This book is one of a trio of books that appeared during the 70's that made the case for a Libertarian society with the complete absence of government. The other two are For a New Liberty
and The Market for Liberty
The former takes what one might call a "natural rights" approach to the subject and the latter comes from an Objectivist standpoint.
"The Machinery of Freedom" on the other hand takes a cost/benefit approach to the issues, and I think that makes it the best choice as a first read along with making it the best of the three.
If I devoted any space in this review to describe just how much this book has changed my worldview and entire life as a result, I highly doubt this review would ever get done.
So instead of raving on about how massive a game changer this book is, I'll get straight to the point.
"The Machinery of Freedom" is the work of Milton Friedman's son which argues that everything the government presently does (including police, courts, and possibly national defense) could be done privately through free market means. In simple terms these services could operate on a decentralized (multiple providers) profit and loss basis (instead of through compulsory taxation).
Although numerous terms exist for this type of economic arrangement, "Anarcho-Capitalism" is the term used in the book to refer to it.
What made this book so fascinating to me was it's emphasis on taking a cost/benefit approach to the question of whether or not such a system is desirable. Sure the State is out of the picture and thus cannot violate anyone's rights, but does the resulting alternative actually work?
This is what "The Machinery of Freedom" sets out to do. In this second edition, the book is divided into four parts.
Part one is a series of chapters that defend the concept of private ownership. You could look at it as being a defense of free market systems . The two chapters on economic monopoly are extremely fascinating. When I first read them I was only just becoming familiar with understanding why natural monopolies are less likely to occur in the absence of government interference.
Part two deals with specific reforms that could happen tomorrow that would bring us closer to an Anarcho-Capitalist society. School vouchers and decentralized governments are some examples. Friedman also tackles some additional challenges that have been made against free markets and also gives some additional ideas for how they might handle certain situations.
For instance, he suggests that if workers want total control over a given company, they could combine some of their wealth and buy it from the people presently in charge. A lot more is discussed in these chapters - roads, dealing with pollution, etc. - but the really distinct content begins in part three.
Part three is where the subject of anarchy finally comes up. Friedman begins by explaining what separates government and anarchy, then he explains how the market would provide law. The second chapter in this part (Police, Courts, and Laws - on the Market) contains some of the most thought-provoking material on the subject of law without government I have ever come across. If you think private protection agencies are likely to go to war with each other, this chapter might change that.
The next chapter (The Stability Problem) also gives further weight to the idea that private protection is likely to be far less life-threatening than the current government system of police protection we have now. Other things like national defense, or what means are most realistic in attaining an Anarcho-Capitalist system are also covered here.
Part four is a new part to the second edition. Here Friedman explores some challenges that could be raised towards any Libertarian ideology, and explains why the (then) new field of economic analysis of law is an excellent tool for answering a number of challenges. Friedman also covers Medieval Iceland as an example of a series of private arrangements between people to produce law.
His chapter on foreign policy has his usual "nothing is perfect but the best available choice is..." kind of nuanced attitude toward the subject and seemed to have inspiration from what was going on during the cold war at the time the book was published. The following chapter on private currency gave some food for thought; in large part because he explores far more alternatives besides simply going back to a gold standard.
It sure is difficult to cover every reason this book is so significant and why you should either buy or download it (yes, he doesn't believe in copyright and Open Court is cool with that).
I will say that if you already consider yourself at minimum a Libertarian-leaning person, this book has the potential to push your ideology even further than you ever thought possible! That turned out to be an understatement for me, but if you take the time to read the book the outcome will speak for itself.