Milton Friedman- Economics - Essay Example

All of these policies generated tremendous wealth and opportunity. They certainly weren’t perfect, but nothing in life is perfect. These were policies that were championed by one of the great economists in the history of the world: Milton Friedman. Today, as the world again plunges into economic crisis and the American government tries to solve all of the world’s problems by itself, Friedman’s lessons are more important than ever before. He has in no way been proven wrong, and those that suggest he has have a very poor understanding of economics and of history.

For a long time the world was divided between people who believed in free markets and those who wanted the government to control everything. During this battle both of these ideas became more and more focused. In the United States, one of the main advocates of free markets were those belonging to the Chicago School of Economics. This group was led by Milton Friedman who believed that market economies are stable if left to themselves and can engender much more prosperity and freedom than any other system of government.

Problems, he believed, only really occur when governments intervene. Friedman took a lot of the basic principles set forth by Adam Smith and he modernized them in a way. But if he saw President Obama’s bailout packages and the Trouble Asset Relief Program today he would be shocked. Buying up failing companies and giving money to many more, is the opposite of free market economics. The problem, he would probably say, is that too many companies were allowed to get too large and to have too much sway over the American economy.

The solution, however, would not be government intervention on the massive scale that is suggest: the solution would be to manage the failure of failing companies, so that the economy as a whole does not collapse. The auto companies for example have for decades refused to adapt to changing market circumstances while simulteanously beating