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Milton Friedman on Free markets and the price system

The most important single central fact about a free market is that no exchange takes place unless both parties benefit.
Commanding Heights: Milton Friedman interview
Interview, 2000, PBS, “The Economic Logic Behind Black Markets,” interview conducted October 1, 2000
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  1. The key insight of Adam Smith's Wealth of Nations is misleadingly simple: if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.
    Free to Choose
    Book, 1980, Ch. 1 "The Power of the Market", p. 13
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  2. Fundamentally, there are only two ways of coordinating 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.
    Capitalism and Freedom
    Book, 1962, Ch. 1 The Relation Between Economic Freedom and Political Freedom, pp. 12-13
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  3. The well-meaning current sponsors of universal national service will recoil at that prospect. They would insist on letting the youngsters choose for themselves how they serve. That is what happens now, via the market system, in which market wages equate supply and demand. But universal national service is meaningless unless it involves equal pay—which also means control and direction of labor.
    Universal National Service
    Column, 1979, Newsweek (1979); reprinted in the Congressional Record, Extensions of Remarks, May 15, 1979, p. 11349, introduced by Representative Ron Paul of Texas, who says Friedman “recently” made these arguments “in Newsweek.” The reprint gives no issue date and omits part of the opening paragraph, Congressional Record, May 15, 1979, p. 11349
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