Capitalism is generally considered a philosophy of economic systems that favors private ownership of the means of production, creation of goods or services for profit or income by individuals or corporations, competitive markets, voluntary exchange, wage labor, capital accumulation, and personal finance. Capitalism is variously defined by sources and there is no general consensus among scholars on the definition nor which economies can historically be properly considered capitalist. The designation is applied to a variety of historical cases, varying in time, geography, politics, and culture. There is, however, general agreement that capitalism became dominant in the Western world following the demise of feudalism.

Economists, political economists and historians have taken different perspectives on the analysis of capitalism. Economists usually emphasize the degree that government does not have control over markets (laissez faire), and on property rights. Most political economists emphasize private property, power relations, wage labor, class and emphasize capitalism as a unique historical formation. The extent to which different markets are free, as well as the rules defining private property, is a matter of politics and policy, and many states have what are termed mixed economies. A number of political ideologies have emerged in support of various types of capitalism, the most prominent being economic liberalism.

Capitalism gradually spread throughout the Western world in the 19th and 20th centuries.

Etymology and early usage

{| align="right" class="box" style="margin-left:1em;text-align: left; border: 4px solid #aaaaaa; padding: 2px; font-size: 100%; width: 30%;" |bgcolor="#dbeaff"| Other terms sometimes used for capitalism:

Capitalist mode of production

Economic liberalism Free-enterprise economy Free market Laissez-faire economy Market economy Market liberalism Self-regulating market |}

The term ''capitalist'' as referring to an owner of capital (rather than its meaning of someone adherent to the economic system) shows earlier recorded use than the term ''capitalism'', dating back to the mid-seventeenth century. ''Capitalist'' is derived from ''capital'', which evolved from ''capitale'', a late Latin word based on proto-Indo-European ''caput'', meaning "head" — also the origin of ''chattel'' and ''cattle'' in the sense of movable property (only much later to refer only to livestock). Capitale emerged in the 12th to 13th centuries in the sense of referring to funds, stock of merchandise, sum of money, or money carrying interest. By 1283 it was used in the sense of the capital assets of a trading firm. It was frequently interchanged with a number of other words — wealth, money, funds, goods, assets, property and so on.

The ''Hollandische Mercurius'' uses ''capitalists'' in 1633 and 1654 to refer to owners of capital. In French, Étienne Clavier referred to ''capitalistes'' in 1788, six years before its first recorded English usage by Arthur Young in his work ''Travels in France'' (1792). David Ricardo, in his ''Principles of Political Economy and Taxation'' (1817), referred to "the capitalist" many times. Samuel Taylor Coleridge, an English poet, used ''capitalist'' in his work ''Table Talk'' (1823). Pierre-Joseph Proudhon used the term ''capitalist'' in his first work, ''What is Property?'' (1840) to refer to the owners of capital. Benjamin Disraeli used the term ''capitalist'' in his 1845 work ''Sybil''. Karl Marx and Friedrich Engels used the term ''capitalist'' (''Kapitalist'') in ''The Communist Manifesto'' (1848) to refer to a private owner of capital.

According to the ''Oxford English Dictionary'' (OED), the term ''capitalism'' was first used by novelist William Makepeace Thackeray in 1854 in ''The Newcomes'', where he meant "having ownership of capital". Also according to the OED, Carl Adolph Douai, a German-American socialist and abolitionist, used the term ''private capitalism'' in 1863.

The initial usage of the term ''capitalism'' in its modern sense has been attributed to Louis Blanc in 1850 and Pierre-Joseph Proudhon in 1861. Marx and Engels referred to the ''capitalistic system'' (''kapitalistisches System'') and to the capitalist mode of production (''kapitalistische Produktionsform'') in ''Das Kapital'' (1867). The use of the word "capitalism" in reference to an economic system appears twice in Volume I of ''Das Kapital'', p. 124 (German edition), and in ''Theories of Surplus Value'', tome II, p. 493 (German edition). Marx did not extensively use the form ''capitalism'', but instead those of ''capitalist'' and ''capitalist mode of production'', which appear more than 2600 times in the trilogy ''Das Kapital''.

Marx's notion of the capitalist mode of production is characterised as a system of primarily private ownership of the means of production in a mainly market economy, with a legal framework on commerce and a physical infrastructure provided by the state. No legal framework was available to protect the labourers, so exploitation by the companies was rife. Engels made more frequent use of the term ''capitalism''; volumes II and III of ''Das Kapital'', both edited by Engels after Marx's death, contain the word "capitalism" four and three times, respectively. The three combined volumes of ''Das Kapital'' (1867, 1885, 1894) contain the word ''capitalist'' more than 2,600 times.

An 1877 work entitled ''Better Times'' by Hugh Gabutt and an 1884 article in the ''Pall Mall Gazette'' also used the term ''capitalism''. A later use of the term ''capitalism'' to describe the production system was by the German economist Werner Sombart, in his 1902 book ''The Jews and Modern Capitalism'' (''Die Juden und das Wirtschaftsleben''). Sombart's close friend and colleague, Max Weber, also used ''capitalism'' in his 1904 book ''The Protestant Ethic and the Spirit of Capitalism'' (''Die protestantische Ethik und der Geist des Kapitalismus'').

Economic elements

Capitalist economics developed out of the interactions of the following elements.

A product is any good produced for exchange on a market. "Commodities" refers to standard products, especially raw materials such as grains and metals, that are not associated with particular producers or brands and trade on organized exchanges.

There are two types of products: capital goods and consumer goods. Capital goods (i.e., raw materials, tools, industrial machines, vehicles and factories) are used to produce consumer goods (e.g., televisions, cars, computers, houses) to be sold to others. The three inputs required for production are labour, land (i.e., natural resources, which exist prior to human beings) and capital goods. Capitalism entails the private ownership of the latter two — natural resources and capital goods — by a class of owners called capitalists, either individually, collectively or through a state apparatus that operates for a profit or serves the interests of capital owners.

Money was primarily a standardized medium of exchange, and final means of payment, that serves to measure the value all goods and commodities in a standard of value. It eliminates the cumbersome system of barter by separating the transactions involved in the exchange of products, thus greatly facilitating specialization and trade through encouraging the exchange of commodities. Capitalism involves the further abstraction of money into other exchangeable assets and the accumulation of money through ownership, exchange, interest and various other financial instruments.

Labour includes all physical and mental human resources, including entrepreneurial capacity and management skills, which are needed to produce products and services. Production is the act of making products or services by applying labour power to the means of production.

Capitalism is the system of raising, conserving and spending a set monetary value in a specified market. There are three main markets in your basic capitalistic economy which are labor, goods and services, and financial. Labor markets (people) make products and get paid for work by the goods and services market (companies, firms, or corporations, etc.) which then sells the products back to the laborers. However both of the first two markets pays in to and receive benefits from the financial market, which handles and regulates the actual money in the economic system. This includes banks, credit-unions, stock exchanges, etc. On a monetary stand point governments control just how much money is in circulation worldwide which plays an immense role on how money is spent in our own country.

Most of these institutes focus on a form of economics called macroeconomics which keeps its eyes on things such as inflation: the rate at which money loses its value over time; growth: how much money a government has and how quickly it accrues money; unemployment, and rates of trade between other countries. Whereas microeconomics deals with individual firms, people, and other institutions that work within a set frame work of rules to balance prices and the workings of a singular government.

Both micro and macroeconomics work together to form a singular set of evolving rules and regulations. The governments (the macroeconomic side) set both national and international regulations that keep track of prices and corporation’s (microeconomics) growth rates, set prices, and trade while the corporations influence what federal laws are set.

Types of capitalism

There are many variants of capitalism in existence. All these forms of capitalism are based on production for profit, at least a moderate degree of market allocation and capital accumulation. The dominant forms of capitalism are listed here.

Mercantilism

A nationalist form of early capitalism where national business interests are tied to state interests, and consequently, the state apparatus is utilized to advance national business interests abroad. An example of this is colonists living in America who were only allowed to trade with and purchase goods from their respective mother countries (Britain, France, etc.). Mercantilism holds that the wealth of a nation is increased through a positive balance of trade with other nations.

Free-market capitalism

Free market capitalism consists of a free-price system where supply and demand are allowed to reach their point of equilibrium without intervention by the government. Productive enterprises are privately owned, and the role of the state is limited to protecting the rights to life, liberty, and property.

Social market economy

A social market economy is a nominally free-market system where government intervention in price formation is kept to a minimum but the state provides significant social security, unemployment benefits and recognition of labour rights through national collective bargaining laws. The social market is based on private ownership of businesses.

State capitalism

State capitalism consists of state ownership of the means of production within a state. The debate between proponents of private versus state capitalism is centered around questions of managerial efficacy, productive efficiency, and fair distribution of wealth.

Corporate capitalism

Corporate capitalism is a free or mixed market characterized by the dominance of hierarchical, bureaucratic corporations, which are legally required to pursue profit. State monopoly capitalism was originally a Marxist concept referring to a form of corporate capitalism where the state is used to benefit, protect from competition and promote the interests of dominant or established corporations.

Mixed economy

A largely market-based economy consisting of both public ownership and private ownership of the means of production. Most capitalist economies are defined as "mixed economies" to some degree although the balance between the public and private sectors may vary.

Other

Other variants of capitalism include:

Anarcho-capitalism

Crony capitalism

Finance capitalism

Financial capitalism

Late capitalism

Market economy

Neo-capitalism

Post-capitalism

Technocapitalism

History

Economic trade for profit has existed since the second millennium BC. However, capitalism in its modern form is usually traced to the Mercantilism of the 16th-18th Centuries.

Mercantilism

The period between the sixteenth and eighteenth centuries is commonly described as mercantilism. This period, the Age of Discovery, was associated with geographic exploration being exploited by merchant overseas traders, especially from England and the Low Countries; the European colonization of the Americas; and the rapid growth in overseas trade. Mercantilism was a system of trade for profit, although commodities were still largely produced by non-capitalist production methods.

While some scholars see mercantilism as the earliest stage of capitalism, others argue that capitalism did not emerge until later. For example, Karl Polanyi, noted that "mercantilism, with all its tendency toward commercialization, never attacked the safeguards which protected [the] two basic elements of production—labour and land—from becoming the elements of commerce"; thus mercantilist attitudes towards economic regulation were closer to feudalist attitudes, "they disagreed only on the methods of regulation."

Moreover Polanyi argued that the hallmark of capitalism is the establishment of generalized markets for what he referred to as the "fictitious commodities": land, labour, and money. Accordingly, "not until 1834 was a competitive labour market established in England, hence industrial capitalism as a social system cannot be said to have existed before that date."

Evidence of long-distance merchant-driven trade motivated by profit has been found as early as the second millennium BC, with the Old Assyrian merchants. The earliest forms of mercantilism date back to the Roman Empire. When the Roman Empire expanded, the mercantilist economy expanded throughout Europe. After the collapse of the Roman Empire, most of the European economy became controlled by local feudal powers, and mercantilism collapsed there. However, mercantilism persisted in Arabia. Due to its proximity to neighboring countries, the Arabs established trade routes to Egypt, Persia, and Byzantium. As Islam spread in the seventh century, mercantilism spread rapidly to Spain, Portugal, Northern Africa, and Asia. Mercantilism finally revived in Europe in the fourteenth century, as mercantilism spread from Spain and Portugal.

Among the major tenets of mercantilist theory was bullionism, a doctrine stressing the importance of accumulating precious metals. Mercantilists argued that a state should export more goods than it imported so that foreigners would have to pay the difference in precious metals. Mercantilists argued that only raw materials that could not be extracted at home should be imported; and promoted government subsidies, such as the granting of monopolies and protective tariffs, which mercantilists thought were necessary to encourage home production of manufactured goods.

European merchants, backed by state controls, subsidies, and monopolies, made most of their profits from the buying and selling of goods. In the words of Francis Bacon, the purpose of mercantilism was "the opening and well-balancing of trade; the cherishing of manufacturers; the banishing of idleness; the repressing of waste and excess by sumptuary laws; the improvement and husbanding of the soil; the regulation of prices…"

Similar practices of economic regimentation had begun earlier in the medieval towns. However, under mercantilism, given the contemporaneous rise of absolutism, the state superseded the local guilds as the regulator of the economy. During that time the guilds essentially functioned like cartels that monopolized the quantity of craftsmen to earn above-market wages.

At the period from the eighteenth century, the commercial stage of capitalism originated from the start of the British East India Company and the Dutch East India Company. These companies were characterized by their colonial and expansionary powers given to them by nation-states. During this era, merchants, who had traded under the previous stage of mercantilism, invested capital in the East India Companies and other colonies, seeking a return on investment. In his "History of Economic Analysis," Austrian economist Joseph Schumpeter reduced mercantilist propositions to three main concerns: exchange controls, export monopolism and balance of trade.

Industrialism

A new group of economic theorists, led by David Hume and Adam Smith, in the mid 18th century, challenged fundamental mercantilist doctrines as the belief that the amount of the world’s wealth remained constant and that a state could only increase its wealth at the expense of another state.

During the Industrial Revolution, the industrialist replaced the merchant as a dominant actor in the capitalist system and affected the decline of the traditional handicraft skills of artisans, guilds, and journeymen. Also during this period, the surplus generated by the rise of commercial agriculture encouraged increased mechanization of agriculture. Industrial capitalism marked the development of the factory system of manufacturing, characterized by a complex division of labor between and within work process and the routine of work tasks; and finally established the global domination of the capitalist mode of production.

Britain also abandoned its protectionist policy, as embraced by mercantilism. In the 19th century, Richard Cobden and John Bright, who based their beliefs on the Manchester School, initiated a movement to lower tariffs. In the 1840s, Britain adopted a less protectionist policy, with the repeal of the Corn Laws and the Navigation Acts. Britain reduced tariffs and quotas, in line with Adam Smith and David Ricardo's advocacy for free trade.

Karl Polanyi argued that capitalism did not emerge until the progressive commodification of land, money, and labour culminating in the establishment of a generalized labour market in Britain in the 1830s. For Polanyi, "the extension of the market to the elements of industry – land, labour and money – was the inevitable consequence of the introduction of the factory system in a commercial society." Other sources argued that mercantilism fell after the repeal of the Navigation Acts in 1849.

Keynesianism and neoliberalism

In the period following the global depression of the 1930s, the state played an increasingly prominent role in the capitalistic system throughout much of the world.

After World War II, a broad array of new analytical tools in the social sciences were developed to explain the social and economic trends of the period, including the concepts of post-industrial society and the welfare state. This era was greatly influenced by Keynesian economic stabilization policies. The postwar boom ended in the late 1960s and early 1970s, and the situation was worsened by the rise of stagflation.

Exceptionally high inflation combined with slow output growth, rising unemployment, and eventually recession to cause a loss of credibility in the Keynesian welfare-statist mode of regulation. Under the influence of Friedrich Hayek and Milton Friedman, Western states embraced policy prescriptions inspired by laissez-faire capitalism and classical liberalism.

In particular, monetarism, a theoretical alternative to Keynesianism that is more compatible with laissez-faire, gained increasing prominence in the capitalist world, especially under the leadership of Ronald Reagan in the US and Margaret Thatcher in the UK in the 1980s. Public and political interest began shifting away from the so-called collectivist concerns of Keynes's managed capitalism to a focus on individual choice, called "remarketized capitalism." In the eyes of many economic and political commentators, the collapse of the Soviet Union brought further evidence of the superiority of market capitalism over planned economy.

Globalization

Although international trade has been associated with the development of capitalism for over five hundred years, some thinkers argue that a number of trends associated with globalization have acted to increase the mobility of people and capital since the last quarter of the 20th century, combining to circumscribe the room to maneuver of states in choosing non-capitalist models of development. Today, these trends have bolstered the argument that capitalism should now be viewed as a truly world system. However, other thinkers argue that globalization, even in its quantitative degree, is no greater now than during earlier periods of capitalist trade.

Perspectives

Classical political economy

The classical school of economic thought emerged in Britain in the late 18th century. The classical political economists Adam Smith, David Ricardo, Jean-Baptiste Say, and John Stuart Mill published analyses of the production, distribution and exchange of goods in a market that have since formed the basis of study for most contemporary economists.

In France, 'Physiocrats' like François Quesnay promoted free trade based on a conception that wealth originated from land. Quesnay's ''Tableau Économique'' (1759), described the economy analytically and laid the foundation of the Physiocrats' economic theory, followed by Anne Robert Jacques Turgot who opposed tariffs and customs duties and advocated free trade. Richard Cantillon defined long-run equilibrium as the balance of flows of income, and argued that the supply and demand mechanism around land influenced short-term prices.

Smith's attack on mercantilism and his reasoning for "the system of natural liberty" in ''The Wealth of Nations'' (1776) are usually taken as the beginning of classical political economy. Smith devised a set of concepts that remain strongly associated with capitalism today. His theories regarding the "invisible hand" are commonly misinterpreted to mean individual pursuit of self-interest unintentionally producing collective good for society. It was necessary for Smith to be so forceful in his argument in favor of free markets because he had to overcome the popular mercantilist sentiment of the time period.

He criticized monopolies, tariffs, duties, and other state enforced restrictions of his time and believed that the market is the most fair and efficient arbitrator of resources. This view was shared by David Ricardo, second most important of the classical political economists and one of the most influential economists of modern times.

In ''The Principles of Political Economy and Taxation'' (1817), he developed the law of comparative advantage, which explains why it is profitable for two parties to trade, even if one of the trading partners is more efficient in every type of economic production. This principle supports the economic case for free trade. Ricardo was a supporter of Say's Law and held the view that full employment is the normal equilibrium for a competitive economy. He also argued that inflation is closely related to changes in quantity of money and credit and was a proponent of the law of diminishing returns, which states that each additional unit of input yields less and less additional output.

The values of classical political economy are strongly associated with the classical liberal doctrine of minimal government intervention in the economy, though it does not necessarily oppose the state's provision of a few basic public goods. Classical liberal thought has generally assumed a clear division between the economy and other realms of social activity, such as the state.

While economic liberalism favors markets unfettered by the government, it maintains that the state has a legitimate role in providing public goods. For instance, Adam Smith argued that the state has a role in providing roads, canals, schools and bridges that cannot be efficiently implemented by private entities. However, he preferred that these goods should be paid proportionally to their consumption (e.g. putting a toll). In addition, he advocated retaliatory tariffs to bring about free trade, and copyrights and patents to encourage innovation.

Marxist political economy

Karl Marx considered capitalism to be a historically specific mode of production (the way in which the productive property is owned and controlled, combined with the corresponding social relations between individuals based on their connection with the process of production) in which capitalism has become the dominant mode of production.

The capitalist stage of development or "bourgeois society," for Marx, represented the most advanced form of social organization to date, but he also thought that the working classes would come to power in a worldwide socialist or communist transformation of human society as the end of the series of first aristocratic, then capitalist, and finally working class rule was reached. Following Adam Smith, Marx distinguished the use value of commodities from their exchange value in the market. Capital, according to Marx, is created with the purchase of commodities for the purpose of creating new commodities with an exchange value higher than the sum of the original purchases. For Marx, the use of labor power had itself become a commodity under capitalism; the exchange value of labor power, as reflected in the wage, is less than the value it produces for the capitalist.

This difference in values, he argues, constitutes surplus value, which the capitalists extract and accumulate. In his book ''Capital'', Marx argues that the capitalist mode of production is distinguished by how the owners of capital extract this surplus from workers—all prior class societies had extracted surplus labor, but capitalism was new in doing so via the sale-value of produced commodities. He argues that a core requirement of a capitalist society is that a large portion of the population must not possess sources of self-sustenance that would allow them to be independent, and must instead be compelled, to survive, to sell their labor for a living wage.

In conjunction with his criticism of capitalism was Marx's belief that exploited labor would be the driving force behind a revolution to a socialist-style economy. For Marx, this cycle of the extraction of the surplus value by the owners of capital or the bourgeoisie becomes the basis of class struggle. This argument is intertwined with Marx's version of the labor theory of value arguing that labor is the source of all value, and thus of profit.

Vladimir Lenin, in ''Imperialism, the Highest Stage of Capitalism'' (1916), modified classic Marxist theory and argued that capitalism necessarily induced monopoly capitalism—which he also called "imperialism"—to find new markets and resources, representing the last and highest stage of capitalism. Some 20th century Marxian economists consider capitalism to be a social formation where capitalist class processes dominate, but are not exclusive.

Capitalist class processes, to these thinkers, are simply those in which surplus labor takes the form of surplus value, usable as capital; other tendencies for utilization of labor nonetheless exist simultaneously in existing societies where capitalist processes are predominant. However, other late Marxian thinkers argue that a social formation as a whole may be classed as capitalist if capitalism is the mode by which a surplus is ''extracted'', even if this surplus is not ''produced'' by capitalist activity, as when an absolute majority of the population is engaged in non-capitalist economic activity.

In ''Limits to Capital'' (1982), David Harvey outlines an overdetermined, "spatially restless" capitalism coupled with the spatiality of crisis formation and resolution. Harvey used Marx’s theory of crisis to aid his argument that capitalism must have its “fixes” but that we cannot predetermine what fixes will be implemented, nor in what form they will be. His work on contractions of capital accumulation and international movements of capitalist modes of production and money flows has been influential. According to Harvey, capitalism creates the conditions for volatile and geographically uneven development

Weberian political sociology

In some social sciences, the understanding of the defining characteristics of capitalism has been strongly influenced by 19th century German social theorist Max Weber. Weber considered market exchange, rather than production, as the defining feature of capitalism; capitalist enterprises, in contrast to their counterparts in prior modes of economic activity, was their rationalization of production, directed toward maximizing efficiency and productivity; a tendency leading to a sociological process of enveloping "rationalization". According to Weber, workers in pre-capitalist economic institutions understood work in terms of a personal relationship between master and journeyman in a guild, or between lord and peasant in a manor.

In his book ''The Protestant Ethic and the Spirit of Capitalism'' (1904–1905), Weber sought to trace how a particular form of religious spirit, infused into traditional modes of economic activity, was a condition of possibility of modern western capitalism. For Weber, the 'spirit of capitalism' was, in general, that of ascetic Protestantism; this ideology was able to motivate extreme rationalization of daily life, a propensity to accumulate capital by a religious ethic to advance economically, and thus also the propensity to reinvest capital: this was sufficient, then, to create "self-mediating capital" as conceived by Marx.

This is pictured in Proverbs 22:29, “Seest thou a man diligent in his calling? He shall stand before kings” and in Colossians 3:23, "Whatever you do, do your work heartily, as for the Lord rather than for men." In the ''Protestant Ethic'', Weber further stated that “moneymaking – provided it is done legally – is, within the modern economic order, the result and the expression of diligence in one’s calling…”

And, "If God show you a way in which you may lawfully get more than in another way (without wrong to your soul or to any other), if you refuse this, and choose the less gainful way, you cross one of the ends of your calling, and you refuse to be God's steward, and to accept His gifts and use them for him when He requierth it: you may labour to be rich for God, though not for the flesh and sin" (p. 108).

Western capitalism, was, most generally for Weber, the "rational organization of formally free labor." The idea of the "formally free" laborer, meant, in the double sense of Marx, that the laborer was both free to own property, and free of the ability to reproduce his labor power, i.e., was the victim of expropriation of his means of production. It is only on these conditions, still abundantly obvious in the modern world of Weber, that western capitalism is able to exist.

For Weber, modern western capitalism represented the order "now bound to the technical and economic conditions of machine production which to-day determine the lives of all the individuals who are born into this mechanism, not only those directly concerned with economic acquisition, with irresistible force. Perhaps it will so determine them until the last ton of fossilized coal is burnt" (p. 123). This is further seen in his criticism of "specialists without spirit, hedonists without a heart" that were developing, in his opinion, with the fading of the original Puritan "spirit" associated with capitalism.

Institutional economics

Institutional economics, once the main school of economic thought in the United States, holds that capitalism cannot be separated from the political and social system within which it is embedded. It emphasizes the legal foundations of capitalism (see John R. Commons) and the evolutionary, habituated, and volitional processes by which institutions are erected and then changed (see John Dewey, Thorstein Veblen, and Daniel Bromley.)

One key figure in institutional economics was Thorstein Veblen who in his book The Theory of the Leisure Class (1899) analyzed the motivations of wealthy people in capitalism who conspicuously consumed their riches as a way of demonstrating success. The concept of conspicuous consumption was in direct contradiction to the neoclassical view that capitalism was efficient.

In The Theory of Business Enterprise (1904) Veblen distinguished the motivations of industrial production for people to use things from business motivations that used, or misused, industrial infrastructure for profit, arguing that the former is often hindered because businesses pursue the latter. Output and technological advance are restricted by business practices and the creation of monopolies. Businesses protect their existing capital investments and employ excessive credit, leading to depressions and increasing military expenditure and war through business control of political power.

German Historical School and Austrian School

From the perspective of the German Historical School, capitalism is primarily identified in terms of the organization of production for markets. Although this perspective shares similar theoretical roots with that of Weber, its emphasis on markets and money lends it different focus. For followers of the German Historical School, the key shift from traditional modes of economic activity to capitalism involved the shift from medieval restrictions on credit and money to the modern monetary economy combined with an emphasis on the profit motive.

In the late 19th century, the German Historical School of economics diverged, with the emerging Austrian School of economics, led at the time by Carl Menger. Later generations of followers of the Austrian School continued to be influential in Western economic thought in the early part of the 20th century.

Austrian-born economist Joseph Schumpeter, sometimes associated with the School, emphasized the "creative destruction" of capitalism—the fact that market economies undergo constant change. Schumpeter argued that at any moment in time there are rising industries and declining industries. Schumpeter, and many contemporary economists influenced by his work, argue that resources should flow from the declining to the expanding industries for an economy to grow, but they recognized that sometimes resources are slow to withdraw from the declining industries because of various forms of institutional resistance to change.

The Austrian economists Ludwig von Mises and Friedrich Hayek were among the leading defenders of market economy against 20th century proponents of socialist planned economies. Mises and Hayek argued that only market capitalism could manage a complex, modern economy.

Since a modern economy produces such a large array of distinct goods and services, and consists of such a large array of consumers and enterprises, argued Mises and Hayek, the information problems facing any other form of economic organization other than market capitalism would exceed its capacity to handle information. Thinkers within Supply-side economics built on the work of the Austrian School, and particularly emphasize Say's Law: "supply creates its own demand." Capitalism, to this school, is defined by lack of state restraint on the decisions of producers.

Austrian economists such as Murray Rothbard argued that Marx failed to make the distinction between ''capitalism'' and ''mercantilism''. They argue that Marx conflated the imperialistic, colonialistic, protectionist and interventionist doctrines of mercantilism with capitalism.

Austrian economics has been a major influence on some forms of libertarianism, in which laissez-faire capitalism is considered to be the ideal economic system.

Keynesian economics

In his 1937 ''The General Theory of Employment, Interest, and Money'', the British economist John Maynard Keynes argued that capitalism suffered a basic problem in its ability to recover from periods of slowdowns in investment. Keynes argued that a capitalist economy could remain in an indefinite equilibrium despite high unemployment.

Essentially rejecting Say's law, he argued that some people may have a liquidity preference that would see them rather hold money than buy new goods or services, which therefore raised the prospect that the Great Depression would not end without what he termed in the ''General Theory'' "a somewhat comprehensive socialization of investment."

Keynesian economics challenged the notion that laissez-faire capitalist economics could operate well on their own, without state intervention used to promote aggregate demand, fighting high unemployment and deflation of the sort seen during the 1930s. He and his followers recommended "pump-priming" the economy to avoid recession: cutting taxes, increasing government borrowing, and spending during an economic down-turn. This was to be accompanied by trying to control wages nationally partly through the use of inflation to cut real wages and to deter people from holding money.

John Maynard Keynes tried to provide solutions to many of Marx’s problems without completely abandoning the classical understanding of capitalism. His work attempted to show that regulation can be effective, and that economic stabilizers can rein in the aggressive expansions and recessions that Marx disliked. These changes sought to create more stability in the business cycle, and reduce the abuses of laborers. Keynesian economists argue that Keynesian policies were one of the primary reasons capitalism was able to recover following the Great Depression. The premises of Keynes’s work have, however, since been challenged by neoclassical and supply-side economics and the Austrian School.

Another challenge to Keynesian thinking came from his colleague Piero Sraffa, and subsequently from the Neo-Ricardian school that followed Sraffa. In Sraffa's highly technical analysis, capitalism is defined by an entire system of social relations among both producers and consumers, but with a primary emphasis on the demands of production. According to Sraffa, the tendency of capital to seek its highest rate of profit causes a dynamic instability in social and economic relations.

Neoclassical economics and the Chicago School

Today, the majority of academic research on capitalism in the English-speaking world draws on neoclassical economic thought. It favors extensive market coordination and relatively neutral patterns of governmental market regulation aimed at maintaining property rights; deregulated labor markets; corporate governance dominated by financial owners of firms; and financial systems depending chiefly on capital market-based financing rather than state financing.

Milton Friedman took many of the basic principles set forth by Adam Smith and the classical economists and gave them a new twist. One example of this is his article in the September 1970 issue of ''The New York Times'' Magazine, where he argues that the social responsibility of business is “to use its resources and engage in activities designed to increase its profits…(through) open and free competition without deception or fraud.” This is similar to Smith’s argument that self-interest in turn benefits the whole of society. Work like this helped lay the foundations for the coming marketization (or privatization) of state enterprises and the supply-side economics of Ronald Reagan and Margaret Thatcher.

The Chicago School of economics is best known for its free market advocacy and monetarist ideas. According to Friedman and other monetarists, market economies are inherently stable if left to themselves and depressions result only from government intervention.

Friedman, for example, argued that the Great Depression was result of a contraction of the money supply, controlled by the Federal Reserve, and not by the lack of investment as John Maynard Keynes had argued. Ben Bernanke, current Chairman of the Federal Reserve, is among the economists today generally accepting Friedman's analysis of the causes of the Great Depression.

Neoclassical economists, today the majority of economists, consider value to be subjective, varying from person to person and for the same person at different times, and thus reject the labor theory of value. Marginalism is the theory that economic value results from marginal utility and marginal cost (the marginal concepts). These economists see capitalists as earning profits by forgoing current consumption, by taking risks, and by organizing production.

Neoclassical economic theory

Neoclassical economics explain capitalism as made up of individuals, enterprises, markets and government. According to their theories, individuals engage in a capitalist economy as consumers, labourers, and investors. As labourers, individuals may decide which jobs to prepare for, and in which markets to look for work. As investors they decide how much of their income to save and how to invest their savings. These savings, which become investments, provide much of the money that businesses need to grow.

Business firms decide what to produce and where this production should occur. They also purchase inputs (materials, labour, and capital). Businesses try to influence consumer purchase decisions through marketing and advertisement, as well as the creation of new and improved products. Driving the capitalist economy is the search for profits (revenues minus expenses). This is known as the profit motive, and it helps ensure that companies produce the goods and services that consumers desire and are able to buy. To be profitable, firms must sell a quantity of their product at a certain price to yield a profit. A business may lose money if sales fall too low or if its costs become too high. The profit motive encourages firms to operate more efficiently. By using less materials, labour or capital, a firm can cut its production costs, which can lead to increased profits.

An economy grows when the total value of goods and services produced rises. This growth requires investment in infrastructure, capital and other resources necessary in production. In a capitalist system, businesses decide when and how much they want to invest.

Income in a capitalist economy depends primarily on what skills are in demand and what skills are being supplied. Skills that are in scarce supply are worth more in the market and can attract higher incomes. Competition among workers for jobs — and among employers for skilled workers — help determine wage rates. Firms need to pay high enough wages to attract the appropriate workers; when jobs are scarce, workers may accept lower wages than they would when jobs are plentiful. Trade union and governments influence wages in capitalist systems. Unions act to represent their members in negotiations with employers over such things as wage rates and acceptable working conditions.

The market

Supply is the amount of a good or service produced by a firm and which is available for sale. Demand is the amount that people are willing to buy at a specific price. Prices tend to rise when demand exceeds supply, and fall when supply exceeds demand. In theory, the market is able to coordinate itself when a new equilibrium price and quantity is reached.

Competition arises when more than one producer is trying to sell the same or similar products to the same buyers. In capitalist theory, competition leads to innovation and more affordable prices. Without competition, a monopoly or cartel may develop. A monopoly occurs when a firm supplies the total output in the market; the firm can therefore limit output and raise prices because it has no fear of competition. A cartel is a group of firms that act together in a monopolistic manner to control output and raise prices.

Role of government

In a capitalist system, the government does not prohibit private property or prevent individuals from working where they please. The government does not prevent firms from determining what wages they will pay and what prices they will charge for their products. Many countries, however, have minimum wage laws and minimum safety standards.

Under some versions of capitalism, the government carries out a number of economic functions, such as issuing money, supervising public utilities and enforcing private contracts. Many countries have competition laws that prohibit monopolies and cartels from forming. Despite anti-monopoly laws, large corporations can form near-monopolies in some industries. Such firms can temporarily drop prices and accept losses to prevent competition from entering the market, and then raise them again once the threat of entry is reduced. In many countries, public utilities (e.g. electricity, heating fuel, communications) are able to operate as a monopoly under government regulation, due to high economies of scale.

Government agencies regulate the standards of service in many industries, such as airlines and broadcasting, as well as financing a wide range of programs. In addition, the government regulates the flow of capital and uses financial tools such as the interest rate to control factors such as inflation and unemployment.

Democracy, the state, and legal frameworks

Private property

The relationship between the state, its formal mechanisms, and capitalist societies has been debated in many fields of social and political theory, with active discussion since the 19th century. Hernando de Soto is a contemporary economist who has argued that an important characteristic of capitalism is the functioning state protection of property rights in a formal property system where ownership and transactions are clearly recorded.

According to de Soto, this is the process by which physical assets are transformed into capital, which in turn may be used in many more ways and much more efficiently in the market economy. A number of Marxian economists have argued that the Enclosure Acts in England, and similar legislation elsewhere, were an integral part of capitalist primitive accumulation and that specific legal frameworks of private land ownership have been integral to the development of capitalism.

Institutions

New institutional economics, a field pioneered by Douglass North, stresses the need of a legal framework in order for capitalism to function optimally, and focuses on the relationship between the historical development of capitalism and the creation and maintenance of political and economic institutions. In new institutional economics and other fields focusing on public policy, economists seek to judge when and whether governmental intervention (such as taxes, welfare, and government regulation) can result in potential gains in efficiency. According to Gregory Mankiw, a New Keynesian economist, governmental intervention can improve on market outcomes under conditions of "market failure", or situations in which the market on its own does not allocate resources efficiently.

Market failure occurs when an externality is present and a market will either under-produce a product with a positive externalization or overproduce a product that generates a negative externalization. Air pollution, for instance, is a negative externalization that cannot be incorporated into markets as the world’s air is not owned and then sold for use to polluters. So, too much pollution could be emitted and people not involved in the production pay the cost of the pollution instead of the firm that initially emitted the air pollution. Critics of market failure theory, like Ronald Coase, Harold Demsetz, and James M. Buchanan argue that government programs and policies also fall short of absolute perfection. Market failures are often small, and government failures are sometimes large. It is therefore the case that imperfect markets are often better than imperfect governmental alternatives. While all nations currently have some kind of market regulations, the desirable degree of regulation is disputed.

Democracy

The relationship between democracy and capitalism is a contentious area in theory and popular political movements. The extension of universal adult male suffrage in 19th century Britain occurred along with the development of industrial capitalism, and democracy became widespread at the same time as capitalism, leading many theorists to posit a causal relationship between them, or that each affects the other. However, in the 20th century, according to some authors, capitalism also accompanied a variety of political formations quite distinct from liberal democracies, including fascist regimes, absolute monarchies, and single-party states.

While some thinkers argue that capitalist development more-or-less inevitably eventually leads to the emergence of democracy, others dispute this claim. Research on the democratic peace theory indicates that capitalist democracies rarely make war with one another and have little internal violence. However critics of the democratic peace theory note that democratic capitalist states may fight infrequently and or never with other democratic capitalist states because of political similarity or stability rather than because they are democratic or capitalist.

Some commentators argue that though economic growth under capitalism has led to democratization in the past, it may not do so in the future, as authoritarian regimes have been able to manage economic growth without making concessions to greater political freedom. States that have highly capitalistic economic systems have thrived under authoritarian or oppressive political systems. Singapore, which maintains a highly open market economy and attracts lots of foreign investment, does not protect civil liberties such as freedom of speech and expression. The private (capitalist) sector in the People's Republic of China has grown exponentially and thrived since its inception, despite having an authoritarian government. Augusto Pinochet's rule in Chile led to economic growth by using authoritarian means to create a safe environment for investment and capitalism.

In response to criticism of the system, some proponents of capitalism have argued that its advantages are supported by empirical research. Indices of Economic Freedom show a correlation between nations with more economic freedom (as defined by the indices) and higher scores on variables such as income and life expectancy, including the poor, in these nations.

Advocacy for capitalism

Economic growth

Many theorists and policymakers in predominantly capitalist nations have emphasized capitalism's ability to promote economic growth, as measured by Gross Domestic Product (GDP), capacity utilization or standard of living. This argument was central, for example, to Adam Smith's advocacy of letting a free market control production and price, and allocate resources. Many theorists have noted that this increase in global GDP over time coincides with the emergence of the modern world capitalist system.

In years 1000–1820 world economy grew sixfold, 50 % per person. After capitalism had started to spread more widely, in years 1820–1998 world economy grew 50-fold, i.e., 9-fold per person. In most capitalist economic regions such as Europe, the United States, Canada, Australia and New Zealand, the economy grew 19-fold per person even though these countries already had a higher starting level, and in Japan, which was poor in 1820, to 31-fold, whereas in the rest of the world the growth was only 5-fold per person.

Proponents argue that increasing GDP (per capita) is empirically shown to bring about improved standards of living, such as better availability of food, housing, clothing, and health care. The decrease in the number of hours worked per week and the decreased participation of children and the elderly in the workforce have been attributed to capitalism.

Proponents also believe that a capitalist economy offers far more opportunities for individuals to raise their income through new professions or business ventures than do other economic forms. To their thinking, this potential is much greater than in either traditional feudal or tribal societies or in socialist societies.

Political freedom

Milton Friedman stated that the economic freedom of capitalism is a requisite of political freedom which has been continuously echoed by others such as Andrew Brennan and Ronald Reagan. Friedman stated that centralized operations of economic activity is always accompanied by political repression. In his view, transactions in a market economy are voluntary, and the wide diversity that voluntary activity permits is a fundamental threat to repressive political leaders and greatly diminish power to coerce. Friedman's view was also shared by Friedrich Hayek and John Maynard Keynes, both of whom believed that capitalism is vital for freedom to survive and thrive.

Self-organization

Austrian School economists have argued that capitalism can organize itself into a complex system without an external guidance or central planning mechanism. Friedrich Hayek considered the phenomenon of self-organization as underpinning capitalism. Prices serve as a signal as to the urgent and unfilled wants of people, and the promise of profits gives entrepreneurs incentive to use their knowledge and resources to satisfy those wants. Thus the activities of millions of people, each seeking his own interest, are coordinated.

Criticisms

Critics of capitalism associate it with: social inequality and unfair distribution of wealth and power; a tendency toward market monopoly or oligopoly (and government by oligarchy); imperialism, counter-revolutionary wars and various forms of economic and cultural exploitation; repression of workers and trade unionists; social alienation; economic inequality; unemployment; and economic instability. Individual property rights have also been associated with the tragedy of the anticommons.

Notable critics of capitalism have included: socialists, anarchists, communists, national socialists, social democrats, technocrats, some types of conservatives, Luddites, Narodniks, Shakers and some types of nationalists.

Marxists have advocated a revolutionary overthrow of capitalism that would lead to socialism, before eventually transforming into communism. Many socialists consider capitalism to be irrational, in that production and the direction of the economy are unplanned, creating many inconsistencies and internal contradictions. Labor historians and scholars such as Immanuel Wallerstein have argued that unfree labor — by slaves, indentured servants, prisoners, and other coerced persons — is compatible with capitalist relations.

Many aspects of capitalism have come under attack from the anti-globalization movement, which is primarily opposed to corporate capitalism. Environmentalists have argued that capitalism requires continual economic growth, and that it will inevitably deplete the finite natural resources of the Earth.

Many religions have criticized or opposed specific elements of capitalism. Traditional Judaism, Christianity, and Islam forbid lending money at interest, although alternative methods of banking have been developed. Some Christians have criticized capitalism for its materialist aspects and its inability to account for the wellbeing of all people. Many of Jesus's parables deal with clearly economic concerns: farming, shepherding, being in debt, doing hard labour, being excluded from banquets and the houses of the rich, and have implications for wealth and power distribution.

See also

Communism

Corporatocracy

Economics

Market economy

Perspectives on capitalism

Socialism

Notes

References

Bacher, Christian (2007) ''Capitalism, Ethics and the Paradoxon of Self-exploitation'' GRIN Verlag. p. 2

De George, Richard T. (1986) ''Business ethics'' p. 104

Lash, Scott and Urry, John (2000). ''Capitalism''. In Nicholas Abercrombie, S. Hill & BS Turner (Eds.), ''The Penguin dictionary of sociology'' (4th ed.) (pp. 36–40).

Wolf, Eric (1982) ''Europe and the People Without History''

Wood, Ellen Meiksins (2002) ''The Origins of Capitalism: A Longer View'' London: Verso

Thomas K. McCraw, ''"The Current Crisis and the Essence of Capitalism"'', The Montreal Review (August, 2011)

External links

Center on Capitalism and Society at Columbia University

Center for the Study of Capitalism at Wake Forest University

nan:Chu-pún-chú-gī

Category:Economic systems Category:Economic ideologies Category:Economies Category:Economic liberalism Category:Ideologies Category:Social philosophy Category:Political economy Category:Individualism

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Name	Bill Gates
Birth name	William Henry Gates III
Birth date	October 28, 1955
Birth place	Seattle, Washington, United States
Residence	Medina, Washington, United States
Nationality	American
Alma mater	Harvard University (dropped out)
Education	Lakeside School class of 1973
Occupation	Chairman of MicrosoftCo-Chair of the Bill & Melinda Gates FoundationCEO of Cascade InvestmentChairman of Corbis
Years active	1975–present
Net worth	US$ 61 billion (2012)
Boards	Berkshire Hathaway
Religion	None (Agnostic)
Spouse
Children	3
Parents	William H. Gates, Sr.Mary Maxwell Gates
Signature	BillGates Signature.svg
Website	}}

William Henry "Bill" Gates III (born October 28, 1955 in Seattle, Washington) is an American business magnate, investor, philanthropist, and author. Gates is the former chief executive officer (CEO) and current chairman of Microsoft, the software company he founded with Paul Allen. He is consistently ranked among the world's wealthiest people and was the wealthiest overall from 1995 to 2009, excluding 2008, when he was ranked third; in 2011 he was the wealthiest American and the second wealthiest person. During his career at Microsoft, Gates held the positions of CEO and chief software architect, and remains the largest individual shareholder, with 6.4 percent of the common stock. He has also authored or co-authored several books.

Gates is one of the best-known entrepreneurs of the personal computer revolution. Gates has been criticized for his business tactics, which have been considered anti-competitive, an opinion which has in some cases been upheld by the courts. In the later stages of his career, Gates has pursued a number of philanthropic endeavors, donating large amounts of money to various charitable organizations and scientific research programs through the Bill & Melinda Gates Foundation, established in 2000.

Gates stepped down as chief executive officer of Microsoft in January 2000. He remained as chairman and created the position of chief software architect. In June 2006, Gates announced that he would be transitioning from full-time work at Microsoft to part-time work, and full-time work at the Bill & Melinda Gates Foundation. He gradually transferred his duties to Ray Ozzie, chief software architect, and Craig Mundie, chief research and strategy officer. Gates's last full-time day at Microsoft was June 27, 2008. He remains at Microsoft as non-executive chairman.

Early life

Gates was born in Seattle, Washington, to William H. Gates, Sr. and Mary Maxwell Gates. His parents are of English, German, and Scots-Irish descent. His father was a prominent lawyer, and his mother served on the board of directors for First Interstate BancSystem and the United Way. Gates's maternal grandfather was J. W. Maxwell, a national bank president. Gates has one elder sister, Kristi (Kristianne), and one younger sister, Libby. He was the fourth of his name in his family, but was known as William Gates III or "Trey" because his father had the "II" suffix. Early on in his life, Gates's parents had a law career in mind for him. When Gates was young, his family regularly attended a Congregational church.

At 13 he enrolled in the Lakeside School, an exclusive preparatory school. When he was in the eighth grade, the Mothers Club at the school used proceeds from Lakeside School's rummage sale to buy a Teletype Model 33 ASR terminal and a block of computer time on a General Electric (GE) computer for the school's students. Gates took an interest in programming the GE system in BASIC, and was excused from math classes to pursue his interest. He wrote his first computer program on this machine: an implementation of tic-tac-toe that allowed users to play games against the computer. Gates was fascinated by the machine and how it would always execute software code perfectly. When he reflected back on that moment, he said, "There was just something neat about the machine." After the Mothers Club donation was exhausted, he and other students sought time on systems including DEC PDP minicomputers. One of these systems was a PDP-10 belonging to Computer Center Corporation (CCC), which banned four Lakeside students—Gates, Paul Allen, Ric Weiland, and Kent Evans—for the summer after it caught them exploiting bugs in the operating system to obtain free computer time.

At the end of the ban, the four students offered to find bugs in CCC's software in exchange for computer time. Rather than use the system via Teletype, Gates went to CCC's offices and studied source code for various programs that ran on the system, including programs in FORTRAN, LISP, and machine language. The arrangement with CCC continued until 1970, when the company went out of business. The following year, Information Sciences, Inc. hired the four Lakeside students to write a payroll program in COBOL, providing them computer time and royalties. After his administrators became aware of his programming abilities, Gates wrote the school's computer program to schedule students in classes. He modified the code so that he was placed in classes with mostly female students. He later stated that "it was hard to tear myself away from a machine at which I could so unambiguously demonstrate success." At age 17, Gates formed a venture with Allen, called Traf-O-Data, to make traffic counters based on the Intel 8008 processor. In early 1973, Bill Gates served as a congressional page in the U.S. House of Representatives.

Gates graduated from Lakeside School in 1973. He scored 1590 out of 1600 on the SAT and enrolled at Harvard College in the autumn of 1973. While at Harvard, he met Steve Ballmer, who later succeeded Gates as CEO of Microsoft.

In his sophomore year, Gates devised an algorithm for pancake sorting as a solution to one of a series of unsolved problems presented in a combinatorics class by Harry Lewis, one of his professors. Gates's solution held the record as the fastest version for over thirty years; its successor is faster by only one percent. His solution was later formalized in a published paper in collaboration with Harvard computer scientist Christos Papadimitriou.

Gates did not have a definite study plan while a student at Harvard and spent a lot of time using the school's computers. Gates remained in contact with Paul Allen, and he joined him at Honeywell during the summer of 1974. The following year saw the release of the MITS Altair 8800 based on the Intel 8080 CPU, and Gates and Allen saw this as the opportunity to start their own computer software company. He had talked this decision over with his parents, who were supportive of him after seeing how much Gates wanted to start a company.

Microsoft

BASIC

After reading the January 1975 issue of ''Popular Electronics'' that demonstrated the Altair 8800, Gates contacted Micro Instrumentation and Telemetry Systems (MITS), the creators of the new microcomputer, to inform them that he and others were working on a BASIC interpreter for the platform. In reality, Gates and Allen did not have an Altair and had not written code for it; they merely wanted to gauge MITS's interest. MITS president Ed Roberts agreed to meet them for a demo, and over the course of a few weeks they developed an Altair emulator that ran on a minicomputer, and then the BASIC interpreter. The demonstration, held at MITS's offices in Albuquerque was a success and resulted in a deal with MITS to distribute the interpreter as Altair BASIC. Paul Allen was hired into MITS, and Gates took a leave of absence from Harvard to work with Allen at MITS in Albuquerque in November 1975. They named their partnership "Micro-Soft" and had their first office located in Albuquerque. Within a year, the hyphen was dropped, and on November 26, 1976, the trade name "Microsoft" was registered with the Office of the Secretary of the State of New Mexico. Gates never returned to Harvard to complete his studies.

Microsoft's BASIC was popular with computer hobbyists, but Gates discovered that a pre-market copy had leaked into the community and was being widely copied and distributed. In February 1976, Gates wrote an Open Letter to Hobbyists in the MITS newsletter saying that MITS could not continue to produce, distribute, and maintain high-quality software without payment. This letter was unpopular with many computer hobbyists, but Gates persisted in his belief that software developers should be able to demand payment. Microsoft became independent of MITS in late 1976, and it continued to develop programming language software for various systems. The company moved from Albuquerque to its new home in Bellevue, Washington on January 1, 1979, after the former rejected his loan application.

During Microsoft's early years, all employees had broad responsibility for the company's business. Gates oversaw the business details, but continued to write code as well. In the first five years, Gates personally reviewed every line of code the company shipped, and often rewrote parts of it as he saw fit.

IBM partnership

IBM approached Microsoft in July 1980 regarding its upcoming personal computer, the IBM PC. The computer company first proposed that Microsoft write the BASIC interpreter. When IBM's representatives mentioned that they needed an operating system, Gates referred them to Digital Research (DRI), makers of the widely used CP/M operating system. IBM's discussions with Digital Research went poorly, and they did not reach a licensing agreement. IBM representative Jack Sams mentioned the licensing difficulties during a subsequent meeting with Gates and told him to get an acceptable operating system. A few weeks later Gates proposed using 86-DOS (QDOS), an operating system similar to CP/M that Tim Paterson of Seattle Computer Products (SCP) had made for hardware similar to the PC. Microsoft made a deal with SCP to become the exclusive licensing agent, and later the full owner, of 86-DOS. After adapting the operating system for the PC, Microsoft delivered it to IBM as PC-DOS in exchange for a one-time fee of $50,000.

Gates did not offer to transfer the copyright on the operating system, because he believed that other hardware vendors would clone IBM's system. They did, and the sales of MS-DOS made Microsoft a major player in the industry. Despite IBM's name on the operating system the press quickly identified Microsoft as being very influential on the new computer, with ''PC Magazine'' asking if Gates were "The Man Behind The Machine?" He oversaw Microsoft's company restructuring on June 25, 1981, which re-incorporated the company in Washington state and made Gates President of Microsoft and the Chairman of the Board.

Windows

Microsoft launched its first retail version of Microsoft Windows on November 20, 1985, and in August, the company struck a deal with IBM to develop a separate operating system called OS/2. Although the two companies successfully developed the first version of the new system, mounting creative differences caused the partnership to deteriorate. It ended in 1991, when Gates led Microsoft to develop a version of OS/2 independently from IBM.

Management style

From Microsoft's founding in 1975 until 2006, Gates had primary responsibility for the company's product strategy. He aggressively broadened the company's range of products, and wherever Microsoft achieved a dominant position he vigorously defended it. He gained a reputation for being distant to others; as early as 1981 an industry executive complained in public that "Gates is notorious for not being reachable by phone and for not returning phone calls."

As an executive, Gates met regularly with Microsoft's senior managers and program managers. Firsthand accounts of these meetings describe him as verbally combative, berating managers for perceived holes in their business strategies or proposals that placed the company's long-term interests at risk. He often interrupted presentations with such comments as, "That's the stupidest thing I've ever heard!" and, "Why don't you just give up your options and join the Peace Corps?" The target of his outburst then had to defend the proposal in detail until, hopefully, Gates was fully convinced. When subordinates appeared to be procrastinating, he was known to remark sarcastically, "I'll do it over the weekend."

Gates's role at Microsoft for most of its history was primarily a management and executive role. However, he was an active software developer in the early years, particularly on the company's programming language products. He has not officially been on a development team since working on the TRS-80 Model 100, but wrote code as late as 1989 that shipped in the company's products. On June 15, 2006, Gates announced that he would transition out of his day-to-day role over the next two years to dedicate more time to philanthropy. He divided his responsibilities between two successors, placing Ray Ozzie in charge of day-to-day management and Craig Mundie in charge of long-term product strategy.

Antitrust litigation

Many decisions that led to antitrust litigation over Microsoft's business practices have had Gates's approval. In the 1998 ''United States v. Microsoft'' case, Gates gave deposition testimony that several journalists characterized as evasive. He argued with examiner David Boies over the contextual meaning of words such as, "compete", "concerned", and "we". ''BusinessWeek'' reported:

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Gates later said he had simply resisted attempts by Boies to mischaracterize his words and actions. As to his demeanor during the deposition, he said, "Did I fence with Boies? ... I plead guilty. Whatever that penalty is should be levied against me: rudeness to Boies in the first degree." Despite Gates's denials, the judge ruled that Microsoft had committed monopolization and tying, and blocking competition, both in violation of the Sherman Antitrust Act.

Appearance in ads

Gates appeared in a series of ads to promote Microsoft in 2008. The first commercial, co-starring Jerry Seinfeld, is a 90-second talk between strangers as Seinfeld walks up on a discount shoe store (Shoe Circus) in a mall and notices Gates buying shoes inside. The salesman is trying to sell Mr. Gates shoes that are a size too big. As Gates is buying the shoes, he holds up his discount card, which uses a slightly altered version of his own mugshot of his arrest in New Mexico in 1977 for a traffic violation. As they are walking out of the mall, Seinfeld asks Gates if he has melded his mind to other developers, after getting a yes, he then asks if they are working on a way to make computers edible, again getting a yes. Some say that this is an homage to Seinfeld's own show about "nothing" (''Seinfeld''). In a second commercial in the series, Gates and Seinfeld are at the home of an average family trying to fit in with normal people.

Post-Microsoft

Since leaving day-to-day operations at Microsoft (where he remains Chairman), Gates continues his philanthropy and, among other projects, purchased the video rights to the Messenger Lectures series called ''The Character of Physical Law'', given at Cornell University by Richard Feynman in 1964 and recorded by the BBC. The videos are available online to the public at Microsoft's Project Tuva.

In April 2010, Gates was invited to visit and speak at the Massachusetts Institute of Technology where he asked the students to take on the hard problems of the world in their futures.

Personal life

Gates married Melinda French on January 1, 1994. They have two daughters, Jennifer Katharine Gates (1996) and Phoebe Adele (2002), and one son, Rory John (1999).

The Gates's home is an earth-sheltered house in the side of a hill overlooking Lake Washington in Medina. According to King County public records, as of 2006 the total assessed value of the property (land and house) is $125 million, and the annual property tax is $991,000.

His estate has a swimming pool with an underwater music system, as well as a gym and a dining room.

Also among Gates's private acquisitions is the Codex Leicester, a collection of writings by Leonardo da Vinci, which Gates bought for $30.8 million at an auction in 1994. Gates is also known as an avid reader, and the ceiling of his large home library is engraved with a quotation from ''The Great Gatsby''. He also enjoys playing bridge, tennis, and golf.

Gates was number one on the Forbes 400 list from 1993 through to 2007 and number one on ''Forbes'' list of The World's Richest People from 1995 to 2007 and 2009. In 1999, Gates's wealth briefly surpassed $101 billion, causing the media to call him a "centibillionaire". Since 2000, the nominal value of his Microsoft holdings has declined due to a fall in Microsoft's stock price after the dot-com bubble burst and the multi-billion dollar donations he has made to his charitable foundations. In a May 2006 interview, Gates commented that he wished that he were not the richest man in the world because he disliked the attention it brought. Gates has several investments outside Microsoft, which in 2006 paid him a salary of $616,667 and $350,000 bonus totalling $966,667. He founded Corbis, a digital imaging company, in 1989. In 2004 he became a director of Berkshire Hathaway, the investment company headed by long-time friend Warren Buffett. In March 2010 Bill Gates was bumped down to the second wealthiest man behind Carlos Slim.

Philanthropy

Gates began to appreciate the expectations others had of him when public opinion mounted suggesting that he could give more of his wealth to charity. Gates studied the work of Andrew Carnegie and John D. Rockefeller, and in 1994 sold some of his Microsoft stock to create the William H. Gates Foundation. In 2000, Gates and his wife combined three family foundations into one to create the charitable Bill & Melinda Gates Foundation, which is the largest transparently operated charitable foundation in the world. The foundation allows benefactors access to information regarding how its money is being spent, unlike other major charitable organizations such as the Wellcome Trust. The generosity and extensive philanthropy of David Rockefeller has been credited as a major influence. Gates and his father met with Rockefeller several times, and modeled their giving in part on the Rockefeller family's philanthropic focus, namely those global problems that are ignored by governments and other organizations. As of 2007, Bill and Melinda Gates were the second-most generous philanthropists in America, having given over $28 billion to charity. They plan to eventually give 95% of their wealth to charity.

The foundation was at the same time criticized because it invests assets that it has not yet distributed with the exclusive goal of maximizing return on investment. As a result, its investments include companies that have been charged with worsening poverty in the same developing countries where the Foundation is attempting to relieve poverty. These include companies that pollute heavily, and pharmaceutical companies that do not sell into the developing world. In response to press criticism, the foundation announced in 2007 a review of its investments, to assess social responsibility. It subsequently canceled the review and stood by its policy of investing for maximum return, while using voting rights to influence company practices. The Gates Millennium Scholars program has been criticized for its exclusion of Caucasian students.

Gates's wife urged people to learn a lesson from the philanthropic efforts of the Salwen family, which had sold its home and given away half of its value, as detailed in ''The Power of Half''. Gates and his wife invited Joan Salwen to Seattle to speak about what the family had done, and on December 9, 2010, Gates, investor Warren Buffett, and Mark Zuckerberg (Facebook's CEO) signed a promise they called the "Gates-Buffet Giving Pledge", in which they promised to donate to charity at least half of their wealth over the course of time.

Recognition

In 1987, Gates was officially declared a billionaire in the pages of Forbes' 400 Richest People in America issue, just days before his 32nd birthday. As the world's youngest self-made billionaire, he was worth $1.25 billion, over $900 million more than he'd been worth the year before, when he'd debuted on the list. ''Time'' magazine named Gates one of the 100 people who most influenced the 20th century, as well as one of the 100 most influential people of 2004, 2005, and 2006. ''Time'' also collectively named Gates, his wife Melinda and U2's lead singer Bono as the 2005 Persons of the Year for their humanitarian efforts. In 2006, he was voted eighth in the list of "Heroes of our time". Gates was listed in the ''Sunday Times'' power list in 1999, named CEO of the year by ''Chief Executive Officers magazine'' in 1994, ranked number one in the "Top 50 Cyber Elite" by ''Time'' in 1998, ranked number two in the ''Upside'' Elite 100 in 1999 and was included in ''The Guardian'' as one of the "Top 100 influential people in media" in 2001.

In 1994, he was honoured as the twentieth Distinguished Fellow of the British Computer Society. Gates has received honorary doctorates from Nyenrode Business Universiteit, Breukelen, The Netherlands, in 2000; the Royal Institute of Technology, Stockholm, Sweden, in 2002; invited in 2003 to deliver the keynote address of the Golden Jubilee of the Indian Institute of Technology,held in San Jose, California; Waseda University, Tokyo, Japan, in 2005; Tsinghua University, Beijing, China, in April 2007; Harvard University in June 2007; the Karolinska Institutet, Stockholm, in January 2008, and Cambridge University in June 2009. He was also made an honorary trustee of Peking University in 2007. Gates was also made an honorary Knight Commander of the Order of the British Empire (KBE) by Queen Elizabeth II in 2005, in addition to having entomologists name the Bill Gates flower fly, ''Eristalis gatesi'', in his honor.

In November 2006, he and his wife were awarded the Order of the Aztec Eagle for their philanthropic work around the world in the areas of health and education, particularly in Mexico, and specifically in the program "''Un país de lectores"''. In October 2009, it was announced that Gates will be awarded the 2010 Bower Award for Business Leadership of The Franklin Institute for his achievements in business and for his philanthropic work. In 2010 he was honored with the Silver Buffalo Award by the Boy Scouts of America, its highest award for adults, for his service to youth.

In 2011, Bill Gates was ranked as the fifth most powerful person in the world, according to rankings by Forbes magazine.

Investments

Cascade Investments LLC, a private investment and holding company, incorporated in United States, is controlled by Bill Gates, and is headquartered in the city of Kirkland, Washington.

bgC3, a new think-tank company founded by Bill Gates.

Corbis, a digital image licensing and rights services company.

TerraPower, a nuclear reactor design company.

Books and films

To date, Bill Gates has authored two books. ''The Road Ahead'', written with Microsoft executive Nathan Myhrvold and journalist Peter Rinearson, was published in November 1995, and it summarized the implications of the personal computing revolution and described a future profoundly changed by the arrival of a global information superhighway. ''Business @ the Speed of Thought'' was published in 1999, and discusses how business and technology are integrated, and shows how digital infrastructures and information networks can help getting an edge on the competition.

Gates has appeared in a number of documentaries, including the 2010 documentary film ''Waiting for "Superman"'', and the BBC documentary series ''The Virtual Revolution''.

Gates was prominently featured in ''Pirates of Silicon Valley'', a 1999 film which chronicles the rise of Apple and Microsoft from the early 1970s to 1997. He was portrayed by Anthony Michael Hall.

See also

List of billionaires (also see List of college dropout billionaires and List of wealthiest non-inflated historical figures)

Paul Allen – Microsoft's co-founder, friend, and fellow billionaire

Books

References

Further reading

"The Meaning of Bill Gates: As his reign at Microsoft comes to an end, so does the era he dominated", ''The Economist'', June 28, 2008.

External links

Bill & Melinda Gates Foundation

Profile at Microsoft

Profile at Forbes

How I Work: Bill Gates, ''Fortune'', March 30, 2006

The Forbes 400

Category:1955 births Category:American billionaires Category:American computer businesspeople Category:American computer programmers Category:American chief executives Category:American technology company founders Category:American investors Category:American nonprofit businesspeople Category:American people of English descent Category:American people of German descent Category:American people of Scotch-Irish descent Category:American people of Scottish descent Category:American philanthropists Category:American technology writers Category:Bill & Melinda Gates Foundation people Category:Businesspeople from Washington (state) Category:Businesspeople in software Category:Directors of Microsoft Category:Fellows of the British Computer Society Category:Gates family Category:Harvard University people Category:History of Microsoft Category:Honorary Knights Commander of the Order of the British Empire Category:Living people Category:Members of the United States National Academy of Engineering Category:Microsoft employees Category:National Medal of Technology recipients Category:People from King County, Washington Category:Windows people

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birth name	Michael Francis Moore
birth date	April 23, 1954
birth place	Flint, Michigan, United States
years active	1972–present
occupation	Actor, director, screenwriter, producer
Religion	Roman Catholic
Spouse	Kathleen Glynn (1991–present)
alma mater
website	}}

Michael Francis Moore (born April 23, 1954) is an American filmmaker, author, social critic and activist. He is the director and producer of ''Fahrenheit 9/11'', which is the highest-grossing documentary of all time. His films ''Bowling for Columbine'' and ''Sicko'' also place in the top ten highest-grossing documentaries. In September 2008, he released his first free movie on the Internet, ''Slacker Uprising'', which documented his personal quest to encourage more Americans to vote in presidential elections. He has also written and starred in the TV shows ''TV Nation'' and ''The Awful Truth''.

Moore criticizes globalization, large corporations, assault weapon ownership, U.S. Presidents Bill Clinton and George W. Bush, the Iraq War, the American health care system, and capitalism in his written and cinematic works.

Personal life

Moore was born in Flint, Michigan, and raised in Davison, a suburb of Flint, by parents Veronica (née Wall), a secretary, and Frank Moore, an automotive assembly-line worker. At that time, the city of Flint was home to many General Motors factories, where his parents and grandfather worked. His uncle LaVerne was one of the founders of the United Automobile Workers labor union and participated in the Flint Sit-Down Strike.

Moore was brought up Catholic, attended parochial St. John's Elementary School for primary school and later attended St. Paul's Seminary in Saginaw, Michigan, for a year. He then attended Davison High School, where he was active in both drama and debate, graduating in 1972. As a member of the Boy Scouts of America, he achieved the rank of Eagle Scout. At the age of 18, he was elected to the Davison school board.

Since 1990, Moore has been married to producer Kathleen Glynn, with whom he has a stepdaughter named Natalie. Moore is a Catholic, but has said he disagrees with church teaching on subjects such as abortion and same-sex marriage.

Following the Columbine High School massacre, Moore acquired a life membership to the National Rifle Association (NRA). Moore said that he initially intended to become the NRA's president and dismantle it, but he soon dismissed the plan as too difficult. Observers such as Dave Kopel noted that there was no chance of that happening; authors David T. Hardy and Jason Clarke wrote about how Moore failed to discover that the NRA selects a president not by membership vote but by a vote of the board of directors.

In 2005 ''Time'' magazine named Moore one of the world's 100 most influential people. Also in 2005, Moore started the annual Traverse City Film Festival in Traverse City, Michigan.

Career

After dropping out of the University of Michigan–Flint following his freshman year (where he wrote for the student newspaper ''The Michigan Times''), Moore worked at the local Buick plant. At 22 he founded the alternative weekly magazine ''The Flint Voice'', which soon changed its name to ''The Michigan Voice'' as it expanded to cover the entire state. In 1986, when Moore became the editor of ''Mother Jones'', a liberal political magazine, he moved to California and ''The Michigan Voice'' was shut down. After four months at ''Mother Jones'', Moore was fired. Matt Labash of ''The Weekly Standard'' reported this was for refusing to print an article by Paul Berman that was critical of the Sandinista human rights record in Nicaragua. Moore refused to run the article, believing it to be inaccurate. "The article was flatly wrong and the worst kind of patronizing bullshit. You would scarcely know from it that the United States had been at war with Nicaragua for the last five years." Moore believes that ''Mother Jones'' fired him because of the publisher's refusal to allow him to cover a story on the GM plant closings in his hometown of Flint, Michigan. He responded by putting laid-off GM worker Ben Hamper (who was also writing for the same magazine at the time) on the magazine's cover, leading to his termination. Moore sued for wrongful dismissal, and settled out of court for $58,000, providing him with seed money for his first film, ''Roger & Me.''

Directing/producing

; ''Roger & Me'': Moore first became famous for his 1989 film, ''Roger & Me'', a documentary about what happened to Flint, Michigan, after General Motors closed its factories and opened new ones in Mexico, where the workers were paid much less. Since then Moore has been known as a critic of the neoliberal view of globalization. "Roger" is Roger B. Smith, former CEO and president of General Motors.

; ''Pets or Meat: The Return to Flint'': (1992) is a short (23-minute) documentary film that was aired on PBS. It is based on the feature-length film ''Roger & Me'' (1989) by Michael Moore. The film's title refers to Rhonda Britton, a Flint, Michigan, resident featured in both the 1989 and 1992 films who sells rabbits as either pets or meat.

; ''Canadian Bacon'': In 1995, Moore released a satirical film, ''Canadian Bacon'', which features a fictional US president (played by Alan Alda) engineering a fake war with Canada in order to boost his popularity. It is noted for containing a number of Canadian and American stereotypes, and for being Moore's only non-documentary film. The film is also one of the last featuring Canadian-born actor John Candy, and also features a number of cameos by other Canadian actors. In the film, several potential enemies for America's next great campaign are discussed by the president and his cabinet. (The scene was strongly influenced by the Stanley Kubrick film ''Dr. Strangelove.'') The President comments that declaring war on Canada was as ridiculous as declaring war on international terrorism. His military adviser, played by Rip Torn, quickly rebuffs this idea, saying that no one would care about "... a bunch of guys driving around blowing up rent-a-cars."

; ''The Big One'': In 1997, Moore directed ''The Big One'', which documents the tour publicizing his book ''Downsize This! Random Threats from an Unarmed American'', in which he criticizes mass layoffs despite record corporate profits. Among others, he targets Nike for outsourcing shoe production to Indonesia.

; ''Bowling for Columbine'': Moore's 2002 film, ''Bowling for Columbine'', probes the culture of guns and violence in the United States, taking as a starting point the Columbine High School massacre of 1999. ''Bowling for Columbine'' won the Anniversary Prize at the 2002 Cannes Film Festival and France's César Award as the Best Foreign Film. In the United States, it won the 2002 Academy Award for Documentary Feature. It also enjoyed great commercial and critical success for a film of its type and became, at the time, the highest-grossing mainstream-released documentary (a record now held by Moore's ''Fahrenheit 9/11''). It was praised by some for illuminating a subject avoided by the mainstream media.

; ''Fahrenheit 9/11'': ''Fahrenheit 9/11'' examines America in the aftermath of the September 11, 2001 attacks, particularly the record of the Bush administration and alleged links between the families of George W. Bush and Osama bin Laden. ''Fahrenheit'' was awarded the ''Palme d'Or'', the top honor at the 2004 Cannes Film Festival; it was the first documentary film to win the prize since 1956. Moore later announced that ''Fahrenheit 9/11'' would not be in consideration for the 2005 Academy Award for Documentary Feature, but instead for the Academy Award for Best Picture. He stated he wanted the movie to be seen by a few million more people via a television broadcast prior to election day. According to Moore, "Academy rules forbid the airing of a documentary on television within nine months of its theatrical release", and since the November 2 election was fewer than nine months after the film's release, it would have been disqualified for the Documentary Oscar. However, Fahrenheit received no Oscar nomination for Best Picture. The title of the film alludes to the classic book ''Fahrenheit 451'' about a future totalitarian state in which books are banned; according to the book, paper begins to burn at 451 degrees Fahrenheit. The pre-release subtitle of the film confirms the allusion: "The temperature at which freedom burns." At the box office, as of 2010 ''Fahrenheit 9/11'' is the highest-grossing documentary of all time, taking in over US$200 million worldwide, including United States box office revenue of almost US$120 million. In February 2011, Moore sued producers Bob and Harvey Weinstein for US$2.7 million in unpaid profits from the film, claiming they used "Hollywood accounting tricks" to avoid paying him the money.

; ''Sicko'': Moore directed this film about the American health care system, focusing particularly on the managed-care and pharmaceutical industries. At least four major pharmaceutical companies — Pfizer, Eli Lilly, AstraZeneca, and GlaxoSmithKline — ordered their employees not to grant any interviews to Moore. According to Moore on a letter at his website, "roads that often surprise us and lead us to new ideas—and challenge us to reconsider the ones we began with have caused some minor delays." The film premiered at the Cannes Film Festival on May 19, 2007, receiving a lengthy standing ovation, and was released in the U.S. and Canada on June 29, 2007. The film was the subject of some controversy when it became known that Moore went to Cuba with chronically ill September 11th rescue workers to shoot parts of the film. The United States is looking into whether this violates the trade embargo. The film is currently ranked the fourth highest grossing documentary of all time and received an Academy Award nomination for Best Documentary Feature.

; ''Captain Mike Across America'':Moore takes a look at the politics of college students in what he calls "Bush Administration America" with this film shot during Moore's 60-city college campus tour in the months leading up to the 2004 election. The film was later re-edited by Moore into ''Slacker Uprising''.

; ''Capitalism: A Love Story'': On September 23, 2009, Moore released a new movie titled ''Capitalism: A Love Story'', which looks at the late-2000s financial crisis and the U.S. economy during the transition between the incoming Obama Administration and the outgoing Bush Administration. Addressing a press conference at its release, Moore said, "Democracy is not a spectator sport, it's a participatory event. If we don't participate in it, it ceases to be a democracy. So Obama will rise or fall based not so much on what he does but on what we do to support him."

Writing

Moore has written or co-written eight non-fiction books, mostly on similar subject matter to his documentaries. ''Stupid White Men'' (2001), is ostensibly a critique of American domestic and foreign policy but, by Moore's own admission, is also "a book of political humor." ''Dude, Where's My Country?'' (2003), is an examination of the Bush family's relationships with Saudi royalty, the Bin Laden family, and the energy industry, and a call-to-action for liberals in the 2004 election. Several of his works have made bestseller lists.

Acting

Moore has dabbled in acting, following a 2000 supporting role in ''Lucky Numbers'' as the cousin of Lisa Kudrow's character, who agrees to be part of the scheme concocted by John Travolta's character. He also had a cameo in his ''Canadian Bacon'' as an anti-Canada activist. In 2004, he did a cameo, as a news journalist, in ''The Fever'', starring Vanessa Redgrave in the lead.

Television

Between 1994 and 1995, he directed and hosted the BBC television series ''TV Nation'', which followed the format of news magazine shows but covered topics they avoid. The series aired on BBC2 in the UK. The series was also aired in the US on NBC in 1994 for 9 episodes and again for 8 episodes on Fox in 1995.

His other major series was ''The Awful Truth'', which satirized actions by big corporations and politicians. It aired on Channel 4 in the UK, and the Bravo network in the US, in 1999 and 2000. Moore won the Hugh M. Hefner First Amendment Award in Arts and Entertainment for being the executive producer and host of ''The Awful Truth'', where he was also described as "muckraker, author and documentary filmmaker".

Another 1999 series, ''Michael Moore Live'', was aired in the UK only on Channel 4, though it was broadcast from New York. This show had a similar format to ''The Awful Truth'', but also incorporated phone-ins and a live stunt each week.

Music videos

Moore has directed several music videos, including two for Rage Against the Machine for songs from ''The Battle of Los Angeles'': "Sleep Now in the Fire" and "Testify". He was threatened with arrest during the shooting of "Sleep Now in the Fire", which was filmed on Wall Street; the city of New York had denied the band permission to play there, although the band and Moore had secured a federal permit to perform.

He also directed the videos for R.E.M. single "All the Way to Reno (You're Gonna Be a Star)" in 2001 and the System of a Down song "Boom!".

Appearances in other documentaries

Moore appeared in ''The Drugging of Our Children'', a 2005 documentary about over-prescription of psychiatric medication to children and teenagers, directed by Gary Null a proponent of Alternative Medicine. In the film Moore agrees with Gary Null that Ritalin and other similar drugs are over-prescribed, saying that they are seen as a "pacifier".

Moore appeared on fellow Flint natives Grand Funk Railroad's edition of Behind The Music.

Moore appeared as an off-camera interviewer in ''Blood in the Face'', a 1991 documentary about white supremacy groups. At the center of the film is a neo-Nazi gathering in Michigan.

Moore appeared in ''The Yes Men'', a 2003 documentary about two men who pose as the World Trade Organization. He appears during a segment concerning working conditions in Mexico and Latin America.

Moore briefly appears in Alex Jones's documentary ''Martial Law 9/11: Rise of the Police State''. Jones criticises Moore for not going into more depth about the World Trade Center attacks in ''Fahrenheit 9/11'', particularly about NORAD standing down, and for portraying George W. Bush as an unassuming frontman instead of an active conspirator in 9/11. Jones manages to ask Moore why he didn't mention NORAD standing down, and Moore swiftly answers that "it would be un-American".

Moore was interviewed for the 2004 documentary, ''The Corporation.'' One of his highlighted quotes was: "The problem is the profit motive: for corporations, there's no such thing as 'enough'".

Moore appeared in the 2006 documentary ''I'm Going to Tell You a Secret'', which chronicles Madonna's 2004 Re-Invention World Tour. Moore attended her show in New York City at Madison Square Garden.

Political views

Although Moore has been noted for his liberal political activism, he rejects the label "political activist" saying such a description is redundant as a citizen of a democracy: "I and you and everyone else has to be a political activist. If we're not politically active, it ceases to be a democracy." According to John Flesher of the Associated Press, Moore is known for his "fiery left-wing populism," and publications such as the Socialist Worker Online have hailed him as the "new Tom Paine."

Moore was a high-profile guest at both the 2004 Democratic National Convention and the 2004 Republican National Convention, chronicling his impressions in ''USA Today''. He was criticized in a speech by Republican Senator John McCain as "a disingenuous film-maker." Moore laughed and waved as Republican attendees jeered, later chanting "four more years." Moore gestured his thumb and finger at the crowd, which translates into "loser."

During September and October 2004, Moore spoke at universities and colleges in swing states during his "Slacker Uprising Tour". The tour gave away ramen and underwear to students who promised to vote. One stop during the tour was Utah Valley State College. A fight for his right to speak resulted in massive public debates and a media blitz. The Utah event was chronicled in the documentary film ''This Divided State''.

Despite having supported Ralph Nader in the 2000 presidential election, Moore urged Nader not to run in 2004 so as not to split the left vote. On ''Real Time with Bill Maher'', Moore and Maher knelt before Nader to plead with him to stay out of the race.

Moore drew attention in 2004 when he used the term "deserter" when he introduced Retired Army Gen. Wesley K. Clark at a Democratic Presidential debate in New Hampshire. Noting that Clark had been a champion debater at West Point, Moore told a laughing crowd, "I know what you're thinking. I want to see that debate" between Clark and [George W.] Bush -- "the general versus the deserter." Moore said he was referring to published reports in several media outlets including ''The Boston Globe'' which had reported that "there is strong evidence that Bush performed no military service as required when he moved from Houston to Alabama to work on a U.S. Senate campaign from May to November 1972."

On April 21, 2008, Moore endorsed Barack Obama for President, stating that Hillary Clinton's recent actions had been "disgusting." Moore is an active supporter of the Occupy Wall Street protest in New York City and spoke with the OWS protesters on September 26, 2011. On October 29, 2011, he spoke at the Occupy Oakland protest site to express his support.

Criticism

Filmmaker and adjunct professor at the School of Cinematic Arts of the University of Southern California Mitchell Block says that Moore's documentary subjects "are being presented in a false light". Harlan Jacobson, editor of ''Film Comment'' magazine, said that Moore muddled the chronology in ''Roger & Me'' to make it seem that events that took place before G.M.’s layoffs were a consequence of them. Critic Roger Ebert defended Moore's manipulation of the timeline as an artistic and stylistic choice that had less to do with his credibility as a filmmaker and more to do with the flexibility of film as a medium to express a satiric viewpoint.

Published work

Bibliography

Filmography

''Roger & Me'' (1989)

''Pets or Meat: The Return to Flint'' (1992) (TV)

''Canadian Bacon'' (1995)

''The Big One'' (1997)

''And Justice for All'' (1998) (TV)

''EDtv'' (1999) (cameo as himself)

''Lucky Numbers'' (2000) (as actor)

''Bowling for Columbine'' (2002)

''Fahrenheit 9/11'' (2004)

''Sicko'' (2007)

''Captain Mike Across America'' (2007)

''Slacker Uprising'' (2008)

''Capitalism: A Love Story'' (2009)

Television series

''TV Nation'' (1994)

''The Awful Truth'' (1999)

''Michael Moore Live'' (1999)

References

External links

The Populist: Michael Moore Can Make You Cry / ''New Yorker'' (16 February 2004)

America's Teacher by Naomi Klein, ''The Nation'', September 23, 2009

A 2007 NOW on PBS interview with Michael Moore

Michael Moore on His Life, His Films and His Activism - video interview by ''Democracy Now!''

Michael Moore on 2010 Midterm Elections, the Tea Party, and the Future of the Democratic Party

''In Depth'' interview with Moore, October 2, 2011

Category:1954 births Category:Living people

Category:Academy Award winners Category:Actors from Michigan Category:American alternative journalists Category:American anti–Iraq War activists Category:American anti-war activists Category:American documentary filmmakers Category:American film actors Category:American film directors Category:American health activists Category:American music video directors Category:American political writers Category:American social commentators Category:César Award winners Category:Eagle Scouts Category:Emmy Award winners Category:National Rifle Association members Category:People from Flint, Michigan Category:Roman Catholic activists Category:University of Michigan alumni Category:Writers from Michigan Category:Writers Guild of America Award winners Category:Youth empowerment individuals Category:Youth rights individuals Category:Progressivism in the United States Category:Music video directors

ar:مايكل مور ast:Michael Moore bg:Майкъл Мур ca:Michael Moore cs:Michael Moore cy:Michael Moore da:Michael Moore de:Michael Moore et:Michael Moore es:Michael Moore eo:Michael Moore eu:Michael Moore fa:مایکل مور fr:Michael Moore gv:Michael Moore gl:Michael Moore ko:마이클 무어 hr:Michael Moore io:Michael Moore id:Michael Moore it:Michael Moore he:מייקל מור la:Michael Moore lt:Michael Moore hu:Michael Moore ml:മൈക്കൽ മൂർ nl:Michael Moore (filmmaker) ja:マイケル・ムーア no:Michael Moore nn:Michael Moore oc:Michael Moore pl:Michael Moore pt:Michael Moore ro:Michael Moore ru:Мур, Майкл simple:Michael Moore sk:Michael Moore sr:Мајкл Мур sh:Michael Moore fi:Michael Moore sv:Michael Moore tr:Michael Moore uk:Майкл Мур yi:מייקל מאור zh:麥可·摩爾

name	Milton Friedman
school tradition	Chicago School of Economics
color	maroon
birth date	July 31, 1912
birth place	Brooklyn, New York
death date	November 16, 2006
death place	San Francisco, California
nationality	American
institution	Hoover Institution (1977–2006)University of Chicago (1946–77)Columbia University (1937–41, 1943–45, 1964–65)NBER (1937–40)
field	Economics
alma mater	Columbia University (Ph.D.), 1946, University of Chicago (M.A.), 1933 Rutgers University (B.A.), (1932)| influences Adam Smith, Irving Fisher, Frank Knight, Murray Rothbard, Jacob Viner, Harold Hotelling, Arthur Burns, Friedrich Hayek, Homer Jones, Ludwig von Mises, Henry Simons, George Stigler
opposed	John Maynard Keynes, John Kenneth Galbraith, Murray Rothbard
influenced	Margaret Thatcher, Alan Greenspan, David D. Friedman, Anna J. Schwartz, Ben Bernanke, Gary Becker, Thomas Sowell, Harry Markowitz, Chicago Boys, William F. Buckley, Jr., Cato Institute, Ron Paul
contributions	Price theory, Monetarism, applied macroeconomics, floating exchange rates, volunteer military, Permanent income hypothesis, Friedman test
awards	John Bates Clark Medal (1951) Nobel Memorial Prize in Economics (1976)Presidential Medal of Freedom (1988)National Medal of Science (1988)
signature	MiltonFriedman Autograph.jpg ‎ }}

Milton Friedman (July 31, 1912 – November 16, 2006) was an American economist, statistician, and author who taught at the University of Chicago for more than three decades. He was a recipient of the Nobel Memorial Prize in Economic Sciences, and is known for his research on consumption analysis, monetary history and theory, and the complexity of stabilization policy. As a leader of the Chicago school of economics, he influenced the research agenda of the economics profession. A survey of economists ranked Friedman as the second most popular economist of the twentieth century behind John Maynard Keynes, and ''The Economist'' described him as "the most influential economist of the second half of the 20th century…possibly of all of it."

Friedman's challenges to what he later called "naive Keynesian" (as opposed to New Keynesian) theory began with his 1950s reinterpretation of the consumption function, and he became the main advocate opposing activist Keynesian government policies. In the late 1960s he described his own approach (along with all of mainstream economics) as using "Keynesian language and apparatus" yet rejecting its "initial" conclusions. During the 1960s he promoted an alternative macroeconomic policy known as "monetarism". He theorized there existed a "natural" rate of unemployment, and argued that governments could increase employment above this rate (e.g., by increasing aggregate demand) only at the risk of causing inflation to accelerate. He argued that the Phillips curve was not stable and predicted what would come to be known as stagflation. Though opposed to the existence of the Federal Reserve, Friedman argued that, given that it does exist, a steady, small expansion of the money supply was the only wise policy.

Friedman was an economic adviser to conservative President Ronald Reagan. His political philosophy extolled the virtues of a free market economic system with minimal intervention. He once stated that his role in eliminating U.S. conscription was his proudest accomplishment, and his support for school choice led him to found The Friedman Foundation for Educational Choice. In his 1962 book ''Capitalism and Freedom'', Friedman advocated policies such as a volunteer military, freely floating exchange rates, abolition of medical licenses, a negative income tax, and education vouchers. His ideas concerning monetary policy, taxation, privatization and deregulation influenced government policies, especially during the 1980s. His monetary theory influenced the Federal Reserve's response to the global financial crisis.

Milton Friedman's works include many monographs, books, scholarly articles, papers, magazine columns, television programs, videos, and lectures, cover a broad range of topics of microeconomics, macroeconomics, economic history, and public policy issues. His books and essays were widely read, and have had an international influence, including in Communist countries.

Early life

Friedman was born in Brooklyn, New York, to recent Jewish immigrants Jenő Friedman and Sára Landau from Beregszász in Austria-Hungary (now Berehove in Ukraine), both of whom worked as dry goods merchants. Shortly after Milton's birth, the family relocated to Rahway, New Jersey. A talented student, Friedman graduated from Rahway High School in 1928, just before his 16th birthday.

Friedman graduated from Rutgers University in New Jersey, where he specialized in mathematics and initially intended to become an actuary. During his time at Rutgers, Friedman became influenced by two economics professors, Arthur F. Burns and Homer Jones, who convinced him that modern economics could help end the Great Depression. After graduating from Rutgers in 1932, Friedman was offered two scholarships to do graduate work; one being Mathematics at Brown University and the other being Economics at the University of Chicago.Friedman chose the latter, thus earning an M.A. in 1933. He was strongly influenced by Jacob Viner, Frank Knight, and Henry Simons. It was at Chicago that Friedman met his future wife, economist Rose Director. During 1933–34 he had a fellowship at Columbia University, where he studied statistics with renowned statistician and economist Harold Hotelling. He was back in Chicago for 1934–35, spending the year working as a research assistant for Henry Schultz, who was then working on ''Theory and Measurement of Demand''. That year, Friedman formed what would prove to be lifelong friendships with George Stigler and W. Allen Wallis.

Public service

Friedman was initially unable to find academic employment, so during 1935, he followed his friend W. Allen Wallis to Washington, where Franklin D. Roosevelt's New Deal was "a lifesaver" for many young economists. At this stage, Friedman said that he and his wife "regarded the job-creation programs such as the WPA, CCC, and PWA appropriate responses to the critical situation," but not "the price- and wage-fixing measures of the National Recovery Administration and the Agricultural Adjustment Administration." Foreshadowing his later ideas, he believed price controls interfered with an essential signaling mechanism to help resources be used where they were most valued. Indeed, Friedman later concluded that all government intervention associated with the New Deal was "the wrong cure for the wrong disease," arguing that the money supply should simply have been expanded, instead of contracted. In the publication ''Monetary History of the United States'' by Friedman and Anna Schwartz, they argue that the Great Depression was caused by monetary contraction, which was the consequence of poor policymaking by the Federal reserve and the continuous crises of the banking system.

During 1935, he began work for the National Resources Committee, which was then working on a large consumer budget survey. Ideas from this project later became a part of his ''Theory of the Consumption Function''. Friedman began employment with the National Bureau of Economic Research during autumn 1937 to assist Simon Kuznets in his work on professional income. This work resulted in their jointly authored publication ''Incomes from Independent Professional Practice'', which introduced the concepts of permanent and transitory income, a major component of the Permanent Income Hypothesis that Friedman worked out in greater detail in the 1950s. The book hypothesizes that professional licensing artificially restricts the supply of services and raises prices.

During 1940, Friedman was appointed an assistant professor teaching Economics at the University of Wisconsin–Madison, but encountered antisemitism in the Economics department and decided to return to government service. Friedman spent 1941–43 working on wartime tax policy for the Federal Government, as an advisor to senior officials of the United States Department of the Treasury. As a Treasury spokesman during 1942 he advocated a Keynesian policy of taxation, and during this time he helped to invent the payroll withholding tax system, since the federal government badly needed money in order to fight the Second World War. He later said in an interview, "I have no apologies for it, but I really wish we hadn't found it necessary and I wish there were some way of abolishing withholding now."

Academic career

Early years

During 1943, Friedman joined the Division of War Research at Columbia University (headed by W. Allen Wallis and Harold Hotelling), where he spent the rest of the war years working as a mathematical statistician, focusing on problems of weapons design, military tactics, and metallurgical experiments. Then during 1945, Friedman submitted ''Incomes from Independent Professional Practice'' (co-authored with Kuznets and completed during 1940) to Columbia as his doctoral dissertation. The university awarded him a Ph.D. during 1946. Friedman spent the 1945–46 academic year teaching at the University of Minnesota (where his friend George Stigler was employed). On February 12, 1945, his son, David D. Friedman was born.

University of Chicago

During 1946, Friedman accepted an offer to teach economic theory at the University of Chicago (a position opened by departure of his former professor Jacob Viner to Princeton University). Friedman would work for the University of Chicago for the next 30 years. There he helped build an intellectual community that produced a number of Nobel Prize winners, known collectively as the Chicago School of Economics.

At that time, Arthur Burns, who was then the head of the National Bureau of Economic Research, asked Friedman to rejoin the Bureau's staff. He accepted the invitation, and assumed responsibility for the Bureau's inquiry into the role of money in the business cycle. As a result, he initiated the "Workshop in Money and Banking" (the "Chicago Workshop"), which promoted a revival of monetary studies. During the latter half of the 1940s, Friedman began a collaboration with Anna Schwartz, an economic historian at the Bureau, that would ultimately result in the 1963 publication of a book co-authored by Friedman and Schwartz, ''A Monetary History of the United States, 1867–1960''.

Friedman spent the 1954–55 academic year as a Fulbright Visiting Fellow at Gonville and Caius College, Cambridge. At the time, the Cambridge economics faculty was divided into a Keynesian majority (including Joan Robinson and Richard Kahn) and an anti-Keynesian minority (headed by Dennis Robertson). Friedman speculates that he was invited to the fellowship because his views were unacceptable to both of the Cambridge factions. Later his weekly columns for ''Newsweek'' magazine (1966–84) were well read and increasingly influential among political and business people. From 1968 to 1978, he and Paul Samuelson participated in the Economics Cassette Series, a biweekly subscription series where the economist would discuss the days' issues for about a half hour at a time.

Friedman was an economic adviser to Republican presidential candidate Barry Goldwater during 1964.

Nobel memorial prize and retirement

In 1976 Friedman won the Nobel Memorial Prize in Economics "for his achievements in the fields of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilization policy." During the banquet speech he made a reference to “the Prize in Economic Sciences in Memory of Alfred Nobel”. In that he was the first recipient to do so, and it wasn’t until 2006 that a recipient of the prize called it by its proper name. During 1977, at age 65, Friedman retired from the University of Chicago after teaching there for 30 years. He and his wife moved to San Francisco where he became a visiting scholar at the Federal Reserve Bank of San Francisco. From 1977 on, he was affiliated with the Hoover Institution at Stanford University. During the same year, Friedman was approached by the Free To Choose Network and asked to create a television program presenting his economic and social philosophy. The Friedmans worked on this project for the next three years, and during 1980, the ten-part series, titled ''Free to Choose'', was broadcast by the Public Broadcasting Service (PBS). The companion book to the series (co-authored by Milton and his wife, Rose Friedman), also titled ''Free To Choose'', was the bestselling nonfiction book of 1980 and has since been translated into 14 foreign languages.

Friedman served as an unofficial adviser to Ronald Reagan during his 1980 presidential campaign, and then served on the President's Economic Policy Advisory Board for the rest of the Reagan Administration. During 1988, he received the National Medal of Science and Reagan honored him with the Presidential Medal of Freedom. Milton Friedman is known now as one of the most influential economists of the 20th century. Throughout the 1980s and 1990s, Friedman continued to write editorials and appear on television. He made several visits to Eastern Europe and to China, where he also advised governments.

Scholarly contributions

Economics

Friedman was best known for reviving interest in the money supply as a determinant of the nominal value of output, that is, the quantity theory of money. Monetarism is the set of views associated with modern quantity theory. Its origins can be traced back to the 16th-century School of Salamanca or even further; however, Friedman's contribution is largely responsible for its modern popularization. He co-authored, with Anna Schwartz, ''A Monetary History of the United States'' (1963), which was an examination of the role of the money supply and economic activity in U.S. history. A striking conclusion of their research was one regarding the role of money supply fluctuations as contributing to economic fluctuations. Several regression studies with David Meiselman during the 1960s suggested the primacy of the money supply over investment and government spending in determining consumption and output. These challenged a prevailing but largely untested view on their relative importance. Friedman's empirical research and some theory supported the conclusion that the short-run effect of a change of the money supply was primarily on output but that the longer-run effect was primarily on the price level.

Friedman was the main proponent of the monetarist school of economics. He maintained that there is a close and stable association between price inflation and the money supply, mainly that price inflation should be regulated with monetary deflation and price deflation with monetary inflation. He famously quipped that price deflation can be fought by "dropping money out of a helicopter."

Friedman's arguments were designed to counter popular claims that price inflation at the time was the result of increases in the price of oil, or increases in wages: as he wrote,

Friedman rejected the use of fiscal policy as a tool of demand management; and he held that the government's role in the guidance of the economy should be restricted severely. Friedman wrote extensively on the Great Depression, which he termed the Great Contraction, arguing that it had been caused by an ordinary financial shock whose duration and seriousness were greatly increased by the subsequent contraction of the money supply caused by the misguided policies of the directors of the Federal Reserve.

Friedman also argued for the cessation of government intervention in currency markets, thereby spawning an enormous literature on the subject, as well as promoting the practice of freely floating exchange rates. His close friend George Stigler explained, "As is customary in science, he did not win a full victory, in part because research was directed along different lines by the theory of rational expectations, a newer approach developed by Robert Lucas, also at the University of Chicago."

Friedman was also known for his work on the consumption function, the permanent income hypothesis (1957), which Friedman himself referred to as his best scientific work. This work contended that rational consumers would spend a proportional amount of what they perceived to be their permanent income. Windfall gains would mostly be saved. Tax reductions likewise, as rational consumers would predict that taxes would have to increase later to balance public finances. Other important contributions include his critique of the Phillips curve and the concept of the natural rate of unemployment (1968). This critique associated his name, together with that of Edmund Phelps, with the insight that a government that brings about greater inflation cannot permanently reduce unemployment by doing so. Unemployment may be temporarily lower, if the inflation is a surprise, but in the long run unemployment will be determined by the frictions and imperfections of the labor market.

Friedman's essay "The Methodology of Positive Economics" (1953) provided the epistemological pattern for his own subsequent research and to a degree that of the Chicago School. There he argued that economics as ''science'' should be free of value judgments for it to be objective. Moreover, a useful economic theory should be judged not by its descriptive realism but by its simplicity and fruitfulness as an engine of prediction. That is, students should measure the accuracy of its predictions, rather than the "soundness of its assumptions. His argument was part of an ongoing debate among such statisticians as Jerzy Neyman, Leonard Savage, and Ronald Fisher.

Statistics

One of his most famous contributions to statistics is sequential sampling. "Friedman did statistical work at the Division of War Research at Columbia. He and his colleagues came up with a sampling technique, known as sequential sampling, which became, in the words of ''The New Palgrave Dictionary of Economics'', 'the standard analysis of quality control inspection.' The dictionary adds: 'Like many of Friedman’s contributions, in retrospect it seems remarkably simple and obvious to apply basic economic ideas to quality control; that however is a measure of his genius.'"

Other work

Friedman was an important member of the team during World War II that developed a new proximity fuse for anti-aircraft projectiles, which prevented shells from exploding unless they were near the object they are meant to destroy.

Public policy positions

Federal reserve

Friedman believed that if the money supply was to be centrally controlled (as by the Federal Reserve) that the preferable way to do it would be with a mechanical system that would keep the quantity of money increasing at a steady rate. However, instead of government involvement at all, he was open to a "real," non-government, gold standard where money is produced by the private market: "A real gold standard is thoroughly consistent with [classical] liberal principles and I, for one, am entirely in favor of measures promoting its development." He did however add this caveat, "Let me emphasize that this note is not a plea for a return to a gold standard.... I regard a return to a gold standard as neither desirable nor feasible—with the one exception that it might become feasible if the doomsday predictions of hyperinflation under our present system should prove correct." He said the reason that it was not feasible was because "there is essentially no government in the world that is willing to surrender control over its domestic monetary policy." However, it could be done if "you could re-establish a world in which government's budget accounted for 10 percent of the national income, in which laissez-faire reigned, in which governments did not interfere with economic activities and in which full employment policies had been relegated to the dustbin..."

He was critical of the Federal Reserve's influence on the economics profession. In a 1993 letter to University of Texas economics professor and former House Banking Committee investigator Robert Auerbach, Friedman wrote:

I cannot disagree with you that having something like 500 economists is extremely unhealthy. As you say, it is not conducive to independent, objective research. You and I know there has been censorship of the material published. Equally important, the location of the economists in the Federal Reserve has had a significant influence on the kind of research they do, biasing that research toward noncontroversial technical papers on method as opposed to substantive papers on policy and results.

School choice

In his 1955 article "The Role of Government in Education" Friedman proposed supplementing publicly operated schools with privately run but publicly funded schools through a system of school vouchers. Reforms similar to those proposed in the article were implemented in, for example, Chile in 1981 and Sweden in 1992. In 1996 Friedman, together with his wife, founded the The Foundation for Educational Choice to advocate school choice and vouchers.

Conscription

Milton Friedman was a major proponent of a volunteer military, stating that the draft was "inconsistent with a free society." In ''Capitalism and Freedom'', he argued that conscription is inequitable and arbitrary, preventing young men from shaping their lives as they see fit. During the Nixon administration he headed the committee to research a conversion to paid/volunteer armed force. He would later state that his role in eliminating the conscription in the United States was his proudest accomplishment. Friedman did, however, believe a nation could compel military ''training'' as a reserve in case of war time.

Libertarianism and the Republican party

He served as a member of President Reagan's Economic Policy Advisory Board during 1981. During 1988, he received the Presidential Medal of Freedom and the National Medal of Science. He said that he was a libertarian philosophically, but a member of the U.S. Republican Party for the sake of "expediency" ("I am a libertarian with a small 'l' and a Republican with a capital 'R.' And I am a Republican with a capital 'R' on grounds of expediency, not on principle.") But, he said, "I think the term classical liberal is also equally applicable. I don't really care very much what I'm called. I'm much more interested in having people thinking about the ideas, rather than the person."

Public goods and monopoly

Friedman was supportive of the state provision of some public goods that private businesses are not considered as being able to provide. However, he argued that many of the services performed by government could be performed better by the private sector. Above all, if some public goods are provided by the state, he believed that they should not be a legal monopoly where private competition is prohibited; for example, he wrote:

Welfare

Friedman made newspaper headlines by proposing a negative income tax to replace the existing welfare system, and then opposing a bill to implement it because the bill proposed to supplement the existing system rather than replace it.

Drugs

Friedman also supported libertarian policies such as legalization of drugs and prostitution. During 2005, Friedman and more than 500 other economists advocated discussions regarding the economic benefits of the legalization of marijuana.

Economic freedom

Michael Walker of the Fraser Institute and Friedman hosted a series of conferences from 1986 to 1994. The goal was to create a clear definition of economic freedom and a method for measuring it. Eventually this resulted in the first report on worldwide economic freedom, ''Economic Freedom in the World''. This annual report has since provided data for numerous peer-reviewed studies and has influenced policy in several nations.

Along with sixteen other distinguished economists he opposed the Copyright Term Extension Act and filed an amicus brief in ''Eldred v. Ashcroft''. He supported the inclusion of the word "no-brainer" in the brief.

Friedman argued for stronger basic legal (constitutional) protection of economic rights and freedoms in order to further promote industrial-commercial growth and prosperity and buttress democracy and freedom and the rule of law generally in society.

Honors, recognition, and influence

Friedman allowed the Cato Institute to use his name for its biannual Milton Friedman Prize for Advancing Liberty beginning in 2001. A Friedman Prize was given to the late British economist Peter Bauer during 2002, Peruvian economist Hernando de Soto during 2004, Mart Laar, former Estonian Prime Minister during 2006 and a young Venezuelan student Yon Goicoechea during 2008. His wife Rose, sister of Aaron Director, with whom he initiated the Friedman Foundation for Educational Choice, served on the international selection committee. Friedman was also a recipient of the Nobel Prize in Economics.

Hong Kong

Friedman once said, "If you want to see capitalism in action, go to Hong Kong." He wrote in 1990 that the Hong Kong economy was perhaps the best example of a free market economy.

One month before his death, he wrote the article "Hong Kong Wrong – What would Cowperthwaite say?" in the ''Wall Street Journal'', criticizing Donald Tsang, the Chief Executive of Hong Kong, for abandoning "positive noninterventionism." Tsang later said he was merely changing the slogan to "big market, small government," where small government is defined as less than 20% of GDP. In a debate between Tsang and his rival, Alan Leong, before the 2007 Chief Executive election, Leong introduced the topic and jokingly accused Tsang of angering Friedman to death.

Chile

During 1975, two years after the military coup that ended the government of Salvador Allende, the economy of Chile experienced a crisis. Friedman accepted the invitation of a private foundation to visit Chile and speak on principles of economic freedom. He spent seven days in Chile giving a series of lectures. One of the lectures was entitled "The Fragility of Freedom," and according to Friedman, "dealt with precisely the threat to freedom from a centralized military government." Friedman encapsulated his philosophy in a lecture at Universidad Católica de Chile, saying: "free markets would undermine political centralization and political control."

Friedman also met with military dictator President Augusto Pinochet during his visit. He never served as an adviser to the Chilean government, but did write a letter to Pinochet outlining what Friedman considered the two key economic problems of Chile. The letter listed a series of monetary and fiscal measures deemed a "shock program" to end hyperinflation and promote a market economy. His letter suggested (among other, more specific prescriptions) that a brief period of cutting government spending would reduce its fiscal deficit and thus reduce the rate of increase of the quantity of money in the country that was driving inflation. The economist did however admit his knowledge of Chile was "too limited to enable [him] to be precise or comprehensive" and that the measures he outlined were "to be taken as illustrative." Friedman felt that there might be a brief period ("measured in months") of higher unemployment, followed by recovery once inflation was tamed. His letter also suggested that cutting spending to reduce the fiscal deficit would result in less transitional unemployment than raising taxes to do so. Later, Friedman said he believed that market reforms would undermine Pinochet. Chilean graduates of the Chicago School of Economics and its new local chapters had been appointed to important positions in the new government soon after the coup, which allowed them to advise Pinochet on economic policies in accord with the School's economic doctrine.

According to his critics, Friedman did not criticize Pinochet's dictatorship at the time, nor the assassinations, illegal imprisonments, torture, or other atrocities that were well known by then. In his 1980 documentary ''Free to Choose'', he said the following: "Chile is not a politically free system, and I do not condone the system. But the people there are freer than the people in Communist societies because government plays a smaller role. ... The conditions of the people in the past few years has been getting better and not worse. They would be still better to get rid of the junta and to be able to have a free democratic system." In 1984 Friedman proclaimed he has "never refrained from criticizing the political system in Chile."

Friedman defended his activity in Chile on the grounds that, in his opinion, the adoption of free market policies not only improved the economic situation of Chile but also contributed to the amelioration of Pinochet's rule and to the eventual transition to a democratic government during 1990. That idea is included in ''Capitalism and Freedom'', in which he declared that economic freedom is not only desirable in itself but is also a necessary condition for political freedom. He stressed that the lectures he gave in Chile were the same lectures he later gave in China and other socialist states. During the 2000 PBS documentary ''The Commanding Heights'' (based on the book), Friedman continued to argue that criticism over his role in Chile missed his main contention that freer markets resulted in freer people, and that Chile's unfree economy had caused the military government. Friedman suggested that the economic liberalization he advocated caused the end of military rule and a free Chile.

Iceland

Friedman visited Iceland during the autumn of 1984, met with important Icelanders and gave a lecture at the University of Iceland on the "tyranny of the ''status quo''." He participated in a lively television debate on August 31, 1984 with socialist intellectuals, including Ólafur Ragnar Grímsson, who later became the president of Iceland. When they complained that a fee was charged for attending his lecture at the University and that hitherto, lectures by visiting scholars had been free-of-charge, Friedman replied that previous lectures had not been free-of-charge in a meaningful sense: Lectures always have related costs. What mattered was whether attendees or non-attendees covered those costs. Friedman thought that it was fairer that only those who attended paid. In this discussion Friedman also stated that he did not receive any money for delivering that lecture.

Estonia

Although Friedman never visited Estonia, his book ''Free to Choose'' exercised a great influence on that nation's then 32-year-old prime minister, Mart Laar, who has claimed that it was the only book on economics he had read before taking office. Laar's reforms are often credited with responsibility for transforming Estonia from an impoverished Soviet Republic to the "Baltic Tiger." A prime element of Laar's program was introduction of the flat tax. Laar won the 2006 Milton Friedman Prize for Advancing Liberty, awarded by the Cato Institute.

United Kingdom

Milton Friedman influenced the thinking of Alan Walters and Patrick Minford, two of Margaret Thatcher's main macroeconomic advisers. See the book ''Margaret Thatcher's Revolution: How it Happened and What it Meant'', edited by Subroto Roy & John Clarke, Continuum 2005

Criticism

Keynesian criticism

During the financial crisis of 2007–2010, several Keynesian economists such as James Galbraith and Joseph Stiglitz blamed the free market philosophy of Friedman and the Chicago school for the economic turmoil.

After Friedman's death in 2006, Keynesian Nobel laureate Paul Krugman, praised Friedman as a "great economist and a great man," but criticized him by writing that "he slipped all too easily into claiming both that markets always work and that only markets work. It's extremely hard to find cases in which Friedman acknowledged the possibility that markets could go wrong, or that government intervention could serve a useful purpose."

Austrian school criticism

In 1971, libertarian economist Murray Rothbard criticized Friedman's efforts to make the government more efficient as detrimental to individual liberty, concluding "...as we examine Milton Friedman’s credentials to be the leader of free-market economics, we arrive at the chilling conclusion that it is difficult to consider him a free-market economist at all." Friedman's position on governmental control of money changed since 1971 when this criticism was made. In a 1995 interview in ''Reason'' magazine he said the "difference between me and people like Murray Rothbard is that, though I want to know what my ideal is, I think I also have to be willing to discuss changes that are less than ideal so long as they point me in that direction." He said he actually would "like to abolish the Fed," and points out that when he has written about the Fed it is simply his recommendations of how it should be run given that it exists.

Other criticism

In her book ''The Shock Doctrine: The Rise of Disaster Capitalism'', journalist and author Naomi Klein criticized Friedman's ideology and the principles that guided the economic restructuring that followed the military coups in countries such as Chile and Indonesia, drawing analogies between the way that Friedman proposed using the social "shock" of the coups to create an economic "blank slate" with Ewen Cameron's controversial medical experiments that used electroshock therapy to create a mental "blank slate" in patients with mental disorders. Based on the extent to which the application of neoliberal policies has contributed to income disparities and inequality, both Klein and Noam Chomsky have suggested that the primary role of neoliberalism was as an ideological cover for capital accumulation by multinational corporations. Chilean economist Orlando Letelier asserted that Pinochet's dictatorship resorted to oppression because of popular opposition to Chicago School policies in Chile.

Klein's book has been heavily criticized. In the October 2008 issue of Reason magazine, Swedish historian Johan Norberg called her book a "disastrous ... polemic" and criticized the book as exaggerating some facts, ignoring others subjecting Friedman to "the most malevolent distortions of a thinker's ideas in recent history." Norberg asserts that, in fact, "Friedman's view was the opposite of what Klein claims" and "twists [the] relationship [between Friedman and Pinochet's regime] beyond recognition," concluding that "Klein is dead wrong about Friedman." The New York Times said that Klein "accuses Friedman of being the godfather of a Mafia-like gang," stated that "her argument constantly overreaches because her goal is not really to tame capitalism so much as to taunt it" and that Klein is "blind to the necessary role of entrepreneurial capitalism in overcoming the inherent tendency of any established socialist system to lapse into stagnation."

Personal life

According to a 2007 article in ''Commentary'' magazine, his "parents were moderately observant [Jews], but Friedman, after an intense burst of childhood piety, rejected religion altogether." He described himself as an agnostic.

Friedman wrote extensively of his life and experiences, especially in 1998 in his memoirs with his wife Rose, titled ''Two Lucky People''. He died of heart failure at the age of 94 years in San Francisco on November 16, 2006. He was survived by his wife (who died on August 18, 2009) and their two children, David, who is a philosopher and anarcho-capitalist economist, and Janet. David's son, Patri Friedman, is the executive director of the Seasteading Institute.

See also

Works of Milton Friedman

Friedman–Savage utility function

Friedman rule

Friedman's k-percent rule

Friedman test

List of economists

List of Jewish Nobel laureates

List of notable Presidential Medal of Freedom recipients

History of economic thought

Notes

Bibliography

References

Butler, Eamonn. ''Milton Friedman'' (Harriman Economic Essentials) (2011)

Ebenstein, Alan O. ''Milton Friedman: a biography'' (2007)

Wood, John Cunningham, and Ronald N. Wood, ed. (1990) ''Milton Friedman: Critical Assessments'', v. 3. Scroll to chapter-preview links. Routledge.

Further reading

Friedman, Milton (1948). "A Monetary and Fiscal Framework for Economic Stability," '' American Economic Review'', 38(3), pp. 245-264. Also in Friedman (1953), pp. 133–56.

Friedman, Milton (1953). ''Essays in Positive Economics'', University of Chicago Press. Chapter- preview links.

Friedman, Milton (1959). ''A Program for Monetary Stability''. Fordham University Press. New York. TOC chapter-preview links.

"The Role of Monetary Policy." ''American Economic Review,'' Vol. 58, No. 1 (Mar., 1968), pp. 1–17 JSTOR presidential address to American Economics Association

External links

*''Booknotes'' interview with Friedman on the 50th Anniversary Edition of F.A. Hayek's ''Road to Serfdom'', November 20, 1994.

*''In Depth'' interview with Friedman, September 3, 2000

The Milton Friedman papers at the Hoover Institution Archives

Selected Bibliography for Milton Friedman at the University of Chicago Library

Inflation and Unemployment 1976 lecture at NobelPrize.org

Profile and Papers at Research Papers in Economics/RePEc

Milton Friedman, ''Commanding Heights'', PBS, October 1, 2000, interview, profile and video

Becker Friedman Institute at the University of Chicago

"Free To Choose" (1980) a PBS TV Series by Milton Friedman

Milton Friedman at the Cato Institute

Free to Choose Network

The Foundation for Educational Choice

Milton Fridman at Scarlett

Milton Friedman:Why Not a Volunteer Army?, ''New Individualist Review'', Spring 1967

The Social Responsibility of Business is to Increase its Profits, Milton Friedman, ''The New York Times Magazine'', September 13, 1970

Interview with Milton Friedman, Dominic Streatfeild, May 25, 2000, source material for ''Cocaine: An Unauthorised Biography''

Milton Friedman vs. The Fed Bailout by Michael Hirsh, ''Newsweek'', July 17, 2009

Four Deformations of the Apocalypse, David Stockman, ''The New York Times'', July 31, 2010

The Case for Free Trade by Milton and Rose Friedman

How to Cure Inflation : Milton Friedman

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name	Naomi Klein
birth date	May 08, 1970
birth place	Montreal, Quebec, Canada
occupation	Author, activist
subject	Alter-globalization, anti-war
website	naomiklein.org
spouse	Avi Lewis }}

Naomi Klein (born May 8, 1970) is a Canadian author and social activist known for her political analyses and criticism of corporate globalization.

Family

Klein was born in Montreal, Quebec and brought up in a Jewish family with a history of peace activism. Her parents had moved to Montreal from the U.S. in 1967 as war resisters to the Vietnam War. Her mother, documentary film-maker Bonnie Sherr Klein, is best known for her anti-pornography film ''Not a Love Story''. Her father, Michael Klein, is a physician and a member of Physicians for Social Responsibility. Her brother, Seth Klein, is director of the British Columbia office of the Canadian Centre for Policy Alternatives.

Her paternal grandparents were communists who began to turn against the Soviet Union after the Molotov-Ribbentrop Pact and had abandoned communism by 1956. In 1942 her grandfather Phil Klein, an animator at Disney, was fired after the Disney animators' strike, and went to work at a shipyard instead. Klein's father grew up surrounded by ideas of social justice and racial equality, but found it "difficult and frightening to be the child of Communists", a so-called red diaper baby.

Klein's husband, Avi Lewis, works as a TV journalist and documentary filmmaker. His parents are the writer and activist Michele Landsberg and politician and diplomat Stephen Lewis, son of David Lewis, one of the founders of the Canadian New Democratic Party, son in turn of Moishe Lewis, born Losz, a Jewish labour activist of "the Bund" who left Central Europe for Canada in 1921. Klein announced on March 5, 2012 that the couple is expecting their first child in June.

Early life

Klein spent much of her teenage years in shopping malls, obsessed with designer labels. As a child and teenager, she found it "very oppressive to have a very public feminist mother" and she rejected politics, instead embracing "full-on consumerism."

She has attributed her change in worldview to two events. One was when she was 17 and preparing for the University of Toronto, her mother had a stroke and became severely disabled. Naomi, her father and brother took care of Bonnie through the period in hospital and at home, making educational sacrifices to do so. That year off prevented her "from being such a brat." The next year, after beginning her studies at the University of Toronto, the second event occurred: the 1989 École Polytechnique massacre of female engineering students, which proved to be a wake-up call to feminism.

Klein's writing career started with contributions to ''The Varsity'', a student newspaper, where she served as editor-in-chief. After her third year at the University of Toronto, she dropped out of university to take a job at the ''Toronto Globe and Mail'', followed by an editorship at ''This Magazine.'' In 1995, she returned to the University of Toronto with the intention of finishing her degree but left the university for a journalism internship before acquiring the final credits required to complete her degree.

Major works

''No Logo''

In 2000, Klein published the book ''No Logo'', which for many became a manifesto of the anti-corporate globalization movement. In it, she attacks brand-oriented consumer culture and the operations of large corporations. She also accuses several such corporations of unethically exploiting workers in the world's poorest countries in pursuit of greater profits. In this book, Klein criticized Nike so severely that Nike published a point-by-point response. ''No Logo'' became an international bestseller, selling over one million copies in over 28 languages.

''Fences and Windows''

In 2002 Klein published ''Fences and Windows'', a collection of her articles and speeches written on behalf of the anti-globalization movement (all proceeds from the book go to benefit activist organizations through The Fences and Windows Fund).

''The Take''

In 2004, Klein and her husband, Avi Lewis, released a documentary film called ''The Take'' about factory workers in Argentina who took over a closed plant and resumed production, operating as a collective. The first African screening was in the Kennedy Road shack settlement in the South African city of Durban, where the Abahlali baseMjondolo movement began.

At least one article in ''Z Communications'' criticized ''The Take'' for its portrayal of the Argentine General and politician Juan Domingo Perón, which they felt portrayed him as a social democrat.

''The Shock Doctrine''

Klein's third book, ''The Shock Doctrine: The Rise of Disaster Capitalism'', was published on September 4, 2007, becoming an international and New York Times bestseller translated into 28 languages. The book argues that the free market policies of Nobel Laureate Milton Friedman and the Chicago School of Economics have risen to prominence in countries such as Chile under Pinochet, Russia under Yeltsin, and the United States (for example, the privatization of the New Orleans Public Schools after Hurricane Katrina). The book also argues that policy initiatives (for instance, the privatization of Iraq's economy under the Coalition Provisional Authority) were rushed through while the citizens of these countries were in shock from disasters, upheavals, or invasion.

Central to the book's thesis is the contention that those who wish to implement unpopular free market policies now routinely do so by taking advantage of certain features of the aftermath of major disasters, be they economic, political, military or natural in nature. The suggestion is that when a society experiences a major 'shock' there is a widespread desire for a rapid and decisive response to correct the situation; this desire for bold and immediate action provides an opportunity for unscrupulous actors to implement policies which go far beyond a legitimate response to disaster. The book suggests that when the rush to act means the specifics of a response will go unscrutinized, that is the moment when unpopular and unrelated policies will intentionally be rushed into effect. The book appears to claim that these shocks are in some cases, such as the Falklands War, intentionally encouraged or even manufactured.

Klein identifies the "shock doctrine", elaborating on Joseph Schumpeter, as the latest in capitalism's phases of "creative destruction".

''The Shock Doctrine'' was adapted into a short film of the same name, released onto YouTube. The film was directed by Jonás Cuarón, produced and co-written by his father Alfonso Cuarón. The video has been viewed over one million times.

The publication of ''The Shock Doctrine'' increased Klein's prominence, with the ''New Yorker'' judging her "the most visible and influential figure on the American left—what Howard Zinn and Noam Chomsky were thirty years ago." On February 24, 2009, the book was awarded the inaugural Warwick Prize for Writing from the University of Warwick in England. The prize carried a cash award of £50,000.

Iraq War criticism

Klein has written on various current issues, such as the Iraq War. In a September 2004 article for ''Harper's Magazine'', she argues that, contrary to popular belief, the Bush administration did have a clear plan for post-invasion Iraq, which was to build a completely unconstrained free market economy. She describes plans to allow foreigners to extract wealth from Iraq, and the methods used to achieve those goals. The 2008 film ''War, Inc.'' was partially inspired by her article, ''Baghdad Year Zero''.

Klein's August 2004 "Bring Najaf to New York", published in ''The Nation'', argued that Muqtada Al Sadr's Mahdi Army "represents the overwhelmingly mainstream sentiment in Iraq." She went on to say "Yes, if elected Sadr would try to turn Iraq into a theocracy like Iran, but for now his demands are for direct elections and an end to foreign occupation". Marc Cooper, a former ''Nation'' columnist, attacked the assertion that Al Sadr represented mainstream Iraqi sentiment and that American forces had brought the fight to the holy city of Najaf. Cooper wrote that "Klein should know better. All enemies of the U.S. occupation she opposes are not her friends. Or ours. Or those of the Iraqi people. I don’t think that Mullah Al Sadr, in any case, is much desirous of support issuing from secular Jewish feminist-socialists."

Criticism of Israeli policies

In March 2008, Klein was the keynote speaker at the first national conference of the Alliance of Concerned Jewish Canadians. In January 2009, during the Gaza War, Klein supported the Boycott, Divestment and Sanctions (BDS) campaign against Israel, arguing that "the best strategy to end the increasingly bloody occupation is for Israel to become the target of the kind of global movement that put an end to apartheid in South Africa."

In summer 2009, on the occasion of the publication of the Hebrew translation of her book ''The Shock Doctrine'', Klein visited Israel, the West Bank, and Gaza, combining the promotion of her book and the BDS campaign. In an interview to the Israeli newspaper ''Ha'aretz'' she emphasized that it is important to her "not to boycott Israelis but rather to boycott the normalization of Israel and the conflict." In a speech in Ramallah on the 27th of June, she apologized to the Palestinians for not joining the BDS campaign earlier. Her remarks, particularly that "[Some Jews] even think we get one get-away-with-genocide-free-card" were characterized by an op-ed columnist in the ''Jerusalem Post'' as "violent" and "unethical", and as the "most perverse of aspersions on Jews, an age-old stereotype of Jews as intrinsically evil and malicious."

Klein was also a spokesperson for the protest against the spotlight on Tel Aviv at the 2009 Toronto International Film Festival, a spotlight that Klein said was a very selective and misleading portrait of Israel.

Other activities

Klein contributes to ''The Nation'', ''In These Times'', ''The Globe and Mail'', ''This Magazine'', ''Harper's Magazine'', and ''The Guardian''.

Klein once lectured as a Miliband Fellow at the London School of Economics as an award-winning journalist, writer on the anti-globalisation movement.

Klein ranked 11th in an internet poll of the top global intellectuals of 2005, a list of the world's top 100 public intellectuals compiled by the ''Prospect'' magazine in conjunction with ''Foreign Policy'' magazine.

Klein was involved in a protest condemning police action during the G20 summit in Toronto, ON. She spoke to a rally seeking the release of protesters in front of police headquarters on June 28, 2010.

In May 2011, Klein received an honourary degree from Saint Thomas University.

On October 6, 2011, Klein visited Occupy Wall Street and gave a speech declaring the protest movement "The most important thing in the world."

On November 10, 2011, Klein participated in a panel discussion about the future of Occupy Wall Street with four other panelists, including Michael Moore and William Greider, in which she stressed the crucial nature of the evolving movement.

List of works

Books and contributed chapters

2000. ''No Logo: No Space, No Choice, No Jobs''. ISBN 0312421435

2002. ''Fences and Windows: Dispatches from the Front Lines of the Globalization Debate''. ISBN 0312307993

2003. Contributor ''Wrestling with Zion: Progressive Jewish-American Responses to the Israeli-Palestinian Conflict''

2007. ''The Shock Doctrine: The Rise of Disaster Capitalism''. ISBN 0805079831 - winner of the Warwick Prize for Writing (2009)

2009. Contributor ''Going Rouge: Sarah Palin An American Nightmare'' ISBN 0061939897

Articles

2011. ''Capitalism vs. the Climate; What the right gets - and the left doesn't - about the revolutionary power of climate change.'' November 9, 2011, The Nation

Filmography

''The Corporation'' (interview)

''The Take''

''The Shock Doctrine''

References

Further reading

External links

The Shock Doctrine at Macmillan Publishers

Column archive at ''The Guardian''

Column archive at ''The Nation''

Video

Video: An Introduction to Naomi Klein's No Logo

Naomi Klein: "Minority Death Match: Jews, Blacks and the ‘Post-Racial’ Presidency" - video report by ''Democracy Now!''

Klein interview Q&A; C-SPAN - Nov 29, 2009, transcript and video of 1 hr interview

Naomi Klein on Climate Debt: Why Rich Countries Should Pay Reparations To Poor Countries - video report by ''Democracy Now!''

Naomi Klein: The Real Crime Scene Was Inside the G20 Summit

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