Quote of the Day: Preservation of Political Freedom through the Free Markets

What the market does is to reduce greatly the range of issues that must be decided through political means, and thereby to minimize the extent to which government need participate directly in the game. The characteristic feature of action through political channels is that it tends to require or enforce substantial conformity. The great advantage of the market, on the other hand, is that it permits wide diversity. It is, in political terms, a system of proportional representation. Each man can vote, as it were, for the color of tie he wants and get it; he does not have to see what color-the majority wants and then, if he is in the minority, submit.

It is this feature of the market that we refer to when we say that the market provides economic freedom. But this characteristic also has implications that go far beyond the narrowly economic. Political freedom means the absence of coercion of a man by his fellow men. The fundamental threat to freedom is power to coerce, be it in the hands of a monarch, a dictator, an oligarchy, or a momentary majority. The preservation of freedom requires the elimination of such concentration of power to the fullest possible extent and the dispersal and distribution of whatever power cannot be eliminated – a system of checks and balances. By removing the organization of economic activity from the control of political authority, the market eliminates this source of coercive power. It enables economic strength to be a check to political power rather than a reinforcement.

(bold emphasis added)

This from Milton and Rose Friedman’s 1962 book (p.15), Capitalism and Freedom (as quoted by Professor Don Boudreaux at Café Hayek).

The illustrious economist and freedom fighter Milton Friedman celebrated his centennial birthday yesterday. And this stirred up the hornet’s nest about Dr. Friedman’s “love fest” with Keynes.

I’d say that this controversy just shows how people’s views evolve and this applies to Dr. Friedman. For instance, despite promoting activist monetarism, Dr. Friedman eventually declared that he favored the abolishment of the US Federal Reserve see here and here

Nevertheless, while I may not be agreeable to some of his earlier “statist comprises”, he surely has been one of the most eloquent and charismatic promoter and advocate of free markets, in general. That's why many of his videos have been posted here.

Belated Happy Birthday Dr. Friedman