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Free Market Capitalism

Milton Friedman argued that for capitalism to flourish the state must remove itself from pretty much all economic activity except for “the military, the courts and some of the major highways.”

The underlying idea is that private person makes better economic choices than state regulators. For example:

1. The owner of a business will invest carefully to satisfy his customers
2. A worker will chose a job based on the hours, pay and skills he may develop

Each economic actor seeks the most beneficial opportunities and thus moves the whole economy along to maximum prosperity.

So what does the state have to do with it? Very little. In this system the state should play a minor role by only:

1. Protecting private property rights
2. Maintaining law and order
3. Defending the whole ball of wax from external aggression

That’s the idea anyway. So…. Are the world markets not free enough or was Marx right?

 

“It is necessary in the first instance that the parties in the market should be free to sell and buy at any price at which they can find a partner to the transaction, and that anybody should be free to produce, sell, and buy anything that may be produced or sold at all.”
~Friedich Von Hayek

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Categories: Economic Systems
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