That system is called free-market capitalism. That means you need a system that guarantees both the economic and political liberties we need to thrive. In both cases, restrictions on economic and political freedoms have the same result: they prevent individuals freely pursuing their own dreams and destinies. Now compare that to the case of an American citizen who isn’t allowed to visit the Soviet Union because she holds pro-capitalist views. As he goes about booking his travel, he realizes he can’t afford the trip, because the government’s capital controls mean that sterling is undervalued relative to the dollar. Imagine a hypothetical British holidaymaker in the aftermath of the Second World War set on taking a vacation in the US. Why not? Well, economic and political freedoms are actually interdependent and, if you curtail the former, you also limit the latter. In reality, you can’t mix the state-led socialist economy of the Soviet Union with the individual political freedoms of the US to create a kind of “democratic socialist” society. Follow that approach to its logical conclusion and you soon end up with the idea that any political system can be combined with any economic system.īut that’s a mistake. We typically learn that economics is about material well-being, while politics is about individual freedom. why basic education benefits society as a whole but university education doesn’t.Įconomics and politics are often taught as separate subjects in school.how a negative income tax could boost social welfare and.why government spending doesn’t necessarily lead to economic growth.In this summary of Capitalism and Freedom by Milton Friedman What starts out as a promise to redress market imbalances ends up aiding monopolies, undermining living standards and – paradoxically – increasing inequality. As he saw it, the road to hell really is paved with good intentions. The idea that the state can and should play a role in the economic life of our societies is back in fashion.Īll that would have worried Milton Friedman, one of the twentieth-century economists most closely associated with the argument that economic freedom is the only guarantor of political liberty. On Amazon, books with titles like Communism for Kids meanwhile race up the bestseller lists. In the US, self-declared “democratic socialist” Bernie Sanders is one of the frontrunners to lead the Democratic party into the 2020 presidential election. That’s a view which has been increasingly challenged in the decade since the 2008 financial crash. As Margaret Thatcher famously put it, “there is no alternative.” As communism crumbled, politicians and intellectuals of all stripes reached a similar verdict: liberal-democratic capitalism was the only game in town. The Cold War between state-sponsored Soviet socialism and the Western world’s capitalism ended in a decisive victory for the latter camp.

Friedman capitalism and freedom