Milton Friedman on Labour Markets - Dictionary of Arguments
Brocker I 402
Labour Market/Friedman: thesis: private households would not have to participate in the exchange because they could produce for themselves if necessary(1). However, because most people lack the means of production for their own work, they have to make a living as wage earners; in fact, they do not have the option of foregoing contracts with employers. This leads to a structural imbalance of power on the labour market, which can be reflected in an unfavourable development of income distribution for the employees.
Unemployment: unemployment is not treated by Friedman in "Capitalism and Freedom".
Friedman does not deal with Keynes' theory, according to which the market system does not tend to balance itself in the labour market (KeynesVsFriedman).
Friedman implicitly presupposes full employment. There are still options for employees. ((s) Full employment is not defined as an employment rate of 100%).
VsFriedman: this gives the misleading impression that a stable supply of money to the economy by the central bank is sufficient to prevent crises and economic unemployment.
FriedmanVsTrade Unions: trade unions are the only threat to the functioning of the labour market and trade unions, since as "monopolistic" organisations they hinder companies' decision-making freedom.
SpahnVsFriedman: However, trade unions are not the cause, but the reflex of a market failure: Usually, capitalist market societies are characterized by a varying degree of underemployment. Even with "full employment", there are millions of unemployed in large economies. A nuclear, unregulated labour market would create the risk of wage and price deflation which, as in the 1930s, could undermine the stability of the macroeconomic system.
Labour market/Friedman: the ideal he has in mind: is a free marketplace in which everyone seeks his advantage through supply and demand activities.
1. Milton Friedman, Capitalism and Freedom, Chicago 1962. Dt.: Milton Friedman, Kapitalismus und Freiheit, München 2004, S. 36
Peter Spahn, „Milton Friedman, Kapitalismus und Freiheit“, in: Manfred Brocker (Hg.) Geschichte des politischen Denkens. Das 20. Jahrhundert. Frankfurt/M. 2018_____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Author1]Vs[Author2] or [Author]Vs[term] is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition.
Econ Fried I
The role of monetary policy 1968
Geschichte des politischen Denkens. Das 20. Jahrhundert Frankfurt/M. 2018