The concept of well-being is central to the subject matter of moral philosophy as well as economics. According to some moral theorists (particularly utilitarians) morality is about the maximization of social well-being. According to others, notably John Rawls (1972) we ought to give particular priority to the worst off members in society. Both these and other moral positions, whatever the priority they attach to different members of society in arriving at moral judgements, require an account of well-being or advantage. The concern with well-being is thus of foundational importance in moral philosophy, even if well-being is not thought of as all that matters. Furthermore, those who want to distinguish ‘morality’ from ‘self-interest’ must furnish us with an account of human interests, so that we can distinguish the moral realm from that of self-interest or prudence. The concerns of moral philosophers, here, clearly overlap with those of economists. Economists (particularly in welfare and development economics) are much concerned with questions of how well people are doing, with their ‘standard of living’ or ‘quality of life’. However, there are very different ways of thinking about each of these ideas. Indeed, we need to discriminate between different views of the quality of life and to decide which is the most appropriate for the purposes of moral theory and the normative parts of economics.

In the ‘Introduction’ to Capitalism and Freedom, Friedman's stated intentions are to: (i) establish the role of competitive capitalism as a system of economic freedom and a necessary condition for political freedom; (ii) indicate the proper role of government in a free society; and (iii) return the term ‘liberal’ ‘… to its original sense – as the doctrines pertaining to a free man’ (1962, p. 6). In fact, Friedman accomplishes none of these things. This essay has three distinct, though related, objectives: first, to compare Friedman's position with the liberal alternative; second, to show why Friedman's position is more properly regarded as libertarian than liberal; and third, to assess the quality of Friedman's argument in its own right. My purpose is to demonstrate that Friedman overlooks the important liberal insight that the unrestricted accumulation of private propety may limit rather than promote individual freedom. This omission is crucial. Not only does it divorce Friedman's conception from liberalism, it also vitiates his case for economic freedom as a necessary condition for political freedom.

According to the standard objection to backward induction in games, its application depends on highly questionable assumptions about the players' expectations as regards future counterfactual game developments. It seems that, in order to make predictions needed for backward reasoning, the players must expect (i) each player to act rationally at each node that in principle could be reached in the game, and also to expect (ii) that this confidence in the future rationality of the players would be kept by each player come what may: even at the game-nodes that could only be reached by irrational play. Both expectations seem to be rather unreasonable: a player's initial disposition to rational behaviour may be weakened by a long stretch of irrational play on his part and, even more importantly, his initial confidence in the other players' future rationality may be undermined by an irrational play on their part. For different formulations of this objection see Binmore (1987), Reny (1988) and (1989), Bicchieri (1989), Pettit and Sugden (1989). (For defences of backward induction see Sobel (1993) and Aumann (1995) and (1996).)