Wednesday, November 23, 2011

Milton Friedman Responds To OWS Protestors

During his lifetime, Milton Friedman was a tireless advocate of individual liberty and the free market. Dr. Friedman's passionate defense of freedom and markets was a powerful and timeless message that would be just as relevant today if Milton Friedman were alive to address the concerns of the OWS protestors about wealth, inequality, and the poor, as when Friedman delivered these lectures more than 30 years ago:






38 Comments:

At 11/23/2011 6:18 PM, Blogger Paul said...

Newt Gingrich addresses OWS protestors: "Take a bath and get a job."

 
At 11/23/2011 7:14 PM, Blogger Comparative Disadvantage said...

I've always enjoyed watching these videos. OWS demands are nothing new, despite being all the rage.

 
At 11/23/2011 7:19 PM, Blogger PeakTrader said...

We need to reduce risk for the rich. So, they can create more jobs and more goods to help the poor.

 
At 11/23/2011 7:44 PM, Blogger Hydra said...

Defense ding a hypothetical perfect free market is easy. Defending an actual market with all its inefficiencies is a lot harder.

 
At 11/23/2011 7:52 PM, Blogger Hydra said...

PT: after we "give" all this protection, how long should we wait for results?

 
At 11/23/2011 8:18 PM, Blogger Che is dead said...

"Defense ding a hypothetical perfect free market is easy. Defending an actual market with all its inefficiencies is a lot harder." -- Hydra

Most of those "inefficiencies" are the result of government intervention. So, yes, government intervention in the free markets is difficult to defend.

 
At 11/23/2011 8:20 PM, Blogger Che is dead said...

"PT: after we "give" all this protection, how long should we wait for results?" -- Hydra

How long will we have to wait for results from the trillions spent on the lefts "War on Poverty"?

 
At 11/23/2011 8:45 PM, Blogger Hydra said...

I dunno, but I'm pretty sure one wait time is equal to the other.

The reasons should be obvious.


If government intervention distorts the markets, why do businesses and special interests spend so much on lobbyists?

Would not that be against their own best interests?

Or maybe the free market absent government interference, like taxes on pollution, is more free but less perfect.

 
At 11/23/2011 9:56 PM, Blogger VangelV said...

Milton Friedman was defending the free market, not corporatism. While some of the OWS idiots are anti-capitalist and anti-market the ones who are against the bailouts of the big banks and the double dealing in the financial system are right. The US needs a free market and the corporatist system that uses politicians to transfer wealth from investors, savers, and workers to insiders has to go.

 
At 11/24/2011 12:00 AM, Blogger JGH said...

Hydra ...

duh. Why would corporations spend money on lobbyists?

Exactly ... to distort the market in THEIR favor ... to exclude competitors, to gain unfair advantages.

Distorted markets have losers ... and winners, and they employ lobbyists to be winners.

If you have a "business" that relies on lobbyists, you don't have a true business. It's not the people who are the problem, it's the government, picking winners and losers.

Corporations respond to incentives ... the same way you do.

 
At 11/24/2011 3:43 AM, Blogger Steve said...

What can I say? But History has proven Keynes right over and over and Friedman wrong.

 
At 11/24/2011 4:18 AM, Blogger PeakTrader said...

Hydra, it's not about "protection," it's about cost, i.e. unnecessary costs.

When the rich are slowed or stopped from becoming richer, then the poor are slowed or stopped from becoming richer.

 
At 11/24/2011 4:37 AM, Blogger PeakTrader said...

Steve says: "History has proven Keynes right over and over and Friedman wrong."

A most ignorant, biased, and incorrect assumption.

 
At 11/24/2011 7:11 AM, Blogger PeakTrader said...

The poor need hard-working, risk-taking entrepreneurs:

Venezuela's economy
Oil leak
The Economist
Feb 24th 2011

Since 2008 China has lent Venezuela $12 billion and is being repaid in oil shipments.

The president’s hostility to business has devastated the rest of the economy. He has nationalised hundreds of companies and trumped up charges against their owners, causing much of Venezuela’s private sector to shut up shop and flee.

As a result, the country has seen vast capital flight, and must import many goods that it used to produce. Non-oil exports have ground to a halt: petroleum now accounts for 92% of its dollar intake.

******

By the Numbers | What's Next Venezuela?
Oct 7, 2011

When Hugo Chávez Frías took office in February 1999, he promised Venezuelans equality, opportunity, and prosperity.

Twelve years later, the rich are still rich and the poor are poorer as they face higher food prices, persistent blackouts, and a shrinking economy with the highest inflation in the Americas and soaring unemployment.

After returning from a visit to Venezuela in April 2010, Russian Prime Minister Vladimir Putin boasted that he had sold President Hugo Chávez another $5 billion in weapons – a huge sum for a Latin American country that is deep in recession and busy rationing its water, electricity and hard currency.

 
At 11/24/2011 8:48 AM, Blogger Ed R said...

Milton Friedman was right on the distributional efficiencies of free markets.

He was much less right about about a number of other things.

 
At 11/24/2011 9:27 AM, Blogger VangelV said...

What can I say? But History has proven Keynes right over and over and Friedman wrong.

Both were wrong. But Keynes was a lot more wrong than Friedman.

We live in a Keynesian world where the government has meddled and regulated all aspects of economic activities. The areas where there was least regulation have been responsible for the greatest advances and wealth generation. The areas where there has been the most regulation have proven that regulation is not effective and has unintended consequences. (Think of the 120+ regulators in the financial sector missing the housing bubble problem.)

Both Democrats and Republicans, and certainly all Europeans are Keynesians. How did that work out?

 
At 11/24/2011 10:33 AM, Blogger Fearsome Tycoon said...

People who think the free market will never help the poor have either never been to the United States, where the market has provided cheap clothes, cheap food, cheap housing, cheap cars, and even cheap computers and cheap entertainment that the lowest strata of society can afford, or have never been to the third world, where socialist governments are unable to provide any of these things.

 
At 11/24/2011 10:43 AM, Blogger VangelV said...

People who think the free market will never help the poor have either never been to the United States, where the market has provided cheap clothes, cheap food, cheap housing, cheap cars, and even cheap computers and cheap entertainment that the lowest strata of society can afford, or have never been to the third world, where socialist governments are unable to provide any of these things.

They are confused. Which is why they hate Wal-Mart as much as they do. But what do you expect from those who have been educated in the public school system and conditioned to react emotionally rather than to think logically?

 
At 11/24/2011 11:09 AM, Blogger PeakTrader said...

VangelV says: "Both were wrong. But Keynes was a lot more wrong than Friedman."

That's like saying both rain and sunshine are wrong, but rain is more wrong than sunshine.

The goal is to optimize an economy, or raise living standards at the fastest sustainable rate.

Too many people don't even know if an economy is moving towards or away from optimization.

 
At 11/24/2011 12:38 PM, Blogger AIG said...

"Defense ding a hypothetical perfect free market is easy. Defending an actual market with all its inefficiencies is a lot harder."

Defending from what? The argument is about degrees, not absolutes.

"Both were wrong. But Keynes was a lot more wrong than Friedman."
That's like saying both rain and sunshine are wrong, but rain is more wrong than sunshine"

You have to understand Peak, in the mind of Paultards, Milton Friedman was the devil. He was a statist pig who didn't agree with absolute groundbreaking genius that was Murry Rothbard. As such, he is condemned as an enemy of the people.

"If government intervention distorts the markets, why do businesses and special interests spend so much on lobbyists? "

Seriously? Because of the first part of your sentence.

 
At 11/24/2011 3:40 PM, Blogger VangelV said...

That's like saying both rain and sunshine are wrong, but rain is more wrong than sunshine.

It isn't because both Friedman and Keynes were court economists trying to justify the power of the state. The difference was how much power they each thought was permitted. Both went way too far.

The goal is to optimize an economy, or raise living standards at the fastest sustainable rate.

Whose goal? The central planners? But why should central planners meddle in voluntary transactions? Why should they control the money supply? Why should they apologize for the theft that they call taxation?

Too many people don't even know if an economy is moving towards or away from optimization.

This is a meaningless statement. You either believe in economic liberty or you don't. If you do then you reject the Friedman/Keyens versions of statism. If you don't you have a whole spectrum of charlatans and mountebanks to choose from that will provide you with all the false arguments you need to feel better about your beliefs.

 
At 11/24/2011 3:46 PM, Blogger VangelV said...

You have to understand Peak, in the mind of Paultards, Milton Friedman was the devil. He was a statist pig who didn't agree with absolute groundbreaking genius that was Murry Rothbard. As such, he is condemned as an enemy of the people.

Friedman was not bad as economists go but still too much of a statist. He was a moral relativist who rejected the idea that individuals have natural rights, which he had to in order to form his economic philosophy. His son is much better on the issue of individual freedom but even David has some of the same drawbacks.

 
At 11/24/2011 7:23 PM, Blogger PeakTrader said...

VangelV, countries or the masses don't magically become wealthy.

They implement economics that actually work, on massive scales (whether it's a bottom-up approach, e.g. microeconomics, or a top-down approach, e.g. macroeconomics).

There was plenty of wild freedom in the Dark Ages, but not much economic growth.

 
At 11/24/2011 7:37 PM, Blogger VangelV said...

VangelV, countries or the masses don't magically become wealthy.

They implement economics that actually work, on massive scales (whether it's a bottom-up approach, e.g. microeconomics, or a top-down approach, e.g. macroeconomics).

There was plenty of wild freedom in the Dark Ages, but not much economic growth.


What exactly is your point? Are you favouring a big state that meddles in voluntary transactions? Why is economic liberty worse than a hampered system?

 
At 11/24/2011 7:58 PM, Blogger PeakTrader said...

VangelV, when you use the wrong tool and can't fix it, it's not the tool's fault.

 
At 11/24/2011 8:35 PM, Blogger VangelV said...

VangelV, when you use the wrong tool and can't fix it, it's not the tool's fault.

What tool was used? And how can you fix anything when you can't even figure out what the problem is?

 
At 11/24/2011 10:22 PM, Blogger Fearsome Pirate said...

There was almost no economic freedom in the Dark Ages. Most people in Europe were slaves during that time.

You're best off ignoring anyone who condemns Milton Friedman as a "statist," as he has simply read too much Rothbard to be useful.

 
At 11/25/2011 3:26 AM, Blogger PeakTrader said...

VangelV, economic tools are used to fix firms, or microeconomies. Similarly, they can fix macroeconomies.

If policymakers can't even identify problems, it's not the fault of tools.

Fearsome Pirate, it seems, slavery wasn't that significant in the Dark Ages:

http://smartin.bol.ucla.edu/caledonia/life.html

 
At 11/25/2011 12:40 PM, Blogger VangelV said...

VangelV, economic tools are used to fix firms, or microeconomies. Similarly, they can fix macroeconomies.

If policymakers can't even identify problems, it's not the fault of tools.


This is the central planner argument. We have the tools and we can fix the economy when we use them properly. But this argument does not have much support in the real world because there is no evidence that economies can be planned and fixed.

 
At 11/25/2011 1:52 PM, Blogger wtng2fish said...

Steve says: "History has proven Keynes right over and over and Friedman wrong."

A most ignorant, biased, and incorrect assumption.




Ever notice how liberals almost never provide independently verifiable facts to lend credence to their assertions? Their selective "logic" can't withstand ALL the facts. Mainly because ALL of the facts inevitably lead to a proper perspective. Not to mention reality.

 
At 11/25/2011 2:48 PM, Blogger Jon said...

Friedman is right to criticize a 100% inheritance tax, but I don't think this is what OWS is about.

In the second video Friedman recommends the very policies that have been implemented over the last 30 years. The real minimum wage rate has fallen as corrected for inflation since then. Welfare expenditures have been reduced. Meaning aid to the poor, not welfare and Medicare, which have their own dedicated taxes. Of course taxes have become a lot less progressive. Friedman's recommendations have been implemented and this was done on the expectation it would help blacks. Has it? No. The opposite. From the end of the 40's up to the 80's blacks made some gains. Since then they haven't. So the theory sounds plausible but we have to check it against the facts. It's failed in that regard.

He says free market capitalism is what brings people out of poverty. But of course there is no such thing as a free market. You can contrast those that are more free market with those that are less. The US at the end of the 19th century was highly protectionist and interventionist. The most radical redution in poverty since the 50's is in South Korea and that has been highly interventionist. Very aggressive industrial policy. Very protectionist, blocking the importation of superior products in order to build their industrial base. S Korea was the equivalent of Haiti 60 years ago. Today they make Hyundai, Kia, LG, Samsung. A powerhouse. Where's Haiti? Still trying the low tariff, low tax, low regulation methods. And still where they were 50 years ago, if not worse.

And I would add that the real destruction of blacks occurred due to the drug war. It wasn't with the implementation of welfare that the black family disintegrated. When 1 in 3 blacks spend time in prison what do you expect will happen?

In the third video he gives us the trickle down theory. Give rich people more money and they build factories which create jobs. That's great, but there's another factor. If you redistribute and put money in the hands of the poor they spend it. That demand induces wealthy people to build factories. So which factor dominates? The verdict is in. We've tried trickle down. Demand is down and unemployment is up. We are in the worst economic downturn we've had since the great depression. Friedman's theories have failed the test of reality. That's why OWS is out there.

Here's how Will Rogers put it. "The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellow’s hands.”

 
At 11/25/2011 4:46 PM, Blogger juandos said...

"And I would add that the real destruction of blacks occurred due to the drug war. It wasn't with the implementation of welfare that the black family disintegrated. When 1 in 3 blacks spend time in prison what do you expect will happen?"...

Sadly jon your ardent liberal desires run aground on the harsh shoals of reality...

So its no suprise that the rest of your anti-capitalist rant is just as whacked...

You have an alledged Will Rogers quote you offer up jon but then one quote deserves another...

There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest of them have to pee on the electric fence for themselves.

 
At 11/25/2011 4:49 PM, Blogger Jeff Perren said...

It's a real pity that Friedman doesn't respond to this young Marxist as Rand would have. Instead of labeling his suggestion as the grossly immoral (advocated) violation of property rights that it is, he goes after the question from a purely Utilitarian perspective.

That approach will inevitably fail since it accepts the same altruist-collectivist premises that are driving the young man's point of view.

 
At 11/25/2011 5:11 PM, Blogger PeakTrader said...

VangelV, just because you don't see evidence doesn't mean no evidence exists.

Monetary, fiscal, and trade policies are notable examples.

 
At 11/25/2011 5:40 PM, Blogger PeakTrader said...

Jon, you're creating a false reality by focusing on some factors, while ignoring many other factors.

Coincidence is not causality.

 
At 11/25/2011 11:10 PM, Blogger VangelV said...

VangelV, just because you don't see evidence doesn't mean no evidence exists.

Monetary, fiscal, and trade policies are notable examples.


Examples of what? That governments screw up everything they touch?

 
At 11/27/2011 6:34 AM, Blogger Manuel said...

More on Milton Friendman:

http://manuelalvarezlopez.blogspot.com/2011/09/milton-friedman.html

 
At 11/28/2011 10:31 AM, Blogger Jon said...

I enjoyed your link, juandos, and it has some good info. Clearly glorification of single motherhood was misguided. There was some increase in single motherhood among black families in the 60's, but it doesn't really take off until the 70's according to census data. See here.

 

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