Lehrman American Studies Center

I - II

1. In what ways does political freedom depend on economic freedom? Explain why he thinks that a country with a socialist economy, but which values pluralism of opinion and expression, cannot work.
2. Why is it so important that individuals be effectively free to enter or not enter into a particular exchange?
3. On page 25 Friedman lists (twice) the three basic roles of government, which are roles that the market cannot perform by itself. Explain them.
4. What do pollution and general access roads have in common? Why does this make collective action (usually through the government) necessary?

For Further Reflection

• Why does Friedman think that economic freedom is an end in itself?
• What does a (classical) liberal, in Friedman's sense, say about individual ethics and what the individual does with his freedom?
• "The basic problem of social organization is ..."
• Why would the believer in liberty be challenged by the fact of human interdependence and the principle of individual freedom? Why would there be a conflict between the two?
• Explain, in great detail, how voluntary cooperation through the marketplace solves the problem of coordinating large numbers of people.
• Notice how this passage "[the market] gives people what they want instead of what a particular group thinks they ought to want" is like Rawls, who of course argues for a different set of social arrangements, but who also believes that "the good" (moral merit, utility, etc.) should not be a part of our consideration.
• In the first paragraph of chapter 2, Friedman makes fun of the idea that "the end does not justify the means", which usually means that a good end cannot justify bad means, but which he takes to mean that if you take morally neutral means (say, a knife), its moral value is determined by the end to which you use it (to slice bread or to slice a throat). But it's nice of him to not let himself be carried away by making fun of others, and rather take the objection seriously.
• "...the more basic end of the use of acceptable means." Notice how close this is to Nozick's (more precise) description of the right means a side constraint that cannot be violated.
• Political decision-making requires conformity, market-based decision-making encourages diversity. How so? Why do political mechanisms, which encourage conformity "stress social cohesion."
• Friedman thinks that government is necessary in three kinds of situation: to prevent physical coercion and enforce contracts, in cases of ... and in cases of ... .
• Although he thinks that, in the case of monopoly, reasonable people will come to different conclusions, what is his argument for keeping monopolies private and unregulated? How does his argument rely on the dynamism of the economy?
• Why is it "hard to know when neighborhood effects are sufficiently large to justify particular costs in overcoming them"?
• "Paternalism" is a description of the state acting like a parent (to children or the mentally deficient). Why would this be troublesome for the liberal? (Hint: "Father knows best" implies that there is such a thing as a "best". "Daddy is doing this for your own good" means that there is such a thing as "good".)
• Use the Conclusion to put in your mind what Friedman thinks government should do in a liberal society. Look at his 14 examples of inappropriate government intervention. Why does he think these interventions are inappropriate? What typically justifies these interventions (for example, Social Security or professional licensing), and why do you think he'd deem these justifications to be inappropriate?

VI - VII

1. Describe the externality (neighborhood effect) of education and how it justifies government financing of education. Why is it fine to subsidize elementary schools or liberal arts colleges, but it is not fine to subsidize professional programs such as business or medical schools (hint: human capital accumulation)?
2. What is the argument behind "vouchers" for schools? How would de-nationalizing (i.e., eliminating public schools and just handing money to private schools to educate everyone) tend to increase equality of opportunity? What are some of the consequences of public schools having so little competition?
3. Friedman mentions a particular method of financing professional education that looks like "partial slavery", and that although economically efficient seems repugnant. What is this method? Explain how he defends his proposed solution.
4. Why does Friedman say that minorities and oppressed groups should be really, really in favor of the free market?
5. Why are anti-discrimination laws so bad for freedom? Why are "right-to-work" and "yellow-dog" laws bad for freedom? Why does he argue that the free market would be so much more effective than laws at fixing the problems that laws attempt to fix?

VIII - IX

1. Why does Friedman think that monopoly is damaging, but less damaging than commonly thought? Why does he think the main problems from monopoly come from inappropriate government intervention?
2. What is business's (and labor's) social responsibility, according to him? Why does he hate the common way we use the term?
3. What is so wrong with requiring doctors and lawyers to pass a test before they are allowed to practice? How would we identify good or bad lawyers and doctors without licensure?
4. What are the reasons that Friedman gives for why many professions have licensure requirements?

Questions about X - XIII

1. What is the capitalist principle that Friedman finds "cannot in and of itself be regarded as an ethical principle"? What is the major instrumental role in the market place of distribution "in accordance with product"? What are the beneficial roles played by inequality?
2. Give a few examples of government policy actually end up achieving an end exactly opposite to what was desired (in terms of redistributive tax schemes or poverty alleviation measures). If those government policies have unintended effects, why were they put in place? Why are they kept in place?
3. Discuss the "negative income tax" proposal, its pros and its cons.
4. Describe the difference between a liberal and an egalitarian.
5. The conclusion is a splendid summary: study it carefully.