I know of no example in time or place of a society that has been marked by a large measure of political freedom, and that has not also used something comparable to a free market to organize the bulk of economic activity.
Interpretation
Political freedom and a free market are intertwined in society's success.
Milton Friedman asserts that there has never been a society that enjoyed significant political freedom without also embracing principles of a free market. The quote highlights the idea that economic organization through free market systems is essential for fostering political liberties and overall societal prosperity.
In practice
In a speech about economic policies, this quote can emphasize the importance of free markets in ensuring political rights.
The economic miracle that has been the United States was not produced by socialized enterprises, by government-unon-industry cartels or by centralized economic planning. It was produced by private enterprises in a profit-and-loss system. And losses were at least as important in weeding out failures, as profits in fostering successes. Let government succor failures, and we shall be headed for stagnation and decline.
Universities exist to transmit knowledge and understanding of ideas and values to students not to provide entertainment for spectators or employment for athletes.
There is no place for government to prohibit consumers from buying products the effect of which will be to harm themselves.
There is one and only one social responsibility of business - to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.
The great danger to the consumer is the monopoly -whether private or governmental. His most effective protection is free competition at home and free trade throughout the world. The consumer is protected from being exploited by one seller by the existence of another seller from whom he can buy and who is eager to sell to him. Alternative sources of supply protect the consumer far more effectively than all the Ralph Naders of the world.
The strongest argument for free enterprise is that it prevents anybody from having too much power. Whether that person is a government official, a trade union official, or a business executive. If forces them to put up or shut up. They either have to deliver the goods, produce something that people are willing to pay for, are willing to buy, or else they have to go into a different business.
The reason we should do a carbon tax is because it's the right thing to do. It's economics 101, elementary stuff.
If you feed enough oats to the horse, some will pass through to feed the sparrows (referring to "trickle down" economics).
Customers often value a good more when its price goes up. One reason may be its signaling value. An expensive handcrafted mechanical watch may tell time no more accurately than a cheap quartz model; but, because few people can afford one, buying it signals that the owner is rich.
If low taxes were the way that people like me created wealth, then we'd be starting our companies in the Congo or Somalia or Afghanistan, but we're not. We come to places where there are lots and lots of customers.
Economic policies absorb almost the entire attention of government, and at the same time become ever more impotent. The simplest things, which only fifty years ago one could do without difficulty, cannot get done any more. The richer a society, the more impossible it become to do worthwhile things without immediate payoff.
Over the years, the U.S. economy has shown a remarkable ability to absorb shocks of all kinds, to recover, and to continue to grow. Flexible and efficient markets for labor and capital, an entrepreneurial tradition, and a general willingness to tolerate and even embrace technological and economic change all contribute to this resiliency.
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