Free to Choose: A Personal Statement

Twenty-five years after its original publication as the book companion to a PBS series, Milton and Rose Friedman's "Free to Choose" (FTC) remains a highly relevant, easy to read, classic tome expounding the virtues of free market capitalism and the flaws and dangers of socialism and government control of the economy. The Friedman's brilliance in FTC is to continually demonstrate how government control inhibits personal freedom, whereas free market capitalism is what results when individuals have the right to "life, liberty and the pursuit of happiness". The roots of the Friedman's arguments go all the way back to the Jeffersonian concept of liberty as defined in the Declaration of Independence. Modern-day liberalism, which still believes in the "right to choose" in many social arenas (in fact, these exact words are used by abortion rights supporters), does not believe in an individual's right to choose in economic manners (e.g. liberalism would say a woman can choose to have an abortion, but it should be provided by a doctor working in the government run healthcare system). When the Friedman's describe their ideal economic system and practices, they are describing the principles of classical liberalism, or libertarianism. In FTC, the Friedmans present the basic arguments of libertarianism in engaging, persuasive language using layman's terms. The Friedmans have obviously won many converts. Milton Friedman was one of the intellectual forces behind the Reagan revolution, and showed how to boost the U.S. economy by lowering marginal tax rates and reducing government regulation. He is the father of school vouchers, to give poor Americans the opportunity to choose the schools their children attend (this is described in FTC chapter six). He won a Nobel Prize for his monetary theories, and FTC includes an analysis of the monetary failures that Friedman claims both led to and prolonged the Great Depression. FTC covers many other important economic topics. The Friedmans present strong arguments in favor of free trade, which is constantly under attack in the halls of Congress. They describe the downsides of government regulation, and show how it can lead to the opposite of the intended effects. An entire chapter is devoted to the cause and cure for inflation, a problem that bedeviled the U.S. in the 1970s and that gave rise to the Reagan revolution. But I would cite chapter five, entitled "Created Equal", as the single most important chapter in the book. The Friedmans show how the concept of equality has changed since the country's founding, and show the dangers of "equality of outcome", which many misguided politicians and other leaders appear to want, although not individuals (else why do so few choose to live in communes?). I've heard it said that California Governor Arnold Schwarzenegger hands out copies of this book as gifts. If so, he should be careful about passing out copies to his Kennedy in-laws, as this book just might cause Ted Kennedy's mind to blow if he ever bothered to read it. Someday, the last of the old guard socialists such as Castro and Ted Kennedy will pass on, thereby providing more opportunity for the "turning tide" towards economic freedom that the Friedmans describe in the last chapter of FTC to become even more prevalent.

This book presents a clear, thoughtful, and rational argument for maximizing free choice within the limits largely set by John Stuart Mill's "On Liberty" (that is, one may not use his or her liberty to harm another). Friedman sets out a strong case that when people are left to pursue their own interests, the whole becomes greater than the sum of the parts, and the commonwealth benefits more than when central planners try to orchestrate economies. That should be obvious now that nations like China and Vietnam, while retaining political repression, have given wide scope to free markets and thereby lifted millions out of poverty. Contrast that with Cuba or Venezuela, where central economic planning prevails, and the people are largely destitute. The book's argument is often attacked as an appeal to "greed," which is unfortunate as "self-interest" is not necessarily greed. I think mostly of one of my leftist friends in this regard who assails capitalism and whatnot, but who, due to his comfortable job in a government bureau, is able to pursue an acting and singing career after hours. Is he not, there, pursuing his self interest? And doesn't the larger public benefit from his ability to deploy his talents? I along with many have enjoyed many of his performances, and will continue to. It's just Friedman's thesis at work: we all benefit when everyone seeks his own interest. The book is often attacked as being anarchistic (or something like that) -- that is, that "limited government" or "less regulation" means "no government or "no regulation." Quite to the contrary, Friedman argues for a very clear and specific role for government in regulating natural monopolies, enforcing contracts, and taking many other actions to make sure that markets function openly. He clearly embraces regulation with the stipulation that when employed the benefits exceed the costs. And there's the rub with many government programs (say, agriculture subsidies): they favor entrenched interests rather than the commonwealth. His arguments about free trade convince me that it is the best way to help the poor in the world. I've read that the annual subsidy for one cow in Belgium rivals the annual salary of an African subsistence farmer. Take down that trade barrier benefiting the rich Belgian cow owner, and that farmer suddenly has a chance to present his goods on a world market. My point is, if you care about the poor, and if you care about social justice and all that, this might just be a crazy (and, for a change, effective) way to go. I don't fully agree with some of the book's policy prescriptions regarding environmental, education or monetary policy, but I suggest that Friedman's thoughts, formulated in the 1970s and published first in 1980, are far more likely to be successful than current ideas like "common core" or "quantitative easing." Overall, this is a thought-provoking read no matter what your political stripe is. Check it out.

Okay, first of all, this is a different kind of book. Although Milton Friedman is known as an economist, he's actually much more than that...his writings weave together ideas on morality, politics, freedom, liberty - and of course, a strong underpinning of economics. But somehow, he manages to do this weaving in a relatively effortless way, so that you see the connection from natural law and economics all the way up. I find his approach markedly different from, say, a Paul Krugman - who seems to start with a preconceived idea of what results he wants to have, and then he tries to connect it to the economics...he (and others like him) always seem to be making convoluted, contorted cases that really don't bear close scrutiny. Milton Friedman, on the other hand, seems able to connect the dots with clarity, and you come away feeling that rather than expressing opinions, he's almost revealing sacred and irrefutable truths. The book is a close cousin to a 1980's PBS TV series of the same name - also available on DVD (some - but not all - of it is also available on Google Video). The TV series was gripping in its day, although even though much of the content is identical, the book has somewhat of a different and to me, more authoritative "feel". Still, if you like the book, I highly recommend viewing the TV series as well. It was updated in the early 1990s with each section narrated by some big names in entertainment and politics, including Ronald Reagan. As for the content of the book, it's hard to find fault with any of it, and it remains as applicable today as when it was first written 30 years ago. In that way, it's similar to Adam Smith and others that wrote about some of these same ideals hundreds of years ago, yet they remain eerily relevant, even today. The book speaks about the power of the free market and the tyranny socialism leads to. Pity that our leaders (and fellow Americans) refuse to learn these lessons. This is one book that should be required reading for all Americans.

Friedman was, of course, the single most important champion of the free market in the 20th century. This book, based on a TV series in the 70s, was written close to 40 years ago. One cannot help but read his book with a strong sense of ambivalence: at once delighted in how his thoughts still apply so well in today's world of ecoomics, while dismayed at how far we have moved away from Adam Smith's ideal. From a layman's point of view, Friedman's book had been written in language that is easy to understand. It covers a full range of issues: free market and global trade, big government and bureaucray, politics and special interests, monetary management, as well as their application to social welfare, education, housing, taxation, etc. He had indeed presented a comprehensive, and well-explained, account of key issues in modern economics. A highly recommended read, at any time.

Milton Friedman was a highly visible economist, statistician, and policy commentator during the Twentieth Century. Before he died in 2006, he wrote and co-wrote several books relating economic theory, policy studies, and statistics. He was the recipient of the Nobel Prize in economics in 1976. I just finished reading "Free To Choose: A Personal Statement," written by Thomas Friedman and his wife, Rose Friedman. The book is dense and full of well thought-out arguments for free markets, smaller government, and how policies that adhere to these principles will result in greater liberty and freedom for the people that live under them. This book is almost thirty years old and it shows. Many of the numbers the Friedmans use in the book are laughable today, especially those they use as salaries for the common man or the cost of an average home. It's fascinating, however, they write at the end of the Carter administration that "the tide is turning." "The failure of Western governments to achieve their proclaimed objectives has produced a widespread reaction against big government. In Britain the reaction swept Margaret Thatcher to power in 1979 on a platform pledging her Conservative government to reverse the socialist policies that had been followed by both Labour and earlier Conservative governments ever since the end of World War II." "Free To Choose" is organized in chapters that each spend a liberal amount of print on a specific category of policy thinking. The first chapter, "The Power Of The Market" spends nearly 30 pages covering the ideals of a free market, the dangers of price controls, and the role of government with respect to markets. The second chapter is devoted to governments' role in free trade and overall liberty and economic growth. Hint: Friedman isn't a fan of tariffs or any other kind of government meddling with trade between nations. He offers a compelling historical argument for free trade by examining the governance and trade policies of Japan during the latter half of the 19th century and India during the latter half of the 20th century. The third chapter, "The Anatomy of Crisis," is perhaps the most relevant to readers today. It examines the modern banking system in the United States from the inception of the Federal Reserve in 1913, the depression nobody remembers from 1920-21, and the Great Depression of the 1930s. For those who believe we are currently at risk of suffering from the same mistakes or making greater ones today in our vulnerable financial status, this chapter offers some brilliant insights. In the conclusion of this chapter, the Friedmans write: "In one respect the (Federal Reserve) System has remained completely consistent throughout. It blames all problems on external influences beyond its control and takes credit for any and all favorable occurrences. It thereby continues to promote the myth that the private economy is unstable, while its behavior continues to document the reality that government is today the major source of economic instability." The fourth chapter, "Cradle to Grave," examines the development of the *welfare state* beginning in Europe in the late 1800s and then in the U.S. in the 1920s. Friedman spotlights health, education, and welfare in this chapter because at the time the book was written, they fell under a single department within the federal government. "The waste is distressing, but it the least of the evils of the paternalistic programs that have grown to such massive size. Their major evil is their effect on the fabric of our society. They weaken the family; reduce the incentive to work, save, and innovate; reduce the accumulation of capital; and limit our freedom. These are the fundamental standards by which they should be judged." The following chapter challenges the popular notions of what "equality" means. The Friedmans distinguish between the following: * Equality of outcome * Equality of opportunity * Equality before God Concerning *equality of outcome*, they write: "Life is not fair. It is tempting to believe that government can rectify what nature has spawned. But it is also important to recognize how much we benefit from the very unfairness we deplore." This chapter goes on to examine the effects of egalitarian policies as practiced in the US and in other modern societies. "... a society that puts freedom first will, as a happy by-product, end up with greater freedom and greater equality. Though a by-product of freedom, greater equality is not an accident. A free society releases the energies and abilities of people to pursue their own objectives. It prevents some people from arbitrarily suppressing others. It does not prevent some people from achieving positions of privilege, but so long as freedom is maintained, it prevents those positions of privilege from being institutionalized; they are subject to continued attack by other able, ambitious people. Freedom means diversity but also mobility. It preserves the opportunity for today's disadvantaged to become tomorrow's privileged and, in the process, enabled almost everyone, from top to bottom, to enjoy a fuller and richer life." Next, the Friedmans attach "What's Wrong with Our Schools?" It's no surprise their position is that centralized planning is a substantial culprit of the problem with schools. Again, freedom is the answer, they say. Vouchers, for example, tied with freedom to choose public schools, are an ideal way to encourage competition between private and public schools and drive education quality up. I found this passage about public subsidies of higher education shocking considering what we have observed in 2009: "When we first started writing about higher education, we had a good deal of sympathy for the (justification that public subsidies was an investment in future productivity and economic growth of society). We no longer do. In the interim we have tried to induce the people who make this argument to be specific about the alleged social benefits. The answer is almost always simply bad economics. We are told that the nation benefits by having more highly trained people, that investment in providing such skills is essential for economic growth, that more trained people raise the productivity for the rest of us. These statements are correct. But none is a valid reason for subsidizing higher education. Each statement would be equally correct if made about physical capital (i.e., machines, factory buildings, etc.), yet **hardly anyone would conclude that tax money should be used to subsidize the capital investment of General Motors or General Electric.** Milton Friedman is undoubtably spinning in his grave today. Following education is the question of "Who Protects the Consumer?" This chapter discusses the development of the Interstate Commerce Commission, The Food and Drug Administration, The Consumer Products Safety Commission, The Department of Energy and the Environmental Protection Agency. The Friedmans raise some very valid questions about the government's role in establishing these authorities and whether they are effective in their stated objectives. For example, many are familiar with Ralph Nader's book, "Unsafe at Any Speed," in which he supposedly documents the safety risk the Chevrolet Corvair was to its occupants. This book ignited a firestorm that eventually crushed the Corvair out of production and resulted in new government regulations pertaining to the manufacture of automobiles. It's difficult to argue that the outcome was a bad thing, but what about the original premise? Was the Corvair that bad? My dad was a Corvair collector and had two that he tinkered with, restored, and drove around on occasion. I always thought they were odd cars because the engine was in the back. The Friedmans point out that ten years after Nader's book landed, "one of the agencies that was set up in response to the subsequent public outcry finally got around to testing the Corvair that started the whole thing. They spent a year and a half comparing the performance of the Corvair with the performance of other comparable vehicles and they concluded, 'The 1960-63 Corvair compared favorably with the other contemporary vehicles used in the tests.'" Next is "Who Protects the Worker?" Here labor unions land square in the crosshairs. Also addressed are government interventions into work such as regulations against child labor, minimum wage laws, OSHA oversight, workers compensation, and more. Chapter 9 is about inflation. This isn't very relevant right now, but likely will deserve a re-read in a year or so. Here, Friedman puts his statistician muscles to work and establishes through numbers a strong correlation between monetary control and consumer prices. When the the Treasury and the Federal Reserve flood the market with money, prices respond by going up. The final chapter is a nice capstone on the book and discusses how the U.S. Constitution relates to many of the policies discussed and how it is eroded by some. Appendix A is an interesting inclusion. It is the party platform from the Socialist party during the 1928 presidential campaign. The Friedmans go through each of the 14 items in the platform and demonstrate that despite the Socialist Party not having a chance in Hell of ever having a candidate elected, since 1928, just about each and every one of these ideas put forth by the Socialist Party has been enacted. That's something to think about. [...]. It's not a quick read, but definitely an informative and educational one.

This classic work by Friedman is incredibly clear and concise. It is a must read for every American. This is not a read from the standpoint of the fundamentals of economic law that you will find in Thomas Sowell’s “Basic Economics”, nor technical economic analysis or econometrics that you will find in many other economic textbooks. Rather, Friedman offers economics from a more philosophical perspective. Friedman demonstrates the relationship between economics and politics and how they affect our freedom. He stresses throughout how shifting economic power away from the people puts the balance of power in the hands of the political. Each chapter is perfectly organized and he gives excellent concrete examples - no stone is left unturned. That said, the main takeaway regarding the overarching purpose of this book - and what this book seems to do best - is assess what the role of government is, and exactly how (and why) the government should or should not interfere in the economy. Friedman also offers '"cures" for the economic "cancers" that harm us today, which are still more relevant than ever. This book pairs perfectly with Thomas Sowell’s “Basic Economics”. This one being more philosophical and the latter more technical.

Below are key excerpts from the book that I found particularly insightful: 1- "Economic freedom is an essential requisite for political freedom. By enabling people to cooperate with one another without coercion or central direction, it reduces the area over which political power is exercised. In addition, by dispersing power, the free market provides an offset to whatever concentration of political power may arise. The combination of economic and political power in the same hands is a sure recipe for tyranny." 2- "The experience of recent years--slowing growth and declining productivity--raises a doubt whether private ingenuity can continue to overcome the deadening effects of government control if we continue to grant ever more power to government, to authorize a "new class" of civil servants to spend ever larger fractions of our income supposedly on our behalf. Sooner or later--and perhaps sooner than many of us expect--an ever bigger government would destroy both the prosperity that we owe to the free market and the human freedom proclaimed so eloquently in the Declaration of Independence." 3- "Prices perform three functions in organizing economic activity: first, they transmit information; second, they provide an incentive to adopt those methods of production that are least costly and thereby use available resources for the most highly valued purposes; third, they determine who gets how much of the product - the distribution of income. These three functions are closely interrelated." 4- "Our society is what we make it. We can shape our institutions. Physical and human characteristics limit the alternatives available to us. But none prevents us, if we will, from building a society that relies primarily on voluntary cooperation to organize both economic and other activity, a society that preserves and expands human freedom, that keeps government in its place, keeping it our servant and not letting it become our master." 5- "The ballot box produces conformity without unanimity; the marketplace, unanimity without conformity. That is why it is desirable to use the ballot box, so far as possible, only for those decisions where conformity is essential." 6- "Freedom cannot be absolute. We do live in an interdependent society. Some restrictions on our freedom are necessary to avoid other, still worse, restrictions. However, we have gone far beyond that point. The urgent need today is to eliminate restrictions, not add to them." 7- "In one respect the System has remained completely consistent throughout. It blames all problems on external influences beyond its control and takes credit for any and all favorable occurrences. It thereby continues to promote the myth that the private economy is unstable, while its behavior continues to document the reality that government is today the major source of economic instability." 8- "The waste is distressing, but it is the least of the evils of the paternalistic programs that have grown to such massive size. Their major evil is their effect on the fabric of our society. They weaken the family; reduce the incentive to work, save, and innovate; reduce the accumulation of capital; and limit our freedom. . These are the fundamental standards by which they should be judged." 9- "A society that puts equality--in the sense of equality of outcome--ahead of freedom will end up with neither equality nor freedom. The use of force to achieve equality will destroy freedom, and the force, introduced for good purposes, will end up in the hands of people who use it to promote their own interests...Freedom means diversity but also mobility. It preserves the opportunity for today's disadvantaged to become tomorrow's privileged and, in the process. enables almost everyone, from top to bottom, to enjoy a fuller and richer life." 10- "We believe that the growing role that government has played in financing and administering schooling has led not only to enormous waste of taxpayers' money but also to a far poorer educational system than would have developed had voluntary cooperation continued to play a larger role...We have tried in this chapter to outline a number of constructive suggestions...These proposals are visionary but they are not impracticable...We shall not achieve them at once. But insofar as we make progress toward them--or alternative programs directed at the same objective--we can strengthen the foundations of our freedom and give fuller meaning to equality of educational opportunity." 11- "Insofar as the government has information not generally available about the merits or demerits of the items we ingest or the activities we engage in, let it give us the information. But let it leave us free to choose what chances we want to take with our own lives." 12- "When unions get higher wages for their members by restricting entry into an occupation, those higher wages are at the expense of other workers who find their opportunities reduced. When government pays its employees higher wages, those higher wages are at the expense of the taxpayer. But when workers get higher wages and better working conditions through the free market, when they get raises by firms competing with one another for the best workers, by workers competing with one another for the best jobs, those higher wages are at nobody's expense. They can only come from higher productivity, greater capital investment, more widely diffused skills." 13- "Five simple truths embody most of what we know about inflation: 1. Inflation is a monetary phenomenon arising from a more rapid increase in the quantity of money than in output (though, of course, the reasons for the increase in money may be various) 2. In today's world government determines--or can determine -the quantity of money. 3. There is only one cure for inflation: a slower rate of increase in the quantity of money. 4. It takes time--measured in years, not months--for inflation to develop; it takes time for inflation to be cured. 5. Unpleasant side effects of the cure are unavoidable." 14- "We have been misled by a false dichotomy: inflation or unemployment. That option is an illusion. The real option is only whether we have higher unemployment as a result of higher inflation or as a temporary side effect of curing inflation." 15- "The two ideas of human freedom and economic freedom working together came to their greatest fruition in the United States. Those ideas are still very much with us. We are all of us imbued with them. They are part of the very fabric of our being. But we have been straying from them. We have been forgetting the basic h that the greatest threat to human freedom is the concentration of power, whether in the hands of government or anyone else. We have persuaded ourselves that it is safe to grant power, provided it is for good purposes."

In "Free To Choose", Milton and Rose Friedman take on the big government and inflation of the 1970's with a well reasoned, well articulated economic overview that ended up as the basis for much of the US and UK economic policies from 1980 through 2008. Bringing a rational analysis of history to bear from Adam Smith through the Great Depression, the Friedmans discuss the power of the market to self regulate, the drivers of economic crisis, and inflation. They then take on, piece by piece, in approximately 30 page chapters, their proposed solutions - both theoretical and practical for: * Social Welfare and Social Security * Racism and Equality under the law * Education * Consumer Protection * Labor and Employer Relations * Inflation Recognizing the challenges that are faced in the political landscape, the approaches they suggest are largely compromises from the theoretical hard line stance, and many of them - such as school vouchers - were actually adopted in the 80's and 90's. One of the most interesting elements of the book is the Friedmans' analysis of the 1928 US Socialist Party platform, and the fact that most of that platform was in place by 1979. As noted, the book is easy to read for an economics text, and is designed so that the lay person can read and understand the contents. A great read, and important work.