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Final Draft Project 2: Capitalism and Freedom

Page history last edited by Adam Klaser 12 years, 5 months ago

Adam Klaser

Capitalism and Freedom

 

 

“Capitalism and Freedom” by Milton Friedman

 

     Prior to the 1960s capitalism was riding high in the clouds and nothing seemed to slow it down except for maybe the government. Under the Eisenhower and Kennedy administrations the United States experienced a rapid growth in federal expenditures. The book, “Capitalism and Freedom”, written by Milton Friedman in 1962, attacks the increase in government involvement and defends capitalism by saying that the latter leads to freedom whereas the first leads to coercion. In “Capitalism and Freedom”, Milton Friedman relies on the ethos of being a renowned economist, the rhetorical tool of proposals, and the logos of empirical models, to argue that competitive capitalism is a necessary device for achieving both economic and political freedom.

           

     To begin with, a summary of “Capitalism and Freedom” must be issued in order to understand how Friedman makes his argument. In the first two chapters of the book Friedman deals with the issue of capitalism being a necessary device for achieving both economic and political freedom on an abstract level in terms of principles. The rest of book deals with the issue of the argument by applying the principles discussed in the first two chapters to a number of problems. The problems discussed range from economic policy issues such as monetary and fiscal policy to social issues such as the distribution of income and poverty. Overall, Friedman, in “Capitalism and Freedom”, tries to connect his argument with a range of problems that was facing the United States at the time the book was published.

               

     In “Capitalism and Freedom”, Friedman uses the ethos of being a renowned economist to make his argument that capitalism is a necessary condition for economic and political freedom. Throughout the book Friedman touches on many economic subjects, such as monetary and fiscal policy and international exchange rates. By being such an affluent economist in all of these areas Friedman is able to use his ethos to support his argument and convince the audience that what he says is correct. A specific example of him using his ethos is when he argues that the direct control of exchange rates is against competitive capitalism and that the only solution is floating exchange rates. Friedman starts off by stating that “the use of direct controls is clearly the worst from almost any point of view and certainly the most destructive of a free society” (Friedman 66). He goes on to argue that floating exchange rates will “enable free market forces to provide a prompt, effective, and automatic response to changes in conditions affecting international trade” (67). The only reason that Friedman is able to make such bold statements is because the ethos of him being a renowned economist makes him a reliable source of information, which makes the audience believe that what he says is correct. This is an effective rhetorical tool because early on in the book Friedman is able to establish his credibility by making such a bold statement which in turn will convince the audience to believe what he says in the rest of the book.

 

      Now, the way in which this claim supports his thesis is very simple. By using direct control the government inhibits competitive capitalism which in turn takes away economic freedom, which according to Friedman, essentially means freedom of exchange. On the other hand, by implementing floating exchange rates the market is able to make the necessary changes itself which in turn promotes economic freedom because people are able buy and sell internationally without restrictions from the government in the form of direct control. Floating exchange rates also support his argument of that competitive capitalism is a necessary condition for political freedom. By taking away direct control from the government, floating exchange rates are able to make the market secure political freedom because it removes “the organization of economic activity from the control of political authority” (9).

     

     In addition to ethos, Friedman uses the rhetorical tool of proposals as an effective technique in continuing the support of his argument. Much of Milton Friedman’s book, “Capitalism and Freedom”, revolves around him proposing an idea to take place of the current system.  Such cases occur in the chapters, The Control of Money, International Trade Agreements, and The Role of Government in Education, to name just a few. One of the most effective examples of a proposal that Friedman uses is in Chapter 6, The Role of Government in Education. Here, Friedman proposes that the current system of governmentally administered schools has had the result of “an indiscriminate extension of governmental responsibility” (85). The extension of government responsibility is obviously against his argument because the increase in government responsibility decreases our political freedom to make choices. He goes even further in knocking down the current system by saying that “the link between the financing of schooling and its administration places other schools at a disadvantage” (90). This shows that the current system is limiting economic freedom in that it is limiting competition between schools because of the funding advantage, which again is against his argument. In order to obtain economic and political freedom in education Friedman proposes that parents receive “vouchers redeemable for a specified maximum sum per child per year if spent on “approved” educational services” (89). By providing this proposal Friedman is able to support his argument. This does so because in order for capitalism to exist there must be little government involvement which this proposal does through by providing vouchers instead of government funding. Once capitalism is established the next step in his argument is to obtain economic freedom, which this proposal does by providing the necessary means for parents to able to take part in voluntary exchanges. Using this example as a proposal is an effective rhetorical technique in supporting his thesis because it first sets up the weak opposition to his thesis and then shoots it down with a much stronger proposal that supports his argument. The proposal technique is effective in convincing his audience to believe his argument because it shows the weakness of the current system and the strengths of his idea, which leads the audience to believe that his system would work better.

 

     Lastly, the use of logos through empirical models is an outstanding technique that Friedman uses in arguing his case for capitalism. The most prominent example of an empirical model used in “Capitalism and Freedom”, is when Friedman demonstrates the voluntary model early in the first chapter. He argues that “the basic problem of social organization is how to co-ordinate the economic activities of large numbers of people” (12) and that there are two ways of doing so, either (1) “central direction involving the use of coercion” or (2) “voluntary co-operation of individuals” (13). The latter he claims is provided easily through capitalism or a free-market because “the central feature of the market organization of economic activity is that it prevents one person from interfering with another in respect of most of his activities” (14). This claim that a free market prevents coercion between people is effective in proving his argument that capitalism is necessary for political freedom because in order to obtain freedom people must be able to make their own decisions which capitalism clearly does in this model. Another claim that Friedman makes with this model is that capitalism, through a free market, also provides the means for economic freedom, which essentially is the buying and selling of goods and labor.  This is possible, according to Friedman, because capitalism makes sure that the selling of labor is uncoerced in that “the employee is protected from coercion by the employer because of other employers for whom he can work” (14-15). The use of this model works well to convince the audience to believe his argument because it provides a simple and logical approach that anyone can understand of how capitalism, through a free market,  provides for the necessary conditions of not only economic freedom but more distinctly, political freedom as well.

             

       Moving away from the rhetorical analysis of "Capitalism and Freedom", I would like to do critique on a particularly interesting claim that Friedman makes about how government involvement leads to an infringement on freedom. The particular claim that Friedman makes is that the nationalization of providing annuities would lead to less freedom because it would limit the economic freedom of competition of private enterprises and the political freedom of individual choices.  Freedom, according to Milton Friedman, means to be able to participate in voluntary exchanges without coercion. Now, coercion means to be forced to do something, and with Friedman, government nationalizing annuities is coercing someone to buy annuities even if they do not want to. So, because of coercion by the government, nationalization should not be allowed not only in annuities but in terms of the whole economy because if this happens then who knows how far the government will go in order to exert its power. Now, this claim is very pretentious because at the time in which this book was written government involvement was increasing unlike any other time seen before, so to make a claim like this was purely subjective. For as we know today annuities are not nationalized and even more importantly, we have just as much freedom today as compared to when this book was written even though there is more government involvement and regulation of the economy now than before. So, in the end, while this claim may have been important during its time, today it is irrelevant in terms of how government involvement affects our freedom.

     

     In conclusion, Milton Friedman effectively uses the rhetorical techniques of ethos, proposals, and logos to present his argument that competitive capitalism is necessary for economic and political freedom. By establishing his ethos of being a renowned economist in the beginning of the book Friedman is able to draw in the reader and convince him or her that what he will have to say is right. After establishing ethos, he is able to present his ideas through proposals and empirical models, effectively intertwining all three techniques in the book, “Capitalism and Freedom”. Overall, Friedman proves his argument effectively and in doing so convinces the reader that capitalism is by far the most superior economic system ever created, despite its flaws.

 

 

Works Cited

 

Friedman, Milton, and Rose D. Friedman. Capitalism and Freedom. Chicago: University of Chicago Press, 2002. Print.

 

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