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. In this episode “The Tyranny of Controls” Milton Friedman shows how government planning and detailed control of economic activity lessens productive innovation and consumer choice.

In this episode Milton Friedman asserts, “When anyone complains about unfair competition, consumers beware. That is really a cry for special privilege always at the expense of the consumer. What we needed in this country is free competition. As consumers, buying in an international market, the more unfair the competition the better. That means lower prices and better quality for us. If foreign governments want to use their taxpayers money to sell people in the United States goods below cost, why should we complain? Their own taxpayers will complain soon enough and it will not last for very long.”

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Milton Friedman’s Free to Choose – Ep.2 (3/7) – The Tyranny of Control

Richard P. Simmons, Industry Specializing Steel Committee: The dilemma of asking our government for assistance in this problem of unfair competition bothers many of us because the sword does cut both ways. But we believe that what we have attempted to do is far different than the kinds of direct government involvement that occur in many of the foreign nations around the world where the governments provide direct financial assistance in the form of either ownership or loans or subsidies in some fashion or another.

What we have attempted to do is simply to get our government to enforce the United States laws against unfair competition that have been on the United States’ books. We draw clear distinction between that and, for example, the several hundred million dollars that the French government has granted to the French steel companies, or that the British Steel Corporation has received $1.3 billion for capital investment this year. So that while we are uneasy in any way interfacing with our government in what we traditionally believe are the free enterprise prerogatives, yet what we are only asking for is that the government enforce the laws that our Congress has passed. I’m not sure that’s really any different than asking someone to arrest someone that commits a crime. I don’t think we would be accused of being reactionary if we reported somebody who was stealing, to the police if it were in violation of a U.S. law. We think that we’re doing exactly the same thing when we bring cases against foreign producers who we believe are violating U.S. laws.

Friedman: The fallacy with that argument is that it begs the real question. Why should there be laws that in effect prevent you and me from buying in the cheapest market?

When anyone complains about unfair competition, consumers beware. That is really a cry for special privilege always at the expense of the consumer. What we needed in this country is free competition. As consumers, buying in an international market, the more unfair the competition the better. That means lower prices and better quality for us. If foreign governments want to use their taxpayers money to sell people in the United States goods below cost, why should we complain? Their own taxpayers will complain soon enough and it will not last for very long.

History provides lots of evidence on what happens when government protected industries compete with industries who have the operate in an open and free market. It’s almost always the government protected industries that come out second best.

Ask Sir Freddy Laker, the Englishman who introduced low cost air traffic across the Atlantic. Who were his chief competitors? They were all government protected, government financed, government regulated airlines. He came out very well, made a mint of money. And you and I have gotten cheaper travel across the Atlantic.

Nothing would promote the long run health of the steel industry, make it into a more efficient, profitable and productive industry than for the U.S. government to keep its hands off, neither providing special privileges, nor imposing special restraints. And what is true for the steel industry is true for every other industry in the country.

These women work in an industry that so far hasn’t asked for special protection __ the silicon chip industry. Every one of these small squares on this disk is a highly complicated and integrated micro circuit. An American technician examines them for defects. It is highly skilled work and she’s had a lot of training. When she has done her job, the rejects will be separated from the rest and the good circuits will be packed up and sent half way around the world to Malaysia. The product of American technological skills returns looking like this. Each micro circuit has been enclosed in ceramic by a Malaysian worker who is highly productive at this sort of work. But, the Malaysians are not able to test their product so back they come here to America to be fed into these machines.

American engineers are good at producing sophisticated machines. In an operation that lasts a fraction of a second, these machines can test every circuit, can grade it for quality, and then can sort it into one of six different categories of reliability. The invisible hand in this free market has done wonders for both the American girls and their Malaysian counterparts. And that’s not the end yet because American silicon chips are exported to many countries where foreign workers assemble them. The final product is then returned to our stores so that you and I, the consumers, can benefit from $10.00 calculators, as well as from a lot of other electronic devices that not long ago simply did not exist. When this Hi-Fi equipment first came on the market, only the rich could afford it.

But even when the international market and labor seem to work to everyone’s advantage, people still put up arguments against it. The usual argument against complete free trade is that cheap labor from abroad will take jobs away from workers at home. Well, what is cheap? A Japanese worker is paid in yen and American workers paid in dollars. How do we compare the yen with the dollars? We need some way of transforming the one into the other. That is where the exchange rate enters in __ the price of yen in terms of the dollar.

Suppose that some exchange rate, Japanese goods are in general cheaper than American goods, and we will be buying much from Japan and selling little to them. But what will the Japanese do with the extra dollars they earn? They don’t want to buy American goods. By assumption, those are all dear. They want to buy Japanese goods. But to buy Japanese goods, they need yen. Calls will come in from all over the world to places like this, offering to buy yen for dollars. But there will be more offers to buy yen than to sell yen. In order to get customers, those offering to buy will have to raise the price. The price of yen in terms of dollars will go up.

As you remember, that is what happened in 1977 and 1978. By late 1978, it took 50% more dollars to buy a given amount of yen than it had taken a year earlier. But what happens when the price of yen in terms of dollars goes up? Japanese labor is no longer so cheap. Japanese goods are no longer so attractive to American consumers. On the other hand, American labor is no longer so dear to Japanese. American goods are more attractive to the Japanese. We will export more to them. We will import less from them. New jobs will be created in export industries to replace any jobs that might have been lost in industries competing with imports. That is how a free market and foreign exchange balances trade around the world when it is permitted to operate. The problem is that more often than not free market is not permitted to operate. For reasons that seem to make sense if you don’t examine them carefully, government insists on interfering, but when they do it’s not possible to hide the harmful effects for very long.

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“The Failure of Socialism” episode of Free to Choose in 1990 by Milton Friedman (Part 1)

By Everette Hatcher III | Posted in Milton Friedman, Ronald Reagan | Edit | Comments (0)

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. In this episode “The Tyranny of Controls” Milton Friedman shows how government planning and detailed control of economic activity lessens productive innovation and consumer choice.

In this episode Milton Friedman asserted, “Central planning, in practice, has condemned India’s masses to poverty and misery. We know what has happened in Japan. Free trade set off a process that revolutionized Japan and the lives of its people. Improvements in material well-being went hand in hand with the elimination of the rigid social structure of a century ago. It’s no accident. As always, economic freedom promotes human freedom.”

Milton Friedman’s Free to Choose – Ep.2 (2/7) – The Tyranny of Control

But it is more than just a symbol of honoring the past. It typifies the policy that they are actually following.

The new government in 1948 decided that India’s traditional weaving industry and its workers should be protected from 20th century industrialization. What were the consequences of that policy? This is India today, 30 years after winning independence. These are scenes of a very typical Indian community __ one of thousands. It is called “Anicaputar” and it is about 1,000 miles south of the capital, New Delhi. This is not the kind of life the government intended to perpetuate. But it is one result of their policy. By subsidizing the cotton that the villagers spin and the cloth that they weave, they made it difficult for modern industry to develop.

This is sizing. It’s an essential technique in cloth production where the yarn is smoothed clean. A modern machine could do the same thing in a hundredth of the time. The result of government planning to modernize industry is that the number of hand looms roughly doubled in the first thirty years after India’s independence. Today, in thousands of villages throughout India, the sound of hand looms can be heard from early in the morning until late at night. In this village alone, there are more than 3,000 hand looms in operation.

Since 1948, three generations of villagers have sat at these looms making cloth with patterns that never vary, using methods that never change. There is nothing wrong with this activity, provided it survives the test of the market, provided it is the way in which these people can use their abilities and their energies most effectively. After all, in Japan, where the government has not specially encouraged the hand loom industry, there remains a very small, but very productive hand loom segment. The trouble here is that this industry exists only because the government has subsidized and supported it because it has in effect imposed taxes, direct and indirect, on the rest of the people of India, people who are no better off than these people are in order to enable this activity to continue.

Other industries, both textile industries and industries of a variety of kinds, have been restricted, explicitly kept back, prevented from providing more productive employment in order to make room for this industry. The effect has been to inhibit the development, to prevent the growth, to prevent the dynamic activity that could otherwise develop out of the energies and the abilities to the people of India. This looks like a factory, but it is also home for the people who work here. When they are not sitting at their looms, they eat and sleep in a corner of this hut.

Throughout the world, governments always profess to be forward-looking. In practice, they are always backward-looking. Either protecting the industries that exist, or making sure that whatever ventures they have decided to undertake, are encouraged and developed. This occurs at the expense of the kind of healthy development of new, dynamic, adapted industries that would surely occur if the market were allowed to operate freely. If it were allowed to separate out the unsuccessful ventures from the successful ones. Discouraging the unsuccessful and encouraging the successful.

India has tremendous economic and human potential, every bit as much as Japan had a century ago. The human tragedy is that in India, that potential has been stifled by the straightjacket imposed by an all-wise and paternalistic government.

Central planning, in practice, has condemned India’s masses to poverty and misery. We know what has happened in Japan. Free trade set off a process that revolutionized Japan and the lives of its people. Improvements in material wellbeing went hand in hand with the elimination of the rigid social structure of a century ago. It’s no accident. As always, economic freedom promotes human freedom.

And in the meantime, what has happened to the Japanese weaving industry? This is how textiles start life in a Japanese weaving shed today. A design for cloth is placed on a drum. As it revolves, it is scanned by an electric eye. Each color, each variation in the pattern and texture is transmitted faithfully to a computer. It’s all that the modern loom of Japan requires. This loom is fitted with electronics that make it one of the most sophisticated of its sort in the world. The fabric that it produces is the best silk of its kind.

Thanks to the speed and efficiency of these machines, the price of the silk is competitive. The workers are highly skilled and well paid. With the new technology, there is very little __ a loom like this cannot produce. This piece will become the sash of a traditional bridal gown. These are machine-made products. But by any standards, they are beautiful. They can stand comparison with the very finest work of the hand loom. And it’s not merely the end product itself that is remarkable. The sophisticated technology which was developed to make all of this possible, has been adapted to other processes. Part of the self-generating development under free enterprise, and it all stems from an ancient, traditional industry __ weaving __ that imported a new method for controlling its looms when Japan turned to free trade more than a century ago.

Yet, believe it or not, many still maintain today that markets cannot be left to operate freely. That they must be controlled by government. This dockside is in Scotland, a British government, a socialist government decided that its role was to protect the workers here from competition. So down there in governed shipyards, they are building these vessels for the Polish government. To get the order, the British government is using the money of British taxpayers to subsidize the work. In other words, British people are making these ships in order to sell them at a loss to the Poles. Not only the Poles, but we also in America benefit from this kind of philanthropy.

The steel industry in the United States makes a fine profit. Other countries do too. And their steel is often cheaper, sometimes because their taxpayers subsidize it. So, why shouldn’t the American consumer buy steel wherever he can get it cheapest __ at home or abroad. The American steel industry works very hard trying to persuade us that it’s not in our self-interest to buy in the cheapest market. They urge the government to restrict what they call unfair competition, though, of course, they recognize that there are dangers in this.

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“The Failure of Socialism” episode of Free to Choose in 1990 by Milton Friedman (Part 1)

By Everette Hatcher III | Posted in Milton Friedman, Ronald Reagan | Edit | Comments (0)

FREE TO CHOOSE “Who protects the worker?” Video and Transcript Part 7 of 7

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. Milton Friedman shows in this episode how the worker is best protected and it is not by the government!!!!!!!

Milton Friedman’s  best point made in the following debate is this statement:

“The crucial issue is whether governmental measures which have the effect of favoring union organization of giving them privileges and immunities that are not accorded to other organizations in the society, benefit the society as a whole, or harm the society as a whole. The proposition I tried to make in this film was that the source of the prosperity of this country was freedom of enterprise, freedom of employers to hire, of workers to work for whom they wanted to; and insofar as unions have played a role, they have protected some workers at the expense of others, and have retarded the prosperity of this country. I think that Lynn Williams’ statements to the contrary cannot be supported by any empirical or other evidence that he has, understandably, I’m not blaming him for this, he would be faithless to his job if he did not believe sincerely in what he’s saying. I’m not questioning his sincerity, but sincerity is a much overrated virtue in our society. The plain fact is that there is no evidence whatsoever that either unions or minimum wages have made positive contributions to the prosperity of this country. Some unions have, of course, some unions have done great harm. It’s not an open and shut picture in which you can make a sweeping statement. But on the whole, the growth of this country… The sweeping statement I make is that the prosperity of this country derives primarily from freedom of enterprise and freedom to hire, to employ, to work, and not from restrictive measures imposed by trade unions.”

Pt 7

FRIEDMAN: Sure.

L. WILLIAMS: This is only to say, surely __

FRIEDMAN: Everybody can benefit.

L. WILLIAMS: This is only to say that a busy economy, one in which there’s investment and development and so on is an economy that’s a good economy for working people and for everyone else. I think we say that in the AFL-CIO. at least once a month, all the time. There’s nothing in which __ there’s nothing in which we’re more interested than having a busy, functioning economy. The question is how to bring that about. I do suggest and I think __ I think can be defended as long as we want to discuss it, that the prosperity we have in America today that the labor movements have made an enormous __ the labor movement has made an enormous contribution to that and in the absence of the labor movement and in the absence of minimum wage this would not be as prosperous a country as it is.

MCKENZIE: Now hold it there __ hold it there, Lynn. I want to get a reaction to that. He stated the case for what unions have achieved. Could we go around, first of all, do you accept any part of that?

W. WILLIAMS: No, it’s preposterous, you know, as I suggested before. I mean, if we, you know, if minimum wages could make people richer __

MCKENZIE: Unions we’re talking about now.

W. WILLIAMS: Well, if unions could make people richer __

MCKENZIE: Yeah.

W. WILLIAMS: __ all you have to do is tell people in Bangladesh why don’t you unionize and demand a higher wage. You could be rich like the United States.

L. WILLIAMS: We’re telling everyone in the world.

W. WILLIAMS: It’s productivity.

L. WILLIAMS: We told them in Japan it works.

MCKENZIE: Lynn __

W. WILLIAMS: The workers have higher wages in our country because they’re more productive. That’s how you get higher wages. And this just plain __ I mean, it’s nonsense.

BRADY: And why are they more productive?

W. WILLIAMS: Because they have capital __

BRADY: Enormous capital investment.

(Several people talking at once.)

BRADY: And the higher wages are paid and the higher the capital intents of industry.

L. WILLIAMS: And because there are consumers to buy the stuff who have wages which enable them to go into the marketplace and buy something.

BRADY: Without the capital investment they wouldn’t have the wage and it would be no way of paying them without the capital investment.

L. WILLIAMS: If all those workers weren’t making any money there wouldn’t be much prosperity__

BRADY: There would be no way of paying it without the capital investment.

MCKENZIE: Ernest Green, what’s the reply, your reply?

GREEN: I stand by my initial statement, that it is a prerequisite of the democratic society to have trade unions, organizations aligned, workers to band together in their mutual interests, and __

VOICE OFF SCREEN: Are you saying voluntary associations?

GREEN: And if that, if that group __ I’m saying that trade unions like A. Philip Randolph’s sleeping car porters, the Pullman car company would have never, on its own, given those workers who worked very hard and were very productive people, well educated, any increase in their wages had it not been for the intervention of Randolph.

FRIEDMAN: The crucial issue is whether governmental measures which have the effect of favoring union organization of giving them privileges and immunities that are not accorded to other organizations in the society, benefit the society as a whole, or harm the society as a whole. The proposition I tried to make in this film was that the source of the prosperity of this country was freedom of enterprise, freedom of employers to hire, of workers to work for whom they wanted to; and insofar as unions have played a role, they have protected some workers at the expense of others, and have retarded the prosperity of this country. I think that Lynn Williams’ statements to the contrary cannot be supported by any empirical or other evidence that he has, understandably, I’m not blaming him for this, he would be faithless to his job if he did not believe sincerely in what he’s saying. I’m not questioning his sincerity, but sincerity is a much overrated virtue in our society. The plain fact is that there is no evidence whatsoever that either unions or minimum wages have made positive contributions to the prosperity of this country. Some unions have, of course, some unions have done great harm. It’s not an open and shut picture in which you can make a sweeping statement. But on the whole, the growth of this country __

VOICE OFF SCREEN: I’d like for you to make a sweeping statement.

FRIEDMAN: I do. The sweeping statement I make is that the prosperity of this country derives primarily from freedom of enterprise and freedom to hire, to employ, to work, and not from restrictive measures imposed by trade unions.

MCKENZIE: Everybody briefly now. Ernest __

GREEN: And I would say that the intervention of the strong Federal Government, who those employers hire, the kinds of protection, the wage standards, health conditions, are the requirement of this government to protect these people. Because the history of it has shown that hasn’t occurred; and in your case in Spartanburg, South Carolina, again, I argue that the only reason that they can come back now and attract firms from Switzerland and Germany is because, one that we had a strong government that provided protection for all of its citizens which didn’t occur fifteen years ago.

MCKENZIE: Bill Brady.

BRADY: Economic freedom, in my opinion, should not be abridged. I think that these two gentlemen are advocating that it be abridged. They’re advocating a retention of the minimum wage; they’re advocating, I think, Lynn Williams is advocating the retention of the Davis Bacon Act. They do not, it seems to me, believe that freedoms are interdependent and indivisible. There are freedoms __ there is economic freedom; there is press freedom; there is freedom of assembly; there’s religious freedom; and you are advocating to me a great abridgement of economic freedom and when you do that you injure the other freedoms that we have. And if you do it enough, as we are doing in this country today, if you do it enough we are in danger of losing all of our other freedoms.

MCKENZIE: Now we leave this very spirited discussion, and I hope you’ll join us again for the next episode of Free to Choose.

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Bob Chitester Discusses Milton Friedman and ‘Free to Choose’

Published on Jul 30, 2012 by LibertarianismDotOrg

“There are very few people over the generations who have ideas that are sufficiently original to materially alter the direction of civilization. Milton is one of those very few people.”

That is how former Federal Reserve Chairman Alan Greenspan described the Nobel laureate economist Milton Friedman. But it is not for his technical work in monetary economics that Friedman is best known. Like mathematician Jacob Bronowski and astronomer Carl Sagan, Friedman had a gift for communicating complex ideas to a general audience.

It was this gift that brought him to the attention of filmmaker Bob Chitester. At Chitester’s urging, Friedman agreed to make a 10 part documentary series explaining the power of economic freedom. It was called “Free to Choose,” and became one of the most watched documentaries in history.

The series not only reached audiences in liberal democracies, but was smuggled behind the iron curtain where it played, in secret, to large audiences. Reflecting on its impact, Czech president Vaclav Klaus has said: “For us, who lived in the communist world, Milton Friedman was the greatest champion of freedom, of limited and unobtrusive government and of free markets. Because of him I became a true believer in the unrestricted market economy.”

July 31st, 2012 is the 100th anniversary of Friedman’s birth. To commemorate that occasion, we’d like to share an interview with “Free to Choose” producer Bob Chitester. Like this interview, the entire series can now be viewed on-line at no cost at http://www.freetochoose.tv/, thanks to the incredible technological progress brought about by the economic freedom that Milton Friedman celebrated.

Produced by Andrew Coulson, Caleb O. Brown, Austin Bragg, and Lou Richards, with help from the Free to Choose Network

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Celebrating Milton Friedman

by Andrew J. Coulson

Andrew Coulson directs the Cato Institute’s Center for Educational Freedom and is the author of Market Education: The Unknown History.

Added to cato.org on July 31, 2012

This article appeared in Cato.org on July 31, 20

For us, who lived in the communist world, Milton Friedman was the greatest champion of freedom, of limited and unobtrusive government and of free markets. Because of him I became a true believer in the unrestricted market economy.

Those are the words of Czech President Vaclav Klaus. Both Friedman’s writings and his landmark 1980 documentary series “Free to Choose”were smuggled into totalitarian communist states, inspiring a generation of future scholars, activists, and politicians.

July 31st, 2012 is the 100th anniversary of Friedman’s birth. To commemorate that occasion, the Cato Institute has put together a video interview with Bob Chitester, producer of “Free to Choose,” recounting how it came to be, its impact, and what it was like working with Milton Friedman.

Aside from those who lived under communism, there is another group for whom Friedman was and is a colossal figure: advocates of educational freedom. At a time when state-run schooling had been the norm for nearly a century, and had long ceased to be questioned by America’s elites, Friedman offered a modest observation: there was no good reason for the government of a free society to actually run schools and many good reasons for it not to do so.

He made this case in his essay “On the Role of Government in Education,” first published in 1955. The idea had been floated by others, including Adam Smith and Thomas Paine, but Friedman eloquently and powerfully introduced it to the American policy debate. In so doing, he, more than any other individual, can be credited with giving rise to the modern school choice movement.

Not only did Friedman spark the creation of this movement, he helped to fan the flame of educational freedom, writing popular commentaries and book chapters, speaking with and encouraging activists, founding a leading school choice institution, and dedicating the entire sixth episode of “Free to Choose” to this subject.

I had the good fortune to speak and correspond with Milton occasionally, starting in the late 1990s, and what struck me most about him was his personal integrity. He once told me that he never said anything negative about a person in private that he would not be willing to say openly in that person’s presence. So far as I know, he never violated that principle. And while he staunchly defended his conclusions as long as he remained convinced of their correctness, he would amend them if the weight of evidence shifted.

Indeed the rigorous empiricism that Friedman applied in his scholarly work is generally regarded as one of his most influential contributions to the field of economics—for a long time controversial but eventually the norm, at least in principle. His view, published in the 1953 collection Essays in Positive Economics, was that

the ultimate test of the validity of a theory is… the ability to deduce facts that have not yet been observed, that are capable of being contradicted by observation, and that subsequent observation does not contradict. [p. 300]

Equally wise, though not yet as widely accepted, is the long time horizon against which Friedman measured policy outcomes. Economist and philosopher of science James R. Wible notes that Friedman’s greatest contribution “may be his constant reminder not to forget the long run consequences of short run policies.”

In the 1982 edition of his book Capitalism and Freedom, Friedman observed that scholars cannot single-handedly bring about change. Their real role, he wrote, is to “keep the lights on”—to remind us which policies work and which do not, and to show us how to advance our understanding even further. His own unfailing empiricism and concern for the long term remain valuable beacons today, both for advocates of educational freedom and the broader policy community.

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FREE TO CHOOSE “Who protects the worker?” Video and Transcript Part 4 of 7

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. Milton Friedman shows in this episode how the worker is best protected and it is not by the government!!!!!!!

The essence of what Milton Friedman is saying in this episode is this:

“When unions get higher wages for their members by restricting entry into an occupation, those higher wages are at the expense of other workers who find their opportunities reduced. When government pays its employees higher wages, those higher wages are at the expense of the taxpayer. But when workers get higher wages and more civilized working conditions through the free market, when they get them by firms competing with one another for the best workers, by workers competing with one another for the best jobs, those higher wages are at nobody’s expense. They can only come from higher productivity, greater capital investment, more widely diffused skills. The whole pie is bigger, there is more for the worker, but there’s also more for the employer, the investor, the consumer and even the taxpayer. That’s the way a free market system distributes the fruits of economic progress among all the people. That’s the essence of the age of the worker.”

Pt 4

Friedman: Suddenly, in a free market, workers who once could not find jobs are now at a premium. Everyone benefited, workers and employers alike and the town thrived. One of the workers who arrived in Spartanburg was Mr. Juma. He came as a refugee from Edie Amiens Uganda.

Mr. Juma: We came in this country just with $139. I had a family, my wife and two kids. And, we came with only four bags of clothing which weighs about 40 pounds each, but we’re not allowed to take more than that. We had to leave all our possessions, all our property in Uganda. And myself, I just came down to Flowers Baking Company and I was hired as a laborer to work in the plant at $2.49 per hour.

Friedman: Five years later he is chief accountant of the company. In a free market his best protection his real wealth, turned out to be his skills and his desire to use them.

Juma: America has to offer me a lot of things. And this is a great country. I came in this country penniless, today I own a house, I own three cars, my wife has got a good job, I myself have got a good job and the children are schooling and everything has been working so fine. I believe this because of opportunity. This is where everyone wants to work in this country. There is lot of opportunity.

Friedman: When unions get higher wages for their members by restricting entry into an occupation, those higher wages are at the expense of other workers who find their opportunities reduced. When government pays its employees higher wages, those higher wages are at the expense of the taxpayer. But when workers get higher wages and more civilized working conditions through the free market, when they get them by firms competing with one another for the best workers, by workers competing with one another for the best jobs, those higher wages are at nobody’s expense. They can only come from higher productivity, greater capital investment, more widely diffused skills. The whole pie is bigger, there is more for the worker, but there’s also more for the employer, the investor, the consumer and even the taxpayer. That’s the way a free market system distributes the fruits of economic progress among all the people. That’s the essence of the age of the worker.

DISCUSSION

Participants: Robert McKenzie, Moderator; Milton Friedman; Lynn Williams, International Secretary, United Steel Workers of America; Walter Williams, Professor of Economics, Temple University; Ernest Green, Assistant Secretary of Labor, Department of Labor, Washington, D.C.; William H. Brady, President, W. H. Brady Co.

MCKENZIE: The discussion is already underway here at the University of Chicago, so let’s join it.

L. WILLIAMS: Well, we tried a free market system without labor unions. We tried it back in the 1920s and into the ’30s and it led the world into the biggest economic disaster it’s ever seen in modern times. Now I don’t think that we’re talking free market or labor unions. We’re talking free market with or without labor unions and a free market system without labor unions is a total disaster.

MCKENZIE: Let’s get other reactions to this, now, around the group. Is the free market system, Milton’s Friedman’s been arguing I think, not labor unions, which best protect the interests or serve the interests of the worker? Walter Williams, your reaction.

W. WILLIAMS: Well, I think clearly labor unions serve the best interests of workers who happen to be members of labor unions at the expense of workers who are excluded from being members of labor unions.

MCKENZIE: Ernest Green?

GREEN: I don’t think you can have a democratic society without having trade unions. I think if you look at any democratic country, it’s essential to it, right of workers to organize and I think it’s consistent if we are to maintain a democratic country, those freedoms that the right of workers to organize is a primary objective that maintains a democratic country, those freedoms that the right of workers to organize is a primary objective that we have to maintain.

MCKENZIE: Bill Brady?

BRADY: Well if they are so vital, why are so many union members leaving the union? Why are they, why are they losing so many __ why are the unions losing so many decertification elections? Why has the number of union members declined so precipitously from 23 percent of the labor force to what is it now __ less than 19, 18 percent?

L. WILLIAMS: All depends whose figures you’re reading. But workers aren’t leaving the labor movement in droves. The union is not declining precipitously. My union, the United Steel Workers of America, the major unions in the country, many small ones are out organizing and growing. The mix of work __ the mix of work in the society is changing. We have some employers, as we saw in the film, who can’t wait to rush off to the south and try to get in an anti-union environment and invest their money in prosperity in the south instead of in the north and surely if you invest money anywhere you’re going to have prosperity.

MCKENZIE: Let me just __

L. WILLIAMS: So we also have a mix in terms of Civil Service and service workers, where we have employers who have grumbled on that film about $2.90 minimum wage.

BRADY: I don’t know that if you __ I don’t know that if you invest money anywhere that you’re going to have prosperity. I don’t think that that’s a given. That is, you seem to me to be dealing in a premise there that is incorrect.

(Several people talking at once.)

MCKENZIE: Wait a minute now, wait a minute. The key question we’re discussing is: Who protects the worker? Is it the labor union or the free market that best serves his interest?

W. WILLIAMS: Well, it seems like from the evidence that I have, from a number of research projects that I’ve engaged in, I found that labor unions protect their members often at the expense of disadvantaged people. And it’s a very, very interesting question that labor unions down through the ages have discriminated against all kinds of people in favor of a particular class of workers.

L. WILLIAMS: We haven’t, Walter, we haven’t

W. WILLIAMS: We find that labor unions have gone out on strikes and have murdered and maimed people because other people sought entry and in terms of Mr. Green’s remark, he says that in the free democratic society we need labor unions. Yes, that is true, we need the right for voluntary association, that is people have the right to form association, but it should not be a requirement that you be a member of a labor union in order to establish a contract for employment.

L. WILLIAMS: Can’t we get some __ can’t we get some perspective in this, Walter. Talking about unions down through the ages makes no sense at all in terms of where we’re at now in this century at this time. This business of trying to relate where unions come from to the, to the medical profession and Hippocratic oaths, Hippocratic oaths or hypocritical oaths, however one looks at that, back in the Greek aeons really have very little relevancy.

W. WILLIAMS: Yes it does.

L. WILLIAMS: The violence, see hear me out a minute , I waited patiently.

W. WILLIAMS: Okay, okay.

L. WILLIAMS: The violence it’s associated with __ well, not so patiently, but I waited. The violence associated with the labor movement and so on have been minimal and was a reaction in this century, not over the ages, a reaction in this century to the violence done workers by corporation and powerful economic groups when there was no workers’ organization to protect them and no way to deal with their greed and with their power __

MCKENZIE: Okay. Now, now I’m turning to Milton because he’s heard the flavor of the discussion.

FRIEDMAN: Sure. What Lynn Williams is now saying is utter nonsense. There’s no other __ no two ways about it. The conditions of the worker in this country before there was labor unions were very important __ improved very greatly. You cannot tell me the millions of people, my parents, your parents, for all I know, parents of many people around, came to this country from Europe in order to be exploited and in order to be subjected to violence. Of course, there were incidents of violence.

GREEN: I disagree with that vehemently. I mean most of the blacks came to this country not voluntarily, but they were shipped here.

FRIEDMAN: The blacks __

GREEN: And the interesting thing about the issue on __ on Spartanburg though __

FRIEDMAN: The blacks did not __ excuse me, hold on for a second.

GREEN: Is that you left out __

FRIEDMAN: Hold on.

MCKENZIE: Let him finish and then back to you.

GREEN: All right.

FRIEDMAN: The blacks are an exception and I agree with you completely.

GREEN: Twenty-two million exceptions, though.

FRIEDMAN: But they are a very important exception. But there are also millions and millions __the people that Mr. Williams represents are not mostly blacks. They are mostly from the Slavic countries, came from Eastern Europe.

L. WILLIAMS: If you look at the membership of the Steel Workers __

FRIEDMAN: If we __ if we go back, the violent __ there was violence, of course, there always has been violence. It’s not excusable, I’m not excusing violence on the part of anyone, but I agree with Mr. Green and with Walter Williams that people should be free to organize. Of course they should be free to organize. What I object to is the special privileges that have been given by government to labor unions which are not available to other groups at all. When labor unions have used violence in industrial disputes they are not subjected to the same sanctions as people ordinarily are. When cars are turned over in the course of a labor dispute, how often do people go to jail as a result of it?

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