Friedman advocates that supply creates its own demand (Say's Law which Keynes' coined). Hence, looking at our modern day supply corn, we have so much corn we don't even know what to do with all of it. Nor the capacity to store all of it so some of it lays out in the mud by the grain elevators. Currently, we believe that if we keep corn prices low enough and supply incredibly high, businesses and industries will find something to do with it thus creating a demand for it. Corn, as the Omnivore's Dilemma has showed us, is in or used to make so much food made by the industry.
Who makes up the industry? Well a few massive corporations - monopolies. Monopolies Mr. Friedman likes, but more on that in a second. Cargill and ADM (Archer Daniels Midland) buy nearly one third of the corn produced in America (Omnivore's Dilemma 63) meanwhile there are only 4 giant meatpacking companies, who use corn to feed their cows, Tyson, Cargill subsidiary Excell, Swift & Company, and National (these companies slaughter and market 4 out of 5 beef cattle in the US) (Omnivore's Dilemma 69). These are a just few of the countless examples of how monopolies run the food economy. Agriculture is also the product of government policies through subsidizing corn for example (Omnivore's Dilemma 61). Thus the government runs a monopoly on the food economy also.
Friedman sticks up for monopolies in Capitalism and Freedom: Monopoly and Social Responsibility. He talks about the economic theory of competition and how it is an ideal construct "designed to analyze particular problems rather than to describe existing situations. As a result, there can be no clear-cut determination of whether a particular enterprise or industry is to be regarded as monopolistic or competitive" (121). He goes on to say that enterprise (business) monopolies have a "relative unimportance from the point of view of the economy as a whole" (121). He completely writes off monopolies as something relativistic and unimportant. He goes on more to defend and write off the stigmatism's of monopolies but I'll spare the details for the sake of brevity. Which reaffirms the seemingly rationale/attitude of our current government (and public) favoring and allowing for the existence of so many monopolies today.
The economy of agriculture has turned into the free market system thanks to Mr. Butz. And Friedman argues for the inherent morality of free markets where they will self correct themselves. The notion of social responsibility does not apply to entrepreneurs because their only responsibility, he claims of course, to make a profit. In turn, the demands and needs of everyone will be fulfilled via the free market.
Keynes argues for active investment. Instead, modern corn production is a passive investment just hoping that someone or some business will buy the massive reserves/excess.
It's only fitting that I wrote this during a thunderstorm. The gods are clashing over their paradigms while the lay people on earth are effected by their destructive disagreements and lack of understanding.
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