Friedman opens Chapter 1 by asserting that the term “democratic socialism” is an oxymoron: a society cannot be both democratic and socialist. This is because socialism does not support freedom, whereas democracy does. Economic freedom, while valuable in and of itself, is also needed for political freedom to occur. When the government controls key aspects of the economy, as in a socialist system, it curbs economic freedom and prevents political freedom. The liberal considers how a society can limit the effects of bad actions and maximize the effects of good actions while preserving as much freedom as possible.

Next, Friedman lists ways a government might limit an individual’s economic freedom. One example is a person who goes to jail for selling an over-the-counter drug at a lower price than the manufacturer has set in conjunction with the government. In addition to restricting economic freedom, this situation hampers political freedom, which Friedman defines as the absence of coercion. The government has a tendency toward coercion, he says, so by “removing the organization of economic activity from the control of political authority, the market eliminates […] coercive power” (15).

Friedman says that throughout time, the majority of people have lacked economic freedom. They have suffered from the tyranny of their leaders and the servitude that’s been forced upon them.