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on January 7, 2006
Almost everyone can agree that economic growth is good: the material benefits of more jobs, better pay, bigger houses and more money to spend on education and healthcare are indisputable. There may be a few spoilers railing against resource depletion, urban blight, and greenhouse gases, but ultimately those problems can be overcome by growth also. Now Harvard professor Benjamin Friedman argues that in addition to material benefits there are also moral benefits.

Friedmand writes that: "Economic growth - meaning a rising standard of living for a clear majority of citizens - more often than not fosters greater oppurtunity, tolerance of diversity, social mobility, commitment to fairness and dedication to democracy." And conversely, when there is economic stagnation or decline the citizen's "moral character" tends to decline accordingly, there being less tolerance, less openess, and less generosity to the poor and the disadvantaged.

Using the United States as a case in point, Friedman argues that from 1953 to 1973 median family income doubled. As the economy grew and Americans prospered, society became more open and tolerant. During this period, segregation became unconstitutional, the right to vote was guaranteed, racial discrimination was banned, fair housing and equal employment opportunity legislation was enacted. These events made America a more just and equitable society. Then from 1973 to 1995, the average wage in today's dollars declined. The national mood toward progressive social programs began to sour. Indeed these programs were cited by some as being unduly burdensome and being the cause of slow wage growth. Nevertheless, in times of falling incomes, Americans naturally become more concerned with their share of the shrinking economic pie. Friedman also sees here a deterioration of moral character.

It should be fairly obvious by now that Friedman is a liberal and equates morality with social welfare programs - this being the most contentious issue of the book. Conservatives and libertarians will be quick to point out that support for affirmative action, immigration, strong unions, endangered species, etc. have been detrimental to economic growth and are, therefore, by Friedman's definition, immoral. These critics will claim that in order to foster economic growth we must have reduced taxes, less regulation, non-union labor and fewer workplace rules. The resulting economic growth would raise all boats, and would thus be morally correct.

Friedman and his critcs do not disagree that the end result of economic growth - aside from material well-being - should be tolerance, openess, social mobility and dedication to democracy. They disagree on the means of achieving those goals. Friedman favors government intervention on behalf of the poor and the disadvantaged. The big question is whether or not it is in fact helping them. Two other books that have examined this question are Amartya Sen's "Development As Freedom" and Jeffrey Sach's "The End of Poverty." They have concluded that the poor must be provided with at least the basic tools for develpment. This doesn't mean generous welfare programs, but it does mean some public assistance - they need basic capablilites to achieve and contribute to society. Friedman is at his best when he stresses the importance of economic growth in providing these opportunities.
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on November 19, 2005
People who complain that books like Freakonomics are too short, elementary or filled with fluff should take a look at Friedman's Moral Consequences of Economic Growth. Not to say that this is an introduction to economics, gee-whiz or otherwise. This is a different book entirely. Focusing on how economic activity can impact human culture from a moral standpoint instead gives this book an interdisciplinary "bigger picture" authority and appeal. There is a lot to appreciate in this book and while I wouldn't exactly call it an easy read, it is understandable even to a non-economist like myself. I don't agree with all of Friedman's arguments, but in my opinion he does a fine job of choosing and presenting relevant issues. So whether or not you agree with what he has to say, this book will give you plenty of good food for thought.
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on December 25, 2009
This book is well-intentioned. And the author (BF) is candid enough to admit there are some facts his theory doesn't explain. But the thesis is in large part either so vague and full of exceptions as to be unverifiable, or else demonstrably wrong.

The book's affirmative thesis is that (i) "[E]conomic growth brings not only higher private incomes but greater openness, tolerance and democracy" (@15), (ii) "Economic growth matters because it enables the majority of a society's population to feel better off compared to benchmarks that are still recent enough to be meaningful. But once growth stops ... it is only a question of time before habits adapt and the sense of well-being dissipates" (@83), and (iii) "[I]n a stagnant economy, where one person's gain is necessarily someone else's loss, people who get ahead are perceived not only as doing so at other peoples' expense but as directly disadvantaging others. ... Stagnant economies, therefore, do not breed support for economic mobility, or for openness of opportunity more generally" (@86). BF tries to prove this by showing that during periods of "stagnation", countries often see outbreaks of racism, fascism, etc., while during periods of growth, they often enact laws (or undergo changes in social mores) that extend civil liberties and social welfare benefits to wider groups of people (see charts @ 214, 243, 265, 294).

An abbreviated list of issues I had with this line of argument:

1. WHAT IS GROWTH?: You have to wait until p. 47 for BF to offer his definition of economic growth: "a sustained increase in per capita incomes and living standards"(@47). But is this median income? GDP per capita? Something else? The book's lack of definitional clarity or consistency makes many of BF's arguments spongy, and may disguise the fact that some of his arguments are not correct. Here's an example of the latter: Many of the econometric studies BF relies on use GDP (or GDP per capita) as the relevant variable. Problem is, increasing GDP or GDP per capita doesn't necessarily increase the median real income in a society. Since 1980, increases in GDP per capita in the US, other Anglo-Saxon countries and Japan have been accompanied by a *decline* in real median income. In other words, it is not leaving the majority of those societies' populations "better off," in terms of increasing the majority's actual per capita income.

2. NARROW BASE OF EXAMPLES: BF's case studies are all white, European-rooted societies: the US, UK, Germany and France. Yet BF feels this is a sufficient base from which to generalize to the world. Have people learned nothing from post-colonialism? For example, Japan is the world's second-largest economy, with exceedingly rapid growth during much of the 20th Century. Its culture obviously is not European or Anglo-Saxon. The fact that it's not discussed in detail, and barely even mentioned in this book, greatly undermines the credibility of BF's thesis.

3. "EXCEPTIONS," OR A SPECIOUS PATTERN?: BF is admirably forthright that even the historical examples he does cite don't uniformly support his thesis. The cases of Britain and France each include a number of examples where movements towards greater openness, democracy, etc. occurred during moments of stagnation. And he admits that the US provides an even bigger example: the New Deal. I'd add yet another, albeit occurring after publication of this book: the outpouring of popular concern for temporary workers during the recent recession here in Japan, and the related doubts about American-style liberal capitalism. Both were factors leading to the change of political power in Japan in 2009.

BF calls the New Deal an "exception," and quotes A. Gerschenkron: "Historical hypotheses are not ... universal propositions. They cannot be falsified by a single exception. Testing them largely means trying to discover the boundaries of the area in which they seem reasonably valid." (@179; ellipsis is BF's.) But why should we be persuaded by Gerschenkron in this instance? Where do you draw the line between tolerating so many "exceptions" and questioning the validity of the hypothesis? To say there's "a single exception" is no excuse, when BF himself cites several.

4. ENVIRONMENTAL ISSUES: As another reviewer has noted, BF ignores a branch of the literature on economics and the environment. He relies on the "environmental Kuznets curve" (EKC), which purports to show many environmental problems first getting worse and then getting better as per capita GDP goes up (@382-383). He fails to cite to much literature questioning the reality of the EKC, and even some of the sources he cites in support are equivocal (e.g., Bradford & al., cited @533n.35, found evidence of the EKC in regard to only 6 of 14 pollutants). BF also claims that a shift to the service economy will reduce the environmental impact of growth (@381). Empirical evidence undermining this claim appears in a number of papers by U. Minnesota's Sangwaon Suh and collaborators, as well as in work by Fabrice Flipo and Jean Gadrey in Europe. (To be fair, however, some of this empirical work appeared after the book's publication date).

5. MISLEADING PRESENTATION OF RELATIONSHIP BETWEEN GROWTH AND "FREEDOMS": Notwithstanding all these complaints, BF is at his worst when he tries to generalize his argument to the developing world (Chapter 12). At pp. 313 and 316, he presents scatter-plot graphs showing "average rights and liberties rating" versus income per capita as evidence for his hypothesis. Each includes a trend line showing, e.g. that the higher the rate of growth in the period 1978-2003, the higher the "average freedoms" as determined by the criteria of Freedom House (FH), a US think tank that receives most of its funding from the US government. There are several problems with this:

(a) How FH ranks each country seems to be highly subjective and not particularly transparent. Moreover, many FH criteria relate specifically to economic rights, not necessarily political ones. BF mentions in a footnote that he gets similar results using ratings from The Economist magazine (@509); this shows only that one champion of free markets corroborates another. Would the same result have obtained if BF had relied on, say, Oxfam or Amnesty International?

(b) The distribution of the highest FH rankings is very culturally dependent. Of the 42 countries receiving the highest ratings (a total of 2 in the original Freedom House rankings, 1.0 in BF's re-scale), 20 are Anglo-Saxon or former colonies or protectorates of Anglo-Saxon countries, and all but 3 of the rest are in Western Europe (Uruguay, Chile, Cape Verde). So to attribute their high "average freedoms" ranking to their rate of GDP growth may be incorrect.

(c) There's also a more subtle fallacy of treating the nations in scatter plots as fungible entities, rather than as each behaving in accordance with its own specific historical circumstances ("path-dependence"). It's question-begging to believe they all follow some social or historical law, since that is what BF's trying to demonstrate. An analogy: suppose you took a snapshot of people emerging from a train station, or from the arrivals area of an airport. The formation they're walking in at that moment might lead you to think they were traveling together; but in fact, each can come from a different origin, and be heading to a different destination. Their current position relative to each other doesn't convey any significant information about their respective histories or destinies. The same fallacy is involved in the now-faded fad for the inequality-based Kuznets Curve, particularly when used for inter-country comparisons; see, e.g. Timothy Patrick Moran's 2005 article in Sociological Forum, "Kuznets's Inverted U-Curve Hypothesis: The Rise, Demise, and Continued Relevance of a Socioeconomic Law" for a fuller explanation; see also Dani Rodrik, ed., "In Search of Prosperity: Analytic Narratives on Economic Growth" (Princeton UP 2003).

(d) OK. Now suppose we ignore (a)-(c) above, and assume the FH data and BF's interpretation of the statistics are on a sound methodological footing. Nonetheless, BF draws the wrong conclusions from the data.

I downloaded FH's 2009 report, as well as the Conference Board's Total Economy Database, which includes purchasing-power-parity per capita GDP statistics (GK method) for 121 of the 192 countries in the FH. It so happened that the median FH ranking of the total sample was the same as the median of the 121-country sample, so this wouldn't have been affected by their absence. I then calculated two sets of data, using the same 0.0-1.0 scale for the average FH score as used by BF.

First, 1980-2008 per capita GDP growth vs. average FH rankings. This data showed the association suggested by BF - but very weakly. Let's divide the plane into quadrants, according to the median scores for average growth rate and average FH score. BF says we should see concentrations in the SW (low freedoms, low growth) and NE (high freedoms, high growth). What actually we see is 33.5 countries in the SW, 39.5 in the NE, but also 23.5 and 24.5 in the remaining two quadrants. In other words, a very fuzzy plot cloud. Excel can give you a "trend line," but eyeballing this suggests that a linear regression isn't really appropriate. ("Correlation coefficient" is around 0.173 - but I put this in quotes, since it's not clear that either variable is normally distributed.)

My other run focused on growth rates from 1999-2008. Since the FH rankings are recent ones, it stands to reason that they should be most affected by more recent history. Here, the association is *exactly the oppposite* of BF's hypothesis: SW has 26.0 countries, NE 27.0, while NW (high freedoms, low growth) 35.5, and SE (low freedoms, high growth) 32.5. In other words, the China/Singapore model of repressive countries growing faster.

Perhaps the most significant problem comes from comparing the 2001-2002 FH survey (the earliest available on their website) with the 2009 survey. As of 2009, 81% of the 192 countries in the FH survey had MAINTAINED OR IMPROVED their FH rankings -- even though by definition 50% of them had below-median growth. Of the 120 countries in my sample (one country was missing from the 2002 FH rankings), only 7 below-median-growth countries "backslid" in their FH rankings, whereas 10 above-median-growth countries had. Despite sluggish growth during this decade in countries like Germany and Japan, no major economy backslid in its FH rankings, and some advanced slightly (1/2 point in FH rankings, about .09 points in BF's re-scale). 28 above-median-growth countries improved their FH rankings -- as did 22 below-median-growth ones (plus 1 with exactly the median score). I note that BF doesn't attempt any such systematic intertemporal comparison in his book, even though his thesis is an intertemporal one.

I don't claim that any of the data - BF's or mine - really shows causative relationships. It's plausible that China's politico-economic model will become more influential in the coming decades, given that its average growth during the past 10 years has been about 2x that of democratic India's (based on Geary-Khamnis PPP method). In any case, the data I examined doesn't show any connection between FH rankings and growth. Rankings tend to improve or stay the same for the vast majority of countries, period.

(e) Unfortunately, that's not all. Not only does BF make dubious use of trend lines for fuzzy clouds of data, he presents his graphs with all the countries' names **sloping in parallel** with these sham lines. There were many other possible orientations for the data labels that would have preserved legibility, without disguising the weakness of the association of factors. I'd hope that this abuse of graphics could be explained by innocent incompetence, but given that BF is a Harvard economics professor, such an explanation is scarcely more reassuring than the alternatives: intentional deceit or reckless carelessness.

I leave aside other criticisms, such as BF's neglect of the "Easterlin paradox" (happiness does not increase with increasing per capita GDP, beyond a certain threshold; this large body of work is mentioned only briefly in passing, and misleadingly characterized), and the ultimate pessimism of his idea that we need to keep buying more and more stuff in order to preserve our political freedoms. I can only conclude that the widespread praise given to the book is, just like the substance of the book itself, little more than wishful thinking.

POSTSCRIPT, 2010/04: Derek Bok's recent book "The Politics of Happiness" describes a number of other counterexamples to BF's thesis, drawn from recent US history. E.g. support for large social programs began to decline *before* GDP growth stagnated in the 1970s; and racial tolerance continued to improve *despite* that stagnation (Bok @ 68-70).
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on December 6, 2005
What is the link between growth and democracy? In his latest book, The Moral Consequences of Economic Growth, Harvard University Professor Benjamin Friedman argues that economic growth or its absence shapes the moral character of a society. For the broad majority of a country's citizens, whether or not living standards are rising determines whether laws are tolerant of new ideas, supportive of immigrants, or protective of poor people. Throughout history, stagnation and economic decline have been associated with intolerance, while growth has been associated with increased tolerance and democracy.

While much of the evidence covered by Professor Friedman is drawn from the history of western economies, he argues that there is plenty of evidence available from developing economies as well. In that context, his book provides abundant illustrations suggesting that even if rising incomes do not solve all problems, they certainly help significantly improve the moral strength of societies, including their ability to open up to welfare improving reforms.

Consider ethnic disputes. When they often originate in a fight over limited resources, economic growth enables conflicting groups to compromise simply because they become less inclined to suspect that others are doing better at their expense. As long as people see their own income rising, they worry less about doing better than others. This creates an environment favorable to political and social advances. The "moral" gains achieved then further fuel the motivation to work towards growth collectively.

Friedman warns, however, that trying to go too fast on the moral front simply to get ahead on that dimension without delivering on the growth agenda can prove to be a major problem, or even be unsustainable. New democracies tend, indeed, to remain fragile as long as there is a concern by the vast majority of their citizens that growth prospects are not likely or that its gains will not be shared fairly. Improving economic conditions are part of what makes a society able to sustain a democracy.

Without growth, little human progress can be achieved. Conversely, economic growth leads to more open, tolerant, and democratic societies. From a policy perspective, Friedman argues that a more explicit recognition of this externality may be an important addition to public discourse on the importance of growth. The quality of growth matters a great deal as well, as Professor Friedman notes, since basic fairness provides positive incentives for societies to develop.
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Although author Benjamin M. Friedman teaches economics at Harvard, this book is not mainly about economics; it is mainly about morality. Friedman goes beyond traditional academic boundaries to propose that the moral tone of various Western democratic societies is connected to their economic growth. This impressive effort may introduce you to potential connections you might otherwise have ignored. However, Friedman offers both sides of the picture. Although economic growth correlates with social progress and stronger democracy, the correlation is not exact. There are some interesting counterexamples. Moreover, the question of how to define social moral progress is very much open. The author, for example, equates racial preferences in college admissions with moral progress, though that is a controversial issue. We find that this good, thought-provoking book offers a great deal of valuable insight into a seldom-considered aspect of economic growth.
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on March 16, 2006
Professor Friedman has provided us a remarkable historical argument in favor of economic growth. The chapters all read very well and cover an enormous range of material. However, a major deificiency in the chapter on environmental concerns is a lack of coverage in the arena of ecological economics. Indeed much of the most recent critcism of economic growth has emanated from this area of inquiry. Professor Friedman only covers EF Schumacher with relatively little analysis and completely neglects the work of Herman Daly, Robert Costanza and other ecological economists. I contacted Professor Friedman about this and he admitted not being familiar with this genre which is a telling sign of how polarized the field of economics has become. The neoclassical school has dominance and maintains the mainstream academic societies, dismissing the ecological school as a sentimental aberration. On the other hand the ecological economists are content with their own associations and journals. When shall the twain meet if we are to have a sound and balanced discussion towards sustainable development?
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on April 4, 2012
Professor Friedman seeks a more open, tolerant and democratic society. He observes stagnation or reversals in these areas across the last 40 years, which he attributes to the generally low economic growth and widening financial inequalities of the period. He selectively groups time periods in American and European history in an attempt to show that periods of economic growth benefiting the general population lead to periods of advances in openness, tolerance and democratic institutions.

The flow from economic experience to beliefs and politics is supported in many ways. Research shows that individuals are risk averse, willing to forego opportunities in order to avoid losses. Workers in a recession won't take pay-cuts but will allow real wage declines through periods of inflation. Individuals determine their progress by making comparisons with their own experience and that of others. When they make progress, they feel better about themselves, society and the political system.

While the behavioral logic is plausible, the author's classification of time into periods of growth and stagnation to demonstrate the link between growth and movements towards openness, tolerance, mobility, fairness and democracy is not persuasive. The historical record seems to be shaped to fit the hypothesis.

Many, especially fellow liberals, will agree that the progressive era around 1900 and the Civil Rights era of the 1960's were times of social progress following times of economic prosperity. They will also agree that the 1930's was a period of social progress, but that it was in response to the necessity of economic stress, rather than a blossom following the prosperous 1920's. They might disagree that the post-WWII era was a time of social growth, pointing to racial issues and populist demagoguery.

The post-Civil War period is not clearly one of advances prompted by earlier economic growth. Periodic growth characterizes the whole time and reconstruction did not lead to the new order envisioned for the South. The so-called new beginnings period since 1993 followed 2 decades of slow growth. It includes some moderation of the trend towards a radically conservative society, but not much.

Similarly, the three responses to periods of economic stagnation are not obvious. The populist era around 1890 followed periods of economic fluctuations, but the social and political responses can be seen as very progressive instead of reactionary. The 1920's are described as "the Klan era", disregarding the continued positive influence of progressive reforms, education and social institutions. The 1970's and 1980's are termed the backlash era. They followed an extended period of economic prosperity. The backlash was more about Vietnam, Watergate and the overreach of Democratic Party policies which ran ahead of the nation's ability to digest change.

Across 500 pages, the author provides pounds of historical illustrations and interpretations, but the case is not made. Instead, the reader gains an appreciation for the strength of the forces which work against an open, tolerant, democratic society. There is always danger of moving backwards. Significant, lasting progress is the exception, rather than the rule in a century and a half where the average person did see significant economic growth in each generation. Economic growth may be a necessary condition for social progress, but it is not clearly sufficient.
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on November 30, 2006
Economics is often considered a values-free discipline (and economists - well, a sperm cell has a better chance of becoming human). Economists have promoted this view with their emphasis on "positive" (scientific) economics. Economic theory must generate testable hypotheses which stand on their ability to predict the future and withstand the test of data. This is actually very important if economic theory is going to serve as the basis for policy. Without a rigorous and dispassionate analysis of the problems we face and their potential solutions, policy is more likely to be destructive than useful. But taken to an academic extreme, this approach makes economics rather arid, an extremely formal social science that looks more like a branch of mathematics. Indeed, some economics journals publish articles so arcane they might as well be about string theory for all the relevance they have to actual human beings.

Friedman understands that economics is much more than mathematics, that it deals directly with human happiness. It's the most optimistic and joyful of sciences, not simply a ruler by which we can measure policy. Its uses and conclusions are fundamentally moral (or immoral). Economic growth isn't just about GDP and reams of statistics, but about the expansion of opportunity, the lifting up of the poor and the powerless to prosperity and self-determination. Markets aren't just about money, but about liberty. It may be the responsibility of economic advisors to be cold, impartial and rational in their analysis and advice, but policy makers and citizens must apply moral reasoning and moral sense to the products of that analysis.

Friedman's book is a solid introduction to the moral relevance of economics. Friedman shows us that economics matters, though it doesn't matter in quite the way that physics matters. Physical knowledge may be used for moral or immoral purposes, but physics is fundamentally without morality. It also need not deal with anything that really matters to you and me. Economic theory can explain human behavior in ways similar to thermodynamic explanations of molecular motion, but humans aren't molecules. You can't simply describe the impact of globalization or tax policy on humans without a moral framework; an attempt to objectify humans as you'd objectify hydrogen molecules contains its own grim morality. It's the strength of Friedman's book that it makes clear that economic decisions and economic analysis are firmly embedded in a moral framework, no matter how hard we might try to ignore it in our pursuit of scientific and mathematical rigor.

Friedman's book isn't just a moral tract; he attempts to make a case for his moral stand. Friedman is a skilled economist, and he marshals historical data and comparisons of different nations and different periods in our own history to make his case. He provides some information useful for evaluating his thesis that economic growth is moral, he doesn't simply assert it. But herein is a weakness in his book. He doesn't provide nearly as much hard information as he should, and he scatters his supporting numbers throughout the text. It would be very helpful to the reader if data were gathered into charts and tables. There's but a single Figure in the book, no tables of data. It should also be noted that his national comparisons leave out some states (China, Singapore, Vietnam) that might contradict his thesis regarding the linkage between economic growth and political liberty. He's chosen his examples far too carefully.

Another weakness of this book is a natural danger of the type of text Friedman has written. Because he is dealing with economics as a moral issue, he takes a moral stance, one that's clearly to the political left in many ways. I have no problem with this, even though I'm somewhat to the right of him, but we should be very clear on one point. While a trained economist like Friedman is in a much better position than the average person to analyze the effects of different policies, he's no more qualified than a pastry chef to comment on the relative desirability of those different policies once their effects have been laid out in terms the pastry chef understands. Friedman makes a number of policy suggestions in his book with which I disagree. He doesn't make it sufficiently clear that their potential effects aren't unambiguously better than those of alternative policies designed to create or enhance economic growth.

My final objection to this book is its length. Friedman is clearly a well-read man of wide interests, and he brings a great deal of his erudition to this book. It strengthens his case, but I'm not sure that the marginal benefits of the 400th page exceed the marginal costs. More than once I found myself wanting an executive summary of the chapter I was reading and wishing that he would just cut to the chase. But that's really a minor complaint. I benefited from reading this book. It's an interesting and thoughtful contribution to the issue of economic growth (and by extension to international trade and economic aid to developing countries), and I strongly recommend it.
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on February 5, 2007
Since the rise fascism and Bolshevism in the 1920s there has been the question of how political rights and civil liberties correspond to economic rights and growth. Amartya Sen has argued that the political rights and civil liberties should not be divorced from economic process (Development As Freedom). Sen's normative approach of equating economic rights to the freedoms one achieves with guaranteed civil liberties is one that many can respect.

Benjamin Freidman has taken a more positivist to the same issue. In doing so he asks, "Which came first the chicken or the egg?" Does economic growth in a capitalist setting require democracy and civil liberties or visa versa? Friedman's study looks back not only over all to this question in modern economic history. But, he also takes specific case studies from the United States, Germany, France and others to see the over all trends of the problem.

From this he develops a matrix on the issue. In times of growth political rights tend to expand. In times of stagnation they tend to contract. What is interesting his not how Friedman arrives at this basic framework, but his look into the exceptions of this common sense rule. Why in the 1930s was the political openness of the New Deal accepted, but the recent economic stagnation in France caused the rise of the right-wing Le Pen party?

Friedman is one of the foremost experts on the political economy. He has held a seat at Harvard since 1972. Yet, in this work for public consumption his writing is more along the lines of an historian. He does not delve too far into the economics or the political science of the issue, which many academics tend to - even for the lay reader. Instead, he sees to it that the main ideas are gotten across.

His prescriptions are simple. Maintain economic growth and we can maintain political and civil liberties. While Amartya Sen may find a problem with placing the chicken before the egg, after this work one must understand that economic stagnation helps noone.
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on March 12, 2012
This is an excellent and extensive statement of economic and morality issues involving living standards with studies of inequality and globalization. It a very well done economic history of 19th and 20th century US and world economic history. There are histories of economic development of USA, UK, France, Germany and the third world. It well justifies the 500 page length.

Friedman makes the case for economic growth to provide resources to support population growth and, fight world poverty and disease and raise living conditions while fully recognizing values other than economic measures of human satisfaction. He examines relationship of rights and liberties to income growth as well as the morality of consumerism. He is very adept at bringing classical opinions to his subject. We get excepts from Tocqueville, Smith, Turgot, Paine, Marx and social conditions from literature. Modern economics from Hanson and Kuznets is incorporated. The book contains an analysis of the Great Depression and examines reasons why the strong rise in income growth after WWII failed to continue, lapsing into stagnation.

The concluding chapter that pretends to look forward is not up to the standard of the investigative portion. It's ideologically biased and sometimes downright wrong.
Four approaches to solving current problems in the USA: reduce spending, raise taxes, restructure SS and Medicare, increase savings rate to finance capital accumulation and government deficits. Its all wishful thinking to avoid more draconian solutions or default.
Friedman claims that tax cuts accrue to the rich based on dividends, saying that middle income holdings of securities are mostly in IRA and 401K accounts that are not subject to tax.
He confuses tax exempt with tax deferred. A retiree not only pays tax on withdrawals, but pays at his marginal income tax rate without befit of the lower capital gains rate. Throw away the last chapter and the rest becomes a valuable reference.
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