Freedom and equality, according to Milton Friedman in his book “Capitalism and Freedom” are two crucial issues in any econom

Summary

Summary

Freedomand equality, according to Milton Friedman in his book &quotCapitalismand Freedom&quot are two crucial issues in any economy. Which of thetwo is more important? Friedman argues that economic policies shouldfocus on promoting freedom primarily because if they focus onequality first, it may even end up jeopardizing freedom as well ascause other economic inefficiencies. If a society puts attainment ofequality before freedom, such a society ends up with neither of thetwo. On the other hand, a society that values freedom as a priorityand a happy by-product will end up with greater liberty and equality. Friedman also strongly advocated for government intervention toalleviate poverty that is mainly brought about by inequality. But howcan the government achieve this?

Oneof the ways in which governments can reduce inequality that isespecially rampant in market economies of Western countries is byproper distribution of income, especially through taxation. Theprinciple to give to &quotto each according to what the instrumentsthe government owns produces&quot should be applied. Progressivetaxation is a strategy that uses this principle. Furthermore,Friedman gives his view on the role of competitive capitalism wherebya lot of economic activity is carried out by the private sectoroperating in a free market. The government should organize suchactivity. For instance, what policies regarding inheritance should beimplemented?

Everycitizen has a freedom to choose what to do with their wealth. Aperson is entitled to whatever wealth they may have accumulated andis equally entitled to pass it on to his offspring. The heirs maygain wealth that they did not work for but they are still entitled toit. It is then up to the government to find a way to equalize it bytaxing them more than they would tax a peasant.

Accordingto John Williamson, it is also important to establish what would beconsidered a desirable set of economic policies in Washington tofind a way to measure the extent to which countries have implementedproposed reforms.

References

MiltonFriedman on income and inequality. (2014, January 17). Retrieved fromBasic rules of life:https://basicrulesoflife.wordpress.com/2014/01/17/milton-friedman-on-income-inequality/