time remained, at the very least until the time this book was written. He notes how quickly the government is to enact programs meant to pull the country out of a recession, but also how slowly it acts to repeal these programs once the recession has passed, arguing that healthy expansions would be hurt by lessened government spending. However, I don’t think this holds as true today as it did over 50 years ago when the book was written. Friedman says that government spending and GDP rose at about the same rate in expansions during his time, but in class we learned that the ratio between spending and GDP declines during expansions today. This chapter clearly demonstrates Friedman’s lack of faith in Keynesian theories, referring to them as “Keynesian jargon” on a couple

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