Critical Understanding of Friedman’s Position & an issues It Involves

A Critical Understanding of Friedman’s Position and the Issues It Involves
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A Critical Understanding of Friedman’s Position and the Issues It Involves
Every economy, whether thriving or otherwise, has in it some elements of government participation or control. That is why economic problems are to some extent political problems. As such, any solution to economic challenges cannot be addressed without the input and participation of the government. Milton Friedman (1962), a renowned economist in “Capitalism and Freedom” passionately wades into the subject arguing that there exists a logical link between economics and politics. He notes that “a healthy private economy naturally provides a check on the power of the state” (8). This paper, therefore, focuses on the critical analysis of the key essentials of economics to develop a critical understanding of Friedman's position and the issues it involves.
The Liberal Friedman and Why He Is Considered a Conservative in Contemporary America
A free society births a free market ultimately culminating into individual productivity individual private enterprises and overall economic development. From a liberal perspective, individual or family is and should be the ultimate goal in judging social arrangements (Friedman, 1962). There exists a logical link between economic and political freedom. Friedman describes himself as a “liberal” in the John Stuart sense of the term because he is the one who puts emphasis on freedom as the ultimate goal and the individual or family as the ultimate entity in the society” (8) He argues that for the country and its people to survive, the government should stay and only intervene when it is absolutely necessary.
The existence of a free market is dependent on less and unnecessary involvement of the government in the economic activity operated by private enterprises. Friedman advances various arguments to support the above claim. While the best abilities of a country come from its free market, the failures come from government intervention. From an economics standpoint, the market is free if the key players are allowed to advocate for radical changes that encourage competition. Friedman sees the market as a direct component of freedom and indirect relation between market arrangement and political freedom. It is against the backdrop of the foregoing prepositions and arguments that Friedman is considered a conservative in contemporary America.
Dean Baker’s Laissez-Faire Argument vis-à-vis Friedman’s Free Market Approach
In an ideal economy, the input and participation of the government in the operation of economic activities is necessary. A free market does not eliminate the need of the government; neither does it defeat its object (Friedman, 1962). The “Government is very essential both as a forum for determining the rules of the game and as umpire to interpret and enforce the rules decided on” (15). From the foregoing, Friedman argues that the government control of the economy is necessary, but its powers must be limited and dispersed.