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The Consequences of Socialism and Capitalism


Published:September 7, 2021

The debate over whether socialism or capitalism leads to better outcomes continues to this day. Milton Friedman argued that it was critical to look at each system's results instead of focusing on the intentions behind them. While proponents of socialism make their appeals based on social justice and equality, the truth is that social injustices are the greatest under socialist regimes.

Discussion Questions

  1. How good is capitalism at generating equality of opportunity?
  2. Is socialism incompatible with a functioning society?

Additional Resources

  • Watch as Milton Friedman discusses socialism and capitalism. Available here.
  • To learn more about the free market, read “The Future of Capitalism,” by Milton Friedman. Available here.
View Transcript

Capitalism... socialism... are means not ends. 

They, in and of themselves, are neither moral nor immoral. 

We have to ask: what are their results? 

Don’t look at what the proponents of one system or another say are their intention, but look at what the actual results are. 

Socialism, which means government ownership and operation of means of production... has appealed to high-minded fine people, 

because of the supposed objectives quality and social justice. 

But you have to ask the question: does the system – no matter what its proponents say – produce those results... and once you look at the results, it’s crystal clear that they do not. 

Where are social injustices greatest? 

Social injustices are clearly greatest where you have central control.