When government provides a service to the public where the government has the advantages, the service becomes a public monopoly. Monopoly has an absence of alternatives, which in turn hinders the freedom of consumers. As the government intervenes a service or good is provided but at the same time consumer freedom is lost. .
Friedman advocates that the government should have limited control over the use of the country's capital. An Automatic Gold Standard and the Discretionary Monetary Authority had both been proved not feasible as free and stable monetary systems, they failed mainly because they granted the government too much power. Friedman argues that the only way for a monetary system to be promising is by establishing a set of laws, which allows the public to exercise control over monetary policies. .
To reach a balance of trade, according to Friedman the free market solution of floating exchange rate is also more effective than combinations of various government intervention methods. Free market forces should determine freely flowing exchange rates. As exchange rate change, price of goods change respectively, therefore the amount of imports and exports change and balance of trade is achieved automatically. .
Milton Friedman advocates an economic theory that free market forces rather than government intervention produces balanced and non-inflationary rate of economic growth. In theory when private expenditures decline, government expenditures should rise to keep the total expenditures stable; when private expenditures rise, government expenditures should decline. In reality, however, it takes time for the government to decide if any federal spending programs is necessary and act out the program. Therefore, many programs do not take effect until the recession or the expansion has passed. Government intervention not only cannot cure the recession or expansion but also exacerbates by making the recession or expansion bigger.
