FREE TO CHOOSE “Who protects the consumer?” Video and Transcript Part 7 of 7 “When government intervenes into these affairs that harms third parties. It picks my pocket. It reduces my freedom”


In 1980 I read the book FREE TO CHOOSE by Milton Friedman and it really enlightened me a tremendous amount.  I suggest checking out these episodes and transcripts of Milton Friedman’s film series FREE TO CHOOSE: “The Failure of Socialism” and “What is wrong with our schools?”  and “Created Equal”  and  From Cradle to Grave, and – Power of the Market.

From the original Free To Choose series Milton asks: “Who Protects the Consumer?”. Many government agencies have been created for this purpose, yet they do so by restricting freedom and stifling beneficial innovation, and eventually become agents for the groups they have been created to regulate.

The best point Milton Friedman made below about the Consumer Protection Agency is this:
“When government intervenes into these affairs that harms third parties. It picks my pocket. It reduces my freedom.”
Pt 7
O’REILLY: Do you favor the government intervention in those areas where, for example, the bar associations and the eyeglass industry were not allowing their members to advertise and then the Federal Trade Commission stepped in and now consumers have the ability to make those kinds of comparisons?
FRIEDMAN: You’re getting into another area, but the answer, a brief answer because we oughtn’t to discuss this here. I am against those governmental measures which have enabled the organizations to have the power to prevent advertising.
O’REILLY: But they were no government __
MCKENZIE: Now, now look, Bob Crandall said __ Bob Crandall said that in an area like the Interstate Commerce Commission there is nothing really to be said in defense at all. Does anybody dissent from that or have we knocked them down flat?
FRIEDMAN: That happens to be the one area on which, so far as I know, you cannot find any dissent anywhere, even __ one of the most effective presentations of what was wrong with ICC was done by one of Ralph Nader’s groups, maybe you were associated with that group. That’s the thing that really baffles me. Fundamentally, here are people, like Ralph Nader and his groups who look at ICC and what is their solution to the problem? More of the same, a different kind of regulation __
CLAYBROOK: No.
FRIEDMAN: __ the only problem is that the wrong people were in there regulating.
CLAYBROOK: No, no, no. That’s not true. No, that’s a complete misrepresentation.
MCKENZIE: You work with Nader now, that’s __
CLAYBROOK: Yes.
FRIEDMAN: That’s Dr. Landau’s solution for the medical problem. Let’s have the right people doing the regulating.
CLAYBROOK: No, no, no. That’s a complete misnomer about the difference between ICC and Health and Safety regulation. There are a number of differences. One is, one involves the economic and the benefits of profits to industry and the other involves the sanctity of life in __ among people.
FRIEDMAN: Excuse me.
MCKENZIE: Now let her finish this point, Milton.
FRIEDMAN: Okay.
MCKENZIE: Yes.
CLAYBROOK: The second one and it deals with your third party relationship is that __ what you’re talking about there is brakes because they’re gonna affect somebody else, but there are also other third-party effects. For example, if you don’t have a helmet used by someone and you hit them with your motorcycle, you’re gonna have huge damage payments to make because they didn’t properly take proper precautions on the public highways. And the question is: Should the public highways be used so that they’re gonna harm somebody else, potentially?
FRIEDMAN: There is nothing that two people do in a world. No man is an island to himself, everything has third-party issues; but you’ve got to have a sense of proportion and the important thing is that government intervention has third-party issues. When government intervenes into these affairs that harms third parties. It picks my pocket. It reduces my freedom. It restricts many activities around the world.
CLAYBROOK: That’s what you question is: what are the benefits? And if the benefits in the auto field, for example, are 55,000 deaths saved, it means __
FRIEDMAN: That’s a very dubious statistic because once again every study has looked at the benefits and not looked at the costs.
CLAYBROOK: Oh no, that’s not true at all. Absolutely not that they haven’t looked at the costs.
FRIEDMAN: I mean the costs in life. You haven’t looked at the fact, for example __
MCKENZIE: Let me clarify this, Milton. I don’t quite follow you.
FRIEDMAN: Sure.
MCKENZIE: Would you explain what you mean exactly?
FRIEDMAN: Of course.
MCKENZIE: Yeah.
FRIEDMAN: Look, take the automobile, by making automobiles more expensive it makes it more profitable to keep older automobiles on the road. The increased age of the automobile is an anti-safety factor by making automobiles safer so people are __ can drive them, people drive them faster or more recklessly then they otherwise would. There are more pedestrian deaths.
CLAYBROOK: That’s a totally unproven and indeed fully rebutted theory. And, in fact, all the savings in lives could __
MCKENZIE: By whom? You or __
CLAYBROOK: Well, no, there are numerous studies, including from__
MCKENZIE: Yeah, I see.
CLAYBROOK: __ Yale and Cooper from Yale and so on, but the key issue has been shown by the regulation that’s been in in the last ten years, you’ve had a huge saving in lives, a decrease in the __ the vehicle deaths that have occurred, the rate of vehicle deaths occurred and so on.
FRIEDMAN: Let me go back again for a moment.
CLAYBROOK: Yes.
FRIEDMAN: You see, the major effect on the saving of life has been from 55_mile_an_hour speed limits.
CLAYBROOK: Oh no, that’s not true.
FRIEDMAN: Which is not after all in there __
CLAYBROOK: Well that is also a regulation.
FRIEDMAN: __ as a safety regulation. That primarily is a fuel regulation.
CLAYBROOK: Yeah, that’s right. It’s a regulation.
MCKENZIE: Yeah.
CLAYBROOK: But your statement’s not accurate.
FRIEDMAN: All right.
CLAYBROOK: That the savings in life have not been primarily __ they’ve been, they’re important from 55. But there have been 55,000 deaths saved by vehicle crash safety regulations.
FRIEDMAN: Excuse me.
CLAYBROOK: Uh_huh.
FRIEDMAN: There have been 55,000 deaths that you have estimated to have been saved by it. Other estimates __
CLAYBROOK: Not me, the General Accounting Office.
FRIEDMAN: Excuse me. Other estimates as well, the estimate by Professor Sam Peltzman (phonetic) of this university, a very, very serious study estimated that there were no lives saved in you took into account all of the indirect effects. Now maybe his study isn’t exactly right.
CLAYBROOK: I don’t think it is.
FRIEDMAN: I’m not going to try to __ but maybe the other study isn’t exactly right either.
CLAYBROOK: Yes, okay, right.
(Laughter)
O’REILLY: But if you’re somewhere in between. If you look at __ consumers have done well if it’s even in between.
FRIEDMAN: No, no. I beg your pardon. If people voluntarily want to risk their lives. Are you saying again you really would not be in favor of prohibiting hand gliding.
CLAYBROOK: We asked the auto __ we asked the auto industry if __
FRIEDMAN: That’s far more dangerous. Did you prohibit the 500_mile speedway?
CLAYBROOK: I think the __ let me answer this. We asked the auto industry if they would remove all the safety standards that have been in effect since 1968 and what would be the savings to the public if they did that. And the answer, sir, that they came back with was, “We couldn’t remove those, they expect them now.” The laminated windshields that don’t crack their head open and the collapsible steering assemblies and the padded dashboards. That __ why the public __ that is now the societal norm. Regulation has changed the thinking of the public and the understanding of what’s possible and so the, you know , what you’re suggesting is that government regulation is willy-nilly and it produces things the public doesn’t want, but you don’t have any__
FRIEDMAN: Excuse me for a moment. You can’t take credit for everything that’s happened in this area. Four-wheel brakes were introduced before there were safety regulations. Many of these developments would have __
MCKENZIE: Well, we leave the matter now for this week and we hope you’ll join us again for the next episode in a week’s time.

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