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Milton Friedman on Competition and monopoly

The great danger to the consumer is monopoly—whether private or governmental. His most effective protection is free competition at home and free trade throughout the world. The consumer is protected from being exploited by one seller by the existence of another seller from whom he can buy and who is eager to sell to him. Alternative sources of supply protect the consumer far more effectively than all the Ralph Naders of the world.

Context. From Free to Choose (1980), written with Rose D. Friedman: the last paragraph before the conclusion of the chapter “Who Protects the Consumer?”, on consumer-protection regulation. Ralph Nader was the best-known consumer advocate of the time.

Free to Choose
Book, 1980, Ch. 7 “Who Protects the Consumer?”, p. 226
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Cite this passage

Milton Friedman, “Free to Choose” (1980), Ch. 7 “Who Protects the Consumer?”, p. 226. https://miltonfriedman.org/quotes/great-danger-consumer-monopoly-ralph-naders-1980

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He also said

  1. A worker is protected from his employer by the existence of other employers for whom he can go to work. An employer is protected from exploitation by his employees by the existence of other workers whom he can hire. The consumer is protected from exploitation by a given seller by the existence of other sellers from whom he can buy.
    Free to Choose
    Book, 1980, Ch. 8 “Who Protects the Worker?”, p. 246
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  2. The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.

    Context. Closing his answer to an audience question about the diversity of the American population, in the question-and-answer session printed with the essay.

    Why Government Is the Problem
    Journal article, 1993, Hoover Institution Press, Essays in Public Policy no. 39, p. 18
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  3. The political reason is that the interests that press for protection are concentrated. The people who are harmed by protection are spread and diffused. Indeed, the very language shows the political pressure. We call a tariff a protective measure. It does protect. It protects the consumer very well against one thing. It protects the consumer against low prices. And yet we call it protection.

    Context. From a lecture asking why protection is so widespread despite the almost uniform condemnation of such measures by economists. This is his political explanation.

    Milton Friedman Speaks: Free Trade: Producer vs. Consumer
    Lecture, 1978, Lecture 8, at 10:15
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