In the
first part of Capitalism and Freedom,
Friedman emphasizes the relationship between economic freedom and political
freedom – while economic freedom is valuable in and of itself, it is also “an
indispensable means toward the achievement of political freedom” (8). This is because the main frustration of
freedom is the concentration of power; competitive capitalism allows economic
power to offset political power. “The
preservation of freedom requires the elimination of such concentration of power
to the fullest possible extent and the dispersal and distribution of whatever
power cannot be eliminated – a system of checks and balances” (15). However, Friedman’s position on free speech
thwarts this end of decentralized power, severely complicating this relationship
between economic and political freedom.
The first
problem is the empirical concentration of economic power in the United States
today. The top 1% owns 34.5% of the
wealth (as of 2010), 5% more than they did 20 years ago, and the bottom 50%
owns only 1.1% of the wealth. Not to
push Occupy too hard, but if this isn’t concentration of economic power, I
don’t know what is. Furthermore, it is
challenging to think of a plausible explanation for this distribution other
than economic freedom – in Friedman’s ideal liberal world, this 1% would of
course be free to accumulate wealth through any voluntary exchange, and most
attempts to prevent this accumulation would be violate their freedom. This income gap seems OK by Friedman.
More
problematic, however, would be this economic power concentration in conjunction
with political power – a situation in which the two concentrate power together,
rather than balancing each other out. For
example, if the salary of members of Congress (not counting benefits) put them
in the top 5% of U.S. workers. Or if campaign
finance rules allowed for effectively unlimited contributions to issues or
candidate races. The power of the
economic top 1% can be heavily leveraged in political matters. Friedman emphasizes this impact of economic
power on political power, arguing that for free speech to “mean anything, the
proponents [of an issue] must be able to finance their cause” (17). He seems to agree that free speech, including
political speech, goes hand in hand with available economic resources. Why, then, is he not concerned that the top
echelon of economic power will out-finance and crowd-out the bottom? Even if
economic freedom is valuable in and of itself, its ability to further
concentrate political power is very difficult to forgive.
(I give Friedman credit for his use
of historical examples, and appreciation of the importance of context – perhaps
the context of 1956, this issue of realizing free speech and the concentration
of economic and political powers was not yet salient. This would be similar to his reference on
p.35 to “detailed regulation of banking” as an unjustifiable role of
government, which perhaps was not able to appreciate the complete context of
the market failure leading to our most recent economic crisis).
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