45 Years, 45 Days: Milton Friedman on the Future of Capitalism in 1978

For the next 45 days, we'll be celebrating Reason's 45th anniversary by releasing a story a day from the archives—one for each year of the magazine's history. See the full list here.

Writing in Reason's May 1978 issue, economist Milton Friedman surveyed the current state and likely future of capitalism:

WHAT IS THE FUTURE of capitalism?—by which I mean the future of competitive capitalism—free enterprise capitalism. In a certain sense, every major society is capitalist. Russia has a great deal of capital, but it is under the control of governmental officials who are supposedly acting as agents of the State. That turns capitalism (state capitalism) into a wholly different system from a system under which capital is controlled by individuals in their private capacity as owners and operators of industry. What I want to take up here is the future of private enterprise—of competitive capitalism.

The future of private enterprise capitalism is also the future of a free society. There is no possibility of having a politically free society unless the major part of its economic resources are operated under a capitalistic private enterprise system….

The real question, therefore, is the future of human freedom. The question that I want to consider is whether or not we are going to complete the movement that has been going on for the past 40 or 50 years, away from a free society and toward a collectivist society. Are we going to continue down that path until we have followed Chile by losing our political freedom and coming under the thumb of an all powerful government? Or are we going to be able to halt that trend, perhaps even reverse it, and establish a greater degree of freedom? One thing is clear—we cannot continue along the lines that we have been moving.