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\title{Capitalism as an Alternative to Equality of Treatment}
\author{Marc Horowitz}
\date{October 30, 1989}

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In {\em Capitalism and Freedom}, Milton Friedman rejects the ideal of
equality of treatment.  Instead, he considers equality of opportunity
under a capitalist economy to be the basis of personal freedom.
He proposes the ethic, ``To each according to what he and the
instruments he owns produces,'' and then bases his argument around
applications of this ethic, showing how this leads to the largest
amount of personal freedom.

Friedman defines political freedom as ``the absence of coercion of a
man by his fellow man.  The fundamental threat to freedom is the power
to coerce.''  The basic problem of a society, then, is how to organize
the economic activities of large numbers of people so that their
personal freedom is preserved.  There are only two ways in which this
can be done efficiently.  The first is by coercion of a centralized
government.  Jobs, prices, products, and economic links are all
defined and enforced by the government.  This system obviously
infringes on the personal freedom of the members of the society.  The
second way is through voluntary cooperation of individuals in a
competitive marketplace.

The household can be considered to be the smallest unit in a
capitalistic economy.  Households are free to exist without any
relationship to other households, if this is what they want.  However,
by specialization and division of labor, it is to the mutual benefit
of households to associate with each other.  Through competition, each
household is able to procure the goods and services it wants on terms
it considers acceptable.  As long as insurances are made against
monopoly and private contracts are enforced, then each household has
complete freedom to do what it wants and with whom.

Why is this system better than that of equality of treatment
enforced by the state?  

 The central principle of a
market economy is that of cooperation through voluntary exchange.
Each individual is free to do business with any other person in the
society.  Members of the society are encouraged to be fair, or else
the competition of the marketplace would eliminate them.  No small
group of people can control the economy.  The main role of the
goverment in such a society would be to enforce contracts and settle
conflicts.




Friedman shows that economic freedom is a necessary condition for
political freedom.  He points to history to show that political
freedom without economic freedom has never existed, and cannot.  A
centralized economy requires that people be placed in specific jobs,
not 

Diametrically opposed to a decentralized capitalist economy would be a
purely socialist economy.  One centralized goverment 

Each person in a capitalist society has the same opportunity to secure
for himself the lifestyle that he wants.  The only differences are
differences resulting from inequal natural ability.  With this
exception, each individual has equa

Freidman tries to show that equality of treatment and equality of the
marketplace are mutually exclusive.  If two people have different
jobs, one easy and the other difficult, they must still be paid the
same in order to preserver inequality of treatment.  In a market-based
economy, the person with the more difficult job would be paid more for
his labor.  This distribution of income directly violates equality of
treatment.

