Skip to content
MiltonFriedman.org

Milton Friedman on Voluntary exchange

The oil problem offers a particularly clear illustration of how the price system promotes both freedom and efficiency, how it enables millions of us to cooperate voluntarily with one another in our common interest. It brings out equally why the only alternative to the price system is compulsion and the use of force.

Context. From a Newsweek column written about a month into the Arab oil embargo of 1973, while retail gasoline and fuel oil prices were still held down under the price controls President Nixon began on August 15, 1971.

Why Some Prices Should Rise
Column, 1973, Newsweek (November 19, 1973); reprinted in full in the Congressional Record, Extensions of Remarks, November 29, 1973, p. 38775, introduced by Representative John H. Rousselot of California, who gives it as “an article which appeared in the November 19, 1973, issue of Newsweek”, Congressional Record, November 29, 1973, p. 38775
Checked against the sourceRead the original

Where this comes from

Checked against the sourceThe wording was checked against the work itself.

Cite this passage

Milton Friedman, “Why Some Prices Should Rise” (Newsweek (November 19, 1973); reprinted in full in the Congressional Record, Extensions of Remarks, November 29, 1973, p. 38775, introduced by Representative John H. Rousselot of California, who gives it as “an article which appeared in the November 19, 1973, issue of Newsweek”, 1973), Congressional Record, November 29, 1973, p. 38775. https://miltonfriedman.org/quotes/price-system-freedom-efficiency-cooperate-voluntarily-1973

Quoted for commentary and research. Rights in the underlying work remain with its rights holder, so cite the work itself, not only this page.

Topics

He also said

  1. The only way that has ever been discovered to have a lot of people cooperate together voluntarily is through the free market. And that’s why it’s so essential to preserving individual freedom.

    Context. Asked why free markets and freedom are inseparable, in a PBS interview for the series Commanding Heights.

    Commanding Heights: Milton Friedman interview
    Interview, 2000, PBS, “On Freedom and Free Markets,” interview conducted October 1, 2000
    Checked against the sourceRead the transcript
  2. I am not enough of an expert—no one is—to know the million and one places where prices fixed by bureaucrats on the basis of arbitrary rules and accidental starting points have created distortions and shortages. … They are hidden in the interstices of an incredibly complex production system that cannot operate without the enormous efficiency of a market-price system to adapt changing demands to changing supplies. And many have been overcome by millions of citizens who found ways to avoid or evade the price controls.

    Context. From a Newsweek column written during the 1973 oil shortages, nine weeks into the Arab oil embargo and more than two years after President Nixon froze wages and prices on August 15, 1971.

    Why Now?
    Column, 1973, Newsweek (December 31, 1973); reprinted in full in the Congressional Record, Extensions of Remarks, January 24, 1974, p. 801, introduced by Representative John M. Ashbrook, who gives the issue as “the December 31, 1973 issue of Newsweek”, and reprinted again the same day at pp. 807 to 808 by Representative Earl F. Landgrebe, Congressional Record, January 24, 1974, p. 801
    Checked against the sourceRead the original
  3. The most effective way to cut consumption and encourage production is simply to let the prices of oil products rise to whatever level it takes to clear the market. The higher prices would give each of the 210 million residents of the U.S. a direct incentive to economize on oil, to find substitutes for oil, to increase the supply of oil.

    Context. From a Newsweek column written about a month into the Arab oil embargo of 1973, while retail gasoline and fuel oil prices were still held down under the price controls President Nixon began on August 15, 1971. Later in the column he adds that what is called for is higher prices for oil products “relative to other products—not general inflation.”

    Why Some Prices Should Rise
    Column, 1973, Newsweek (November 19, 1973); reprinted in full in the Congressional Record, Extensions of Remarks, November 29, 1973, p. 38775, introduced by Representative John H. Rousselot of California, who gives it as “an article which appeared in the November 19, 1973, issue of Newsweek”, Congressional Record, November 29, 1973, p. 38775
    Checked against the sourceRead the original

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