Capitalism and Freedom

“A child is a consumer good. A nanny buys the service called a child.” Truly a remark worthy of a great economist, for he was able to explain everything in human society through the structure of incentives. Liberalism is the ideological foundation that allows people to pursue their interests freely in response to incentives, and capitalism can be seen as the economic consequence of liberalism taking practical form. Yet, surprisingly, under such a doctrine the government’s role is strong. Namely, it instills and enforces upon citizens a fixed notion of private property. In effect, it is a brainwashing apparatus operating at the scale of the nation. As to why it engages in such a thing, the great economist answers like this: “The agreement matters more than the content of the agreement itself.” For otherwise human society cannot but collapse. It is ironic that, precisely because the power held by government is this strong, the government’s use of power must be controlled to the bare minimum. One can only trust that democracy (the political consequence of liberalism) will effectively keep the government in check. At this point, Friedman’s logic confronts a question that absolutely must be answered. If citizens voluntarily surrender their freedom and lose democracy, how can the government be controlled? Friedman’s world is a worldview of tension and contradiction, and as of the spring of 2025, the world is indeed in peril.

Milton Friedman, Capitalism and Freedom

by Milton Friedman

Cheongeoram Media, 2007.04.14.

Original title: Capitalism and Freedom

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