Milton Friedman and Economics

Paper Summary:

The paper discusses three key ideas in Milton Friedman's work, namely that free competitive markets represent the optimal way of organizing production and exchange, that government intervention to rectify market failure usually lead to even worse outcomes and finally, the mix of free markets and the equality of opportunity increase the individual's chance to reach a standard of living that wouldn't seem likely otherwise. The paper also looks at the opposing viewpoint of Robert Kuttner on monetarism, currency markets, the natural rate of unemployment and education.

From the Paper:

"In his book "Capitalism and Freedom", Milton Friedman dedicated a whole chapter to the relationship between economic and political freedom. Over the years, a third type of freedom became obvious in the same equation, namely civil freedom, which the author himself mentioned as important in his last years of work (Winne, 2004). Friedman contends there is a close relationship between the freedom of the individual from a business stand point and that of the society. Thus, when the role of the state is reduced together and its activities are limited (e.g. regulate employment), the freedom of the society is increased and implicitly the political and economic freedom on the individual. The author notes that the state's role should focus on regulating the money volume in circulation."

Sample of Sources Used:

• Friedman, M. and S. Kuznets. 1945. Income from Independent Professional Practice. NewYork: National Bureau of Economic Research
• Friedman, M. and G. Stigler. 1946. Roofs of Ceilings? The Current Housing Problem. Irvington-on-Hudson, NY: Foundation for Economic Education
• Friedman, M. with the assistance of R. D. Friedman. 1962. Capitalism and Freedom. Chicago: University of Chicago Press
• Friedman, M. 1968. Inflation: Causes and Consequences [1963]; Why the American Economy is Depression-Proof [1954]. In Dollars and Deficits, ed. M. Friedman. Englewood Cliffs, NJ: Prentice-Hall
• Friedman, M. and R. D. Friedman. 1980. Free to Choose: A Personal Statement. New York: Harcourt Brace Jovanovich

More papers on Milton Friedman and Economics:

• Essay # 89951 : "Milton Friedman and Monetarism"
• Essay # 93979 : "Milton Friedman and the Rise of Monetarism"
• Analytical Essay # 109525 : "Rose and Milton Friedman"

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