An all-time favorite of mine, Capitalism & Freedom creates a framework of classic liberalism and argues forcefully in favor of free-markets and decentralization over the expansion of government involvement in economic and social affairs. Friedman builds his argument from the ground up by identifying coercion as the State's distinguishing feature over all other societal organizations. From the (classic) liberal's perspective, this aspect shapes the relationship between citizen and government, and strictly limits the appropriateness of State involvement in society, particularly with regard to well-intentioned programs and policy.
Friedman uses this foundation to build a case for limited government in economic matters, citing in particular the consequences of monetary and fiscal policy abuse. In an exceptionally apt comparison, Friedman argues that the same rationale that limits government interference with free speech should likewise apply to government interference in the economy: namely, that constraints be applied to monetary and fiscal policy to limit the potential for government to do harm in its pursuit of doing good. Friedman gives numerous examples in which government officials, exercising carte-blanche economic authority, have further aggravated economic crises by applying a case-by-case standardh to different economic scenarios.
Having clearly laid out his political philosophy, Friedman builds his case for free-markets, detailing control measures intrinsic of a laissez-faire economy. From floating exchange rates to voucher-funded schooling, union contracts to charity, Friedman argues that the free-market harnesses the productive potential of millions of individuals and corporations, reconciling their preferences in a competitive process far more efficiently than any collective body. Throughout the book, Friedman debunks popular myths, disputes misunderstandings, and challenges the conventional wisdom prevalent among intellectuals and social elites of his day and ours.
The book's only drawback is its age and somewhat antiquated writing style that would certainly make it difficult for some readers to fully understand (particularly those who are victims of public school "education"). Friedman references several examples that would have been more easily recognized in the 1960s, but will not be immediately familiar to younger readers. Still, this brilliant work presents the core principles of laissez-faire capitalism and classic liberalism in a relatively clear manner, and is a must-read for anyone studying the dynamics of free-markets and free societies.
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