“The more capitalistic a country is, the smaller the fraction of income paid for the use of what is generally regarded as capital, and the larger the fraction paid for human services. In underdeveloped countries like India, Egypt, and so on, something like half of total income is property income. In the United States, roughly one-fifth is property income. And in other advanced capitalist countries, the proportion is not very different. Of course, these countries have much more capital than the primitive countries but they are even richer in the productive capacity of their residents; hence, the larger income from property is a smaller fraction of the total. The great achievement of capitalism has not been the accumulation of property, it has been the opportunities it has offered to men and women to extend and develop and improve their capacities. Yet the enemies of capitalism are fond of castigating it as materialist, and its friends all too often apologize for capitalism’s materialism as a necessary cost of progress.” (Capitalism and Freedom, p. 169).
A remarkable passage. Friedman here seems unable to understand the concept of materialism except in relation to the distinction between physical and human capital. A materialist society, Friedman suggests, is a society dominated by physical commodities; a non-materialist society is society in which human services play a more important role.
But, of course, (do I need to say it?) this isn’t what materialism means. My Oxford dictionary’s first definition reads:
“a tendency to consider material possessions and physical comfort as more important than spiritual values.”
The contrast is between ‘economic’ factors (exemplified by material possessions but certainly including human services), and spiritual ones. A materialist perspective would, for instance, focus on the size and make-up of a nation’s income, while neglecting less tangible qualities of life. Friedman’s claim that capitalism is not materialistic is couched in the most materialistic terms imaginable.