Capitalism vs Democracy Essay

2342 Words May 12th, 2011 10 Pages
Capitalism and Democracy The political system and the economic system of the United States have been intertwined since the very founding of our country. Although there are many different views on how well the systems work or how they function, this has been a common thought shared by all different sides. Some have an optimistic view of capitalism, while others feel as though capitalism favors too few people. Two major points of view, the conservative and the “reform” liberal, describe how capitalism works, and the role for the government in managing the marketplace, in two similar, yet very different ways. First, we look at the thoughts of Milton Friedman, of the conservative point of view. According to Friedman, capitalism is a free …show more content…
This ensures that everyone has the freedom of choice in the marketplace, and the liberty to make a successful life for themselves, for Friedman believes conducting the economy in a voluntary manner is better for the social fabric of society. Milton Friedman believes there is a role for the government in economic affairs, but that role is very limited. The government’s purpose is to protect the rights and liberties of its citizens, and to be free politically, we must be free economically. He claims that the only time the government should step in is when “market failure” occurs, or when the market can’t or we don’t want it to do something. The federal government should only involve itself in economic affairs to enforce the rules set by and agreed upon by the people, mediate differences among citizens on the meaning of the rules, and allow a way for the rules to be modified if necessary. For example, printing currency should be a federal government function, to allow a fair and uniform payment method throughout the country. The government should also be in charge of regulating monopolies, where the freedom to make choices is compromised by the fact that there is no competition. Another instance would be in situations where there is a “neighborhood effect”, or when a third party is affected by a decision that they were not a part of, such as pollution. If a

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