FRIEDMAN FRIDAY Great quotes from Milton Friedman

I am moving the FRIEDMAN FRIDAY to a monthly feature on http://www.thedailyhatch.org. My passion has been recent years to emphasize the works of Francis Schaeffer in my apologetic efforts and most of those posts are either on Tuesdays or Thursdays.

http://ohnimus.wordpress.com/2012/09/24/13-quotes-from-men-of-recent-history-on-government-welfare/

http://www.drdavewhite.com/2012/12/02/why-doing-good-by-force-is-bad/

http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html

http://www.libertygiant.com/libertygiant/quotes.php

“What kind of society isn’t structured on greed? The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system.” — Milton Friedman

Economic freedom is an essential requisite for political freedom. By enabling people to cooperate with one another without coercion or central direction, it reduces the area over which political power is exercised. – Milton Friedman

Whenever we depart from voluntary cooperation and try to do good by using force, the bad moral value of force triumphs over good intentions. – Milton Friedman

The essential notion of a capitalist society … is voluntary cooperation, voluntary exchange. The essential notion of a socialist society is force. – Milton Friedman

“The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another. “– Milton Friedman

“The power to determine the quantity of money… is too important, too pervasive, to be exercised by a few people, however public-spirited, if there is any feasible alternative. There is no need for such arbitrary power… Any system which gives so much power and so much discretion to a few men, [so] that mistakes – excusable or not – can have such far reaching effects, is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic – this is the key political argument against an independent central bank. “— Milton Friedman

“Fundamentally, there are only two ways of coordinating the economic activities of millions. One is central direction involving the use of coercion – the technique of the army and of the modern totalitarian state. The other is voluntary cooperation of individuals – the technique of the marketplace.” – Milton Friedman

Self-interest is not myopic selfishness. It is whatever it is that interests the participants, whatever they value, whatever goals they pursue. The scientist seeking to advance the frontiers of his discipline, the missionary seeking to convert infidels to the true faith, the philanthropist seeking to bring comfort to the needy – all are pursuing their interests, as they see them, as they judge them by their own values. – Milton Friedman

Milton Friedman (1912-)
American Economist and 1976 Nobel Prize-Winner in Economics

“The economic miracle that has been the United States was not produced by socialized enterprises, by government-union-industry cartels or by centralized economic planning. It was produced by private enterprises in a profit-and-loss system. And losses were at least as important in weeding out failures as profits in fostering successes. Let government succor failures, and we shall be headed for stagnation and decline.”

“Whenever we depart from voluntary cooperation and try to do good by using force, the bad moral value of force triumphs over good intentions.”

“There was a time when we [the U.S.] had completely unrestricted immigration, when anybody could come to these shores and the motto on the Statue of Liberty had some real meaning. This was a country of hope and of promise for immigrants and their children, and as many as a million immigrants a year came in 1906 and ’07 and ’08. By 1914, roughly a third of the population was foreign-born or the immediate descendants of foreign-born . . . The fact that year after year hundreds of thousands of people left the countries of Europe to come to this country was persuasive evidence that they were coming to improve their lot, not to worsen it.”

“Why have we had such a decline in moral climate? I submit to you that a major factor has been a change in the philosophy which has been dominant, a change from belief in individual responsibility to belief in social responsibility. If you adopt the view that a man is not responsible for his own behavior, that somehow or other society is responsible, why should he seek to make his behavior good?”

“The essential notion of a capitalist society . . . is voluntary cooperation, voluntary exchange. The essential notion of a socialist society is force.”

“The preservation of liberty, not the promotion of efficiency, is the primary justification for private property. Efficiency is a happy, though not accidental, by-product–and a most important by-product because liberty could not have survived if it had not also produced affluence.”

“The great virtue of free enterprise is that it forces existing businesses to meet the test of the market continuously, to produce products that meet consumer demands at lowest cost, or else be driven from the market. It is a profit-and-loss system. Naturally, existing businesses generally prefer to keep out competitors in other ways. That is why the business community, despite its rhetoric, has so often been a major enemy of truly free enterprise.”

“Adam Smith’s key insight was that both parties to an exchange can benefit and that, so long as cooperation is strictly voluntary, no exchange can take place unless both parties do benefit.”

“There’s a widespread belief and common conception that somehow or other business and economics are the same, that those people who are in favor of a free market are also in favor of everything that big business does. And those of us who have defended a free market have, over a long period of time, become accustomed to being called apologists for big business. But nothing could be farther from the truth. There’s a real distinction between being in favor of free markets and being in favor of whatever business does.”

“Most economic fallacies derive. . . from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.”

“I’m in favor of legalizing drugs. According to my value system, if people want to kill themselves, they have every right to do so. Most of the harm that comes from drugs is because they are illegal.”

“Fundamentally, there are only two ways of coordinating the economic activities of millions. One is central direction involving the use of coercion–the technique of the army and of the modern totalitarian state. The other is voluntary cooperation of individuals–the technique of the marketplace.”

“If you put the federal government in charge of the Sahara Desert, in 5 years there would be a shortage of sand.”

“Underlying most arguments against the free market is a lack of belief in freedom itself.”

“Freedom in economic arrangements is itself a component of freedom broadly understood, so economic freedom is an end in itself . . . Economic freedom is also an indispensable means toward the achievement of political freedom.”

“We have a system that increasingly taxes work and subsidizes non-work.”

“Hell hath no fury like a bureaucrat scorned.”

“Political freedom means the absence of coercion of a man by his fellow men.”

“A society that puts equality. . . ahead of freedom will end up with neither equality nor freedom.”

“Underlying most arguments against the free market is a lack of belief in freedom itself.”

“Nothing is so permanent as a temporary government program.”

“The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.”

“Inflation is taxation without legislation.”

“What kind of a society isn’t structured on greed? The problem of social organization is how to set up an arrangement under which greed will do the least harm.”

“Self-interest is not myopic selfishness. It is whatever it is that interests the participants, whatever they value, whatever goals they pursue. The scientist seeking to advance the frontiers of his discipline, the missionary seeking to convert infidels to the true faith, the philanthropist seeking to bring comfort to the needy—all are pursuing their interests, as they see them, as they judge them by their own values.”

“The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.”

“History suggests that capitalism is a necessary condition for political freedom.”

“The government solution to a problem is usually as bad as the problem.”

“Most economic fallacies derive . . . from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.”

“When a man spends his own money to buy something for himself, he is very careful about how much he spends and how he spends it. When a man spends his own money to buy something for someone else, he is still very careful about how much he spends, but somewhat less what he spends it on. When a man spends someone else’s money to buy something for himself, he is very careful about what he buys, but doesn’t care at all how much he spends. And when a man spends someone else’s money on someone else, he does’t care how much he spends or what he spends it on. And that’s government for you.”

 

_________________

 

Given what we know in 2012, saying that capitalism will make a society richer than socialism should be about as controversial as saying the earth is round, not flat. Yet, a recent Gallup poll shows that more liberals have a positive view of socialism than capitalism. This is only possible because there are so many perverse incentives that drive the promotion of socialism. If you’re a politician, socialism puts power in your hands while capitalism takes it away. If you want to use the government to control people’s lives, socialism is a wonderful vehicle to do just that while capitalism robs you of that opportunity. If you would rather live off the dole than to work or alternately, prefer to make money off “who you know” instead of “how good a service you provide,” again socialism works better for you. Now take into account the fact that there are no pure socialist or capitalist economies left and it becomes very easy to muddy the water and keep people from realizing the obvious economic superiority of capitalism.

1) Socialism benefits the few at the expense of the many: Socialism is superior to capitalism in one primary way: It offers more security. It’s almost like an extremely expensive insurance policy that dramatically cuts into your quality of life, but insures that if worse comes to worse, you won’t drop below a very minimal lifestyle. For the vast majority of people, this would be a terrible deal. On the other hand, if you’re lazy, completely incompetent or alternately, just have a streak of very bad luck, the meager benefits provided by socialism may be very appealing. So a socialist society forces the many to suffer in order to make it easier for the few. It’s just as Winston Churchill once noted, “The inherent virtue of socialism is the equal sharing of miseries.”

2) Capitalism encourages entrepreneurship while socialism discourages it: A government in a capitalist economy can quite easily give everyone equality of opportunity with a few basic laws and regulations, but socialism strives to create equality of results. This should frighten people who value their freedom because ultimately, as F.A. Hayek has noted, A claim for equality of material position can be met only by a government with totalitarian powers. You can see this happening in America as our efforts to reduce “inequality” have led to an ever expanding government and a vast regulatory tangle that is almost unexplainable despite the fact that it is certainly enforceable. Capitalism encourages people to start a business and build a better life for themselves while socialism lays in wait with IRS agents, nooses made of red tape and meddling bureaucrats looking for businesses to control and loot.

3) Capitalism leads to innovation: Coming up with new products is often time consuming, expensive and hit or miss. Nine ideas may fail before that tenth one takes off. The less the creative people behind these ideas are allowed to benefit, the less time, money and effort they’ll put into developing new concepts and inventions. Put another way, the bigger the risk, the bigger the reward has to be to convince people to take it. Capitalism offers big rewards for productive people while socialism offers makers only a parade of bureaucratic leeches who want to take advantage of their “good fortune.”

4) Capitalism produces more economic growth: Capitalism produces considerably more economic growth than socialism and as John Kennedy said, “A rising tide lifts all boats.” A fast growing economy produces more jobs, more wealth and helps everyone. Many people assume that capitalism isn’t working if there are still poor people, but that misses the point. In many parts of the world, poverty means living in a hut with a dirt floor while in America, most poor Americans have TVs, refrigerators and cell phones. The rich may take home a larger share of the pie in capitalism, but the poor also benefit tremendously from living in a growing, thriving economy.

5) Socialism is too slow to adapt: Capitalism is extremely good at allocating capital to where it’s most valued. It has to be. Either you give people what they are willing to pay for or someone else will. On the other hand, socialism is slow and stupid for a variety of reasons. Because the government is spending someone else’s money, it doesn’t get particularly concerned about losing money. Political concerns about appearances often trump the effectiveness of a program. Moreover, even if politicians and bureaucrats are intelligent and competent, which are big “ifs,” they’re simply not going to have the specific knowledge needed to make decisions that may impact thousands of different industries. This is why capitalism may have its share of troubles, but when there are really colossal economic screw-ups, you’ll always find the government neck deep in the whole mess.

6) Socialism is inherently wasteful: Milton Friedman once said, “Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own.” This is very true and it means that the more capital that is taken out of the economy and distributed, the more of it that will be wasted. The market does a considerably better job of allocating resources than the government because there are harsh penalties for failure. A company that makes products no one wants will go out of business. A poorly performing government program that wastes a hundred times more money will probably receive a bigger budget the next year.

7) Capitalism works in concert with human nature while socialism works against it: Ayn Rand said it well, “America’s abundance was created not by public sacrifices to ‘the common good,’ but by the productive genius of free men who pursued their own personal interests and the making of their own private fortunes. They did not starve the people to pay for America’s industrialization. They gave the people better jobs, higher wages and cheaper goods with every new machine they invented, with every scientific discovery or technological advance—and thus the whole country was moving forward and profiting, not suffering, every step of the way,” but Adam Smith said it better, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.” A man will work much harder to take care of himself, his family and his friends than he will to make money for the state, which will then waste most of it before redistributing it to people who aren’t working as hard as the man who earned it in the first place.

Advertisements
Post a comment or leave a trackback: Trackback URL.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: