Professor Mark J. Perry's Blog for Economics and Finance
Thirty years ago, in 1979, Milton Friedman—the Nobel Prize-winning economist and Britannica contributor who was born this day in 1912—famously “schooled” talk-show host Phil Donahue on the nature of greed and the virtues of capitalism.
HT: Britannica Blog
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
18 Comments:
A brilliant man. I miss his clear, concise statements.
Donahue should have gone into another line of work after this interview. Friedman made Donahue and the socialist mindset look at foolish as they are.
I would love to be able to hear Friedman's take on Obamacare and the other ridiculous ideas currently being floated by the president and Congress.
The primary reason that self-interest is the best motivator for an economic system is that no one knows your needs better than you know them. Certainly not some faceless bureaucrat in a distant city.
The necessary antecedents to proper self-interest are self-responsibility and virtue.
I wish the readers of this blog would take Friedman's edicts truly to heart...and think again about our bloated subsidies to rural areas, or the fat-filled and ineffective military, our useless Department of Agriculture, our equally useless HUD, Dep't of Commerce and Department of Labor. Wipe out Dep't of Education. Privatize national parks.
The outdated and ineffective SEC and FDIC need to go to. GNMA and FNMA: Out.
Wipe out the homeowner's mortgage interest tax deduction.
Privatize public universities--the Friedman way.
There will always be free-market failures--witnsds the boobs running Moody's, S&P, or Fitch's. They gave triple A ratings to mortgage-backed bonds, which were purchased freely by private investors. That was your mortgage meltdown, half of it, right there. The homeowner mortgage interest tax deduction entices every homebuyer to have taxpayers pay for part of the purchase.
But that does mean we need federal agencies to fix the mess. We need less, less federal agencies, lee spending, and no more nanny-state tax breaks.
The problem is, today's "conservatives" are in love with parts of the federal government, and liberals in love with the rest.
We are deficit-spending ourselves to ruin, while decreasing economic output with regs.
Benny,
Whoa, there! I need to catch my breath from such a torrent. Where does one even begin?
While on many of these issues, such as agricultural subsidies, mortgage deductibility, trillion dollar deficits, I can agree with you, I do not see how anyone here can effect many of the changes you suggest in public policy many of which lack broad-based public support (ie. privatizing the national parks system or eliminating the Dept. of Education).
I can understand that you feel strongly about certain issues but repeatedly telling us what we should think seems to be more likely to generate resistance than agreement. It is very difficult to convince someone of the merits of an idea at the best of times but ragging a subject just loses the audience.
This is a very difficult thing to learn particularly when the subject is important and finding the right answer seems critical. Still working on this one myself. It has been said that you can either be right or you can be loved but you cannot be both.
Instead of every idea that you have about what you would change about U.S. public policy, could you tell me about your thoughts on one particular idea or Milton Friedman. It is very difficult to know how to address your arguments when one feels pulled in 15 different directions at the same time.
Could you do me a favor and narrow down the subject for QT? I would like to talk about some of the issues that you have raised but I need to look at these subjects one at a time.
That was so sweet to watch.
Ohhhh...slap down, Milton!
GOOD ONE!
Cutie/QT-
You don't have to take me seriously.
I guess my main point is that the right wing has bought into a huge federal government nanny-state as much as the left wing.
I also find it a bit lugubrious that Dr. Perry snuffles at the public trough, health benefits paid and a pension waiting, all taxpayer financed, and then looks down his nose at other public expenditures.
That's my point!
Unless we stand on principle, we only stand on privilege.
Perry snickers at public funding for community colleges--while freebasing on Michigan tax dollars.
(BTW, I think if Bush had proposed increased public funding for community colleges, and framed it as job training oriented and anti-elitist, the conservatives would have eaten it up. Money for people who want to train as auto mechanics and accountants, and not for the snoots in the Ivy League.)
So we have this blog constantly ridiculing left wing wastes of money (which I concur) but mute on right-wing wastes. In other words, Republican dogma.
But hey, you are in Canada. The future is there. Great country.
The entire Phil Donahue interview can be viewed here:http://freemarketmojo.wordpress.com/2009/07/20/what-is-greed/
"Donahue should have gone into another line of work after this interview. Friedman made Donahue and the socialist mindset look at foolish as they are"...
Well you have to understand the liberal mindset, it knows nothing about feeling foolish...
May I direct you to the example of Nancy Pelosi?
Benny,
I do take things too seriously and agree that the republicans have not been stellar in recent years. I remember promise of The Contract with America. Republicans have come down a long way since that time. Obama's present program for bankrupting the country without actually addressing the root cause of the financial crisis however scares the cr** out of me.
On Canada, I hate to disenchant you but being a conservative in Canada is like joining a leper colony (take it from someone who has been called a Nazi for the crime of putting up a lawn sign). The level of intolerance of liberals toward conservatives and Western Canadians is incongruent with what I believe are the values of an egalitarian, democratic society. There are lots of things about Canada which I like but it is not utopia.
Just wanted to say hi and talk with you. That's sometimes hard when the discussion goes in so many directions. It can be a bit overwhelming at times. Does that make sense?
The primary reason that self-interest is the best motivator for an economic system is that no one knows your needs better than you know them. Certainly not some faceless bureaucrat in a distant city.
Nor some lobbyist in a distant land a la NASSCOM.
Benny,
I do not know precisely Prof. Perry's political philosophy.
While it may seem hypecritical to benefit from a publicly funded education system yet strike right-wing, libertarian views, I believe that it is important that these views are taught/represented at universities where the dominant view is almost wholly liberal/socialist/left-leaning. I realize that wasn't the precise direction of your comment however it would appear to be a logical extrapolation.
Just a thought. Would it be a better outcome to stand on principle and disavow any association with a university leaving the field to those on the left.
One of the most interesting books that I have encountered recently is Robert Altemeyer's The Authoritarians I sincerely doubt that you will find this work of propaganda informative or enjoyable. It is however, important to understand the kinds of subversive garbage that seems to find their way into our universities, both north & south of the border. A critique of psychological authoritarian typing by John Ray provides some perspective on the subject.
The radicalization of the left is somethimg that I have only recently become aware of and I must confess that I find it disturbing.
NASSCOM again?
Just a little obsessed are we, sethstorm?
Cutie/QT-
Those are interesting links. I do mean to read John Dean's book one day. He might have some keen insights. It is interesting that Goldwater did not like the direction of the R-Party.
Oh Canada.
Gee! I wonder how many 'poor people' good, ole Phil put up in HIS house?
Fed those 'poor people' out of HIS pantry?
Put clothes on their backs from HIS closet?
Care to take a stab at it SethStorm?
While I'm inclined to agree with him, he didn't "school" anybody. Cmon folks, this is 1979.
In 1979 you had (for starters):
fewer too-big-to-fails, less corporate consolidation, less of a congress/lobby revolving door, and more private capital in more hands investing in more productive things
Present day, the advantages arranged by the wealthiest capitalists for themselves are just as likely to STIFLE innovation. (See "Who Killed The Electric Car" for an example.)
In the context of 2009.. this clip comes across as ideological and textbook-y.
Friedman mentioned Henry Ford.
Let's imagine Henry Ford in 2009. The auto does not exist. Only rail, and a smattering of other transport (stagecoaches, carts, bicycles).
Ford would get noplace fast.
> longstanding legislated advantages, and subsidies, gives rail an almost insurmountable leg up...eminent domain priority, power delivery infrastructure (coal, electric, water), lower end-customer costs and so on
> congresspeople/governors - owned by the rail/power lobbies - stamp out auto progress in various ways. Statewide bans on street use. Pushing for a kill by Consumer Protection Agency. Filing of patent infringement and other litigation through lobby ties/ shadow groups, etc
> Mass media - belonging to the same conglomos as rail/power - whip gullible masses into a frenzy of false fear and talking points. ("private citizens cannot be trusted.. they're incapable of controlling an auto.. they'll kill us ALL!!") These screamers receive inordinate media coverage, swaying public opinion and further entrenching congressional resistance.
> Ford's invention starves for capital. (doubtful quarterly returns, doubtful public/legislative acceptance)
> Henry Ford, destitute and disheartened, sells out to rail (as do other startups). All prototypes and schematics are destroyed.
That's capitalism circa 2009. It bears little resemblence to the capitalism Friedman rhapsodizes about here.
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