Along with Ayn Rand and Friedrich Hayek, Milton Friedman was one of the main disciples of the free market throughout the 20th Century. His ideological and individualistic dream shrewdly disarmed much of his opposition, however, there are a number of fundamental flaws to his dated philosophy. This free-market philosophy places blame on the individual and faith in private corporations. The radical extents Friedman and his free-market predecessors proposed have never truly been enacted. Nevertheless, the ripples of his thinking have helped to deregulate the modern markets. Since his work, the world has endured the austere and crippling economic measures of Thatcher and Reagan. The policies of privatisation and deregulation led to a lack of opportunity and disproportionate wages. With this, there has been a denial of the individualism and freedom Friedman sought. This has left a sour taste in the mouths of the middle and working classes.
Friedman’s free market philosophy had a fundamental contradiction: he claimed it was mainly down to the “freedom of individuals” to determine their own success whilst endorsing a system that deprives many of the living standards and opportunities to succeed. Friedman famously said, “Those of us who believe in freedom must believe also in the freedom of individuals to make their own mistakes”. While poverty can be accredited to “mistakes” in some cases, the astringent Darwinism of the free market (without the basic protections on healthcare, transport, education, unemployment and wage stagnation) often disregards the decisions of the individual. Evidence for this lack of opportunity and the helplessness of the individual is in the general standards of living that have not been furthered under the total free market. This can be seen with the suffocation of the working classes in the Dickensian squalor of the late 19th century (arguably the free market in practice at its fullest extent). The result was the grim hardship of many as their wages and conditions were placed in a competition of inadequacy. Half of Britain was festering in inescapable poverty by 1851 and by 1870 average weekly working hours had reached 70 hours. Furthermore, no capitalist nation currently adopts a free market as radical as Friedman suggests. This may be as conditions created are met with the burbling anger of an adversarial society that boils over into strikes and protests. Despite this, the lack of opportunity and the exploitation of corporate self-interest that Friedman favoured is present in a more diluted form with the privatisation of America. This can be seen with the rising cost of annual health insurance sitting at a towering $35,000 family average (as of 2018) which had trebled in cost since 2008 despite the stagnation of the minimum wage. This shows the privatisation of such sectors is unaffordable for many with 30.9 million Americans without the means to access insurance. These various examples indicate that the free market allows the wages of many to stagnate at the side of inflation regardless of the toil or expertise of the individual as it determines wages and pricing under the pitiless spreadsheets of profit margins. Friedman famously declared to “judge policy (…) by its results”. If we examine the results of his thinking which was most aptly present in the industrial 19th Century (before his time), they clearly limited opportunity and limited reward of the individual whilst conflictingly his thinking still placed the brunt of the blame heavily on the individual. Despite the common argument that deregulated capitalism improves living standards, such conditions have mainly been improved by a collectivist approach to regulating conditions and opportunities. This collectivist improvement can be seen with the free access to primary education of the Jules Ferry laws in 1881 in America and Atlee’s NHS and the work of Lloyd George and Churchill with various welfare reforms in Britain during the early to mid-20th Century. The only way a freer market of capitalism contributes towards living standards is through the rapid and competitive development of resources. However, this development and competition can still be achieved with the basic protections of a social democracy.
Friedman’s simplistic assumption that hard work of the individual correlates to improved wages in the free market is an ideological myth. The wealthiest in society hold a disproportionate amount of wealth that do not merely reflect hard work. At the other end of society, many of the hardworking are marginalised through deficient wages and conditions as Trade Unions are nullified. The average American works 37.5 hours a week while the average UK citizen works 36.6 hours a week (according to clockify as of 2021). Many of these experience wage stagnations which are exacerbated by the steady increase of the cost of living (seen with house prices in the UK and private insurance in the USA). This failure to lift wages was displayed by AFL-CIO (America’s biggest trade union) findings that, from 1973 to 2013, hourly wages had only increased by 9.2% while productivity increased by 74.4%. These undeservingly low incomes are due to the pure self-interest allowed in deregulated corporations. This exhibits the contradiction of the free market in its failure to reward the very individualism that it pretends to glowingly promote. The glaring and utterly unimaginable inequality that it has presided over is suggested by the figure that the richest 8 people in the world own more than the assets of the bottom 3.5 billion (according to Oxfam as of 2019). At the end of his life, even Friedman regretted the inharmonious gulf of income inequality. He stated in 2003 that “The use of quantity of money as a target has not been a success. I'm not sure I would as of today push it as hard as I once did.” This shows his concession that, under deregulation, the exploits of capitalism towards profit have become inhumane and excessive. This yet again reinforces the illusory anarchy of Friedman’s thinking. This is because the hard work of the individual is very often uncompensated while living standards are expended for private corporations to maintain profit. If the individual is expected to succeed at their own volition, then the essential opportunities such as education, healthcare and the regulation of wages cannot be purely controlled by the avarice of corporations.
Friedman’s other major mistake is his preference of the “invisible hand” of the free market, as Adam Smith (the pioneer of the free market) labelled it, over the intervention of the state. Friedman was writing in an era of reaction against the backward communist regimes of Russia and China which were extremely oppressive, crooked and certainly not to be romanticised. Contextually, his magnified cynicism was understandable with his statement that “the government solution to a problem is usually as bad as the problem”. However, in a democratic system (that was not entertained by the communist regimes mentioned), the accountable governments are more likely to deal with the vested interests of society. Alternatively, corporations have proved consistently that they merely strive for profit often without justice or remorse. This is evident with the reckless and unheeded greed of corporations in recent years. Among these irresponsible actions, tax avoidance has been rife in the modern world for many years. Notably, the HMRC declared a UK tax avoidance loss of £33 billion in 2016-17 and many companies such as Amazon avoided paying a cent on $11.2 billion profit in 2018 (according to The Guardian). Corporations such as Google and Microsoft are also responsible for data selling which invades privacy to fuel unhealthy engagement as exposed by the documentary “The Social Dilemma”. While ironically televised on Netflix, this documentary gave a reliable account of the first-hand confessions of former workers for such Big Tech companies. The disregard of many corporations toward the climate has also been exposed. Around 89% of global emissions come from fossil fuel pollution in 2018 (according to the IPCC) which is intensified by the refusal of deregulated industry to use cleaner energy. This also impacts air pollution deaths with an estimated 20% of worldwide deaths in 2018 down to air pollution (according to GEOS-CHEM). Lastly, many corporations have also been responsible for failure to consciously adjust wages as already discussed. These examples display that the rampant self-interest of corporations has resulted in addictive online consumerism, wage stagnation, tax-avoidance and the ignorant pollution of our planet that may threaten our extinction. Contrastingly, the intervention of democratic governments is capable of not producing the level of inequality guaranteed by the rapacious corporations as government is more accountable. Over years of government intervention, many protections such as free healthcare and education, minimum wages, workers’ rights, nationalised transport and affordable housing have all improved living standards. The profiteering free market entirely neglects such on a consistent basis and therefore cannot be trusted with too much control of these essential protections. The French Economist, Thomas Pikketty, has also flagged that the top tier of income tax being increased upon has produced greater growth and productivity (with the average tax on the super-rich was 82% from 1930 to 1980). This directly suggests social democratic government can benefit economic prosperity whilst also consciously improving the fairness of opportunity and reward.
Friedman was a great intellectual mind who helped examine our approach to the market and to government. However, his reasoning was plagued by the contradiction of promoting individual responsibility whilst also endorsing a free market system that polarises and neglects living standards for the individual. Additionally, the excess wealth of the richest and the exploitation produced by that system continues to be a very regrettable approach. Alternatively, the polar divide created by the free market needs to be ultimately regulated and opportunity provided. This was totally rejected by the ideological disorder of Friedman’s ideas that only destabilise society. Hard work should be incentivised through inequality as Friedman suggested. However, the extents of this inequality must be controlled to ensure people are given the platform to succeed through nationalisation of healthcare, transport and education, a lower cost of living and fairer wages. This can only be undertaken by accountable governments, not merely the self-serving market, through progressive income and corporation tax on the swelling wealth of the super-rich.