David Friedman, like his late father Milton Friedman, is both an academic economist and a popular intellectual with an unabashed libertarian orientation. However, there are important differences between the views embraced by the two men. Academically, David Friedman is best known for his largely theoretical work in the economic analysis of law and his textbook‐​level writings on microeconomics. Politically, he is an advocate of the radical libertarian position known as “anarcho‐​capitalism,” arguing that even the limited functions of the night‐​watchman state (police, courts, law, and punishment) can and should be privately supplied. Unlike other anarcho‐​capitalists, most notably Murray Rothbard, Friedman does not deny the theoretical cogency of the neoclassical literature on market failure, nor has he been inclined to attack economic efficiency as a normative benchmark. Instead, his replies normally take two forms. The first is to question the empirical evidence of market failure charges by noting that supposed monopolists in fact have acted competitively or else had extensive government assistance in securing their monopolistic position in the market. The second is to admit that market failure is real, but nevertheless less serious than comparable government failures. For example, Friedman points out that the democratic process is riddled with externalities. The costs of gathering political information, he contends, are private, whereas the benefits are social; the result is an inefficiently small supply of informed voting. Friedman’s academic and popular interests interact in a number of ways. Most notably, his academic research on the political economy of medieval Iceland has provided anarcho‐​capitalists with arguably the best historical example of their preferred social system. At the same time, Friedman’s interest in the economic analysis of law has led him to criticize various absolutist interpretations of libertarian principles with the aid of some creative counterexamples.

Further Readings

Friedman, David. Hidden Order: The Economics of Everyday Life. New York: HarperBusiness, 1996.

———. Law’s Order: An Economic Account. Princeton, NJ: Princeton University Press, 2000.

———. The Machinery of Freedom: Guide to a Radical Capitalism. La Salle, IL: Open Court, 1989.

Bryan Caplan
Originally published