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Myths About Capitalism

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Published: December 11, 2019

Milton Friedman investigates the myth that in free-market capitalism the rich benefit at the expense of the poor. The truth is that wherever the free market has been permitted to operate, the ordinary person has been able to attain levels of living never before dreamed of. Nowhere have the rich gotten richer and the poor gotten poorer than in those societies that do not permit the free market to operate.

Discussion Questions:

  1. How do the wealthy get ahead in socialist or state-run economies?
  2. Is it possible for inequality to rise while everyone in society gets better off?
     

Additional resources:

  • Watch “Free to Choose: Created Equal,” featuring Milton Friedman, available here.
  • To learn more about the free market, read “The Future of Capitalism,” by Milton Friedman, available here.
  • To learn more about inequality, read this edition of Policy Insights here.
View Transcript

Everywhere in the world there are gross inequalities of income and wealth. 

A myth has grown up, that free market capitalism increases such inequalities, that the rich benefit at the expense of the poor. 

Nothing could be further from the truth. 

Wherever the free market has been permitted to operate, the ordinary man has been able to attain levels of living never dreamed of before. 

Nowhere are the rich richer and the poor poorer, than in those societies that do not permit the free market to operate... whether they be feudal societies where status determines position, or modern, centrally planned economies where access to government determines position.