This is a continuation of my August 12th book review of Milton Friedman’s Capitalism and Freedom, which can be found below.  We last discovered that the foundation of his argument for a connection between capitalism and freedom depends upon whether or not individuals have a right to private ownership of the means of production.

Morality exists in general because people’s actions have physical effects in the world, and as such we need to consider our actions in light of these effects. The relevant standard is the impact of our actions on the things we affect, and how important this impact is on those thing, i.e. according to its impact on their well being. Rights cover those elements of well being that are so important that they must be protected. Minimally, we can be said to have, then, a first right to life; life is the background condition for any other rights or moral categories, and in the absence of basing an argument on a strong metaphysics, life is the essential element to well being. Life is not, however, its own purpose; it is just the precondition for the realization of other purposes. Our ability to act with relative freedom, i.e. our actions do not intrude first upon the right to life of others, and secondly upon their own freedom, is a necessary component of our well being as well. Consequentially, we further have a right to freedom. It has been argued by many that rights to private property are justified as, for example, a necessary precondition for the rights to life and freedom. These conceptions, however, justify only property use, not ownership, because so long as one has the necessary goods when they are needed, one’s rights to freedom and life are perfectly met. There are other attempts to justify private property ownership rights, but I will not cover them at this time. At any rate, ownership of the means of production (raw materials and tools) are direct limitations on the freedom of action and welfare of others, as they take away the means to achieve ends. They take away property use rights from others, and as such they limit the ability of others to meet their own needs, while overextending one’s own rights (in that property use is the only prerequisite of rights being met). We thus do not have a right to private property ownership in the means of production, but do have a right to free use of the means of production. Capitalism, in its absolute private ownership of the means of production, in fact violates the legitimate right to property. Consequentially, capitalism in fact violates rights rather than than guarantees them, this violation of rights is protected by coercive force. In short, Friedman’s entire argument that capitalism protects political freedom is false.

What about economic freedom? Economic freedom, the freedom of exchange, is essentially meaningless with Friedman’s conception of rights. The freedom to exchange goods it not necessarily contested under socialism (for example, socialists would not likely object to, say, a barter fair, and they most certainly would not object to an exchange of services). It is the specific sub-component of ‘economic freedom’ that involves production for exchange that is contested, and primarily because it involves the exploitation of labor, tendency for the accumulation of capital to override social values, and inability to meet human needs except by accident. Were no exploitation present and production geared towards meeting human needs it would be less objectionable. In fact, these conditions are impossible under capitalism, as capitalism presupposes and is founded upon exploitation and producing for profit, not needs. This aside, socialists object not to exchange per se, but capitalist production for exchange; thus, capitalism only differs necessarily from socialism in terms of economic freedom in that socialism rejects the components of economic freedom that violates rights, whereas capitalist apologists such as Friedman defend it.

His argument that freedom of exchange protects political freedom in that it restricts the means at the disposal of the state, thus preventing centralization and consolidation of power, has at least once central problem; it artificially separates the government from its citizens, which cannot be done in a democracy. Now, American democracy is not truly democracy but representative democracy, which is not democracy at all. In theory and practice, representative democracy replaces popular rule with quasi-popular choice of rule by an elite. In a real democracy, however, the government is the people, and thus removing the means from the ends of the populace through capitalism is an imposition on democracy. Friedman’s argument, then, is no more than an explicit argument showing how capitalism thwarts democratic self-determination through empowering a property-owning elite.

To summarize the preceding points, (1) Friedman’s case for capitalism being a necessary condition for democracy as well as economic and political freedom rests upon a notion of private property ownership rights—specifically private property ownership rights over the means of production, tools and raw materials. (2) Property rights are legitimate insofar as they contribute towards freedom and well being, but this supports private property use rights, not ownership rights, and specifically discounts ownership of the means of production, as it impedes freedom and well being. Since private property use rights mean no more than an individual has a right to use the property he or she needs (and here I will accept that private goods which aren’t the means of production have value attached to them that may be more for one particular individual than others, a picture of one’s own children for example, and so I will prima facie hold no qualms over ownership of private property that is not the means of production, at least insofar as my case against Friedman doesn’t require it, so I don’t need to go that far), private ownership of the means of production violates the use rights of others, as well as their freedom and well being. Consequentially, (3) capitalism in fact violates the legitimate range of economic freedom, and as it involves the coercive and illegitimate state defense of private property in the means of production, capitalism rests on coercion, and thus violates political freedom as well. It further (4) undermines democracy through its separation of political means from political ends, in essence holding democracy hostage. If government is to satisfy the purposes that Friedman sees in it, namely “”the maintenance of law and order to prevent coercion of one individual by another, the enforcement of contracts voluntarily entered into, the definition of the meaning of property rights, the interpretation and enforcement of such rights, and the provision of a monetary framework” (27), the government ought to be socialist, devoid of illegitimate coercion because of its recognition of the proper definition of property rights.

Now, Friedman’s support of the connections between capitalism/freedom and capitalism/democracy have been undermined. He makes arguments on more specific sociopolitical issues later, and while many if not all of his points are rendered illegitimate and the questions themselves meaningless after the collapse of his notion of rights, I will proceed to advance additional arguments against them, each on their own terms. I may refer to something pointed out before, such as problems with private ownership of the means of production, but not simply make statements such as “Friedman says x, but since his conception of property rights has been rejected, x is wrong/meaningless”. In other words, I won’t reject his additional arguments by fiat.

In his chapter on Monopoly and Social Responsibility, Friedman argues against what he calls a “monopoly in labor,” referring to workers increasing their class power through unionization. Friedman argues that “if unions raise wage rates in a particular occupation or industry, they necessarily make the amount of employment available in that occupation or industry less than it otherwise would be. . . [and] the effect is an increased number of persons seeking other jobs, which forces down wages in other occupations . . . [making] high-paid workers higher paid at the expense of lower-paid workers.” (124) He thus argues that “unions have therefore not only harmed the public at large and workers as a whole by distorting the use of labor; they have also made the incomes of the working class more unequal by reducing the opportunities available to the most disadvantaged workers” (ibid). While it’s nice hearing Milton Friedman be so concerned here with inequality and disadvantaged workers, his argument presupposes that it is legitimate for capitalists to fire workers in order to preserve profits. His argument is saying this: when unionized workers work to raise wages, their boss has to pay more to employ them, and consequentially the only way the boss can maintain his profit margin is to employ fewer of the workers. It is a sad but true fact that the average American union is relatively conservative, and limits its demands to higher wages, reaching out too little to non-union workers, and rarely if ever fights for the workers outside its own union. However, Friedman’s argument neglects that, while the negative effects of unionization he shows seem believable, they are so only because of the capitalist’s decision to fire workers to maintain the rate of profit. In short, it is the choices of capitalists that might produce greater inequality between workers and harm the public at large. True, without maintaining the profit margin capitalists will be pushed out of the market, but this only shows that capitalists, too, are alienated, and capitalism, not individual capitalists, is the problem. A bit more work remains to be done in the process of reviewing Capitalism and Freedom, and so I will return to this post in short order.

My last review: