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Milton Friedman on Capitalism and socialism

Fundamentally, the Soviet Union is a market economy, but it’s a distorted market economy, because the extraordinarily great role of government forces the market into channels which are not efficient and not effective, and so much of its power is wasted in simply overcoming the bureaucratic mess of the government. That’s why the Soviet Union has such a low standard of life.
The Open Mind
Interview, 1977, The Open Mind, hosted by Richard Heffner, Episode “A Nobel Laureate on the American Economy” (May 3, 1977)
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  1. True, money is only a machine, but it is an extraordinarily efficient machine. ( … ) But money has one feature that these other machines do not share. Because it is so pervasive, when it gets out of order, it throws a monkey wrench into the operation of all the other machines.
    The Role of Monetary Policy
    Journal article, 1968, American Economic Review 58, no. 1 (March 1968), pp. 1–17; reprinted in the House Banking and Currency Committee’s 1968 Compendium on Monetary Policy Guidelines and Federal Reserve Structure, pp. 214–224, p. 221 of the 1968 House reprint
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  2. I think it is only because capitalism has proved so enormously more efficient than alternative methods that it has survived at all. ( … ) I'm not sure capitalism is the right word. There is a sense in which every society is capitalist. The Soviet Union was capitalist, but it was state capitalism. Latin American societies in the past have been capitalist, but it has been oligarchic capitalism. So what we really need to talk about is not capitalism but free market or competitive capitalism which is the system that we would like to have adopted, not just capitalism.
    Reflections on the Great Depression
    Interview, 2002
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  3. "The strongest argument for free enterprise is that it prevents anybody from having too much power. Whether that person is a government official, a trade union official, or a business executive. If forces them to put up or shut up. They either have to deliver the goods, produce something that people are willing to pay for, are willing to buy, or else they have to go into a different business."
    The Tyranny of Control
    Television, 1980, PBS, vol. 2
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