Skip to content

Milton Friedman on Free markets and the price system

The existence of a free market does not of course eliminate the need for government. On the contrary, government is essential both as a forum for determining the 'rule of the game' and as an umpire to interpret and enforce the rules decided on.
Capitalism and Freedom
Book, 1962, Ch. 1 The Relation Between Economic Freedom and Political Freedom, 2002 edition, p. 15
Not yet checkedCite this passage

Where this comes from

Not yet checkedThe wording comes from a secondary compilation and has not yet been checked against the work itself.

Topics

He also said

  1. Although I wish the anarchists luck, since that’s the way we ought to be moving now. But I believe we need government to enforce the rules of the game. By prosecuting anti-trust violations, for instance. We need a government to maintain a system of courts that will uphold contracts and rule on compensation for damages. We need a government to ensure the safety of its citizens–to provide police protection. But government is failing at a lot of these things that it ought to be doing because it’s involved in so many things it shouldn’t be doing.
    Interview with Milton Friedman
    Interview, 1973, Playboy
    Not yet checked
  2. A government which maintained law and order, defined property rights, served as a means whereby we could modify property rights and other rules of the economic game, adjudicated disputes about the interpretation of the rules, enforced contracts, promoted competition, provided a monetary framework, engaged in activities to counter technical monopolies and to overcome neighborhood effects widely regarded as sufficiently important to justify government intervention, and which supplemented private charity and the private family in protecting the irresponsible, whether madman or child—such a government would clearly have important functions to perform. The consistent liberal is not an anarchist.
    Capitalism and Freedom
    Book, 1962, Ch. 2 The Role of Government in a Free Society, p. 34
    Not yet checked
  3. That is why, in my book “Capitalism and Freedom,” I have called it a “fundamentally subversive doctrine” in a free society, and have said that in such a society, “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.”
    A Friedman Doctrine—The Social Responsibility of Business Is to Increase Its Profits
    Column, 1970, The New York Times Magazine, September 13, 1970, Section SM, p. 17
    Checked against the sourceRead the transcript

Think this quote is wrong, misattributed, or missing context?Report it and it gets fixed, not argued with.