What is the summary for Capitalism and Freedom?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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As its title implies, Capitalism and Freedom is a book that argues that a society is only truly free if it has capitalism.  The book argues that the government should leave people alone to pursue wealth as they see fit.  If it does so, the people will develop a system that will be more prosperous and just than they would if there were a lot of government regulation.

Friedman argues in this book that the government takes away people’s freedom when it tries to regulate their economic activity.  For example, he says a person is deprived of freedom when the government forces them to spend some percentage of their income on a retirement savings account (as with Social Security).  He also says that the government takes away people’s freedom when it will not allow them to pursue a given career without getting a license.  If the government did not regulate as much, people would have greater freedom.

If the government would make fewer regulations, there would be more justice and more prosperity.  He thinks, for example, that there would be more prosperity if there were no minimum wage.  With a minimum wage in place, employers are less likely to hire as many people because they have to pay them more.  He says a minimum wage causes greater poverty because it creates a situation where fewer people are able to find work.  He also says that a totally free market would be more just because it would do away with things like discrimination.  He argues that businesses that discriminate will lose out because they will drive away customers and/or because they will lose the potential services of good employees who are the wrong race, religion, or sex.  The other businesses will outcompete these businesses and discrimination will vanish.

In short, this book argues that our society would be better off without government regulation.  We would have more freedom,  more prosperity, and more justice.

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