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Freedom & Economic Fragility
Lindsey Purves
Humanities 30 Mr. Kabachia
May 30, 2012

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According to the quotation by Milton Friedman every individual should be able to “make
the most of his capacities and opportunities according to his own lights.” This is to say that an
individual should be able to move freely up and down in the economy based on his or her own
ideas, knowledge and understanding in the interest of themselves rather than others. Friedman
supports the belief in allowing those that are fit to rise in economic power to do so while those
that are unfit will be out-done by the competition presented by their betters. He rejects the idea
of having modern liberal principles that may hinder the rise of the powerful through ensuring
equality for all in the economy, believing that Classical Liberalism is superior.Although
Friedman’s belief in having a classic liberal economy presents many opportunities to the best and
allows these people to prosper, it is not efficient economically and has been shown through one of
the most impactful economic hits in history.
The Great Depression affected most of the world and was the result of Classical Liberalism
going too far in its belief of economic freedom. During the 1920’s America was prospering more
than ever in history and, like most people, the people living in the United States took advantage
of this huge “boom” in the economy to invest in stock and buy everything they had wanted for
years but had not previously been able to purchase. The problem was in how these people were
getting the money to buy huge numbers of stocks and merchandise. The banks were allowing
people who could very obviously never afford to pay off such large loans anytime soon, to take out
the money they wanted, and more, to invest in the economy. Being able to borrow large sums of
money from the banks allowed even the poorest people to rise up in the economy but in the end
could not pay back any of this money because they held a false position in the economy without
having a steady, well-paying job that would allow them to make enough money to pay off their
debt.

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The twenties were also a time of major consumerism. People finally had the chance to buy
what they wanted, not just what they needed and so they took out loans that were higher than
what they needed to buy stock to buy items like expensive cars and clothing as well. Suddenly
when the stock market crashed and the banks that were “too big to fail” went broke, everyone was
left with the expensive items they had purchased but no money to buy their essential needs like
food. No one could afford to buy expensive things anymore so even the option of selling their new
cars and top brand clothing wasn’t an option; no one could afford to buy the items from those
selling them for what they’re worth.
Arguably one of the biggest factors that led to the Great Depression was the free reign of
competition between companies and banks. There were no regulations to tell big corporations
that they could not, or should not, sell a car way out of someone’srangeon bank loans alone, nor
to tell banks that lending money that can never be paid back will cause a devastating blow to the
economy. Everyone was in competition with each other to persuade consumers to buy their
product or service even though the only payment they would receive would be in the form of a
loan taken from a bank, never to be paid off. With money being put into purchases but nothing
being put back into the banking system, the banks could not survive and eventually collapsed, all
those loans that were taken out now worth nothing at all.
When it comes to something as fragile as the economy, having Classical Liberalism with
no precautions set in place in case of stock market crashes or major bank failures can lead to so
much economic failure that it affects most of the world. It is too risky to let the economy run
itself freely and expect no backlash should economic freedom, self-interest and competition prove
to go too far down the wrong path. Milton Friedman had the right idea in his support of freedoms
for all and, to an extent, allowing everyone the equal opportunity to both fail and succeed, but his

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ideas are too risky when it’s on an economic, or in the case of the Great Depression, global scale
and complete freedom affects not just the self but others as well.