on October 5, 2001
As an assignment in his high school honors English class, my son recently asked me to name a book that had an impact on my life. My answer was "Free to Choose" by Milton & Rose Friedman. I grew up with fairly liberal views in a Democrat household. More than anything else, reading this book in the early 1980s changed my perceptions of reality. This book is most responsible for changing me into a conservative. Although I took four economics courses in college (and got high grades in each) and was a political science major, my views were never substantially budged until I read this great book.
It is written very clearly; you need not have an economics background to understand it. The arguments are clear and eloquent. Friedman demonstrates why the free market works best for the economy but more importantly, he demonstrates why the free market preserves individual dignity. Beyond mere economics, the free market is the most moral system. In so many areas, if you really think about it, choices are the business of the individual, not the government. When the government overtaxes us, it is not only bad for the economy, it is bad morally. Overtaxation enables the government to make certain choices and removes that decisionmaking from the individual. I think school choice is an example of this.
My son's teacher assigned him to read this book. Happily, he will be exposed to the lucid arguments for few governmental controls and greater choice among individuals. I highly recommend this book which had so great an impact on my life.
on April 9, 2002
"Free to Choose" (1980) is a great companion to Friedman's ten hour video presentation by the same name that appeared on PBS in the early eighties to rave reviews and some of the highest ratings in PBS history. The video series was extremely well done and taken right from this book.
Friedman explains how and why markets work, why minimum wage statutes hurt instead of help unskilled labor (they price entry level or "training positions" out of the market) and why the Great Depression happened (protectionist tariffs like Smoot-Hawley devastating trade between nations was the primary reason).
Like Hayek and von Mises before him, Friedman explodes the Keynesian mythology that government spending is actually good for the economy. Moreover, this book is written for the layman. You don't need a PhD in economics or a Nobel Prize (both of which Professor Friedman has) to understand this work. It is clear, concise and cogently written.
If you want to understand why the market is ineluctable, this is a must read...and if you get the chance, I highly recommend the companion video series - some of the best work done on explaining why the free market works and planned/controlled economies fail.
It as timely today (despite the dated references) because the free market still works (it always will) and command/controlled economies always fail...this book tells why.
on May 10, 2001
Being Nobel winning economist, I was not sure what to expect from this "personal statement". What a pleasant surprise and enjoyable read. The book represents the Friedman's take on the government policies of the day (1979). Not knowing that the book was written over 20 years ago a reader would swear it just rolled off the press. The fact that the problems addressed by this book are still the problems we are (or more importantly are not truly) debating today only bolsters the arguments that current government policy is failing.
As a not quite totally liberal or Libertarian (as modern socialist democrats (Ted Kennedy, Al Gore, Diane Feinstien, etc.) and moderate Republicans (Olympia Snowe, Lincoln Chaffee, James Jeffords, etc.) have co-opted the liberal and moderate monikers), Friedman puts forth arguments against government intervention is many areas, but does demonstrate where government can be helpful, in limited ways, to address various market failures. The book addresses areas such as free markets, price and wage controls (which are currently causing electricity shortages in California), equality and justice, education (Friedman has been urging parental choice in public schooling since the 1950s), consumer protection, worker protection and inflation. The book presents each issue by examining how we got to the current state, what is wrong with the current policy and how he believes the policy should be changed. In various instances, he suggest both his preferred change and a watered down version (pragmatic version) that might actually be enacted in our current political morass.
A quick note to readers. One reviewer suggested that the book plagiarizes the work of Lord John Maynard Keynes. This could not be further from the truth. Friedman is a monetarist more in the vain derived from classical economics as presented by Adam Smith and used as a basis by the American Founders, especially Thomas Jefferson. The failed policies of the newer Keynesian economics (demand side economics) are at the heart of what Friedman is railing against: Government control. Also Monetarist are distinguished from the supply side theories of Robert Mundel and Art Laffer. In fact, the only Keynes quote I can recall from the book was used to demonstrated that even someone as wrong as Keynes knew that monetary inflation (printing too much money) was one of the worst mistakes a government can make. "There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."
on December 29, 1999
As we head into the next millennium, it becomes increasingly clear the progress we've enjoyed is mainly attributable to the freedom of the marketplace. The Friedman's provide an incredibly readable and understandable defense of the marketplace. A believer in the free market will find this book a refreshing review of reality. However, uninitiated neophytes, who still cling to government solutions, will likely have to struggle to accept this book's seemingly contrarian positions. The effort is well worth it. When written, this book challenged conventional wisdom - today many of its propositions are conventional wisdom. How far we've come - thank you Milton and Rose Friedman.
on January 2, 2003
Following on from his earlier classic, Capitalism and Freedom, Nobel-prizing winning economist and champion of free markets, Milton Friedman (with Rose Friedman) wrote this brilliant popular yet profound book on real economics. In a time when people are more prone to point the finger at corporations and plead the government to "fix things", Friedman's superb explication of the benefits of truly free markets (which does not include political bribes from Enron) deserves a revisit. Friedman takes on many mistaken ideas about free markets and the need for regulation. Advocates of intervention typically compare an imperfect free market (often a market only partly free but distorted by little-known interventions) to a perfect governmental solution. However, regulators are human too, and lack the disciplining forces of the market. Friedman's penetrating yet immensely readable analysis of a range of issues related to free markets and regulations remains as timely and relevant as ever.
on October 17, 2002
Note: This book deserves a little less than 5 stars, but since there aren't such levels of fine-tuning, I am giving it 5 stars.
Milton Friedman's FREE TO CHOOSE: A PERSONAL STATEMENT is the ultimate layman's synthesis of the ideas of economics developed at the University of Chicago in the past century. This system has had profound implications on our current model of the free market, as Friedman is just one of many in a line of Nobel-prize winning economists to come from that school.
All the classical ideas of micro- and macroeconomics are presented in an accessible and effective fashion in this book. If you don't understand why the free market works, or are hesitant to undertake a more rigorous approach in learning about capitalism, FREE TO CHOOSE is definitely for you. Friedman assumes very little previous knowledge about economics. His arguments depend only on an ability and willingness to think rationally about economics and everyday decision-making processes.
However, this rational approach is also a downfall to FREE TO CHOOSE. Chicago-style economists love to use purely rational appeals in their writing, and Milton Friedman is no different. Some of his empirical evidence is unconvincing; as such, a few of his policy statements go against more current, empirically developed economic theories. His shoddy treatment of externalities and failures in the market (he dismisses some of them without sufficient cause) would make it seem that unfettered capitalism is a perfect system when it is not. Especially for those of you who don't have the tools to judge the validity of economic theories, be forewarned about this aspect of FREE TO CHOOSE.
Overall, an excellently written, widely accessible book that is definitely worth purchasing if you are unfamiliar with the ideas of capitalism. If you have a solid understanding of economics, then none of the ideas will be new (and you will probably notice some of the same problems I did).
on October 1, 2009
If you are torn between reading Free to Choose or Capitalism and Freedom, I strongly recommend the latter. Not only is it a shorter book than this one, but Friedman does a better job of arguing his case in Capitalism and Freedom. Both Greg Mankiw and Larry Summers recommend Capitalism and Freedom as their top econ book.
on December 7, 2003
In this book, Dr Friedman makes the case why freedom, in the economic and social sense, is the best policy. Reading this book is a life changing experience for anyone who has not had much exposure to economics; Dr Friedman, alas, is arguably the top economist of our time.
The book offers not only a critique of developments in education, trade policy, workers rights, drug policy, among other economic and social issues, but he also offers solutions. He readily recognizes the difficulties of implementing his solutions (political mainly), but nonetheless he is searching for the best non-utopian alternative.
Dr Friedman will also demystify the image that economists are wholly consumed by growth and GDP. He is guided by the rule that each person knows best what they want and should be free to pursue it, within limits (of hurting others, etc.).
This is an easy to read book, a great intro to social issues or a great alternative view of the world. I hardly think it can be construed as liberal or conservative, these labels cannot encompass the true spirit of freedom as developed in the book. If I had to classify it, this book is about the rational improvement of society by letting each one pursue their own goals (again, a maxim espoused by the founding fathers and long forgotten). Overall, anyone interested in social issues should read this book; it may not convince you, but it will make you think.
on September 25, 1998
The cover of this book depicts Milton Friedman holding a pencil. Why a pencil? Because it represents the virtues of capitalism and free markets. The only thing I, as a consumer, know about pencils is how much they cost. I don't know anything about the cost of the graphite, rubber for the eraser, the wood, or the yellow paint.
The manufacturer does know those things. But she doesn't know the prices of the chemicals that make up the paint, etc. In this way, the free market's system of prices allocates information in a way no central planner could ever hope to. The number of operations and transactions that must occur in order to produce that pencil is astronomical -- and the free market, through the price mechanism, manages to do just that every second.
There is more in the book than just that point, of course, but it is very much worth the casual reader's while.
In response to the previous reviewer -- I imagine Dr. Friedman would be surprised to hear that his arguments had been rebutted by Keynes and Galbraith, precisely because much of Friedman's work is a response to the work of those two. And while David Ricardo certainly updated the work of Adam Smith, there is no way Ricardo could be called anything but a laissez-faire classical liberal.
on September 1, 2013
Below are key excerpts from the book that I found particularly insightful:
1- "Economic freedom is an essential requisite for political freedom. By enabling people to cooperate with one another without coercion or central direction, it reduces the area over which political power is exercised. In addition, by dispersing power, the free market provides an offset to whatever concentration of political power may arise. The combination of economic and political power in the same hands is a sure recipe for tyranny."
2- "The experience of recent years--slowing growth and declining productivity--raises a doubt whether private ingenuity can continue to overcome the deadening effects of government control if we continue to grant ever more power to government, to authorize a "new class" of civil servants to spend ever larger fractions of our income supposedly on our behalf. Sooner or later--and perhaps sooner than many of us expect--an ever bigger government would destroy both the prosperity that we owe to the free market and the human freedom proclaimed so eloquently in the Declaration of Independence."
3- "Prices perform three functions in organizing economic activity: first, they transmit information; second, they provide an incentive to adopt those methods of production that are least costly and thereby use available resources for the most highly valued purposes; third, they determine who gets how much of the product - the distribution of income. These three functions are closely interrelated."
4- "Our society is what we make it. We can shape our institutions. Physical and human characteristics limit the alternatives available to us. But none prevents us, if we will, from building a society that relies primarily on voluntary cooperation to organize both economic and other activity, a society that preserves and expands human freedom, that keeps government in its place, keeping it our servant and not letting it become our master."
5- "The ballot box produces conformity without unanimity; the marketplace, unanimity without conformity. That is why it is desirable to use the ballot box, so far as possible, only for those decisions where conformity is essential."
6- "Freedom cannot be absolute. We do live in an interdependent society. Some restrictions on our freedom are necessary to avoid other, still worse, restrictions. However, we have gone far beyond that point. The urgent need today is to eliminate restrictions, not add to them."
7- "In one respect the System has remained completely consistent throughout. It blames all problems on external influences beyond its control and takes credit for any and all favorable occurrences. It thereby continues to promote the myth that the private economy is unstable, while its behavior continues to document the reality that government is today the major source of economic instability."
8- "The waste is distressing, but it is the least of the evils of the paternalistic programs that have grown to such massive size. Their major evil is their effect on the fabric of our society. They weaken the family; reduce the incentive to work, save, and innovate; reduce the accumulation of capital; and limit our freedom. . These are the fundamental standards by which they should be judged."
9- "A society that puts equality--in the sense of equality of outcome--ahead of freedom will end up with neither equality nor freedom. The use of force to achieve equality will destroy freedom, and the force, introduced for good purposes, will end up in the hands of people who use it to promote their own interests...Freedom means diversity but also mobility. It preserves the opportunity for today's disadvantaged to become tomorrow's privileged and, in the process. enables almost everyone, from top to bottom, to enjoy a fuller and richer life."
10- "We believe that the growing role that government has played in financing and administering schooling has led not only to enormous waste of taxpayers' money but also to a far poorer educational system than would have developed had voluntary cooperation continued to play a larger role...We have tried in this chapter to outline a number of constructive suggestions...These proposals are visionary but they are not impracticable...We shall not achieve them at once. But insofar as we make progress toward them--or alternative programs directed at the same objective--we can strengthen the foundations of our freedom and give fuller meaning to equality of educational opportunity."
11- "Insofar as the government has information not generally available about the merits or demerits of the items we ingest or the activities we engage in, let it give us the information. But let it leave us free to choose what chances we want to take with our own lives."
12- "When unions get higher wages for their members by restricting entry into an occupation, those higher wages are at the expense of other workers who find their opportunities reduced. When government pays its employees higher wages, those higher wages are at the expense of the taxpayer. But when workers get higher wages and better working conditions through the free market, when they get raises by firms competing with one another for the best workers, by workers competing with one another for the best jobs, those higher wages are at nobody's expense. They can only come from higher productivity, greater capital investment, more widely diffused skills."
13- "Five simple truths embody most of what we know about inflation: 1. Inflation is a monetary phenomenon arising from a more rapid increase in the quantity of money than in output (though, of course, the reasons for the increase in money may be various) 2. In today's world government determines--or can determine -the quantity of money. 3. There is only one cure for inflation: a slower rate of increase in the quantity of money. 4. It takes time--measured in years, not months--for inflation to develop; it takes time for inflation to be cured. 5. Unpleasant side effects of the cure are unavoidable."
14- "We have been misled by a false dichotomy: inflation or unemployment. That option is an illusion. The real option is only whether we have higher unemployment as a result of higher inflation or as a temporary side effect of curing inflation."
15- "The two ideas of human freedom and economic freedom working together came to their greatest fruition in the United States. Those ideas are still very much with us. We are all of us imbued with them. They are part of the very fabric of our being. But we have been straying from them. We have been forgetting the basic h that the greatest threat to human freedom is the concentration of power, whether in the hands of government or anyone else. We have persuaded ourselves that it is safe to grant power, provided it is for good purposes."