Democracy and the Free Market

Paper Summary:

This paper discusses Milton Friedman's theory that true democracy is made possible only through the existence of a free market system and attempts to illustrate that this is not necessarily so. The paper looks at Milton's view that economic freedom is tied to political freedom because of the choices it permits and compares the view of Karl Polanyi who argues that commodity-based capitalist systems are built on control over land, labor, and money - but these are not commodities. The paper also examines another perspective that questions Friedman's concepts of freedom and capitalism; Samuel Bowles and Herbert Gintis' view and how they illustrated that a free market system does not safeguard meaningful participation in society, nor does it contribute to a sense of community.

From the Paper:

"Friedman's conception of the relationship between democracy and capitalism is based upon the assertion that the economics and politics are intimately related. In his view, economic freedom is a fundamental component of political freedom because of the choices it permits, in addition to being a means in itself towards achieving political freedom. Competitive capitalism is the economic system which, in his view, best promoted economic freedom, primarily because "it separat[ed] economic power from political power and in this way enable[d] the one to offset the other." It should be noted that Friedman's conception of freedom appears to be one of an absolute, individualistic variety; in his view, even such programmes as state-run pensions constitute coercion of a sort, since a part of one's income is appropriated by the government to fund them."

Sample of Sources Used:

• Bowles, Samuel and Herbert Gintis. Democracy and Capitalism. New York: Basic Books, 1986.
• Friedman, Milton. Capitalism and Freedom. Chicago: University of Chicago Press, 1962.
• Polanyi, Karl. The Great Transformation. Beacon: 1957.

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• Essay # 52219 : "The Free Market System in a Democratic Society"
• Analytical Essay # 89041 : "Amy Chua's Views on Free Market Democracy"
• Analytical Essay # 69826 : "The Lexus and the Olive Tree"

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