In a previous post, I wrote about Hayek’s claim that capitalism reduces economic inequality. Milton Friedman makes the same claim about capitalism and inequality in “Free to Choose.” This claim was quite plausible in the early 70s, less so today. There’s an irony here, which is that the data upon which Friedman and Hayek relied to show that capitalism reduced or didn’t exacerbate inequality were taken primarily from the post-war period of strong unions and active government, the very economic phenomena they were trying to curtail.
Anyway, even if they’re wrong about inequality, Hayek and Friedman can still claim that capitalism benefits the poor – the claim taken up recently by so-callled bleeding-heart libertarians such as John Tomasi and Jason Brennan. Here’s Friedman, from Free to Choose:
The main bit:
“I do not know any exception to the proposition, that if you compare like with like, the freer the system, the better off the ordinary poor people have been.”
Is that true? Continue reading Friedman on Capitalism vs. Poverty