1. FREE TO CHOOSE CHAPTER 10 THE TIDE IS TURNING

2. I. INTRODUCTION “The reaction may prove short-lived and be followed, after a brief interval, by a resumption of the trend toward ever bigger government.”

3. II. IMPORTANCE OF INTELLECTUAL CLIMATE OF OPINION Examples of India and Japan exemplifies the climate of opinion Both followed views from Britain but from different time periods with different climates of opinion US climate has changed over time- from Revolution to Great Depression Constitution has been interpreted differently during those time periods

4. III. OPINION AND POPULAR BEHAVIOR “Popular behavior both reinforces that opinion and plays a major role in translating it into policy.”

5. IV. WHY SPECIAL INTERESTS PREVAIL Why do special interests prevail over the general interest? A. The Power in Washington Power is fragmented into many bits and pieces B. Concentrated Versus Diffuse Interests “There is, as it were, an invisible hand in politics that operates in precisely the opposite direction to Adam Smith’s invisible hand. Individuals who intend only to promote the general interest are led by the invisible political hand to promote a special interest that they had no intention to promote.” C. Bureaucracy A.V. Dicey: “The beneficial effect of state intervention, especially in the form of legislation, is direct, immediate, and so to speak, visible, while its evil effects are gradual and indirect, and lie out of sight…Hence the majority of mankind must almost of necessity look with undue favor upon governmental intervention.”

6. V. WHAT CAN WE DO? “Our Founding Fathers have shown us a more promising way to proceed: by package deals, as it were. We should adopt self- denying ordinances that limit the objectives we try to pursue through political channels. We should not consider each case on its merits, but lay down broad rules limiting what government may do.” We need economic Bill of Rights

7. VI. TAX AND SPENDING LIMITATIONS At both state and federal level, pass constitutional amendments to limit taxes and spending Gov’t spending would be limited to a percent of national income

8. VII. OTHER CONSTITUTIONAL PROVISIONS Offered by Friedman to stimulate thought and further work: A. International Trade Unilaterally move to free trade B. Wage and Price Controls Essentially copy 1st Amendment C. Occupational Licensure No law to prevent occupation D. A Portmanteau Free Trade Amendment Essentially copy 2nd Amendment

9. VII. OTHER CONSTITUTIONAL PROVISIONS E. Taxation Reform personal and corporate taxes F. Sound Money Keep the percentage rate of growth within a fixed range G. Inflation Protection Allow contracts to be adjusted more frequently to mitigate effects of inflation Discuss these provisions. What others would you add? Which would you delete?