David Mytton

Book Review (5/5) – Capitalism and Freedom (Milton Friedman)

Published (updated: ) in Book Reviews.

Originally published on Goodreads.

Friedman is not quite as easy to read as Hayek. Whereas I found I could hardly put The Road to Serfdom down it was so compelling, Friedman was more of a challenging read. He gets very technical but this is because he uses real world examples of how to apply his philosophy to the current state of things (as it was in early-1960s America, which is mostly still relevant today).

I like to understand how the philosophy I read can be applied to real world situations and so I enjoyed how Friedman combines both the theoretical and practical. He doesn’t waste time repeating things unnecessarily and his logic is often very straightforward and comes to a rapid conclusion. For example, he dismisses Marx in just a few sentences, entirely effectively as well!

Friedman’s thoughts on inheritance particularly stood out for me as it instantly changed my opinion on the merits of inherited wealth vs “working hard/earned wealth”:

It is widely argued that it is essential to distinguish between inequality in personal endowments and in property, and between inequalities arising from inherited wealth and from acquired wealth. Inequality resulting from differences in personal capacities, or from differences in wealth accumulated by the individual in question, are considered appropriate, or at least not so clearly inappropriate as differences resulting from inherited wealth. This distinction is untenable. Is there any greater ethical justification for the high returns to the individual who inherits from his parents a peculiar voice for which there is a great demand than for the high returns to the individual who inherits property?

Regardless of your political viewpoint, this is a key text to understand the capitalist ideal. Friedman has chapters on taxation, education, discrimination, licensing, social welfare and others. In all he provides solutions that he thinks will much better tackle the problems at hand. I would particularly like to implement his flat rate negative income tax and simplify the entire system of taxation. This book should be required reading for anyone in government, politics and probably even society in general.