Capitalism, Free Market and Individual Interest

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According to Friedman (n.p), most great successes that serve as milestones in various fields is pursued by individuals with their own interests in mind. The interviewer asks Friedman if he believes greed fuels the majority of core economic and political practices. Friedman responds that without this self-interest (greed), people would be unmotivated to study, innovate, and attempt to further their economic and political goals. The West has traditionally been synonymous with free markets and liberalism. These facets of social, technological, and political life have propelled many Western cultures to where they are now. Friedman notes that capitalism can generally be associated with tendency towards equality and alleviation of poverty unlike other forms of governance and economy.

Individual interests should be considered a paramount factor in determining the flow of the economic system. These interests should not be regarded as greed. One of the early proponents of the concepts of free market, Adam Smith, noted that a businessperson does not initially intent to benefit the society. However, his interest to earn a living pushes him towards getting goods in a good condition and at fair prices to attract the customers (Irwin 7). Therefore, capitalism and a free market have their own adjusting mechanism that neutralises the “greed” being alleged by the interviewer. There is no real greed in capitalism because the success of individuals in attaining their goals depend on those of other stakeholders.

The interviewer complains about capitalism being dictated by bureaucracies. He notes that in capitalism, power and wealth are intertwined, Individuals with wealth continue staying in power and influencing important decisions. They can easily amass wealth by loosening or tightening the laws to favour them. This is a problem that indeed exists in many capitalistic societies. Friedman responds to this by questioning which between political and economic self-interest is more noble. He thus insinuates that there are very few contrasts between the two. Friedman notes that politicians in high offices must always appoint individuals that they deem will improve their political status.

In his argument. Friedman compares the two economic systems that were competing in the 20th century: socialism and capitalism. He notes that the role of organizing the society is vested on its own members. This organization is aimed at benefiting the same society. Therefore, letting one of the society members take charge in political offices does not necessarily compromise the interests of the rest of the society. He notes that all the systems in the world are run by individuals after self-interest. This means that a person will only indulge in activities if they expect certain benefits.

Comparison between socialism and capitalism is good in answering the question on whether personal interests are viable bases for achieving the wellbeing of the society. In socialist nations, it became apparent that leaders were after their own interests after they started amassing personal wealth and misusing power to silence critics. Therefore, despite denying that self-interest was not driving the social, economic and political systems, the reality showed a contradiction from these claims. It becomes apparent that the society can only be efficient if members pursue self-interest. This self-interest is usually achieved by meeting the demands of the rest of the society members. Therefore, Friedman’s argument that all the political and economic systems are driven by self-interest is valid.

Works Cited

Friedman, Milton. Greed. Talk show with Mark Donahue. YouTube Video, July 14, 2007. Web. March 20, 2017.

Irwin, Douglas A. Adam Smith's" tolerable Administration of Justice" and the Wealth of Nations. No. w20636. National Bureau of Economic Research, 2014.

November 09, 2022

Life Psychology

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