Which economic system is the best? Why does Milton Friedman believe capitalism is best?
Throughout history, many leaders and economists have asked “which economic system is the best?” According to Milton Friedman, the answer is clear. Capitalism is the best type of economic system.
Keep reading to find out which economic system is the best.
Which Economic System Is the Best? Is It Capitalism?
A true capitalist system must always put equality of opportunity before equality of outcomes. Proponents of redistribution and government intervention in the economy do not have the evidence of history on their side. This helps prove which economic system is the best.
During the early days of socialism in the 19th and early 20th centuries, it may well have been possible to imagine a collectivist utopia as a superior form of social organization to industrial capitalism—simply because such collectivist societies existed only on paper.
But this can no longer be the case. The experience of poverty, inefficiency, and, inevitably, severe political repression in socialist and communist countries cannot be ignored. This is as true of North Korea and Cuba today as it was of the Soviet Union at the time Milton Friedman was writing.
Capitalism has proven itself to be history’s most effective system for alleviating poverty and raising the standard of living for the vast majority of the human population. Lovers of economic and political freedom must resist every attempt—even by the most well-intentioned idealists—to impose central control over systems of voluntary exchange.
Increased government control over our lives would ultimately lead to the creation of a less free and less prosperous society. We must always remember that concentrated power is dangerous, regardless of the intentions of those wielding it.
Exercise: Understand Capitalism and Freedom
Explore the main takeaways from Capitalism and Freedom.
How did the book challenge your existing ideas about the balance between free markets and government? Did it change any of your ideas? Explain why or why not.
Which of Friedman’s claims do you most strongly disagree with? Explain your answer in a few sentences.
Do you think that what you earn in a capitalist system is solely the product of your own productive capacity? What factors beyond your control might affect this?
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Here's what you'll find in our full Capitalism and Freedom summary:
- The key principles from Milton Friedman's Nobel Prize-winning book
- Why capitalism functions best when it is freed from government restraints
- How forced redistribution schemes are morally unjust