53 pages • 1 hour read
Milton FriedmanCapitalism And Freedom
Nonfiction | Book | Adult | Published in 1962A modern alternative to SparkNotes and CliffsNotes, SuperSummary offers high-quality Study Guides with detailed chapter summaries and analysis of major themes, characters, and more.
Prefaces-IntroductionChapter Summaries & Analyses
Prefaces Summary
The 40th-anniversary edition of Capitalism and Freedom contains three prefaces written by Friedman: the one that appeared in the first edition of the book; a second written, in 1982; and a third, added in 2002. The original notes how the book evolved out of a series of lectures he delivered at Wabash College in 1956. With great gratitude, Friedman notes the key role his wife, Rose, a fellow economist, played in creating the book. He also acknowledges the support he received from the University of Chicago, where he served as an economics professor.
Friedman starts the 1982 preface by sharing some of his key motivations for writing Capitalism and Freedom. He notes that:
[t]hose of us who were deeply concerned about the danger to freedom and prosperity from the growth of government, from the triumph of welfare-state and Keynesian ideas, were a small beleaguered minority regarded as eccentrics by the great majority of our fellow intellectuals (xi).
He also identifies a sizable shift in intellectual attitudes after Capitalism and Freedom was released, remarking that his follow-up book, Free to Choose, received much more national attention upon its release in 1980. He attributes much of this shift to 20th-century historical events. He says that by the time Free to Choose arrived, most people realized that Chinese communism and Russian socialism were fatally flawed, unlike in 1962. He also mentions how the Vietnam War caused many intellectuals who supported big government and Democratic politics to lose some of their faith in these institutions.
In the 2002 Preface, Friedman elaborates on his earlier discussion of changes in the intellectual climate and public opinion. He notes how the elections of American President Ronald Reagan and British Prime Minister Margaret Thatcher, both critics of the welfare state, reflect this shift in attitudes. He also credits the fall of the Berlin Wall and collapse of the Soviet Union with convincing people that capitalism is indeed superior to socialism. Friedman then discusses how the aforementioned attitude change has shaped policies in developing nations. He says that right after World War II, the prevailing perspective advocated “central planning plus massive foreign aid,” which was largely unsuccessful (ix). As opinions shifted and people saw more examples of successful, market-focused approaches in East Asia, many countries chose a larger role for the market and a smaller role for government, thereby increasing economic freedom, political autonomy, and prosperity.
Introduction Summary
Friedman begins Capitalism and Freedom with a brief declaration of what government is and is not. He says individuals in free societies recognize that government is a means to an end, not their master or a fellow citizen. Thus, the individual citizen “recognizes no national goal except as it is the consensus of the goals that the citizens severally strive” (2).
Though government can be a useful tool, it poses a significant danger: destroying the freedom it is supposed to safeguard. This destruction is likely to happen, Friedman says, if power is too concentrated. That is why it’s essential to limit the government’s size and scope, and to disperse its power among smaller units such as states and municipalities. Government exists mainly “to preserve law and order, to enforce private contracts, to foster competitive markets” (2). It also exists to protect citizens’ freedom. Government may also be used to accomplish tasks that would be too difficult or expensive for people to accomplish individually, but this must be done with great care.
Friedman argues that the world’s greatest innovations have resulted not from a centralized government but the ingenuity of individuals, persistent minority viewpoints, and environments that allow a diversity of ideas and opinions. These factors are characteristics of a competitive capitalist system. Friedman defines this as “the organization of the bulk of economic activity through private enterprise operating in a free market,” then states his intention to show how such a system leads to economic freedom and makes political freedom possible (4).
In addition to stating the book’s primary themes, Friedman identifies himself as a liberal. He explains that he follows the classical liberal tradition of the 18th and 19th centuries. Classical liberals supported representative governments, decentralized authority, free trade abroad, and laissez-faire policies domestically. They were deeply concerned about individual liberties as well. Friedman contrasts this school of thought with that of the different group deemed “liberal” in the 20th century (6). Friedman explains that these modern liberals favor government intervention in economic affairs, redistribution of wealth, and other measures a classical liberal would oppose. He also notes that these liberals, unlike classical liberals, often value welfare and equality more than freedom.
Prefaces-Introduction Analysis
The Prefaces and Introduction set the stage for Capitalism and Freedom’s thesis: that competitive capitalism is a way to achieve economic freedom and is a prerequisite for political freedom. These chapters also acquaint the reader with Friedman’s philosophical orientation: classical liberalism. Friedman immediately begins to explain why it is important to adopt liberal values such as a belief in economic freedom. Likewise, he wastes no time in unveiling the chief enemy to freedom: the concentration of power, especially governmental power. This leads to another major theme in the book: that the government’s role in a competitive, capitalist system should be limited so economic activity is organized and driven by a free market.
The book’s early pages also usher in several minor themes and motifs. One is the importance of flexibility in political and economic systems. Friedman believes these systems must evolve in response to the changing conditions of the times. When it comes to economic activity, this is a way for producers to continually meet the demands of consumers. However, Friedman warns against overly hasty change as well, noting that it’s wise to “keep options open until circumstances make change necessary” (xiii). The tension between these two ideas is clear. By introducing this tension at the start of the book, Friedman creates an opportunity to resolve it in the pages that follow. This happens in Chapter 2, in his discussion of consensus.
The Prefaces also introduce a recurrent minor theme: the liberal as underdog. Friedman presents himself and his philosophical allies as a minority group the intellectual community doesn’t take as seriously as it should. By positioning himself as the underdog and his opponents as powerful but misguided, he encourages readers to root for his triumph.
