Chapter 11, Social Welfare Measures Summary and Analysis

The sentiments that produced the progressive income tax also produced a number of "welfare" measures such as social security, public housing, minimum wages, farm price supports, special aid, and so on. Friedman will largely discuss the unintended effects of these programs and will analyze old age and survivor's insurance.

Public housing is often defended on public externality grounds. Those without housing will often impose costs on the community in terms of greater public services, but this does not argue for public housing but higher taxes for the sort of housing that adds to social cost. Public housing can only be justified on paternalist grounds, in Friedman's view.

Further, public housing has involved destroying housing units to make new room and has reduced the amount of space and increased the number of persons per unit. Special...