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Milton Friedman - The Nature of Free Market Capitalism — Transcript

by LibertyPen · 2,306 words · 354 segments · language en · Watch on YouTube

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0:07when you see around the globe the
0:09maldistribution of wealth the the
0:11desperate plight of millions of people
0:13in underdeveloped countries uh when you
0:16see so few Hales and so many have knots
0:19when you when you see the greed and the
0:21concentration of power within don't
0:23aren't you ever did you ever have a
0:25moment of doubt about capitalism and
0:28whether greed's a good idea to on well
0:30first of all tell me is there some
0:32Society you know that doesn't run on
0:34Greed you think Russia doesn't run on
0:36Greed you think China doesn't run on
0:39Greed what is greed of course none of us
0:42are greedy it's only the other fellow
0:44who's
0:45greedy this the world runs on
0:49individuals pursuing their separate
0:50interests the great achievements of
0:53civilization have not come from
0:55government bureaus Einstein didn't
0:57construct his theory under order from a
1:00from a a
1:02bureaucrat Henry Ford didn't
1:03revolutionize the automobile industry
1:05that way in the only cases in which the
1:09masses have escaped from the kind of
1:11grinding poverty you're talking about
1:12the only cases in recorded history or
1:15where they where they have had
1:16capitalism and largely free trade if you
1:18want to know where the masses are worth
1:21worse off worst off it's exactly in the
1:24kinds of societies that depart from that
1:27so that the record of history is
1:29absolutely crystal clear that there is
1:31no alternative way so far discovered of
1:35improving the lot of the ordinary people
1:38that can hold a candle to the productive
1:41activities that are Unleashed by a free
1:43enterprise system but it seems to reward
1:45not virtue as much as ability to
1:47manipulate the system and what does
1:49reward virtue you think the Communist
1:51commissar rewards virtue you think a
1:54Hitler rewards virtue you think excuse
1:57me if you'll pardon me do you think
1:59American president's reward
2:02virtue do they choose their appointees
2:05on the basis of the virtue of the people
2:07appointed or on the basis of their
2:08political
2:09clout is it really true that political
2:12self-interest is nobler somehow than
2:15economic
2:16self-interest you know I think you're
2:18taking a lot of things for granted and
2:20just tell me where in the world you find
2:21these angels who are going to organize
2:24Society for
2:26us why is it we have so many a million
2:29years and everything in the United
2:31States and we still have so many
2:33impoverished people who try to get up
2:35into the world why is it we have this
2:38lack of money where people who can't
2:40support them themselves decently and get
2:42a decent job where all these big men are
2:45up on top making ooodles and ooodles of
2:47money they don't eat it they can only
2:48eat that much eat in know sleep they do
2:51it if they don't eat it and don't don't
2:53use it what do you suppose they do they
2:55it they what do you mean they it you
2:56mean they put it under their pillows
2:58that's right no they keep investing it
3:00investing it in what that's right what
3:02are they invested in well in oil and
3:04everything where I mean all these other
3:06people who are what do they invested in
3:08don't get off the subject what are they
3:09invested in well they invested in a lot
3:12of uh different things that the little
3:13people need well do they invest it in
3:16factories do some of that money end up
3:18in machines do those factories and
3:20machines provide ordinary working people
3:22with jobs or not what do you suppose the
3:24productivity of this country would be
3:26and of the the wage rate would be if the
3:29total amount of capital in this country
3:31today was what it was 100 years
3:33ago where do you suppose the
3:36improvements in productivity come from
3:37except from the re the investment by
3:40people of their savings but let me go to
3:43your fundamental question first place
3:46Nirvana is not for this world there is
3:49no Paradise of course we've got a lot of
3:52people who are poorly
3:53off but if you look at it over time if
3:56you get a sense of proportion the
3:58well-being of of the ordinary people has
4:02been the main thing that has been
4:04improved by economic progress and
4:06economic growth and development and
4:09residual most residual hard cases of
4:12poverty today are the result again of a
4:15failure of government why do we have a
4:18teenage black teenage unemployment rate
4:21in 30 to 40% because of two failures of
4:25government one a failure to provide
4:27decent schooling which is a governmental
4:29responsibility has been whether it
4:31should be or not it has been and second
4:33because of a minimum wage rate which
4:36prevents those kids who haven't had
4:38decent schooling from getting jobs at
4:41low pay at which they can earn the
4:43skills on the jobs that would enable
4:45them to rise to higher pay if you look
4:46at the sources of poverty you will find
4:49a very L most of them are derived from
4:53bad what I regard as wrong-headed
4:55Government policies I want to make sure
4:57I understand you because the government
4:59that's a minimum
5:01wage what does McDonald's do McDonald's
5:05it can't hire as many teenagers it it uh
5:08improves its Capital Equipment to serve
5:10it does Less business because it has to
5:12charge higher uh uh hamburger prices in
5:15the absence of a of a minimum wage
5:18McDonald's would be able to offer a
5:20larger number of jobs to a larger number
5:22of youngsters and they would be able to
5:23acquire some skills and not only
5:26McDonald's so we hire more people more
5:28people get work younger people younger
5:29people would work and they'd get a
5:30chance to develop their skills to become
5:32productive members of society instead of
5:35being driven into a cycle of poverty and
5:37of welfare which is absolutely
5:40deplorable the problem of trying to
5:43interpret and analyze a system either
5:46Pro or Con in terms of such Concepts as
5:49the morality of the system or the
5:51humanity of the system whether
5:53capitalism is Humane or socialism is
5:55Humane or moral or
5:57immoral the problem with that is that
5:59moral values are individual they are not
6:02Collective moral values have to do with
6:05what each of us separately believes and
6:07holds true what what our own individual
6:10values are capitalism socialism Central
6:15planning are means not
6:19ends they in and of themselves are
6:21neither moral nor immoral Humane nor hum
6:24inhumanity we have to ask what are their
6:27results we have to look and what are the
6:30consequences of adopting one or another
6:34system of
6:36organization and from that point of view
6:38the crucial thing is to look beneath the
6:40surface don't look at what the
6:42proponents of one system or another say
6:44are their intentions but look at what
6:46the actual results
6:49are
6:51socialism which means government
6:53ownership and operation of means of
6:55production has
6:57appealed to
7:00high-minded fine People to People of
7:03idealistic views because of the supposed
7:06objectives of socialism especially
7:09because of the supposed objectives of
7:11equality of equality and social justice
7:15now those are fine objectives and it's a
7:18tribute to the people of Good Will that
7:21those objectives should appeal to them
7:24but you have to ask the question does
7:26the system no matter what its proponents
7:28say produce those results and once you
7:31look at the results it's Crystal Clear
7:33that they do
7:35not but Dr fredman uh do you believe in
7:38a total less a fair libertarian
7:41economy yes I also believe there's room
7:45for government and those are not a
7:48contradiction I believe that government
7:50has some very important functions to
7:52perform it has a function of protecting
7:55individuals from physical coercion by
7:58their fellows it has a function of
8:01protecting the nation from foreign
8:03enemies it has a function of enabling us
8:05to have a forum a means through which we
8:09can decide on the rules of property and
8:11so on by which we want to conduct our
8:13Affairs and it has a function of
8:16adjudicating disputes among us those
8:18functions in my
8:20opinion are the fundamental and basic
8:23functions of government there may be
8:25some other peripheral things that
8:26government can do without doing much
8:28harm
8:30but beyond that I believe and as
8:34unfettered a free
8:36enterprise economy as is feasible within
8:40those very narrow limits for a limited
8:43government if you take the automobile
8:45industry in particular since Henry Ford
8:47really revolutionized it it transformed
8:50the nature of life in this country the
8:52automobiles improved tremendously they
8:54came down in cost relative to other
8:56Goods the effect of the of the kind of
8:59regulations you now have have has been
9:01to make automobiles not more safe but
9:04less safe why because by making them
9:07more
9:08expensive they make it pay to keep an
9:10old car on the road longer the average
9:12age of cars on the road has gone up and
9:15old cars are less safe than new cars
9:18there's no case for the government
9:20whatsoever in mandating airbags because
9:23airbags protect the people inside the
9:25car that's my business if I want to
9:27protect myself I should do it at my
9:30expense you'd be against uh mandatory
9:32wearing of helmets for motorcyclists too
9:34of course I think people ought to be
9:35free to do what they want what's it what
9:37what what's wrong with the why can't the
9:39government be paternalistic and
9:42maternalistic and care for its citizens
9:44well that depends on what kind of
9:45government you want of course it can be
9:47but it turns out that the paternalism
9:50tends to serve the interests of the
9:51people who are being paternal and not
9:52the people whom they are supposedly
9:55protecting it's often described as a
9:57profit system but that's a misleading
9:59label it's a profit and loss system and
10:02the loss part is even more important
10:04than the profit because it's what gets
10:06rid of badly managed poorly operated
10:10companies we don't we don't create
10:12inflation by our personal Behavior we
10:14create inflation by getting our
10:17legislators people in Washington to vote
10:19for more and more spending and by
10:22objecting the extra taxes and there by
10:26having it financed by printing money
10:28there's only one way you can stop
10:29inflation and that's by having the
10:32government create less money and spend
10:35less money what does the average citizen
10:38do to uh help the inflation or to fight
10:40it there is nothing the individual
10:43citizen can do to help or fight
10:45inflation in his personal Behavior All
10:48attempts to tell you it's the consumer
10:50who's doing the wasteful consumer who's
10:52producing inflation is an attempt by the
10:54government to shift shift the blame to
10:57somebody else as a citizen you can do a
11:00great deal as a citizen you can exercise
11:03your
11:04influence on your Congressman at the
11:07elections to try to elect people who are
11:10committed to cutting government
11:12spending now we don't have a free market
11:15don't kid yourself and the biggest
11:18enemies of a free market the two biggest
11:21enemies of the free market are two
11:22separate groups my academic colleagues
11:25and business people they business people
11:27are enemies of markets not
11:30friends they the the academic people are
11:35all in favor of freedom for themselves
11:37except even now they aren't even in
11:39favor of that with this politically
11:41correct nonsense that's going around but
11:44historically academic people have always
11:46been in favor of freedom for themselves
11:48they want to be able to say what they
11:49want write what they want do whatever
11:51research they want but they're all
11:53against freedom for everybody else they
11:56think that they know better what's good
11:57for the poor people people and the poor
11:59people do they think they can run the
12:01economy better than the businesses can
12:04the business people are just the
12:06opposite they're all in favor of freedom
12:08for everybody else and at the drop of a
12:12hat you can get any leading businessman
12:13to give you an L man to give you an
12:15eloquent speech on the virtues of free
12:17market but when it comes to their own
12:20business they want to go down to
12:22Washington and get a special tariff to
12:24protect their business they want a
12:25special tax deduction they want a tax
12:28Subs
12:30when Chrysler is on the verge of failing
12:33which it should have done it should have
12:34been allowed to fail Chrysler goes down
12:37and and uh exercises political influence
12:40try to get the government to lended
12:42money to subsidize
12:43it so businessmen in general not all
12:47there have been some notable exceptions
12:48and I don't want to include everybody
12:50just as not all intellectuals are in
12:54that CL but in the main most businessmen
12:58are enemies
12:59of free markets the real beneficiaries
13:02of free
13:04markets are the uh Invisible Man the
13:09small consu the
13:10consumer the ordinary worker those are
13:15the real people who benefit from free
13:17markets but
13:19unfortunately they don't have the kind
13:20of political
13:22clout there is a very important role for
13:25government to play but there's such a
13:27thing as too much of a good thing
13:29and government has been growing Beyond
13:31bounds right now and to take the
13:34simplest measure the government spending
13:37at federal state and local levels
13:39amounts to over 40% of the income of the
13:42people of the country if you go around
13:44and ask people are you getting your
13:46money's worth for that 40% of your
13:48income which is being spent on your
13:50behalf supposedly by government there
13:52are very few people who will say yes the
13:55government is too big it's too intrusive
13:58it restricts what we can do it's
14:00becoming our Master instead of our
14:02servant and we've got to react against
14:05it and cut it down to
14:11size

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