Friedman asserts that the growth of capitalism is associated with decreases in religious, racial, and social discrimination in the economic realm and beyond. One turning point involved contracts replacing status arrangements, which helped medieval serfs gain freedom. The free market plays a large role, too. Friedman says it helps people disregard the attributes they might find unacceptable in other people. That’s because the market “separates economic efficiency from irrelevant characteristics” (109).

Prejudice is undesirable, but anti-discrimination laws are the wrong tactic for addressing the problem, Friedman says. This is a major reason he opposes legislation by the Fair Employment Practice Committee (FEPC). Friedman shares an example of a grocer whose customers do not want to interact with black clerks. The grocer is not necessarily prejudiced, but he knows what his customers want. If he must hire a black person to abide by a law requiring him to take the first qualified applicant regardless of race, he could lose business. Though this law is supposed to address customers’ prejudice, it is likely to punish the grocer the most. Supporters of FEPC laws argue that minorities are being harmed in situations like these, but Friedman thinks the severity of this harm is overstated.