Friedman and Friedman
According to Friedman & Friedman (2002) view a socialist society is not necessarily a democratic and therefore it sometimes tends not to guarantee individual freedom. Likewise, a capitalist economy is also not democratic but it has some perquisites for democracy. Economic freedom therefore means freedom of exchange which is common in a free-market system like the one present in the U.S. Capitalist countries such as the U.S operate in a free-market economy. This is where the market is practically controlled by the supply and demand forces. The government in this case plays a neutral role, it neither limit nor promote the market operations. The non-market systems on the other hand comprises of a regulated market. A good example of non-market system was the Soviet Union market. Here the government regulates the supply and prices of commodities in the economy. This economic system therefore has both political and economic freedom, which means that there is absence of man’s coercion on his fellow men. Here the market is left to regulate supply and demand of goods and services. A free-market system separates political and economic power and in most cases the market power is left to dominate the economy.
But with a non-market economy, there is no any clear distinction between economic and political power. A good example of such economy was the one exercised by the communist Soviet Union. Here, the state which possesses political power also holds the economic power of production of goods and services in the economy. According to Friedman’s argument, a collectivist economic like the one used by the Soviet Union tend to interfere with individual freedom. This is because the political leaders mainly decide on what is to be produced and how much will it be sold, instead of satisfying consumer needs and preferences (Sowell, 2010).
This is however not the case in a capitalist economy, where firms produces to meet customer’s needs. Individual freedom is also guaranteed in a free-market economy since he or she gets to choose what he or she want out of the many varieties in the market. Since with economic freedom, many firms get to join the market and thus trigger competition. Prices of the commodities also falls as firms seek to compete and this favors the low income earners who have a lower purchasing power. With a free-market economy the rich and high income earners also gets to enjoy classy and expensive goods and services as the producers customize them to suit the needs of every stakeholder in the economy. Such market encourages specialization and division of labor which in turn improves quality of goods and services in the market.
It is true that the price of good and services significantly helps in determining the consumer demands. It is therefore a signal sent to the producers who consequently invests to satisfy the market needs. In a free market economy, the pricing systems are mainly established