I became vaguely aware of Milton Friedman in the 1980s, when he was often referred to as the favourite economic guru of Thatcher and Reagan, the founder of "monetarism" as a new school of economics. He was disliked by the left, and there were dark mutterings about his involvement with some of the less pleasant South American regimes of the period.
More recently I was referred to some excellent video clips of Milton Friedman on YouTube, and became interested in how his views fitted into economic thinking as a whole. I also became aware of economic libertarianism, expounded by such organisations as The Cato Institute (publishers of some of the sceptical volumes on man-made global warming theory, but with a much wider range of interests than that) and The Von Mises Institute, that seems to have quite an extreme view as to how limited the role of the state should be. Private justice, anyone?
Capital and Freedom was Friedman's seminal popular work, published in 1962 and based on a series of lectures that Friedman had delivered in the mid to late 1950s. Other popular works include Free to Choose, written jointly with his wife and published in 1980. He doubtless wrote scores of more technical papers in between. Friedman's economic hypothesis is that free market capitalism is the most effective mechanism for organising economic activity and growth, and that it thrives best when the government intervenes in it as little as possible. This economic hypothesis is allied to a strong personal conviction for individual liberty, that men should as far as possible be left to do as they choose so long as their actions to not have injurious effects on others - a philosophy stated emphatically by the founding fathers of the United States.
Milton Friedman argues his case clearly and effectively, and most of it is as apposite today as it was in 1955. Often it is only when he refers to numbers of dollars that one remembers that this book is nearly 50 years old - there always seems to be one or two noughts missing from the end of average salaries. There is quite a lot of historical detail - he devotes a chapter to the Great Depression, and his hypothesis that it was caused not by a failure of the market but by incompetent government intervention. Friedman believed that the market would have suffered less badly, and recovered more quickly, if the government had left well alone. As the Federal Reserve and the Bank of England intervene to deal with the current "credit crunch" banking crisis we have to hope that they will get it right - Friedman seemed to believe that by concentrating the power - and the responsibility - for managing the market even into highly intelligent and well-intentioned hands, you created the conditions for a major upset that the market, left to its own devices, would have avoided by the separate actions of thousands of individual participants acting in their own interests. We shall see!
The problem with Friedman's brand of economic liberalism (and he deliberately stuck to the word "liberal" in an attempt to win it back from left of centre state-interventionists - later he gave up and accepted the description "libertarian") - and with the Thatcherism and Reaganomics that it spawned - was that it can seem harsh and uncaring. Friedman argues passionately against the public provisions of housing, minimum wages, agricultural support, state provided old age pensions and much compulsory attempts to redistribute wealth. He does so on the basis that they interfere with individuals' freedom, concentrate power in government (which often operates inefficiently, and that most such schemes are ultimately counterproductive. He does also argue against the abuse of power by big corporations, through cartels and government lobbying, and expresses concern that the tax laws that allow corporations' retained profit to suffer a lower rate of taxation than income a disadvantages small companies against big ones, and that this, even in the early 1960s, had artificially supported the development of massive corporations. Friedman was, it seems, a small company man, a believer in enterprise on a human scale.
Friedman believed above all in Liberty. His belief in equality - egalitarianism - was more qualified. He believed in equality of rights under the law and of opportunity, but not that the state should attempt to achieve "equality of outcome" - i.e. equality of material wealth. That should be left to individuals to resolve through interaction with others and in accordance with their talents and inclinations. Equality of opportunity, of course, is easily said, and not an issue that Friedman resolves. For example, in arguing for a limited role for government in education, (though a much greater one that some present day libertarians might argue) opportunity for a high quality education would at the least be much easier for those born of rich parents than poor - one point at which I find myself unconvinced by him. In short, though, Friedman thought that men should be free to be unequal.
Whether or not you subscribe to Friedman's ideas, this book represented a major reassertion of the principles of classic, free market economics in the face of progressively more state-directed economies not just in the Eastern-bloc but in the US and Western Europe too. That school of thought had been dominated by John Maynard Keynes, and the latter's "General Theory" shall be my next project. This is an excellent, thought provoking and easily absorbed book.