Milton Friedman's economic perspectives on capitalism have been instrumental in the establishment of fiscal frameworks that support global economies. Friedman’s ideas were conceived during the Great Depression as a way of helping countries survive the aftermath of economic recessions. In particular, he influenced economics to adopt the Keynesian ideas that establish the need for state intervention in a bid to stabilize the economy. In contrast, Friedman is anti-Keynesian who criticized the idea of state regulation and instead insisted on the need for pure and free competition. Various scholars have analyzed Friedman’s ideas in a bid to understand how economies could integrate these lessons to enhance economic outcomes. A synthesis of five related articles will highlight how Friedman’s ideas continue to shape modern economies.
Articles under Review
The synthesis entails five related articles that focus on the economic impacts of Friedman’s ideas which revolve around capitalism. The articles are:
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“Milton Friedman’s Capitalism and Freedom: A Binary Economic Critique”, by Robert Ashford, “The Contributions of Milton Friedman to Economics”, by Robert Hetzel
“Capitalism and the Jews: Milton Friedman and His Critics”, by Jeff Lipkes
“A Critique of Milton Friedman’s Essay “The Social Responsibility of Business Is to Increase Its Profits”, by Thomas Mulligan
“The Rebellion against Keynesianism: Milton Friedman”, by Gavriil Popov
Synthesis of the Articles’ Introductions
The synthesis of the five articles will focus on both the introduction parts as well as the literature review in a bid to establish the main perspectives in each. Milton Friedman, an anti-Keynesian twentieth-century economist idea was informed by the Great Depression which threatened to collapse major global economies. Popov (1990) notes that at the time scholars were searching for answers about what had caused the depression as well as the solutions for overcoming it. At the time Friedman was working in economic departments where he developed a long-term skepticism about economic forecasts.. and the effectiveness of centralized measures in the economy and general”(100) This assertion points to a disregard of Keynesian ideas that emphasize the need for government intervention as a way of reverting economic crisis. In contrast, Friedman opposes state regulation and instead advocates free and pure competition as a way of securing economies. Lipkes (2019) supports this assertion by providing the example of Jews who oppose capitalism following by Friedman’s lecture back in1972. Friedman established that the Jewish religion implies a capitalist outlook with the authorities championing individual liberty when it comes to economic activity. However, this stance is not exhaustive, considering the Jewish scriptures provide contrasting perspectives on wealth and poverty. Some scriptures occasionally view poverty as ennobling and at the same time consider riches as the blessings of the Lord. The conflicting perspectives mean that the Jewish religion is not conclusive, especially on the economic front, thus the need for a better approach.
Milton Friedman's approach to capitalism lies in the notion that a free and competitive market that supports private enterprises is an essential aspect of freedom. However, this idea has attracted numerous criticism considering that it would result in the suppression of individuals’ freedom as well as the underemployment of capital and labor resources. Ashford (2010) adopts binary economics in a bid to refute Friedman’s notion of freedom that would emanate from advocating for competitive markets. According to Ashford (2010), binary economics thrives on three propositions which are capital and labor as factors of production, technology, and capital which enhances production. The integration of the three production factors is more likely to enhance the growth of economies as opposed to the overhaul of the capitalist market structure. Mulligan (1986) criticizes Milton Friedman's arguments in that they fail to prove that social responsibility is an unfair socialist practice. In particular, Friedman cautioned business executives against exercising social responsibility, but instead focus on increasing profit margins. However, Mulligan (1986) insists that the paradigms that Friedman bases these arguments on are questionable as the key premises are false the logical cogency is missing. Hetzel (2007), on the other hand, disagrees with both Ashford and Mulligan by establishing that Friedman made significant contributions to the economics discourse. In particular, Friedman established that central banks are responsible for both inflation and deflation and that competitive markets maintain macroeconomic equilibriums. These ideas were instrumental in the understanding of major economic activities in the twentieth century in addition to influencing public policy.
Synthesis of the Articles’ Literature Reviews
The five articles have incorporated the views of other scholars in a bid to understand Milton Friedman’s ideas and how they may be integrated to enhance economic outcomes. Popov (1990) focused on different texts by Friedman as a way of tracking what influenced his ideas. From the reviews of these works, it is clear that Friedman's ideas were shaped by the economic events of the time as well as George Stigler and Simon Kuznets, scholars who aligned with the Chicago school of thought. As a result, Friedman questioned centralized management which is associated with limited individual freedom which in turn paves the way for capitalism. Lipkes (2019) explores various writings by Friedman and other writers as a way of establishing if Friedman’s economic views have a place in modem economies. According to Lipkes (2019), the Jews were responsible for developing modern capitalism which aimed at improving distribution, creating financial instruments for facilitating nation-building, enlarging existing markets, and discovering new ones. This objective aims at empowering citizens so that they are in a better chance at achieving economic freedom, but it paves the way for the limitation of their civil rights.
Milton Friedman's writings advocate for both personal and economic freedom which may not be possible n capitalist economies where the government centralizes all operations. Ashford’s literature review, however, establishes that the focus should not be on personal freedom but rather on enhancing productivity. According to Ashford (2010), higher productivity paves the way for more profitable employment for the majority of people, higher wages, and more capital which, in turn, creates more freedom for workers. If this is the case, capitalist societies are in a better position of guaranteeing freedom as opposed to insistence on competitive markets as proposed by Friedman. The literature review that has been conducted by Hetzel (2007), on the other hand, establishes that Friedman made significant contributions to the economic discourses. In particular, Friedman insisted on the need to constrain government policy as a way of ensuring that the price system maximum latitude would allow for efficient allocation of resources. ree markets are the most practical way of achieving freedom since they enhance individuals' capacity to better themselves which in turn improves the welfare of an entire economy.
Economic Impacts of Friedman’s Ideas
Friedman’s views have significant economic impacts considering that they were a result of his experience with the global financial crisis, most notably, the Great Recession. At the time, economists relied on Keynesian views that supported the centrality of the government as a mechanism for cushioning economies against financial shocks. Friedman challenged the economist of the time to adopt other perspectives considering that the Keynesian approach was not enough to cushion economies against recessions. In particular, Friedman introduced the concept of the “economic man” who can only participate in nation-building under the free market conditions (Popov, 1990). This form of market insists more on the freedom of the individual as opposed to justice, morality, and equality, which are features of a capitalist society. This assertion is very practical, considering that in as much as capitalist economies insist on technologies and capital, they require labor to achieve their objectives. According to Ashford (2010), people are usually ready to work if they are assured that they will receive better wages which would improve their lives and, in turn, offer them more freedom. While work in a capitalist market is quantified using monetary gains, individual freedom is a non-monetary reward that would motivate people to give their energy and time for the sake of nation-building. Overall, Friedman provides crucial insights which challenge companies and nations to focus more on individuals' needs as opposed to organizational ones to maximize chances for success.
References
Ashford, R. (2010). Milton Friedman’s capitalism and freedom: A binary economic critique. Journal of Economic Issues, 44 (2), 533–541. https://doi.org/10.2753/JEI0021-3624440226
Hetzel, R. L. (2007). The contributions of Milton Friedman to economics. Economic Quarterly, 93(1), 1–30.
Lipkes, J. (2019). Capitalism and the Jews: Milton Friedman and his critics. History of Political Economy, 51 (2), 193-236. DOI 10.1215/00182702-7368836
Mulligan, T. (1986). A critique of Milton Friedman’s essay “The social responsibility of business is to increase its profits.” Journal of Business Ethics, 5 (4), 265–269. https://doi.org/10.1007/BF00383091
Popov, G. (1990). The rebellion against Keynesianism: Milton Friedman. Problems of Economics, 33 (5), 99-103. https://doi.org/10.2753/PET1061-1991330599
