...A predominantly voluntary exchange economy, on the other hand, has within it the potential to promote both prosperity and human freedom. It may not achieve its potential in either respect, but we know of no society that has ever achieved prosperity and freedom unless voluntary exchange has been its dominant principle of organization. We hasten to add that voluntary exchange is not a sufficient condition for prosperity and freedom.....But voluntary exchange is a necessary condition for both prosperity and freedom.
The key insight of Adam Smith's Wealth of Nations is misleading simple: if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.
Restrictions on economic freedom inevitably affect freedom in general, even such areas as freedom of speech and press.
"Equality","liberty"--what precisely do these words from the Declaration of Independence mean? Can the ideals they express be realized in practice? Are equality and liberty consistent one with other, or are they in conflict? ...In the early decades of the Republic, equality meant equality before God; liberty meant the liberty to shape one's own life....Neither equality before God nor equality of opportunity presented any conflict with liberty to shape one's own life. Quite the opposite. Equality and liberty were two faces of the same basic value--...The clue to what Thomas Jefferson and his contemporaries meant by equal is in the next phrase of the Declaration--"endowed by their Creator with certain unalienable rights; that among these are Life, Liberty, and the pursuit of Happiness." Men were equal before God. Each person is precious in and of himself. He has unalienable rights, rights that no one else is entitled to invade...."Liberty" is part of the definition of equality, not in conflict with it. Equality before God--personal equality-- is important precisely because people are not identical.In the past century a myth has grown up that free market capitalism--equality of opportunity as we have interpreted that term--increases such inequalities, that it is a system under which the rich exploit the poor. Nothing could be further from the truth. Wherever the free market has been permitted to operate, where ever anything approaching equality of opportunity has existed, the ordinary man has been able to attain levels of living never dreamed of before. Nowhere is the gap between rich and poor wider, nowhere are the rich richer and the poor poorer, then in those societies that do no permit the free market to operate.
A society that put equality--in the sense of equality of outcome--ahead of freedom will end up with neither quality nor freedom. The use of force to achieve equality will destroy freedom, and the force, introduced for good purposes, will end up in the hands of people who use it to promote their won interest. On the other hand, a society that puts freedom first will, and a happy by-product end up with both greater freedom and greater equality.
The establishment of the school system in the United States as an island of socialism in a free market sea....We believe that the growing role that government has played in financing and administering schooling has led not only to enormous waste of taxpayers money but also to a far poorer educational system than would have developed had voluntary cooperation continued to play a larger role. Few institutions in our society are in a more unsatisfactory state than schools. Few generate more discontent or can do more to undermine our liberty. The educational establishment is up in arms in defense of its existing power and privileges. It is supported by many public-spirited citizens who share a collectivist outlook. But is it also under attack. Declining test scores...One way to achieve a major improvement, to bring learning back in to the classroom, especially for the currently most disadvantaged, is to give all parents greater control over their children's schooling, similar to what those of us in the upper classes have....Parents could, and should, be permitted to use the vouchers not only at private schools but also at other public schools--and not only at schools in their own district, city, or state, but at any school that is willing to accept their child.......Success in restricting numbers, as in enforcing a wage rate generally requires the assistance of the government. In medicine the key as been the licensure of physicians--that is, the requirement that in order for any individual to "practice medicine," he must be licensed by the state....The boards, or state legislatures, have specified conditions for the granting of licenses that in effect give the AMA the power to influence the number of persons admitted to practice....When unions get higher wages for their members by restricting entry into an occupation, those higher wages are at the expense of other workers who find their opportunities reduced.....But when workers get higher wages and better working conditions through the free market....those higher wages are at nobody's expense.
Inflation is a disease, a dangerous and sometimes fatal disease. The cure for inflation is simple to state but hard to implement. Just as an excessive increase in the quantity of money is the on and only important cause for inflation, so... There is only one cure for inflation: a slower rate of increase in the quantity of money...The problem is not one of knowing what to do....The problem is to have the political will to do it.
The role of competition is a feature of the free market that we have encountered time and again. A worker is protected from his employer by the existence of other employers for whom he can go to work. An employer is protected from exploitation by his employee by the existence of other workers whom he can hire. The consumer is protected from exploitation by a given seller by the existence of other sellers from whom he can buy.
Thanks for the ping!
Thank you so much for pinging me to that post in honor of the life-work of Milton Friedman. It was good to read those words; it's very good to have them posted here.
"Free to Choose," the video series done by PBS, is one of the few things PBS has ever done that is worthwhile. Even today, nearly 30 years later, it's appropriate.