“Friedman Friday” (“Free to Choose” episode 1 – Power of the Market. part 4 of 7)

The fundamental principal of the free society is voluntary cooperation. The economic market, buying and selling, is one example. But it’s only one example. Voluntary cooperation is far broader than that. To take an example that at first sight seems about as far away as you can get __ the language we speak; the words we use; the complex structure of our grammar; no government bureau designed that. It arose out of the voluntary interactions of people seeking to communicate with one another. Or consider some of the great scientific achievements of our time __ the discoveries of an Einstein or Newton __ the inventions of Thomas Alva Edison or an Alexander Graham Bell or even consider the great charitable activities of a Florence Nightingale or an Andrew Carnegie. These weren’t done under orders from a government office. They were done by individuals deeply interested in what they were doing, pursing their own interests, and cooperating with one another.

This kind of voluntary cooperation is built so deeply into the structure of our society that we tend to take it for granted. Yet the whole of our Western civilization is the unintended consequence of that kind of a voluntary cooperation of people cooperating with one another to pursue their own interests, yet in the process, building a great society.

DISCUSSION

Participants: Robert McKenzie, Moderator; Michael Harrington, Democratic Socialist Organizing Committee; Milton Friedman; Russell Peterson, Governor of Delaware, 1969_1973; Robert Galvin, Chairman, Motorola, Inc.; Congressman Barber B. Conable, Jr., Ways and Means Committee, U.S. Congress

McKENZIE: It seemed to me he was saying that the golden age for America, when it was truly a land of opportunity, was the late 19th, early 20th century, no regulations, no permits, no red tape.

HARRINGTON: I would argue that the government played a decisive role in an enormous grant to the railroads in creating an America capitalist economy. And secondly, if you go back to that golden age, you find that the government constantly intervened in a rather characteristic way, it used troops against strikers. American labor history has been the most violent, bloody class struggle anywhere in the world, and the government, up until 1932, the law, the courts, the society, always sided with business, always sided against working people. Therefore, I would argue that both economically and in terms of repressing the attempts of people to assert their freedom, our government prior to the rise of the welfare state in this country was more or less owned by business.

McKENZIE: Milton Friedman.

FRIEDMAN: Michael Harrington is seeing the hole in the barn door and he’s not looking at the barn door itself. The plain fact is during the whole of that period, while government did intervene from time to time, and mostly to do harm, I agree with him that government intervention was, in the main, not a good thing; tariffs, for example. On the other hand, throughout that whole period government spending, Federal Government spending, central government spending, never was more than 3 percent of the national income. It was trivial. The land grants to the railroads were a minor factor. I’m not. I don’t approve of them. I’m not saying they were a good thing, but they were a very minor factor. One has to have a sense of proportion and that goes to the whole discussion, that I am not an anarchist. I am not in favor of eliminating government. I believe we need a government, but we need a government that sets a framework and rules within which individuals, pursuing their own objectives, can work together and cooperate together not only in economic areas.

McKENZIE: I want to hold you for a moment, though, to that golden age theory, that we were best when we were regulated least in the late 19th and early 20th century, because remember the sweatshop analogy comes out of there, when there was no attempt to restrict hours of work or to regulate working conditions. Now is that a view you accept of that period?

PETERSON: Well I think it’s necessary to contrast what’s happened in the interim. I don’t see how we can talk about that without comparing it with the interim period. Now you talked earlier about the fact that during the last fifty years we had squandered some of our inheritance of freedom, and I believe during the last fifty years we really have improved our freedom. I spent over half that time working for one of the world’s largest industrial companies, the Dupont Company, deeply involved with the launching of new ventures; and got to know the free enterprise system well, and have a very healthy respect for it. But during that interval, and particularly during the last few years when I have been more involved with government and with environmental matters, I have become convinced that our freedom was improved when the people are allowed to add to their freedom in the marketplace, the freedom to vote with their ballots in the polling place, to put some restraints on the excesses of the marketplace, particularly when you’re concerned with such things as the long-term impact on our health from the pollution of our environment, the introduction of carcinogenic materials, or the radiation of our people with nuclear products.

FRIEDMAN: What about putting some restraints on the excesses of government. Hasn’t that become an ever more serious problem? How is it that a government of the people, supposedly, does things which a very large fraction of the people would really prefer not to have done, such as overtax them, over govern them, over regulate them. I think you’re looking, again, at one side and not the other. And, of course, I agree we have to look at what’s happened in the interim. We’re better off than we were fifty years ago. Never would deny that. But we stand on the shoulders of the people that went before us, and we have to look at how much they achieved from where they started, and that was the period in which you had the tremendous influx of immigrants from abroad, millions and millions and millions of them, when you opened up a new continent, when you had achievements.

McKENZIE: Milton, are you saying, though, that there’s any sense, in which you’d rather go back to those circumstances where there are no regulations of factory work, no hours, limitations of hours worked. Do you want to return to that or do you say that was a stepping stone to where we are now?

FRIEDMAN: It depends on what you mean by circumstances. I don’t want to have to go back to using a horse and buggy instead of an automobile, but I would prefer to go back to the kinds of governmental regulations, or absence of regulations, the greater degree of freedom which was given to individuals to pursue one activity or another, which prevailed then, than which prevails now.

PETERSON: I think that, really, our industrial leaders have been dragged into the future screaming. They resisted the Child Labor Laws, they resisted Social Security, labor unions, and now the environmental movement. Once the government forced them to pay attention to those, by the voting of the people in the ballot box and in the polling place, then the industrial leaders, business leaders, paid attention to those rules and have done a good job in most cases of abiding by them.

FRIEDMAN: Excuse me.

McKENZIE: Now Bob Galvin is an industrialist, now come on, is that a fair statement?

GALVIN: Maybe the industrialists have a clearer view of history and its prospects. The most precious asset we possess is freedom. The easiest way to lose one’s freedom is to go into receivership; and I mean economic receivership. Because a receiver is a dictator. And to the degree that we employ the costs and the burdens of government that lead us in the direction of further debt, ultimate receivership, and then the political consequence of the imposition of the political dictator over the economic and the job and the living rights of the individual, maybe the industrialists can see farther down the pike as to the consequence of all this.

McKENZIE: Michael Harrington.

HARRINGTON: I just think that __ two things. One, to view freedom positively. I think people over 65 years of age in the United States today are freer now because of Medicare. I do not think that the freedom to die from the lack of medicine was a very good thing. Secondly, related to industrialists, I think that one of the startling things about American history is that when Franklin Roosevelt was saving the system from itself, the main beneficiaries were screaming bloody murder at him for being a traitor to his class. When he was in fact the salvation of that class. And I think if you, therefore, if you look at our history, I do think you find a tremendous myopia on the part of industrialists, and you find that the positive increments to our freedom, interestingly enough, have not come from the college graduates, but often from people with __ not from the best people, it’s come from working people. It’s come from poor people, it’s come from blacks and Hispanics and the like.

McKENZIE: Milton, would you reply, but then tell us why you took us to Hong Kong to prove something.

FRIEDMAN: Sure. Unaccustomed as I am to agreeing with Michael Harrington, I will agree in part with what he’s just said.

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