Milton Friedman

In: Business and Management

Submitted By njarmyguy
Words 1243
Pages 5
Milton Friedman and Free-Market Capitalism Milton Friedman is known worldwide for his belief in defending free-market capitalism and his faith that it can proficiently and impartially distribute wealth throughout a nation. Most of Friedman’s peers are not able to put that same amount of confidence in the ability of the market as he. Friedman has suspicions of government interference in the business of a nation’s economy. These suspicions are based on his belief in a limited government and that a capitalist economy free of government interference would provide the best choices for a consumer. Instead of being so involved in the market, he believes that the government has a responsibility to keep a high standard of living through certain functions like defense, education, and public utilities and set certain laws regarding economic policy in order to keep in check the “game” of economics. (Friedman 25) Friedman suggests that the government pass “a legislated rule instructing the monetary authority to achieve a specified rate of growth in the stock of money.” (Friedman 54) Besides serving this purpose, Friedman believes the government’s interference is detrimental. Friedman’s Suspicions of Government Interference The United States government portrays the idea that without government intervention, society’s economic growth would stagger. According to Friedman, economic growth and stability are due to the reduction of government interference. Friedman has many reasons for why he believes that government interference in the economy is not good. He believes that the government creates monopolies and impedes on personal freedoms and liberties. He argues that although the government has to take care of basic essentials of its people, it should have as small a role as possible. Friedman’s attitude is similar to that of Adam Smith, who believed in Laissez-faire, a capitalistic…...

Similar Documents

Milton Friedman

...Wilson 1 Milton Friedman is considered to be one of the most prominent and influential economists of the twentieth century. Friedman’s ideas have changed economic theories as a result of his beliefs in free-market capitalism, competition in education and less government control. He received worldwide recognition for contributing to the balancing and solving of economic issues. He has been recognized by creditable universities and international governments. Friedman developed economic theories that could possibly be studied forever. His theories on economics have contributed excessive cash flow to the world over an extended period of time (Ebenstein). Friedman was born in 1912 and died in 2006. He was an economist, an educator and a leading proponent of monetarism. He received degrees from Rutgers University, University of Chicago and finally a Ph.D. from Columbia University. In 1976 he received the Nobel Prize for economics. Friedman felt that the understandings of economics enabled one to understand how the real world worked (Ebenstein). Friedman studied income and wealth distribution along with distribution of personal finances. His career included working for the National resource Committee on Consumer Budget Studies in 1935, the National Bureau of Economic Research in 1937, the Department of Treasury Division of Tax Research during World War II and he also taught at the University of Chicago. He advised President Nixon and President Reagan on Wilson......

Words: 1070 - Pages: 5

Senior Research Paper: Milton Friedman

...Milton Friedman Jordan Locke Economics 10 April, 2013 Jordan C. Locke 10 April, 2013 Period: 2 Ms. House Milton Friedman Milton Friedman once said, "If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand”. Due to Friedman's many accomplishments and published works in the Economics field, I felt that he would be a great economist to write about. Milton Friedman was born in 1912, to two Jewish immigrant parents that lived in New York City. He earned his Bachelor's degree at Rutgers University at the age of twenty. He then went to the University of Chicago in 1933 to earn his Masters. In 1946, he earned his Doctorate at the Columbia University. He received the John Bates Clark Medal, honoring economists that had achieved the most outstanding levels of achievement by the age of Forty. He received the Nobel Peace Prize for his achievements in the field of consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy. He served as an adviser for President Richard Nixon, and he was the president of the American Economic Association in 1967. He retired from the University of Chicago in 1977, and became the senior researcher at the Hoover Institute at Stanford University. He was the premier spokesman for the monetarist school of economics and a pioneer in promoting the value of free market economics, when the position was not popular. Milton Friedman......

Words: 1382 - Pages: 6

Friedman Dcotrine

...The business of business is business. The responsibility of the corporation is to make the maximum possible profit, playing by the rules. THE FRIEDMAN DOCTRINE –PROBABLY TOO SIMPLIFIED “Business of business is Business” – According to Milton Friedman, this is the fundamental principal of the laissez-faire capitalism. During a period when the nation was struggling to draw the line between collectivism and social responsibility, Friedman’s doctrine was a clear answer. But with the development of crisis such as global warming, mortgage meltdown and labor exploitation in China, it makes one wonder if this doctrine has reached the end of its useful life. It seems Friedman looked at the corporate social responsibility (CSR) issue at its simplistic level and ignored the ambiguity and subjectivity that is part of any successful business. When Friedman contends that individuals can contribute to the society but should do it on his own, it appears Friedman assumes that the Government, the stake holders and the shareholders are separate entities with absolutely no overlap. He over simplifies the responsibilities of corporate executives and forgets the effects the externalities can have on corporation themselves. Similar to Ayn Rand’s objectivism principle, Friedman’s doctrine ignores the human instinct to survive by sticking with the herd. Friedman claims that the corporate executives cannot be relied on to deliver on the social responsibility, yet he believes that the executives can......

Words: 601 - Pages: 3

The Economic Theories of Milton Friedman

...THE ECONOMIC THEORIES OF MILTON FRIEDMAN The Economic Theories of Milton Friedman Milton Friedman was one of the top and most influential economists whose conservative economic theories became influential during the last part of the twentieth century. This paper will explore his economic theories and how his policies were embraced by some conservative politicians but are not as widely adopted today. Milton Friedman would famously say “there is no such thing as a free lunch” (Moore 2012). What he meant was that everything comes with an opportunity cost. If the government spends money then that money must come from the private economy. He was an advocate of capitalism and his views helped revive modern capitalism in the latter part of the twentieth century. He was a proponent of the free market economic system and was opposed to government interference in the economy. Many of his theories have become accepted and lauded by modern day conservative politicians. Milton Friedman was born in Brooklyn, NY in 1912 to immigrant parents. He was awarded a scholarship to Rutgers University where he majored in mathematics. While at Rutgers he became interested in economics due to the poor state of the economy during the Great Depression. After graduating from Rutgers University he went on to receive his master’s degree from the University of Chicago and then on to Columbia University for his doctoral work (Academy of......

Words: 1799 - Pages: 8

Milton Friedman

...Milton Friedman’s America Reviewing the video from Milton Friedman has given quite an insight on how he feels about what America was, what America has become, and what America should be. He focuses his ideas around legal and illegal immigrants and how the laws affect America when dealing with them as a working class. In some sense, the comments that he made were a bit insulting, while on the other hand, the comments were a bit amusing at best. These views are view that I would expect a comedian to address in stand-up than what I would expect a public speaker to verbalize to bluntly. He starts be addressing how immigrants today differ from the immigrants from a few decades ago. He states that in the 40’s the immigrants were welcomed because they came to America looking to work and were willing to take the jobs that no other American wanted. These jobs included agriculture and other labor intensive jobs. He then continued by saying that illegal immigrants were the ones that would take on these jobs, but as states began to legalize immigration, it made possible the ability for immigrants to come to America and become civilian who are able to stay at home and receive a check legally. He is against this because he feels that now immigrants are coming to America legally to get a free check instead of coming to America illegally to earn a living. I don’t believe he is saying to drive immigrant out by making immigration illegal. However, he is saying that illegal......

Words: 942 - Pages: 4

Report on Ilton Friedman

...Milton Friedman once said “The government solution to a problem is usually as bad as the problem” (1975). His extensive collection of books, articles, and lectures echoed his theory of free markets and a reduction in the size of government’s role in them. Whether the topic was public education, government spending or regulation, economic stability, or monetary policy, Milton Friedman viewed government control and regulation as the source of many of the nation’s woes. His works focus on the disadvantages that an extensive, controlling federal government asserts on its citizens. After all, "The strongest argument for free enterprise is that it prevents anybody from having too much power” (1980). Milton knew that “The most important single central fact about a free market is that no exchange takes place unless both parties benefit” (1980). He advocated that a free market economy (with very minimal government intervention) was the cause and effect to the U.S.’s historical economical booms and depressions throughout the years. He even went on to propose that Hong Kong’s government was an ideal example of a free market economy and that the U.S. could learn from it and improve our nation’s economic standing and health. Milton saw mass unemployment (and the ensuing depressions) as a result of this government oversight. This could have been avoided by adopting a free market economy void of unchecked government rule. He insisted “The Great Depression, like most other periods......

Words: 718 - Pages: 3

Ethics, Csr, and Milton Friedman

...Ethics, CSR, and Milton Friedman Marketing in the Era of Managerial Distrust During the first few years of the twenty first century, and in the wake of the terrorist attacks of 9/11, the business world was rocked with news of financial and accounting scandals at major Fortune 500 companies. Enron, a Texas based energy company, lied about profits and was accused of concealing debts so they did not show up in the company’s accounts (BBC News, 8/22/2002). Arthur Andersen, an accounting giant, member of the “Big Six”, and Enron’s corporate auditor, collapsed completely after being found guilty of deliberately destroying evidence of its relationship with Enron (BBC News, 8/22/2002). Tyco executives L. Dennis Kowlowski and Mark H. Swartz were indicted and charged with misappropriating more than 170 million dollars from the company as well as outright stealing 430 million additional dollars through sale of fraudulent shares of Tyco stock (Daniels Funds Ethics Initiative). MCI Worldcom was found guilty of accounting fraud in relation to an overstatement of earnings in 2001 and 2002 (CSR Report for Congress, 8/29/2002), during which time its own auditor was also Arthur Andersen. Executives at each firm (Kenneth Lay, Bernard Ebbers, Dennis Kozlowski, and Mark H. Swartz amongst others) served jail time for their role in these scandals, which severely eroded the public’s trust in the corporate sector. Tyco’s stock plunged from $60.00 to $18.00 in the wake of the......

Words: 1891 - Pages: 8

Free to Shoose Videos Milton Friedman

...continuación presentaré un análisis basado en mi opinión, sobre los primeros 5 videos de la serie Free to Choose del economista estadounidense Milton Friedman. El Sr. Friedman fue un economista bien importante e influyente en los EU. Tanto así que en el 1976 ganó el Premio Nobel de Economía y aún hoy día, luego de su muerte, su legado continúa influyendo a muchos iconos de la economía y del sistema global. En la presentación número uno, El Poder del Mercado, Friedman nos habla sobre el Mercado libre y lo que implica. Antes no existían reglamentos de inmigración y las personas emigraban a países donde sabían que iban a poder progresar poniendo en práctica sus dones y disfrutando de las oportunidades que allí existían. Es muy triste saber lo difícil que personas de otros países lleguen, por ejemplo a EU, y no puedan buscar el sustento por la situación de la ciudadanía con el Dpto. de Inmigración. Existen unos pocos que pueden trabajar pues sus patronos burlan las leyes, pero reciben una paga muy baja. No obstante, los emigrantes no son los únicos que enfrentan problemas de superación. Los mismos estadounidenses también se afectan ya que EU no es un país totalmente libre y se afecta por el régimen de un gobierno que controla la economía de un país y de sus propios ciudadanos aumentando impuestos, tasas de interés entre otros. Friedman, dentro de su punto de vista minimalista, nos da el ejemplo de Hong Kong ya que es un país bastante desarrollado y el gobierno no......

Words: 1401 - Pages: 6

Dr. Milton Friedman

...Dr. Milton Friedman 1. The Social Responsibility of Business Is to Increase Its Profits." that business has a 'social conscience' and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution In 1970 Milton Friedman wrote that "there is one and only one social responsibility of business--to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud." That's the orthodox view among free market economists: that the only social responsibility a law-abiding business has is to maximize profits for the shareholders. The most successful businesses put the customer first, ahead of the investors. In the profit-centered business, customer happiness is merely a means to an end: maximizing profits. In the customer-centered business, customer happiness is an end in itself, and will be pursued with greater interest, passion, and empathy than the profit-centered business is capable of. 2. Friedman is careful to note that the corporate executive has direct responsibility to his employers, the shareholders. He is also careful to argue that this is not necessarily the manager's sole responsibility; there is, after all, the duty to conform to the basic rules of the society. It is not clear if the latter is a moral responsibility or a social responsibility--i.e., if it is a duty the......

Words: 570 - Pages: 3

Freeman vs. Friedman

...Freeman vs. Friedman In their theories of how a business should operate, R. Edward Freeman and Milton Friedman hold virtually opposite beliefs as to what businesses’ responsibilities should be. In favor of the Stakeholder theory, Freeman believes that any person or organization that has a “stake” in the business should also play a role of participation in the business’s actions and decisions. In the other corner of the ring stands Milton Friedman, who holds the belief that said business is only responsible for those that actually own stock in the business – the owners, or stockholders. A strong believer in his reconceptualized Stakeholder Theory of the Modern Corporation, R. Edward Freeman believes the key to success in business is several stakeholders working together in a sort of interconnected “corporate system”. Freeman begins his argument by raising a simple question: For whose benefit and at whose expense should the firm be managed? To answer this question, Freeman attempts to explain why managerial capitalism no longer works. He notes, “The basic idea of managerial capitalism is that in return for controlling the firm, management vigorously pursues the interest of the stockholders” (Freeman, 38). Freeman begins to attack this idea of managerial capitalism with several arguments pertaining to why this form of capitalism no longer can work. He argues that corporations act with limited liability for their actions and remain seemingly immortal since the......

Words: 1854 - Pages: 8

Milton Friedman

...Education for the Future A student in today’s education system could easily find themselves with a heavy work load, and very little free time due to an aggressive national push for improvement. Beginning at surprisingly early grade levels, students are rushed through their days at school in a blur of mandatory material and then loaded up with even more work to take home to their families. This daily process can take a heavy toll on both the families and teachers that are trying to provide good educational support for their students. Even in two parent households, if both parents are working, the ability to maintain a regular home life and keep up with homework can be very difficult. In spite of these issues, the need for better education persists. K-12 schools now more than ever before, have the ability to organize study materials in a way that would allow more efficient use of both student’s and teacher’s time. All K-12 schools can, and should, offer well-designed internet study options; as well as flexible in school technology that is both user friendly and directly supported by qualified teachers. The first thing to consider is that the technology and communications networks needed to support a more efficient education process already exist. Computers and mobile devices are constantly improving ways to integrate into every aspect of our lives. The U.S. Census Bureau reported that 78.9% of households in 2012 had computers and of those households 74.8% of them had......

Words: 744 - Pages: 3

Milton Freidman

...Milton Freidman was born in 1912 in Brooklyn, New York. Freidman was the youngest of four children and even though his parents worked, the income was very little. However, there was always food on the table and the family atmosphere was very supportive. Freidman attended public schools along with his sisters and in 1928 he graduated from high school at the age of sixteen. His father died during his senior year of high school. Friedman wanted to attended college even though it meant he would have to pay for it by himself. Luckily for Friedman, he was awarded a scholarship from Rutgers University. Friedman enjoyed mathematics and he went to school with the intentions of becoming an actuary (a person finds ways to manage potential risks), instead of what he is now famous for, economics. During his four years at Rutgers, he specialized in mathematics and went as far to taking a few actuarial examines. However, shortly after, he became interested in economics and eventually ended with a major in both actuary and economics. In Freidman’s autobiography, he mentions two men who helped him better understand economics. Arthur Burns, one of the men mentioned, was teaching at Rutgers while completing his doctorate for Columbia. “Burns shaped my understanding of economic research, introduced me to the highest scientific standards, and became a guiding influence on my subsequent career” (citation). Homer Jones was the other individual who had an impact on Friedman’s life. ......

Words: 439 - Pages: 2

M. Friedman

...Milton Friedman started the documentary Free to Choose part-3 Anatomy of a Crisis with the genesis of the Great Depression of 1930. Friedman articulated it was the Wall Street Crash on October 29, 1929 better known as “Black Thursday” that began the trickledown effects on the United States economy. Friedman claimed that bellied up businesses and bank failures in the south and mid-west of the United States contributed to the Great Depression. Friedman believed that it was not deemed a crisis until failures reached New York. One casualty the Bank of the United States in New York, New York was in jeopardy of bank failure. Friedman express that although the Federal Reserve Bank of New York whose primary functions are to prevent and or assist banks from bank failure was unsuccessful regarding the Bank of the United States dilemma. With several attempts Federal Reserve Bank proposed that the Bank of the United States merged with other local banks. By doing so a guarantee fund for depositors would cover the Bank of the United States loss and keep it afloat. Ultimately the Bank of the United States shut down December 10, 1930 due to competition from surrounding banks and racism. Friedman goes on about how the Federal Reserve Bank and their unwillingness to create new money by purchasing government securities at a grand scale. Friedman conveyed that the bank failure of the Bank of the United States would have been handled differently and fitting during that time if a Benjamin......

Words: 608 - Pages: 3

According to Nobel Laurate Milton Friedman, “Inflation Is an Old, Old Disease. We Have Had Thousands of Years of Experience of It. There Is Nothing Simpler Than Stopping an Inflation – from the Technical Point of View.”

...Macro Economics Assignment 3 1a. According to Nobel laurate Milton Friedman, “Inflation is an old, old disease. We have had thousands of years of experience of it. There is nothing simpler than stopping an inflation – from the technical point of view.” If inflation were a disease, then what is the cause of the disease? How do you cure the disease? What are the effects of this disease? Please watch the following videos by Milton Friedman to answer the above questions. Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling. Central banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly. As a result of inflation, the purchasing power of a unit of currency falls. Milton Friedman termed it as a dangerous and fatal disease which if allowed to spread unchecked can ultimately destroy the society. It occurs as a result of too much money in the market. The increase in the quantity of money more than the output brings about inflation. The causes of Inflation have been attributed to many things over the years such as greedy businessmen, Trade unions, Spendthrift consumers, etc. However that’s not the case. The main responsibility of inflation falls on the Government. According to Milton Friedman, the primary causes of inflation are as listed below: * Control of the Printing Press: The printing press is under the control of the......

Words: 965 - Pages: 4

Milton Friedman Anaylsis of Interviews

...The first video in the video case assignment was Milton Friedman – Population and Ecology. The video was from a 1977 Q and A session where Professor Friedman takes on an environmental query. The first question Dr. Friedman was asked was; in light of the pressures from the ecology and population, how should this alter the economic policies of our country? Dr. Friedman replied that the U.S. is under populated by the standards of almost any place in the world. What is desirable is a system in which parents, people who choose to have children, bear the costs and the full responsibility of those children. If we have a system of this kind under which you do not artificially encourage population or artificially discourage population, then you will end up with the right population. The figment of Malthusianism is real in some parts of the world, but it has not been real in the advanced countries of the world. Dr. Friedman says, the rate of population growth has been slowing down in the United States. Most of the country now has fewer people per acre than it did 100 years ago. This is because people have voluntarily chosen to move to bigger cities. Dr. Friedman says the only reason we have so much more attention to ecology and population today than we did 50 or 75 years ago, is because we are rich enough to be able to afford the luxury. The water is cleaner and safer to drink today than it was 100 years ago. Not only is the water cleaner in the U.S., but it is cleaner all over the......

Words: 2932 - Pages: 12