In Capitalism and Freedom, Milton Friedman argues that under “free market” capitalism, the individual is protected from constraints upon their freedom of choice. He ascribed to capitalism the task of providing versatile and wide-ranging options to the masses, whether this comes to which products they buy or which jobs they work at.
By Rainer Shea
Published on the author’s own blog, Nov 3, 2021
In Capitalism and Freedom, Milton Friedman argues that under “free market” capitalism, the individual is protected from constraints upon their freedom of choice. He ascribed to capitalism the task of providing versatile and wide-ranging options to the masses, whether this comes to which products they buy or which jobs they work at. He wrote that because unrestrained capitalism is so good at providing these kinds of choices, “Underlying most arguments against the free market is a lack of belief in freedom itself.“ Karl Marx would likely respond to this with a repudiation of Friedman’s claim that unrestricted capitalism is truly a “free economy,” and with a case for why communism provides the masses with more meaningful freedom than capitalism does—much less neoliberal capitalism.
Monopolies are an obvious facet of the neoliberal model that can be pointed to as proof that neoliberalism doesn’t equate to a truly free market. But while touching on this point, it’s important to note that Friedman was not naive about the reality that monopolies exist, or that business interests incentivize companies to tend towards monopoly and certain types of state intervention. He clarified this in an interview where he said: “It’s always been true that business is not a friend of a free market … It’s in the self-interest of the business community to get government on its side.”
While Friedman’s acknowledgement of capital’s monopolistic nature and propensity towards receiving help from the state adds credibility to his intellectual honesty, it at the same time reveals he was on some level conscious that what’s best for capital doesn’t equate to a free economy. Friedman was able to bluntly articulate how and why capital constricts the market: by getting government to act in favor of business. He even described this principle as inevitable, not trying to argue that there’s a better version of capitalism where the government doesn’t favor business. So why does Friedman argue that his vision of a socioeconomic system designed to maximize profits is what’s best for upholding a free society?
Friedman argues for this kind of system because he takes the stance that neoliberalism, as opposed to socialism, social democracy, or any other system, is the relatively superior way for cultivating economic freedom. His case for neoliberalism is not that it provides complete freedom from state control, corruption, or systemic injustice. It’s that neoliberalism offers the least realistic amount of these things. This is evident from his statement in the conclusion of Capitalism and Freedom about the level of freedom that people have in market economies compared to planned economies: “Who today can regard the chains of the proletarians in the Soviet Union as weaker than the chains of the proletarians in the United States, Britain or France or Germany or any Western state?”
This is a crucial justification Friedman uses for arguing that neoliberalism represents a “free economy” in spite of capitalism’s innate constraints on the economy, and for claiming that neoliberalism’s opponents hate the very idea of freedom: that whenever alternative systems to capitalism have been tried, they’ve only brought about even more oppressive systems. If fighting against capitalism only results in worse systems, Friedman implies, the only sensible option is to make business as free from state constraint as possible so that profits can be streamlined.
It’s impossible to tell exactly how much Marx would have approved of the Soviet Union’s system, as it came after his death and in different historical conditions than the ones he used as a frame of reference. But it’s likely that Marx would at least have been able to rebut Friedman’s narrative about the USSR and the other Marxist-Leninist countries overseeing an objectively worse system than neoliberalism. Marx could have done this by pointing to the theory of his crucial partner in formulating theory: Friedrich Engels.
Friedman’s central charge against the USSR’s system was that it was too authoritarian for the proletarians living under it to be considered truly “free,” that these proletarians were constrained by “chains.” But Engels argued that the presence of authority doesn’t necessarily entail oppression, and that authority is merely a tool which can be used for the benefit of the class that’s in control. As Engels write in On Authority: “A revolution is certainly the most authoritarian thing there is; it is the act whereby one part of the population imposes its will upon the other part by means of rifles, bayonets and cannon — authoritarian means, if such there be at all; and if the victorious party does not want to have fought in vain, it must maintain this rule means of the terror which its arms inspire in the reactionists.”
It’s this argument that calls all of Friedman’s claims about the nature of freedom into question. If the projects to build an alternative to capitalism in Russia, China, Cuba, Vietnam, and the other Marxist-Leninist countries can’t honestly be dismissed as mere tyrannical states, but as attempts to wield authority for the proletariat’s benefit despite the many flaws in these attempts, what makes them objectively inferior to the societal model Friedman advocated for? What claim of moral superiority can neoliberalism, and capitalism in general, have to the projects for building an alternative to capitalism? It’s hard to argue that capitalism is the most free system relative to all other systems if the existing attempts at building socialism can’t objectively be called less free.
Of course, that statement from Engels doesn’t alone make the case for the workers in the USSR having been more free than workers in capitalist countries. Which is where different definitions of “freedom” come in; the workers in the USSR may not have had the freedom to become millionaires, like the workers in the capitalist world (theoretically) do, but by important metrics, they had far more freedom from scarcity than workers even in the rich United States did. According to a 1983 report by the CIA, “American and Soviet citizens eat the same amount of food each day but the Soviet diet may be more nutritious.”
Other instances of the USSR enabling relative freedom from deprivation to its citizens were the country’s keeping rents below 4% of the incomes of workers (the lowest rent tariff in the world at the time), its free allocation of housing to those on the waiting list, and its cultivation of conditions where millions would be able to improve their housing conditions every year. Contrast this to the current impacts of neoliberalism in the U.S., where millions are at risk of eviction due to unreliable tenant protection laws.
These egalitarian policies, and their historically proven material impacts of helping people attain greater access to essential resources, are what Marx aimed to bring about. These policies may have come at the expense of bourgeois freedoms and brand choice, but they granted people freedom from many of the miseries that are now found under neoliberalism. And Marx would likely have argued that these types of freedoms are more important.