Capitalism And Freedom Friedman Analysis

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“Summary of Capitalism and Freedom” Milton Friedman Chapter 2: The Role of Government in a Free Society Milton Friedman (July 31, 1912 – November 16, 2006) was an American economist who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory, and the complexity of stabilization policy, Friedman was also an advisor to Republican U.S. President Ronald Reagan] and Conservative British Prime Minister Margaret Thatcher. His political philosophy extolled the virtues of a free market economic system with minimal intervention. He once stated that his role in eliminating U.S. conscription was his proudest accomplishment. In his 1962 book Capitalism and Freedom, Friedman advocated…show more content…
The day-to-day activities are like the player, the legal framework is like the rules of the game. And to be fair, there must be an agreement between the players the rules, and the umpire, which is created by the government. To conclude, government is needed to create the rules, to mediate differences between players on the meaning of the rules, and to enforce compliance with the rules on the part of those few who would otherwise not play the game”. In liberal society, freedom is highly prioritized and respected. So there is a major problem in deciding government’s activities is to resolve conflicts among the freedom of different individuals. Milton Friedman also argues economic areas that raise difficulties. For example, in the economic area, the primary issues arrises covers on the difference between freedom and competition. The definition of “free”, According United States, means that is free to set up an enterprise so that the other or old enterprise cannot keep out with the competitors except, by selling a unique and better product at same price or same product with lower price whereas in the continental tradition, that enterprise are free to do what they want, including fixing the market price, division of markets and uses of everything they have in their disposal in order to triump over the other potential rival or competitors. And another problem in economic area is determining the…show more content…
Therefore, government is needed to determine, arbitrate, and enforce the rules of the game which cannot be done by market itself. There are two general classes such as monopoly and similar market imperfection, and neighborhood effects. The 2 classes before are the restraining factors from achieving an effective market. For example, “exchange is truly voluntary only when nearly equivalent alternatives exist”. Monopoly as an example of an imperfect market implication, because when there is no nearly equivalent alternatives, the freedom of changes is being constricted. Most monopoly is brought on by government support or collusion among people. Solution that maybe can be the best solution for monopoly, is to avoid government interference or to stimulate effective enforcement of rules, such as those that been stated in the anti – trust law. Monopoly emerges when it is technically effective to have one single producer or enterprise. There are three types of monopoly, which are Private monopoly, public monopoly, or public regulation. However, all of three alternatives are evil, so one must choose among evils. Milton Friedman concludes that “if tolerable, private monopoly may be the least of the
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