Capitalism and Freedom versus Free to Choose

Over at the Bleeding Hearts Libertarian blog, Peter Boettke has an interesting post comparing these two defenses of freedom by Milton Friedman.  I had always thought of Capitalism and Freedom as the better academic book, regarding Free to Choose as a popularization of Friedman’s ideas.  Boettke argues this is the common view, but he argues it is mistaken.  He speculates that it is held largely by people who were first persuaded by Capitalism and Freedom, and so were already convinced and familiar with libertarian ideas when they read Free to Choose.  This does describe me, as I first became convinced of these libertarian ideas in 1977-1978, in part from reading Capitalism and Freedom.  As Boettke writes:

I grew into a classical liberal/libertarian movement where all my elders were influenced either by The Road to Serfdom (1944), or Capitalism and Freedom (1962) well before they ever read Free to Choose (1980).  I always disagreed with the assessment that Capitalism and Freedom was the superior book from an academic perspective.  I agree it is a powerful book, I just think Free to Choose is one of the best books I ever read in economics.  Since all of my teachers and mentors in classical liberalism came to their position well before 1980, they did not see Free to Choose as a transformational work, but instead as at best a popularization of ideas they had already come to accept.  But that was then, and this is now, so there probably are some readers of BHL (like me) for whom Free to Choose was in fact a pivotal text in their introduction to free market ideas and the philosophy of limited government.

Whereas Friedman sees Capitalism and Freedom as more theoretical, and Free to Choose as more concrete, I think the introduction into the analysis of the issues of (1) the quantity of information that must be processed and utilized in the economy, as well as the quality of information that must be assessed by economic participants to produce the coordination of economic activities through time, and (2) the role of interest groups, political structure, and the constitutional level of analysis, make Free to Choose a more subtle and ultimately a more persuasive text about the case for the free market economy and the problems of political intervention into the market economy.  To use Deirdre McCloskey’s recent terminology, the prudence only economics of Capitalism and Freedom gives way to a more nuanced understanding of the operation of a free economy and free society that must account for prudence + many other virtues, history, and institutional analysis.

This interesting post raises two issues.  First, how do we understand the relationship between C & F and Free to Choose, and second, how does our reaction to these books relate to the timing of our reading them?  Focusing on the first issue, I think Boettke is right that Free to Choose is a broader, more institutional book, reflecting Hayekian and public choice insights that had grown in influence in the years since C & F had been published.   Still, I still believe Free to Choose was more of a popularization, attempting to reach a broader audience and being connected with a PBS series.

Second, I think there really is something to the idea that when you read the book matters.  If it is your first exposure to the ideas, they will have a greater power than if you have digested them already.  Boettke doesn’t say which book he read first, but I wouldn’t be surprised if it was Free to Choose.

This type of preference for the first exposure also operates, I think, in other areas.  I often discover a band, and purchase one of their albums.  If I really enjoy it, I might purchase another of their albums.  I almost never find the second album to be the equal of the first.  What explains this?  It might be that the first album I buy is the more famous or the higher rated album, but the pervasiveness of this effect suggests to me that something else is at work.  When one listens to a work by a new artist, one is exposed to their distinctive style for the first time and it can be exhilarating.  When one listens to a second work by that artist, one has already been exposed to their style and innovations and so their music appears less exciting.  Perhaps, the distinctive rifts and moves that the musicians make have already been embedded into one’s memory and therefore the new album has less power.

If this is true, then we need to consider the possibility that there is a freshness bias — we are biased towards works, both academic and artistic, that are new to us.