Sample Paper on Capitalism and Freedom

Binary Economic Critique, an article on Capitalism and Freedom, illustrates how the market economy based perpetuates chronic under-occupation and represses individuals’ freedom. Friedman’s flawed interpretation of capitalism constitutes both political and economic implications. So, “What is capitalism?” the simplest approach to defining the relevant features of competitive capitalism it to equate the definition of capitalism to that of political freedom, in terms of the absence of coercion, particularly the coercion of the centralized state.

In the concept ‘Capitalism and Freedom’ Friedman acknowledges that there is increasing acceptance of the view that corporate officers have moral responsibilities but his argument indicates fundamental misconception of the character and nature of a free economy. But, are corporate officials good judges of what the social interest is? They are not, and they should not be. I assume that understanding social welfare lies beyond corporate officials’ specialization of competence and should be left to those whose specialty holds.

Some considerations of the nature and purpose of business as a social institution is usually included to specify the relationship between business and other social corporations. This encompasses the question “What is the social responsibility of business?” Milton Friedman’s classic contention is, “the primary and only responsibility of business is to maximize profit”, to the stakeholders (Ashford, 2010). Friedman asks us to imagine a situation in which corporations take on moral responsibilities to keep prices and wages in line to reduce inflation. The outcomes could be injuries to the economy of a nation. If they do when there is an upward pressure on prices and consequently an increased money supply, then the results will be product shortages, labor shortages, and black markets. From my point of view, corporations are designed for business, not moral deliberations (Ashford, 2010). Social welfare will be maximized if corporations realize this, i.e. if they reject the temptation to be socially “responsible” and instead, merely maximize profits.

References

Ashford, R. (2010). Milton Friedman’s Capitalism and Freedom: A Binary Economic Critique. Journal of Economic Issues, 44(2), 533-542.