Most helpful positive review
19 of 21 people found the following review helpful
Read it if you want to understand capitalism
on 18 April 2011
The book is of course a classic. I don't want to give a detailed academic review or critique, because I'm not qualified. I just want to explain its personal relevance to me.
I came to this after thinking about abstract questions after the financial crash in 2008. What are the theoretical justifications for the free market? What are the theoretical / pragmatic justifications for regulation? Should banks be regulated more? How can capitalism be evolved to reduce the risk of financial crises? How can capitalism deal with the risks of climate change if the costs of climate change are not priced into the market?
Friedman's philosophy is pretty right-wing.... Flat rate income tax of 20% (if I recall correctly). Privatise pretty much everything. But not *everything*. Some government spending is justified because of so-called neighborhood effects. E.g., subsidise poor families to send their kids to school. If not, society as a whole loses out. Some government regulation is justified. E.g., regulation to reduce environmental harm. If not, the market will allow environmental harm and society as a whole will lose out.
This book is pretty much the bible for a huge school of liberal economics that is prevalent in many parts of the world. It's important to read it, *especially* if you are not convinced by the free market. Sometimes I wanted the author to go further with his arguments. For example, he certainly didn't convince me about flat-rate taxation (his main argument appeared to be that tax avoidance is easier to avoid if there is a flat-rate). However, all in all, this is a classic that is worth reading for its rhetoric, breadth (it talks about so many areas of government policy), and importance.