Description:

Selected by the Times Literary Supplement as one of the "hundred most influential books since the war"

How can we benefit from the promise of government while avoiding the threat it poses to individual freedom? In this classic book, Milton Friedman provides the definitive statement of his immensely influential economic philosophy—one in which competitive capitalism serves as both a device for achieving economic freedom and a necessary condition for political freedom. The result is an accessible text that has sold well over half a million copies in English, has been translated into eighteen languages, and shows every sign of becoming more and more influential as time goes on.

Review

There is a single engine under the hood of Capitalism and Freedom, and Milton Friedman runs it through thirteen chapters with the unwavering patience of a man who believes he has found the master key. The engine is a claim about coordination: "Fundamentally, there are only two ways of co-ordinating the economic activities of millions. One is central direction involving the use of coercion—the technique of the army and of the modern totalitarian state. The other is voluntary co-operation of individuals—the technique of the market place." Everything else in the book is an application. Once you accept that the relevant moral axis runs from coercion to voluntary exchange, the chapters on money, trade, education, discrimination, medicine, and welfare are not separate arguments so much as the same argument wearing different clothes. The distinctive thing this book does is not any one of its famous proposals—the monetary growth rule, the school voucher, the negative income tax—but the demonstration that a small classical-liberal toolkit can be turned on almost any institution of mid-century American government and made to yield a verdict of guilty. The position I want to defend is that this method is both the source of the book's enduring force and the reason its verdicts should be read with the suspicion Friedman himself would bring to anyone else's tidy system.

Friedman's premise is stated with admirable economy and defended with real care. Competitive capitalism, he argues, is both a component of freedom in itself and an indispensable means to political freedom, because a market disperses economic power and thereby keeps it from fusing with political power into a single instrument of control. The mechanism is not that markets make people nice; it is structural. "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." The most arresting illustration is his thought experiment about dissent under socialism: in a fully socialized economy, where the state owns every press, every supply of paper, every meeting hall, and every job, who could finance the advocacy of capitalism? Under a market system the same heresy needs only to be made profitable—or to find a patron—and it will be printed. He pairs this with two concrete cases that have aged into set pieces: Churchill barred from the BBC because British radio was a government monopoly, and the Hollywood blacklist collapsing because the producers' profit motive eventually gave blacklisted writers somewhere to sell their work. The argument that a free market in ideas cannot long survive without a free market in goods is the strongest single thread in the book, and it is the one a reader on the political left should sit with longest.

What rescues the opening chapters from triumphalism is a concession most of Friedman's imitators forget to make. "History suggests only that capitalism is a necessary condition for political freedom. Clearly it is not a sufficient condition." He arrives there honestly, after surveying fascist Italy, Nazi-era Germany, imperial Japan, and tsarist Russia—capitalist economies that were politically unfree. This is the intellectual high-water mark of the book and, I will argue, the crack that runs through everything after it. Because once the link between capitalism and freedom is downgraded to necessary-but-not-sufficient, it can no longer do the heavy lifting the later chapters assign it. A condition that coexists comfortably with Mussolini cannot, by itself, tell you whether a minimum-wage law or a licensing board is a step toward serfdom. Friedman knows this, and so in the policy chapters he quietly shifts the load from the grand freedom thesis to a more workmanlike pair of tools: the test of "neighborhood effects" (his term for externalities) and a proto–public-choice account of how concentrated producer interests capture diffuse public ones. The book is most persuasive precisely where it leans on those humble instruments and least persuasive where it reaches back for the rhetoric of freedom to settle a question the freedom thesis cannot reach.

The chapter on money is the book's empirical heart and, not coincidentally, its most durable. Friedman's case that the Great Depression was a failure of policy rather than of capitalism rests on the monetary collapse of 1930–33, when the stock of money fell by roughly a third while the Federal Reserve sat on its hands. "The Great Depression in the United States, far from being a sign of the inherent instability of the private enterprise system, is a testament to how much harm can be done by mistakes on the part of a few men when they wield vast power over the monetary system of a country." He generalizes it into a regularity—"I know of no severe depression in any country or any time that was not accompanied by a sharp decline in the stock of money and equally of no sharp decline in the stock of money that was not accompanied by a severe depression"—and draws from it the prescription for which the chapter is remembered: replace central-bank discretion with a legislated rule fixing the growth of the money stock at a steady three to five percent a year. The move is characteristic. Friedman distrusts not the men at the Fed but the discretion itself, and he reaches, by analogy with the First Amendment's refusal to weigh speech case by case, for a rule that removes the standing temptation to meddle. Whatever one thinks of monetarism's later fortunes, the chapter is the cleanest demonstration in the book of how empirical argument and the dispersal-of-power principle can reinforce each other rather than substitute for one another.

From there the single engine starts doing more of the work, and the strain begins to show. The fiscal chapter dismantles the Keynesian "balance-wheel" with genuine analytical bite—Friedman shows that the naïve multiplier requires a liquidity trap or perfectly inelastic investment demand to function—and then leans on the Friedman–Meiselman finding that the multiplier is empirically close to one. This is the chapter where the book's evidentiary base is thinnest relative to the confidence of its conclusions; a single co-authored study is asked to retire a school of thought, and the prescription (plan taxes and spending for the long run, never for short-run stabilization) follows more from the prior distrust of discretion than from the data. The international chapter is sturdier, partly because its core insight is almost arithmetical: there are only four mechanisms by which a balance-of-payments imbalance can resolve, and only freely floating exchange rates are consistent with a free market, because everything else eventually drives a government toward direct trade controls. Friedman's history here doubles as polemic. He traces full-fledged exchange controls to a single inventor—"To the best of my knowledge they were invented by Hjalmar Schacht in the early years of the Nazi regime"—a genealogy meant to taint the instrument by its origin. The chapter's boldest stroke is its rejection of reciprocal tariff bargaining in favor of unilateral disarmament: "He moves fastest who moves alone. . . . I believe that it would be far better for us to move to free trade unilaterally, as Britain did in the nineteenth century when it repealed the corn laws."

The middle chapters—education, discrimination, monopoly, licensure—are where the method is most inventive and most exposed. On education Friedman makes one of his subtlest distinctions, separating general schooling, which produces a literate and common-valued citizenry and so carries genuine neighborhood effects, from vocational and professional training, which is private investment in human capital with no such spillover. The conclusion is that government may finance schooling but should subsidize the student rather than the institution, handing parents a voucher redeemable at any approved school and letting competition do the rest. It is a constructive proposal that takes the externality seriously rather than waving it away, and it shows Friedman at his best: conceding the case for public action and then arguing about its form. The discrimination chapter is where the same machinery produces its most troubling output. Friedman's analytic claim, borrowed from Becker, is that market discrimination is self-penalizing—the employer who lets prejudice override competence pays for the privilege, exactly as a country pays for a tariff—so competition erodes bigotry and anti-discrimination law is at once unnecessary and dangerous. The danger, he argues, is precedential: "If one takes a broad sweep of history and looks at the kind of things that the majority will be persuaded of if each individual case is to be decided on its merits rather than as part of a general principle, there can be little doubt that the effect of a widespread acceptance of the appropriateness of government action in this area would be extremely undesirable, even from the point of view of those who at the moment favor FEPC."

Read on its own terms, the argument is coherent; read against the historical record it elides, it is the book's clearest case of the method outrunning its evidence. Friedman's own source-selection gives the game away. The case studies throughout the book—the AMA, the Interstate Commerce Commission, public housing—are chosen to illustrate the thesis, not sampled to test it, and nowhere is that more consequential than here, where a market that demonstrably failed to dissolve Jim Crow is asked to stand as proof that markets dissolve discrimination if only left alone. That the discriminator "pays a price" is true and beside the point when an entire region coordinates to make sure he does not pay it. Friedman's instinct to distrust majoritarian remedies is principled, but the principle is applied with a striking asymmetry: the coercion of the state troubles him, while the coercion of private cartel and custom largely does not, and the book offers no test for when private concentrations of power become as dangerous as the public ones he warns against on every other page.

The chapters on monopoly and licensure recover much of that lost ground, because here the concentrated power Friedman attacks is one his framework is well built to see. On monopoly he is bracingly contrarian, marshaling the Nutter and Stigler estimates to argue that cartelization is a smaller and less growing share of the economy than the reformist imagination supposes: "There is, I suspect, a widespread impression that monopoly is both far more important than these estimates suggest and has been growing steadily over time. . . . The over-estimation of the importance of monopoly is accompanied, for much the same reasons, by an over-estimation of the importance of those technological changes that promote monopoly." It is in this chapter that he plants the line that became a movement: "Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible. This is a fundamentally subversive doctrine." The sentence is a useful diagnostic for the whole book, because its force depends entirely on the prior premise that the shareholder-return rule already internalizes everything that matters—the very premise the neighborhood-effects analysis elsewhere concedes is false. The licensure chapter, by contrast, is one of the book's triumphs. Friedman's anatomy of the American Medical Association as a producer cartel—controlling medical-school accreditation and hospital approval, throttling admissions in the 1930s, freezing the intake of foreign physicians, suppressing prepaid group practice—is concrete, documented through Gellhorn and Kessel, and devastating. Here the concentrated interest is genuinely producer-side, the diffuse loser is genuinely the patient, and the public-choice logic fits the facts like a glove. When Friedman's instrument matches its object, the result is some of the sharpest institutional criticism of the period.

The distributive chapters close the book on its characteristic note of austere consistency. Friedman distinguishes the ethics of income distribution from its economics and argues that payment in accordance with product is required for efficient allocation and is, besides, a value even the system's critics tacitly accept. From this he derives a flat-rate income tax—he calculates that a single rate near 23.5 percent on the existing base would match the revenue of the nominally steep graduated schedule, because graduation's yield is hollowed out by depletion allowances, capital-gains treatment, and tax-exempt municipal bonds—and a frank refusal of redistribution as such: "I find it hard, as a liberal, to see any justification for graduated taxation solely to redistribute income. This seems a clear case of using coercion to take from some in order to give to others and thus to conflict head-on with individual freedom." Against the existing welfare patchwork he sets his most humane and most influential proposal, the negative income tax, which would replace the tangle of in-kind programs with a single cash floor that preserves work incentives and lets the poor choose for themselves. The dissection of Old Age and Survivors Insurance into three separable elements—forced redistribution, nationalized annuity provision, and compulsory purchase—is a model of how to take a popular program apart at its conceptual joints and ask whether any single joint can be defended on its own. Even a reader who rejects the conclusions should admire the refusal to let a program hide behind the bundling of its functions.

Placing the book in its lineage clarifies both what it is and what it pretends not to be. Capitalism and Freedom is a foundational text of twentieth-century classical liberalism and of the libertarian political economy that grew from it, and Friedman is candid about his patrimony: the Chicago of Knight, Simons, Mints, Director, and Stigler, and above all Hayek, whose The Road to Serfdom is invoked repeatedly as the founding warning that collectivist economics ends in political serfdom. The book's epigraphs and arguments lean on Dicey's account of how the costs of state intervention arrive gradually and out of sight, and it reaches back past the New Deal to Adam Smith—for the invisible hand, for the conspiracy of producers, and for the consolation Friedman offers at the end. Two of the book's most original moves, though, point forward to traditions it does not name: the relentless contrast between concentrated producer interests and dispersed consumer interests is public-choice theory before the label existed, and the recurring story of the regulator who ends by protecting the regulated—"the ICC protecting railroads then truckers"—is a working theory of regulatory capture avant la lettre. These are the parts of the book that have worn best, in part because they make falsifiable institutional predictions rather than appeals to first principles. Friedman is most convincing when he is doing positive political economy and least convincing when he is doing constitutional theology.

The book's relationship to its antagonists is where its rhetorical character shows most plainly. Against Keynes he is analytically serious; against Marx he is almost sporting, conceding that the surplus-value argument is valid if and only if one already grants the capitalist premise that labor is entitled to its whole product, and then declining to grant it. Against Kennedy he opens the book on a deliberate provocation, rewriting the inaugural's most famous line: "The free man will ask neither what his country can do for him nor what he can do for his country. He will ask rather 'What can I and my compatriots do through government' to help us . . . to protect our freedom?" The targets are well chosen and the engagements are mostly fair, but the cumulative effect is a book in which the author's side never quite loses an exchange, and a reader is entitled to wonder whether a method that finds every intervention producing "the opposite of its stated goal" is discovering a law of politics or restating an assumption. The 2002 preface, to Friedman's credit, contains the book's most honest self-examination: having watched Thatcher, Reagan, and Deng-era reform vindicate his thesis as he saw it, he proposes that his original dichotomy of economic and political freedom needs a third term, civil freedom, after the example of Hong Kong—prosperous and economically free under colonial administration, yet without the democratic politics his framework had led him to expect would follow. That a Hong Kong should require an amendment is the most interesting admission in the book, and a more searching author might have asked whether it strains the necessary-condition thesis rather than merely supplementing it.

What is this book for, and who should read it? It is a manual of method more than a settled body of conclusions, and its lasting value is in the discipline it imposes: take a stated policy goal, ask who is concentrated and who is diffuse, ask whether a genuine neighborhood effect is present or merely asserted, and ask whether the proposed remedy would survive being generalized into a principle that your opponents could one day wield. Applied honestly that discipline is bracing, and applied to medicine and money and regulatory agencies it produced criticism that the subsequent half-century largely confirmed. Applied to discrimination and to the social responsibility of business it produced conclusions that the same period largely refuted, because the method has a blind spot exactly where private power concentrates without the state's help—and Friedman, for all his vigilance against concentrated power, never built the test that would have made his framework see it. He leaves the reader with Smith's consolation that "there is much ruin in a nation," and with his own sharper warning that "concentrated power is not rendered harmless by the good intentions of those who create it." The second sentence is the truer one, and the book is at its best when it turns that suspicion on the well-meaning reformer. It would have been a greater book had it been willing to turn the same suspicion, with the same rigor, on the market it spent its whole length defending.

Notable Quotes

To the free man, the country is the collection of individuals who compose it, not something over and above them. He is proud of a common heritage and loyal to common traditions. But he regards government as a means, an instrumentality, neither a grantor of favors and gifts, nor a master or god to be blindly worshipped and served.

Opening of the Introduction, reframing Kennedy's inaugural address to articulate the liberal view of the citizen-state relationship — individualism, government, freedom, political philosophy

Freedom is a rare and delicate plant. Our minds tell us, and history confirms, that the great threat to freedom is the concentration of power. Government is necessary to preserve our freedom, it is an instrument through which we can exercise our freedom; yet by concentrating power in political hands, it is also a threat to freedom.

Introduction, stating the central paradox of government: necessary for freedom yet a perpetual danger to it — freedom, power, government

Fundamentally, there are only two ways of co-ordinating the economic activities of millions. One is central direction involving the use of coercion -- the technique of the army and of the modern totalitarian state. The other is voluntary co-operation of individuals -- the technique of the market place.

Chapter I, establishing the fundamental dichotomy between coercive and voluntary coordination of economic activity — markets, coercion, economic organization

Indeed, a major source of objection to a free economy is precisely that it does this task so well. It gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.

Chapter I, on why the market's impersonal allocation of goods provokes hostility from those who prefer directed outcomes — markets, paternalism, freedom

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.

Chapter I, contrasting political decision-making (majority rule with conformity) against market decision-making (individual choice with diversity) — markets, diversity, political process, proportional representation

Historical evidence speaks with a single voice on the relation between political freedom and a free market. I know of no example in time or place of a society that has been marked by a large measure of political freedom, and that has not also used something comparable to a free market to organize the bulk of economic activity.

Chapter I, the empirical claim that capitalism is a necessary (though not sufficient) condition for political freedom — political freedom, capitalism, historical evidence

Only a crisis -- actual or perceived -- produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.

1982 Preface, Friedman's statement of the intellectual's role in policy change -- preparing ideas for the moment of crisis — policy change, ideas, crisis, intellectual role

The Great Depression in the United States, far from being a sign of the inherent instability of the private enterprise system, is a testament to how much harm can be done by mistakes on the part of a few men when they wield vast power over the monetary system of a country.

Chapter III, the conclusion of Friedman's argument that the Federal Reserve's failures, not market instability, caused the Depression's severity — Great Depression, Federal Reserve, monetary policy, government failure

Any system which gives so much power and so much discretion to a few men that mistakes -- excusable or not -- can have such far-reaching effects is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic.

Chapter III, the argument against discretionary central banking and for rules-based monetary policy — central banking, discretionary power, rules vs. authorities

To paraphrase Clemenceau, money is much too serious a matter to be left to the Central Bankers.

Chapter III, summarizing the case against an 'independent' central bank with vast discretionary power — monetary policy, central banking, accountability

There are few measures we could take that would do more to promote the cause of freedom at home and abroad than to say to the rest of the world: We believe in freedom and intend to practice it. We can offer you full co-operation on equal terms to all. Our market is open to you. Sell here what you can and wish to. Use the proceeds to buy what you wish. In this way co-operation among individuals can be world wide yet free.

Chapter IV, the case for unilateral free trade as both economic policy and moral example — free trade, international cooperation, freedom

If one were to seek deliberately to devise a system of recruiting and paying teachers calculated to repel the imaginative and daring and self-confident and to attract the dull and mediocre and uninspiring, he could hardly do better than imitate the system of requiring teaching certificates and enforcing standard salary structures.

Chapter VI, the argument for school vouchers and market competition in education against bureaucratic credentialism — education, vouchers, licensing, teacher quality

The man who objects to buying from or working alongside a Negro, for example, thereby limits his range of choice. He will generally have to pay a higher price for what he buys or receive a lower return for his work. Or, put the other way, those of us who regard color of skin or religion as irrelevant can buy some things more cheaply as a result.

Chapter VII, the economic argument that discrimination imposes costs on the discriminator as well as the victim — discrimination, markets, race, economic costs

In such an economy, there is one and only one social responsibility of business -- to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud.

Chapter VIII, Friedman's famous statement on corporate social responsibility — corporate responsibility, profit, business ethics

Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible. This is a fundamentally subversive doctrine.

Chapter VIII, the argument that corporate social responsibility undermines democratic accountability by letting unelected executives exercise public functions — corporate responsibility, freedom, democracy, accountability

The overthrow of the medieval guild system was an indispensable early step in the rise of freedom in the Western world. It was a sign of the triumph of liberal ideas that by the mid-nineteenth century men could pursue whatever trade or occupation they wished without the by-your-leave of any governmental or quasi-governmental authority. In more recent decades, there has been a retrogression.

Opening of Chapter IX, framing occupational licensure as a modern revival of medieval restrictions on economic freedom — occupational licensure, guilds, economic freedom, retrogression

The American Medical Association is perhaps the strongest trade union in the United States. The essence of the power of a trade union is its power to restrict the number who may engage in a particular occupation.

Chapter IX, Friedman's provocative characterization of the AMA as a monopolistic trade union using licensure to restrict entry — medical licensure, AMA, monopoly, trade unions

The great achievement of capitalism has not been the accumulation of property, it has been the opportunities it has offered to men and women to extend and develop and improve their capacities. Yet the enemies of capitalism are fond of castigating it as materialist, and its friends all too often apologize for capitalism's materialism as a necessary cost of progress.

Chapter X, on the distribution of income, noting that human capital rather than physical capital is capitalism's true contribution — capitalism, human capital, materialism, progress

Despite the lip service that we all pay to 'merit' as compared to 'chance,' we are generally much readier to accept inequalities arising from chance than those clearly attributable to merit.

Chapter X, the psychological observation that lottery-like inequality provokes less resentment than deliberately assigned inequality — inequality, merit, chance, human psychology

The state can legislate a minimum wage rate. It can hardly require employers to hire at that minimum all who were formerly employed at wages below the minimum. It is clearly not in the interest of employers to do so. The effect of the minimum wage is therefore to make unemployment higher than it otherwise would be.

Chapter XI, the argument that minimum wage laws hurt precisely the low-income workers they are intended to help — minimum wage, unemployment, unintended consequences

Those of us who believe in freedom must believe also in the freedom of individuals to make their own mistakes. If a man knowingly prefers to live for today, to use his resources for current enjoyment, deliberately choosing a penurious old age, by what right do we prevent him from doing so?

Chapter XI, the argument against compulsory social security on grounds of individual autonomy — freedom, paternalism, social security, individual choice

Humility is the distinguishing virtue of the believer in freedom; arrogance, of the paternalist.

Chapter XI, contrasting the temperament of the liberal (who acknowledges he may be wrong) with the paternalist (who presumes to know what is best for others) — freedom, paternalism, humility, arrogance

The heart of the liberal philosophy is a belief in the dignity of the individual, in his freedom to make the most of his capacities and opportunities according to his own lights, subject only to the proviso that he not interfere with the freedom of other individuals to do the same.

Chapter XII, the summary statement of Friedman's liberal creed, distinguishing equality of rights from equality of outcome — liberalism, dignity, freedom, equality

The difference between the actual operation of the market and its ideal operation -- great though it undoubtedly is -- is as nothing compared to the difference between the actual effects of government intervention and their intended effects.

Conclusion, Friedman's insistence on comparing real markets with real government rather than ideal government — government failure, markets, realism, policy evaluation

The central defect of these measures is that they seek through government to force people to act against their own immediate interests in order to promote a supposedly general interest. They are therefore countered by one of the strongest and most creative forces known to man -- the attempt by millions of individuals to promote their own interests, to live their lives by their own values.

Conclusion, explaining why government programs so consistently produce results opposite to their intentions — government failure, incentives, self-interest, unintended consequences

The preservation and expansion of freedom are today threatened from two directions. The one threat is obvious and clear. It is the external threat coming from the evil men in the Kremlin who promise to bury us. The other threat is far more subtle. It is the internal threat coming from men of good intentions and good will who wish to reform us.

Conclusion, the twin threats to freedom -- external totalitarianism and internal, well-meaning but coercive reform — freedom, threats, good intentions, reform

Fundamentally, there are only two ways of co-ordinating the economic activities of millions. One is central direction involving the use of coercion—the technique of the army and of the modern totalitarian state. The other is voluntary co-operation of individuals—the technique of the market place.

Chapter I, establishing the binary choice between coercion and voluntary exchange as organizing principles for economic life — freedom, markets, coercion, coordination

The free man will ask neither what his country can do for him nor what he can do for his country. He will ask rather 'What can I and my compatriots do through government' to help us discharge our individual responsibilities, to achieve our several goals and purposes, and above all, to protect our freedom?

Introduction, reframing Kennedy's inaugural address from a liberal perspective — freedom, individualism, government

Any system which gives so much power and so much discretion to a few men that mistakes—excusable or not—can have such far-reaching effects is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic—this is the key political argument against an 'independent' central bank.

Chapter III, arguing against discretionary monetary authority — central-banking, power, freedom, institutional-design

Only a crisis—actual or perceived—produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.

1982 Preface, on the role of intellectual work in policy change — ideas, crisis, policy-change, intellectuals

The preservation of freedom is the protective reason for limiting and decentralizing governmental power. But there is also a constructive reason. The great advances of civilization, whether in architecture or painting, in science or literature, in industry or agriculture, have never come from centralized government.

Introduction, on why decentralization promotes innovation as well as liberty — freedom, innovation, centralization, progress

The liberal conceives of men as imperfect beings. He regards the problem of social organization to be as much a negative problem of preventing 'bad' people from doing harm as of enabling 'good' people to do good; and, of course, 'bad' and 'good' people may be the same people, depending on who is judging them.

Chapter I, on the liberal view of human nature and institutional design — human-nature, liberalism, institutional-design

The power to do good is also the power to do harm; those who control the power today may not tomorrow; and, more important, what one man regards as good, another may regard as harm.

Introduction, on why centralized power is dangerous regardless of the intentions of those who wield it — power, freedom, centralization

If one were to seek deliberately to devise a system of recruiting and paying teachers calculated to repel the imaginative and daring and self-confident and to attract the dull and mediocre and uninspiring, he could hardly do better than imitate the system of requiring teaching certificates and enforcing standard salary structures that has developed in the larger city and state-wide systems.

Chapter VI, on how uniform salary scales and certification requirements harm educational quality — education, bureaucracy, incentives, merit

The beneficial effect of State intervention, especially in the form of legislation, is direct, immediate, and, so to speak, visible, whilst its evil effects are gradual and indirect, and lie out of sight.

Chapter XIII, quoting Dicey on why public opinion is biased toward government intervention — government-intervention, unintended-consequences, public-opinion

The central defect of these measures is that they seek through government to force people to act against their own immediate interests in order to promote a supposedly general interest. They are therefore countered by one of the strongest and most creative forces known to man—the attempt by millions of individuals to promote their own interests.

Chapter XIII, explaining why government programs so often produce effects opposite to those intended — incentives, government-failure, self-interest

The greater part of the new ventures undertaken by government in the past few decades have failed to achieve their objectives. The United States has continued to progress; its citizens have become better fed, better clothed, better housed, and better transported. All this has been the product of the initiative and drive of individuals co-operating through the free market. Government measures have hampered not helped this development.

Chapter XIII, summarizing the book's assessment of government intervention versus market progress — government-failure, markets, progress

The threat from the Kremlin requires us to devote a sizable fraction of our resources to our military defense. The importance of government as a buyer of so much of our output, and the sole buyer of the output of many firms and industries, already concentrates a dangerous amount of economic power in the hands of the political authorities.

Chapter XIII, on how military spending threatens economic freedom even when strategically necessary — military-spending, economic-freedom, concentrated-power

An impersonal market separates economic activities from political views and protects men from being discriminated against in their economic activities for reasons that are irrelevant to their productivity—whether these reasons are associated with their views or their color.

Chapter I, on how competitive markets protect minorities by making economic transactions impersonal — markets, discrimination, minority-rights, impersonality

The possibility of co-ordination through voluntary co-operation rests on the elementary—yet frequently denied—proposition that both parties to an economic transaction benefit from it, provided the transaction is bi-laterally voluntary and informed.

Chapter I, stating the foundational principle of mutual benefit through voluntary exchange — voluntary-exchange, mutual-benefit, coordination

In a capitalist society, it is only necessary to convince a few wealthy people to get funds to launch any idea, however strange, and there are many such persons, many independent foci of support.

Chapter I, on how inequality of wealth paradoxically supports freedom of expression by providing diverse patrons — inequality, freedom-of-expression, patronage, pluralism

There is enormous inertia—a tyranny of the status quo—in private and especially governmental arrangements.

1982 Preface, on why change requires crisis rather than merely superior arguments — status-quo, institutional-inertia, policy-change

Being in favor of floating exchange rates does not mean being in favor of unstable exchange rates. When we support a free price system at home, this does not imply that we favor a system in which prices fluctuate wildly up and down.

Chapter IV, distinguishing between free and unstable exchange rates — exchange-rates, free-markets, stability