is an excerpt from Friedman's posthumous new Milton Friedman on Freedom.

Liberalism, as it developed in the seventeenth and eighteenth centuries and flowered in the nineteenth, puts major emphasis on the freedom of individuals to control their own destinies. Individualism is its creed; collectivism and tyranny its enemy. The state exists to protect individuals from coercion by other individuals or groups and to widen the range within which individuals can exercise their freedom; it is purely instrumental and has no significance in and of itself. Society is a collection of individuals, and the whole is no greater than the sum of its parts. The ultimate values are the values of the individuals who form the society; there are no super-individual values or ends. Nations may be convenient administrative units; nationalism is an alien creed.

...“Liberalism” has taken on a very different meaning in the twentieth century and particularly in the United States. This difference is least in the concrete political forms favored: both the nineteenth-century liberal and the twentieth-century liberal favor or profess to favor parliamentary forms, nearly universal adult franchise, and the protection of civil rights. But even in politics there are some not unimportant differences: in any issue involving a choice between centralization or decentralization of political responsibility, the nineteenth-century liberal will resolve any doubt in favor of strengthening the importance of local governments at the expense of the central government; for, to him, the main desideratum is to strengthen the defenses against arbitrary government and to protect individual freedom as much as possible; the twentieth-century liberal will resolve the same doubt in favor of increasing the power of the central government at the expense of local government; for, to him, the main desideratum is to strengthen the power of the government to do “good for” the people.

The difference is much sharper in economic policy where liberalism now stands for almost the opposite of its earlier meaning. Nineteenth-century liberalism favors private enterprise and a minimum of government intervention. Twentieth-century liberalism distrusts the market in all its manifestations and favors widespread government intervention in, and control over, economic activity. Nineteenth-century liberalism favors individualist means to foster its individualist objectives. Twentieth-century liberalism favors collectivist means while professing individualist objectives. And its objectives are individualist in a different sense; its keynote is welfare, not freedom. As Schumpeter remarks, “as a supreme, if unintended, compliment, the enemies of the system of private enterprise have thought it wise to appropriate its label.”...