Thursday, November 6, 2008

Milton Friedman Was Wrong!

When you open-up the business marketplace, totally eliminating government regulations intented to govern the rules of said marketplace, you not only clear the way for unfettered capitalism, and the legitimate entreprenuers and businessmen, but you also open the marketplace to criminals and scoundrels, and the unethical profiteer and quick-buck artist.

If you look at any instance in history, whether it be Chile, Argentina, Bolivia, Brazil, Poland, Russia and even in the United States, the results is the same. There is always the occurrence of widespread criminal activity, and always the resulting financial distortions from minor to catastrophic. It's like opening the hen house to the foxes and trusting that their best instincts will keep them from ravaging the hen house.

As wrongfully implied by Mr. Friedman's thesis, if *the pursuit of wealth and power is unbridled, injustice often results. The human mind is readily able to justify it's own selfishness and lack of consideration for others. The powerful find many reasons to ignore the interests of the weak.

Milton Friedman was naive to the fact that the lure of significant potential profits are not only to the honest entreprenuer and businessman, but the same lure for significant potential profits are extended to the quick-buck artist and profiteer, who is willing to operate unethically to secure unearned profits, this creates the potential for significant marketplace distortions. The potential is great for a break in the compact between the honest businessperson and the trusting customer.

My answer, and response, to the naivete of Milton Friedman's free market thesis is that any fair marketplace has to have strong common-sense governing regulations, codified by law, providing ethical rules covering the conduct in the market place. Without strong common-sense regulations governing the fair practices in the marketplace the door is left open for significant distortions in the marketplace due to the breaking of that most sacred of compacts between the honest capitalist and the honest trusting customer. The punishment is always, as demonstrated by history, distortions in the marketplace ranging from minor to catastrophic.

*Taken from "Critical Thinking, by Richard W. Paul (page 20)".

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