the basis of Milton Friedman’s economic philosophy is his faith
in the free-market system. To him, when government power in
economic matters is limited, individual opportunity is enhanced.
He actually used Adam Smith’s term in an interview when he
claimed that “...the invisible hand of the free market, whereby
men who tend to serve only their own interests serve the public
interest, is a far more sensitive and effective source of both
growth and freedom than the dead hand of the bureaucrat,
however well intentioned he may be.”
Friedman also contends that the relationship between eco
nomic and political freedom— they are integrally bound to one
another. Economic freedom has a dual role in a free society.
First, it is a desirable end in itself, and second, it is necessary to
the maintenance of political freedom. The idea that an individual
should be free to control his own economic activity is a self-
evident truth, according to Friedman. For example, the idea that
most Americans must contribute by law to a Social Security
system, which deprives them of a percentage of their income that
they might very well choose to invest elsewhere, is a limitation
of personal freedom.
A free economic system is necessary to maintain political
freedom, since it ensures a dispersion of powers that is the basis
for political freedom. When economic power is separate from
political power, the government is unable to coerce individuals
through their pocketbooks. The threat of the loss of their jobs, or
of a reduction of income, or other governmental pressures on
individuals who are economically as well as politically tied
together, can result in enormous governmental power and is a
threat to a free society. During the 1950s several screenwriters
were black-listed by the studio heads for alleged communist
leanings. Most of them simply continued writing under assumed
names and continued to make a living. The desire of the produc
ers and directors to make good movies, and good profits, led
them to hire these writers despite their political views. If the
studios had been under government control, political consider
ations would have insured that these men, despite their talent,
would not have been able to earn a living.
While Friedman is opposed to government control, he ac
knowledges a role for government. That role is to support the free
market. The government’s role is to enforce the laws which
232 Economic Theory: An Introduction