Weber argues free markets require state power to function

22 square miles. That is the value Milton Friedman assigned to Manhattan when the Canarsee Indians traded the island to the Dutch for cloth and trinkets. In a 1980 documentary series based on his book Free to Choose, Friedman used that transaction to anchor the American story in the pursuit of freedom. He argued that this freedom released the human energies that created the United States. He presented the unfettered free market as the only historically proven method to keep people free and achieve lasting international peace.

Isabella Weber, an associate professor of economics at the University of Massachusetts Amherst, challenges that narrative in her new book Anti-Fascist Economics: In Defense of Affordability, Dignity, and Democracy. Weber, who is from Nuremberg, Germany, argues that the story of American markets is incomplete without the history of Native Americans, slavery, and violence. She contends that markets did not emerge in a space free of state power or conflict. Instead, bloodshed and ugly dynamics were part of establishing capitalism in most places.

Weber directly addresses Friedman’s famous pencil analogy, in which he described how thousands of people from different backgrounds cooperate to make a simple object without central orders. She agrees that the division of labor is complex and that the price mechanism is important. However, she argues the process is not harmonious. If one asks factory workers in developing countries, they often report long hours and atrocious conditions. Miners digging raw materials face severe health and safety concerns.

Weber points out that large companies organize supply chains with considerable coordination. She identifies concrete institutional power structures between companies and workers, and between large branded goods producers and their suppliers. She argues these relationships of power mean the invisible hand does not operate in an empty space. The price system works, but it works within specific structures that Friedman’s model often ignores.

The debate connects to the current affordability crisis, where inequality, inflation, and gas prices are rising. Weber argues that Friedman’s theory assumes people have sets of preferences and are free to choose between goods once they enter the market. She critiques this view for overlooking the material foundations of those choices. She suggests that personal liberty cannot be separated from economic freedom in the way Friedman proposed.

Historians note that economic changes in Germany in 1933, such as increased government spending on the military and the encouragement of cartels, helped Nazism take hold. These measures are the opposite of free markets. Weber uses this historical context to frame her title. She posits that economics must defend affordability and dignity to prevent the rise of authoritarian systems. She views the state not as the enemy of the market, but as a necessary component of its structure.

The central tension in Weber’s work is the definition of freedom. Friedman’s documentary emphasized that the magic of the price system induces cooperation and peace. Weber counters that this view misses the power dynamics at play. She argues that when large firms dominate supply chains, the freedom of individual workers is constrained. This creates a need for economic policies that protect dignity and ensure that the benefits of trade are distributed fairly.

Weber’s book positions itself against the Chicago School’s absolutism. She does not reject the market entirely, but she rejects the idea that it is self-correcting and harmonious. She highlights the role of state power in creating the conditions for trade. Her analysis suggests that ignoring the political and institutional realities of economics leads to a flawed understanding of liberty and prosperity.

The discussion of the pencil serves as a microcosm for the entire economy. Friedman saw a triumph of impersonal prices. Weber sees a network of power relationships. She argues that to understand the affordability crisis, one must look beyond simple supply and demand. One must examine who controls the means of production and how that control affects the daily lives of workers and consumers. This approach redefines the role of the state in a free society.