The
Man Who Saved Capitalism
And How It Benefits All of Us
The 100th anniversary of the birth of Milton Friedman
occurred this week. You may have never
heard of him (he died in 2006), but in the matter of economics and in defending
the concept of free people and free markets Milton Friedman is a “rock
star.”
Through his books and teaching, Friedman a professor at the
University of Chicago, reinvigorated the world's faith in capitalism. He
discovered, through rigorous science, that free markets work the best to
distribute goods, services and wealth, and that we as individuals are best suited
to making our own decisions.
LaserShip has grown in the shadow of
Milton Friedman and benefited from influence of his work in explaining and
defending free markets and free people.
The success of starting and expanding a business is based on the choices
of individuals:
· Individuals who freely risk and invest their money,
time and effort (stakeholders)
· Individuals making free choices to “sell’ their labor
to whom they wish (employees)
· Individuals who are free to choose with whom they wish
to do business (customers)
Classic free market
thinking, that Friedman expounded, serves and benefits all the individuals
involved in transactions. Each gives up something
but gets something else that is valued more by the recipient: Profits, wages,
services/products.
Our concepts of customer service—pleasing
the customer—and innovation that improves outcomes for all come out of
Friedman’s explanation of free markets: By necessity, enterprises must focus on
the needs of the customer. Friedman
once, humorously, put his thoughts on the subject of pleasing the customer this
way: “If you put the government in
charge of the Sahara Desert, in 5 years there'd be a shortage of sand.”
Innovation which advances life and living
was, to Friedman, totally dependent on and required freely acting individuals
working within a free market system: “The
greatest advances of civilization, whether in architecture or painting, in
science and literature, in industry or agriculture, have never come from
centralized government.”
Beyond all of these benefits, Friedman,
perhaps most importantly, believed that the concepts of private property and
free markets are what protected free individuals: That free markets (businesses
free to enter or leave, produce what the consumer wants, innovate and change as
customer demand dictates, keep the profits of their work) were intricately
linked with free people (people free to choose where and how to live, where and
how to work, what to save or consume).
To Friedman’s way of thinking—and this is important—there could not be
one without the other.
“It is widely (and
wrongly), Friedman wrote, “believed that politics and economics are separate
and largely unconnected; that individual freedom is a political problem and
material welfare an economic problem….”
However, “history suggests that (economic freedom) is a necessary
condition for political freedom.”
Without free markets, Friedman
reasoned, there is only coercion. Free
enterprise is what creates choices: Individuals making free choices as owners,
employees or customers, as to how to invest, where to work or how to spend
resources. “Fundamentally,” said
Friedman, “there are only two ways of coordinating the economic activities of
millions. One is central direction involving the use of coercion…” or “the
other is voluntary co-operation of individuals--the technique of the market
place.”
Friedman was awarded the Nobel
Prize in economics for 1976. This
marked the first sign of the intellectual comeback of free-market economics
that had been losing academic, political and popular appeal.
In a recent tribute paid to Friedman, the
years of 1980-2005 were described as "The Age of Milton Friedman," an
era that "witnessed remarkable progress of mankind. As the world once
again embraced Friedman’s free market policies, living standards rose sharply
while life expectancy, educational attainment, and democracy improved and
absolute poverty declined."
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