In Depth with Milton Friedman w/ EPIC Q&A From Live Callers! Answers your Most Burning Questions!

they're a rebroadcast of book TVs conversation with economist Milton Friedman that program is live next now an in-depth conversation with author and economist Milton Friedman welcome to n depth with dr. Milton Friedman we are in San Francisco where dr. Friedman and his wife Rose live and she'll join us in about two hours but for the next 30 minutes we're going to talk about books and writing and Milton Friedman's career and then we're going to open up the phones for the rest of the time can you remember Milton Friedman the first time you ever wrote anything that had an impact that's very hard to say I guess the first time was when I was a graduate student and I wrote an article that was published in the quarterly Journal of economics how did you feel the impact it was a professional impact it was strictly a technical journal in economics it was a criticism of something that had been written by an English professor professor togu it's a case which had my first contact with Keynes as a matter of fact because I wrote the article and I submitted it to the economic journal which was edited by John Maynard Keynes at that time and he wrote back and said he had shown it to professor pigoil and professor big gu didn't agree so he wasn't going to publish it and then I sent it to the quarterly Journal of economics which was run by Professor Tao stick the very famous economist of that time and he accepted the article in your book that was a big success free to choose you wrote in the preface the television is dramatic it appeals to the emotions it captures your attention yet we remain of the opinion you and your wife that the printed page is a more effective instrument for both education and persuasion the authors of a book can explore issues deeply without being limited by the ticking clock the reader can stop and think turn the pages back without diverted by the emotional appeal of the scenes of moving relentlessly across his television screen what impact today do you think the word has on the page versus television I think what I said there will what we said there is still true absolutely I was most impressed by the diverting effect of television by a different kind of an experience in the 40s and 50s and 60s the University of Chicago used to have a radio program every Sunday the University of Chicago round table it was the most popular talk show in America at that time had an audience of some six million every Sunday and subsequently when television came along the University of Chicago did some roundtables on television and I was on some of both what astounded me and what interested me was a difference in the reaction from radio I got letters which were a wholly different character than those I got from television from the radio letters people were nasty they thought I was a devil incarnate it was very not on don't misunderstand me many of them were very favorable but those were which were negative we're really negative on television you get almost no such letters because people see the face they're diverted from the thought by the impression here's a well here's a nice a pleasant fellow with a nice smile on his face he can't be such a nasty devil and you get a wholly different set of reactions and that means that radio is a better way of sended putting across ideas and television in books and paper or a still better word I'm still persuaded of that how many years have you lived here in San Francisco a little over 20 about 21 years when I when I reached the age of 65 at Chicago I decided to retire from active teaching and that's when I moved out here how many years did you teach at Chicago 30 years and what does it mean to be a part of the Chicago School well the Chicago School is really a collection of people who have similar general policy views they may differ on individual policies but in general they're in favor of free markets limited government private individual choice and that school goes way back way back into the 19th century the University of Chicago was established in 1890 and so it goes back to then when the first chairman of the Department of Economics was a hardcore hard money man who was with you at Chicago names that we would know Jacob miner Frank Knight Henry Symons those are the names you would be most likely to know there were also other people Ted shill Theodore Schultz who was also got a Nobel Prize and more recently Gary Becker George Stigler Ronald Coase in in your 88 years and by the way what's it feel like to be 88 well I tell you at age 50 I would have given you a hundred to one that I would never reach 88 I come from a short-lived family my father died at the age of 49 my mother at the age of 70 so it's a miracle that I'm alive you surprised to be as active as you are I certainly am surprised what's a day like for you any day what do you do on a given day Oh mostly I said in my desk and write or read or at the computer and try to do some work read a book go for a walk and nothing special I really don't know how to describe an average today it depends a great deal we have we are fortunate we have two places an apartment in San Francisco and a house in C ranch which is right on the ocean so a typical day will depend a great deal on whether I'm at sea rancher in San Francisco what part of the United States did you grow up in I grew up in Rahway New Jersey a small town and I was born in Brooklyn New York but I had sense enough to move out when I was 13 months old and so I mu I took my parents to New Jersey and and then I grew up in the town of Rowan what we're parents like my parents were immigrants from Carpathian Ruthenia at the time they came and was part of Hungary subsequently it was part of the Czech Slovakia then it would have - after the war it was part of Russia and now it's part of Ukraine there was somebody who who used to tell somebody who lived there who told the story that I was born in Hungary I grew up in Czechoslovakia I went to school in Czechoslovakia I was married in Russia and now I live in the Ukraine and I haven't moved one of the reasons we do a program called in depth and have you here for three hours and your wife Rose will join us in a couple of hours is that the audience can call and ask you about any number of books that you've written any anything as a matter of fact they can ask you about but to show the extent of it I have piles of books here did you ever count the actual number of books you've read no I never really have it it's hard to count books what are books here you write you write columns as I wrote a Newsweek column and they're collected in a book is that really a book and then you write more columns and there's another collection which may overlap to some extent the other is that a new book so I think it's very hard to count books which book sold the most free to choose there's no doubt the one you had the little paperback that yeah no question it was it was a best-selling non-fiction book of the year in 1980 and it sold well over a million copies is it still on the market oh yes it's still on the market and still available how many languages was a translated into I have forgotten but I think something like 20 don't guarantee that number what about this book well that's interesting that book was published in 1962 and it's a capitalism and freedom it sold well over a half a million copies and the interesting thing about it the reason I mentioned that is when it was first published it was not reviewed in the New York Times it was not reviewed and herald-tribune at that time which was a major paper The Washington Post we reviewed a no major magazine was only reviewed in the technical economics journals and the reason is no doubt because of the fact that it was a in defense of capitalism in defense of free markets and that was not a popular topic at that time here's a book that's only been out a couple years that's right that's my wife's and my memoirs and by the way how long have you been married to this woman on this on the cover 62 years and she's the same age you are she's about to say married she really doesn't know exactly her age because she was born as a matter of fact and what is now well I don't know what it is now I think it's you crying now but she refers to it as Poland it was Russia and she came to the United States just before World War one as a bay as a child but her birth certificate has been lost it was burned up in the First World War when they won the wherever it was held in that town in East Europe went up in flames and so there's a question of whether she's either one you're younger than I am or one year older we're not serving now in that book if I read it right you said that you're don't read the New York Times very seldom these days I read it more than I ever used to because I can bring it down on the net but I don't as a regular matter read the New York Times why is that well first of all I live out here in San Francisco I read in local paper and I read The Wall Street Journal daily and when we were in New York when we lived in New York briefly I did read the New York Times but in general I have found that it's much too wordy for my purposes I I don't really have a time enough to read it if I'm gonna read it I have to read it and I'm not very sympathetic with their general editorial position in your lifetime what other authors have had an impact on you what other authors writers oh whatever oh there's no doubt tea probably the the writer who had the greatest impact on me was Friedrich Hayek whom I know and we talked about that I'm booked we talked about that on book notes in connection with this great book the Road to Serfdom for which I had written an introduction did you know him oh yes sure oh very well I knew him for him I first met him in 1946 I think and I knew him until he died why was that book so important it would not when I say Hayek influenced me it was not simply the Road to Serfdom it was also the other books he wrote constitution of Liberty law legislation it was because it helped me organize my thoughts about the way in which society should be organized about what was special about a free society what were the essential prerequisites of a free society I was generally sympathetic to those ideas but Hayek was a very deep thinker and he is he really if you read him you can't read him without thinking and you can't think without having your basic ideas altered when did he die I'm not a cure sure the exact date must have been about 10-15 years ago something like that he was born in I think 1896 and he lived to the age of I think 90 so that would have taken him to in 1986 who in your lifetime have you most disagreed with when it came to economic theory and this whole subject matter that you write about gee that's a very hard question to ask obviously with Marx and the Socialists but to pick out a single name from that would be would be going back the I should dimension of the people who influenced me it was not only through their books but a greater equally great intellectual influence on me was Arthur burns Arthur burns who later was head of the Federal Reserve System chairman of the Federal Reserve Board was my teacher when I was an undergraduate at Rutgers University and he was my mentor through much of my life and had an enormous influence on me and of course my teachers at Chicago where I did graduate work Jacob Viner whom I mentioned Frank Knight whom I've mentioned were people who had a very great influence on me in your book the two lucky people your autobiographies you mentioned that had the whole discussion about the Nobel Prize for economics in 1976 that you won that it took a number of years for you to get it Paul Samuelson if I remember correctly got it early it's how did that what impact did that have on you when you didn't get it in those early years oh I really didn't have much of an impact I can say it did what impact did it have on you once you got it the major impact was not on me but on how on the publicity and on the letters and talk and requests you get I don't think it had much impact on me as a person but it did certainly alter my opportunities and made me much more visible and available well when I was growing up and went to school Paul Samuelson's text was what we had at my school what's the difference between the way he thought is he still alive but oh yes Paul's still alive he's for I think about four years younger than I am the answer and he's a although we have had many differences we're very good personal friends well what would be the major differences in his thing oh the major there's no question what the major differences the major difference is what we believe the role of government should be I believe the role of government should be minimal I'm in favor of a very limited state if I had my ideal state instead of our governments at various levels spending 40 percent of your income and regulating you and determining and affecting another 10 percent it would be regular it would be spending 10 or 12 percent of your income so I would have a drastically smaller state than we now have Paul is very comfortable with the size of a state as it is would tend if anything to be wanting to make it larger I have a book here that goes way back to 1939 oh yeah you know what have you seen this before oh sure what is it consumer expenditures the United States it's a result of one of the programs that of the New Deal after for FDR came in office and there were many WPA and other programs in order to provide employment and promote recovery and among those was a program that involved getting a large scale cost of living survey of the people of many people's consumption survey there were interviewers who went out and such surveys had been made over time but this was the largest that had ever been made it was a major one and I was employed to analyze the data that came in from that survey and this book as a result of that analysis it gives the end result of that analysis the the group that wrote this was headed by a woman by the name of Hildegard Neyland who was a quite remarkable and able woman employed in the government at the top of this so it says the National Resources Committee the chairman Harold Ickes mm-hmm the father of the Harold Ickes that he was with the Hillary Rodham Clinton campaign Harry Hopkins who was secretary what all of this was pro forma you know this was a bit you know this is Washington it's over big agencies in which people at the top really have nothing to do with what goes on at the bottom divided down into a lot of subgroups but there is a name on here it's in the Advisory Committee that I've seen mentioned before a man named Beardsley Brummell oh yes who was he Beardsley Rummel wasn't well he was a an extraordinarily interesting man originally it's on an academic he was a Dean at the University of Chicago at one point he subsequently worked for RH Macy and became very much very active in Paul takes in during World War two when there was a discussion about how to shift over to withholding he became very widely known for the Rommel plan which was a proposal about how you shifted the problem at that time was that under the income tax as it was before 1944 43 you paid your tax for 1941 and 42 there was no withholding and source no current payment as there is now and the problem is how do you shift from a system in which one year's taxes has paid the next year to a system in which one year's taxes is paid in the same year that involves double taxation if you're gonna collect all the taxes 1942 you were going to have to pay taxes in 43 but we wanted to make we wanted to have taxes in 43 paid in 43 and so there was a problem of forgiveness as it was called to get over that two-year hump and Bursley rummel became famous as proposing a Rummel plan for doing so which was not adopted give us a quick resume on the schools that you learned from where you got your masters in your undergrad your PhD I went to Rutgers University of Rutgers College as an undergraduate it was a New Brunswick New Jersey not far from where I lived and I went there because I was able to get a scholarship there's this Rutgers College at that time was very different from Rutgers University today but cuz University today is a multi University a big University and in New Jersey State University in 1928 when I entered it it was a private college a very small private college and there was established before one of the few colleges established in the United States before the Revolutionary War and but the state was already starting to get involved in it and the first way of getting involved was by having a competitive scholarship they had competitive exam that people took and on the basis of which you had to get a scholar and I was able to get a scholarship to help pay tuition and broadcast so I went to Rutgers as an undergraduate or gh masters and then I went got my masters at the University of Chicago I after getting my bachelor's at Rutgers I went to Chicago and then I got then I went to Columbia University and got my doctors at the Columbia and what schools have you taught and oh I taught I have taught in the University of Wisconsin for one year the University of Minnesota for one year University of Chicago for 30 years and I've taught for one quarter or more in UCLA at the University of Hawaii I don't know where do you remember this book oh yes that's a theory of the consumption function that's the best book I've ever written why well it's hard to tell as you know the books I've written are two very different kinds one kinds are purely technical economics that's the best technical economics book I've written and you asked me why it's hard to answer that but I think most technical economists would agree the reason is somehow it's a nice complete whole it started with an empirical contradiction data that that wasn't weren't consistent with one another it presented a hypothesis to explain the contradiction out of that hypothesis it drew implications that were capable of being contradicted by further evidence it and analyzed the further evidence that there was and found that it was consistent with the hypothesis and the hypothesis is by now part of standard economics so in a sense it had a completion to it that leads me to regard it as the best book I've written and you your preface is written in February of 1956 put out by Princeton University of Princeton books it sold for $4.75 and it's by no means my best-selling book far from it because it is a technical book but it has been translated into quite a number of languages I know Japanese I have it at home a Japanese translation of it you know it's funny when you get a book with your name on it that you can't read who is the first by the way I want to tell our audience that we will go to phones in about six or seven minutes and dr. Freedman's gonna be with us for another two and a half hours and his wife will join us in about an hour and a half which was the first president to pay attention to anything you'd written well I guess that's a very hard question to answer because I don't know what presidents read the one case I do know about is Ronald Reagan and the reason I know that about that because a friend of mine here in San Francisco was who was involved in politics was somehow connected involved in inducing Ronald Reagan to run for governor in the state of California and before that he loves to tell this story that he had invited Reagan to come up to shoot in San Francisco and meet a group of people whom he might talk to and try to discuss the possibilities of running and Reagan came a little early for his appointment and was in the outer office when my friend was in the inner office and when when my friend guy came out and welcomed Reagan to ask him to come into his office he saw Reagan put a book back in his in his pocket and the book keep it back in this pocket was our captain ISM and freedom you had there is this book still by the way on them on the mall yes that's still burn the mark it's a short one day it's a relatively short one but it's selling it's a it's a book that's been translated into at least 20 different languages in your autobiography you talk about presidents and those that you've advised give us a no go let me go back for a moment because I started a thought before that I didn't finish these books are of two very different kinds you held up the theory of the consumption function or that book monetary trends in the United States and yet they are technical books scientific books directed at the professional economists the other class set of books are books like capitalism and freedom like free to choose which are directed to the general public now obviously I could not have written him if I had not been a technical economist that's monetary statistics of the United States which is really a attempt to construct consistent series of the quantity of money in the United States going back to the night to early part of the 19th century and extending through the 20th started asking about presents yeah you write in your autobiography about Richard Nixon how much time did you spend with him and what you think of me well it's a fair amount of time I first met Richard Nixon when he was vice president a friend of mine Alan Wallace who was later who was Chancellor of the University of Rochester he was a fellow student at Chicago back at the 30s and Alan Wallace was serving as chairman of a research group that Nixon had it and he induced me to come down and spend some time with Nixon and I was very much impressed with him in terms of his intellect Nixon was really an intellectual fundamentally he was meant in my opinion miscast as the president he would have been a wonderful professor if he had been at an academic institution he had a funny and a fine mind the highest are one of the highest IQs I would say any of the people I've ever met you say he was different in the quiet of an office and when you saw him with it he was another person he was a different human being I tell one story in the in the memoirs of a session in California during the I guess it was during the 1968 election yeah I'm pretty sure it was that election not 60 yeah it was 68 and in the morning we had a discussion about some policy problems and that was a college seminar that's what it was fine you could talk at Lisbon zone in the afternoon there was a barbecue for the press and out comes a Nixon with waving arms for the public Nixon I wouldn't have recognized him from the morning meeting so he was two people in your book you say you didn't care much for George Bush well I saw George Bush when Reagan was president president as a matter of fact you also said I think in a book that you thought it was a Ronald Reagan's biggest mistake to pick him to be Viceroy yes I do I think the situation would have been altogether different if for example Ronald Reagan had taken Don Rumsfeld as his vice presidential candidate George Bush as they say during the Reagan administration I was a member of an economic policy advisory board that met with Reagan on once a month or so and every meeting George Bush was present he never said a word except hello and polite but never entered into the discussions so I could not form much of an opinion of him so my and my comments about Bush are based entirely on what he did as president but I think as president he tried to undo all of the things that Reagan had done he said before the in the campaign campaign of 1980 when he was trying to get the nomination he talked about voodoo economics after he got elected he went back to his voodoo economics and I think the policies he followed I think he made a major mistake and he agrees that he made a mistake in approving the tax rise in nineteen what was that seventy-eight in the nineteen eighty I'm sorry in nineteen eighty eighty ninety yeah the nineteen ninety tax rise we have calls and it's time for the audience to have their discussion with you and so let's go to Roanoke Virginia for our first call for dr. Milton Friedman on M depth here on t v-- go ahead please dr. Friedman can you tell me in the Constitution where the framers used the word coin article one section eight paragraph five what did they mean by the word coin well at that time they undoubtedly meant what the word coin literally means they stamped out piece of metal because as of the time when the founders were working money most everywhere consisted primarily of metallic money of gold or silver at that time you had both circulating you had essentially a bimetallic currency and so they literally meant coin they meant the stamped out nuggets of metal Roanoke Virginia are you there hello you're on the air the neighbor writes to change the meaning of words in the contract by the Supreme Court the question is whether they whether what the founders had in mind was was whatever is being used as money at that time coins were being used as money in the course of time we we developed alternatives to coins less expensive alternatives to coins as money and I think it's it's not unreasonable to suppose that they would have included that what they really intended was money but money at that time was coins and the content of the word that the content changed over time so I would not think it unreasonable to go from coins to money if you just join us on book TV this is a program called in-depth we've done a number of these this year including authors like Joan Didion and Richard Rhodes and Bill Buckley and John Lucas and now Milton Friedman there'll be others before the years over and said attempt at spending three hours with one person in this case dr. Friedman's wife Rose who spent a lot of time being what kind of a co-writer with you oh yeah sure she's been a part of everything I've done New York City you're next go ahead please hi a single-payer plan in Canada I think that's by far the best way to go and I think many doctors as we heard in the previous program are starting to agree I'd like to hear your comments on this situation well I'm afraid I have to disagree with you I think the single-payer system as a system is a very very poor system if we go to the Canadian case you should look at their waiting lists they have very long waiting lines for all sorts of difficulties and diseases indeed at one point British Columbia contracted with hospitals in Washington in the Seattle Washington to perform a bypass operations in order to reduce the waiting time on bypass operation you'll also have a situation which under one single-payer in Canada physicians in Canada are moving to the United States Canada is losing a considerable fraction of its the graduates from its medical schools to the United States it's a bad system because a third party is involved in payment you do not have a direct relationship between a physician and a patient so that on the whole I'd have to disagree I think that we in the United States have gone too far in the direction of third payer payment our next call is from Canada interesting that from Toronto go ahead please hello hello professor Friedman first I was Dean of a medical school in Canada and I totally agree with you I don't think Americans would want to contain the health care system although there are very good points in it in terms of everyone covered I think unbalanced I think the Americans like to get to the right system that isn't what I called about actually I would very much value your opinion of two individuals on the libertarian slash write an R and and an economist who professor Friedman I admire even more than you or though you're a close second was at Van Mises so I'll hang up and listen to your answer well both both logical means and iron Rand were remarkable individuals and have made great contributions but both of them had one defect they were from my point of view intolerant they were not willing to listen to ideas that didn't conform to their own they demanded that people be disciples and not simply learners iron Rand is particularly that way I think some of her books are marvelous I enjoyed him very greatly but I have observed among people who were influenced by iron Rand that those who became Rand i'ts became almost impossible while those who were influenced by Rand but didn't become Rand ides were influenced and then broaden their conception became very valuable and important citizens and were very influenced men who was a Rand I originally but has and was very much influenced by and read but obviously is not a strict had no longer would be a strict follower of her doctrines the same thing happened with Ludwig von Mises he was a great economist no question but let me give you one example I was I never met our Ayn Rand but I didn't know Ludwig von Mises personally and met him and I will tell you one story which will illustrate my point he and I and other people were members of something called the Mont Pelerin Society and and one of those meetings in the moped iron society one of the former students of Mises fritz ma flow had the temerity to differ with Mises had to do with the question of international exchange rates fritz machlup came out for floating exchange rates while Mises was for a gold standard metres wouldn't talk to him for three years where was von Mises located he was he was originally located in Austria in Vienna and then when the answers came he went to Switzerland and subsequently he came to the United States and was at NYU for many years Madison Wisconsin Milton Friedman used to layer of years ago go ahead please I was wondering what mr. Friedman's opinion is about continuing economic assistance to Russia considering that the accountability that they've had for the aid given so far has been zero well I am for many many years been opposed to for EAGA foreign economic aid I think it does far more harm than good and the Russian case is a prime example of that we have given a lot of money to Russia and it has prevented Russia from establishing the institutions and arrangement which would enable it to become prosperous and free and that's true not only for Russia the the best example of the vices of foreign aid is in a way East Germany and West Germany if you take the countries in the Eastern Europe which were freed when the Berlin Wall fell which got out from under the Soviet Union East Germany has been the slowest one to recover and the slowest one to get better why because it got so much assistance from West Germany it got that assistance from West Germany in ways which prevented East Germany from adjusting to the new situation so I think it's a great mistake for the United States or any other country to give economic for and eight free trade yes open up the borders let them make their way and there is a case for military aid perhaps from time to time but I think there is no case at all for economic foreign aid we're in San Francisco at the ITN Studios on battery if you've ever been here and our guest is dr. Milton Friedman we go to Seattle Washington you're next yes dr. Friedman could you tell me who which president during your lifetime had the best grasp of economics and perhaps the president before you were born that well I don't know about before I was born and it's not easy to answer your question because there are two things involved a grasp of economics and and the principle to willingness to put that economics into play I think in made some ways I would say that Richard Nixon had the best grasp of economics he understood and most deeply but he did not he was but he was not willing to follow his own principles it was against his principles to an introduced wage and price control which he did on August 15 1971 and he said he says in his memoirs that that was the worst thing he ever did but he did it yet he understood what the consequences would be now Ronald Reagan had a very good and clear understanding of economics there's so much misunderstanding about Reagan people think he was somehow an unlearned that's a bunch of nonsense he was a very intelligent and thoughtful man and in particular he really understood the many important economic relations by contrast with Nixon Reagan had principles and was willing to stick to his principles so that for example one of the first things he did when he got into office in 1980 was to end the price controls on oil and gas which was a very important thing you know everybody had been saying oh if you take off those price controls the price of oil and gas will go up to the sky the truth of the matter is as Reagan understood and knew after you took off the prices of controls after a brief interval the price of oil and gas fell and I did not rise do you remember this book of course program for monetary development that arose out of a series of lectures I gave at Fordham University in when I don't remember the year when was that published I'll have to check it I looked inside it said it's a port impress his book and it was first in 1960 just two days ago I got a royalty statement from that book and I got a hundred dollars coming to me for royalty for that book which is still selling it's still there Carlisle Pennsylvania for Milton Friedman yes good morning I'd like to know what you think about the surplus what should be done with it and the framing of tax cuts in terms of spending the surplus thank you I have no doubt what you'd be done with the so-called surplus it should be used to reduce taxes the situation is that Congress is going to Congress and the government is going to spend whatever the tax taxes will yield plus however more they can get away with the only reason you have a surplus today is because you have divided government because you have a Democratic president and a Republican house if you had both if both had been democratic they would not have a surplus today it would have been spent in additional government programs if both had been Republican there would not be a surplus today some of it would have been spent and most of it would have been used to reduce taxes so I have no doubt what should be done with a surplus Albuquerque New Mexico you're next thank you dr. Friedman I'm very concerned about the stability of our economy as we go into this new election cycle and I just like to hear your views on you know how you think we should proceed from here to have a stable economy and a little bit maybe about Alan Greenspan's policies thank you well I am so far as Alan Greenspan's policy to work backward I think he has been done extraordinarily well I think without question the record of the federal reserve under Alan's chairmanship and I should say I have a bias I'm a very close personal friend of Alan Greenspan have been for years but under I think there as a student of monetary history I can tell you that the Federal Reserve has performed better under Alan Greenspan than under any previous chairman in though now what 85 years of its existence at the same time I should add that I have long believed that we'd be better off if we did not have a Federal Reserve System I have long been in favor of replacing the Federal Reserve System by a computer but that's not gonna happen and in the meantime we're very well off with with Alan the more basic question you ask our economy is doing extremely well why is it doing so well it's doing so well primarily because of a technological revolution it's really because of the computer and internet age which has transformed technology the way to run businesses and so on we have much more stability in our economy in part because with computers and improved telecommunications and transportations inventories are much smaller you now have the business of on-time of inventories on time which has improved the quality that there's been an increase in technological productivity those are the things that have been working for us they cannot continue indefinitely and sooner or later we're going to have a recession we're gonna have a collapse that sooner or later we're gonna have a tendency to go into inflation what do we need to do in order to avoid that we need to have a monetary system which will keep to a moderate level the rate at which we increase the money supply that's the first and most important prerequisite the next thing we need to do is to have government keep its hands out of the business we need to let deregulation privatization to the maximum possible extent now those are long term goals they're not a program for next year but they indicate the direction in which we should go Gastonia North Carolina for dr. Friedman yes I'd like to ask dr. Friedman if he'd give an honest evaluation of the influence of John Kenneth Galbraith on American economics you know I don't mind answering that question but I don't like the way it's phrased would you want would you one would you expect me if you didn't say an honest evaluation that I give a dishonesty evaluation I've tried to be honest on my life and I intend to continue to be so I think Kenneth Galbraith has had a great deal of influence in my opinion most of it has been bad again I want us to mention Ken Galbraith and I are good personal friends we've entertained in one another's houses so I have nothing personal against Ken I like him he's just he's a wonderful fella to have dinner with but I don't agree with his views and yet I think those views have been very influential and particularly in the views he expressed in the affluent society and what would be the principle difference again between you and Anna again the same differences between me and Paul Samuelson that Ken is in favor of of government running things he believes that civil servants in Washington know better than people at home what's good for the people at home that's a great vice of what of the interventionist of the people who want the government to run things this is 1963 that's a monitoring history of the United States and it's probably the it's almost certainly the book of mine that has had the most influence within the economics profession why primarily I guess because it covers the history of the night a monetary history of the United States from 1867 to 1960 almost a century but the cetera chapter in there is one on the Great Depression and I think it's main influences because it changed the professions view of the cause of the Great Depression what caused it the widespread opinion before it had been that it was caused by a breakdown of the capitalist system and what we demonstrated in here and I think demonstrated so that it's now very widely accepted I say we because that was a joint publication my co-author was annotated Schwartz who was an economist at the National Bureau in New York City and who is a very well reputed internationally well known economic historian and she and I collaborated together for something like 25 years so on the whole there were a series of three books you held up to two other two there's that monetary history the United States monetary statistics in the United States and on tie trends and monetary trends those three books so to go back we demonstrated in there that the reason for the Great Depression was the fact that the Federal Reserve System made a major mistake in policy that it did not carry out the policies for which it has been established the Federal Reserve System was established in 1913 as a sort of a result of repeated banking panics during the 19th century and in particular the banking panic of 1907 after which there was a governmental Commission established to explore happen and out of that came recommendations that led to the establishment of the Federal Reserve System and it was established for the purpose of preventing banking panics and we had the worst Bank banking panic in the history of the United States under wolly Federal Reserve System was supposedly doing it in the Federal Reserve System during the course of the pattern was saying oh how much worse it would have been if we hadn't been here the usual behavior of bureaucracies so we established but I think we established in here that let me get some dates in here it wasn't the stock market crash the stock market crashed came in October of 1929 the recession which turned into the Great Depression started in August of 1929 and for the first year it wasn't so bad but then in the spring of 30 in in 1930 and particularly at the end of 1930 there were a series of bank failures and the Federal Reserve instead of doing its business of providing liquidity to the banking system to prevent the spread of failures tightened monetary policy the Federal Reserve permitted the quantity of money to go down by a third from 1929 to 1933 actually there was only $2 of money in existence in 1933 for every $3 that there had been in 29 and all the time it had the power to prevent that and all the time the route the purpose for which it had been set out was instructing it to prevent it and it did not and I think we demonstrated that that mistake of a Federal Reserve it caused the Great Depression and I think that had the further effect that you will not have such a Great Depression again Rockville Maryland you're next hi Brian this is Audrey Emerson I met you at the University of Maryland I have three questions for mr. Friedman I'm sorry triplicate triplicate right regarding bureaucracy I know you're against it and I want to ask you to speak please about the medical insurance industry as a bureaucracy because I think that the reason that we're looking toward a single-payer system is because of the negative influence of the medical insurance industry which started many many years ago and led to HMOs and led to the present discontent which is now leading to a wish for the single-payer system also with regard to regulation how does one how in your ideal world would you protect the worker of the people who feel as though they are the exploited classes in the absence of regulation and the third question is more of an observation I and Rand and her influence just recently I was in a bookstore and saw a whole shelf of iron rands books who was very controversial when she was in her heyday and who was very unpopular when she was in her heyday but I I have a theory which was formed at the moment I saw that row of books that it's her influence her very dogmatic influence that has well she has influenced the especially the Christian right and the very dogmatic element and the Republican Party today all right are you thank you very much for all that did you remember yes I did I wrote three things down let's start with the insurance companies I think you haven't dug deeply enough about the source of the problem in my opinion the real source of the problem was the is is the exemption of health services provided by employers from the income tax if you why is it that most people today get their health insurance through their employer that isn't a natural thing why don't you get your food through your employer you used to have company stores and there was a lot of a lot of scandal about company stores mining companies in the West when they work with no community around would establish the store and their their workers would get their food and their clothing and their housing everything through the company store and we have company stores only in medicine why food is more important than than medicine why shouldn't we say that food provided by the employer is tax exempt the reason we have tax exemption goes back to World War two during World War two we had wage and price control and with wage and we also had inflation we also had a lot of money being spent by the government on armaments and big deficits and rapid money growth and that meant that there was as always a shortage of workers because you couldn't raise their wages because it was illegal under thee and yet there was a great demand for him and so employers started to provide fringe benefits and the most popular fringe benefit was a provision of medical services and employers did not report and the what they spent on medical services as the income of employees to the IRS and the IRS as with most bureaucracies was kind of slow to catch on it took a two or three years and when it finally got on it instructed the employers to include the the cost of fringe benefits in the wages reported for income tax purposes well by this time the workers had been taking that for granted and they there a minute a Howell and a how old big enough to make Congress passed the law exempting the provision of medical services from the income tax yeah one bad law namely wage and price control led to another bad law which was the exemption of medical services the medical provision how about regulation well let me go one step further because it was that which leads to the dominance to the fact that most people get their meta medical care through their employer and through insurance now the solution of this is to in my opinion is to either to eliminate the tax exemption and cut taxes accordingly let workers get a more of their pay in cash but let them take care of their own medical care or medical savings accounts which would have the same effect and that would reduce them the role of the insurance companies greatly Medicare has also of course helped in this connection anyway should don't get me started on medical care because that's a big subject all by itself what about the regulation and how - the question is how do workers get protected that was a question who protects workers workers are protected by competition from other employers the way you protect workers is by enabling them to have many employers who can who can use their services that's a much more effective protection than it in union protection now union protection may be good for those in the Union it doesn't do a thing for those who are unemployed because the Union keeps down the number of jobs doesn't do a thing for that there's a role for Union in terms of internal negotiation and bargaining with the employer there's certainly a very important role but there is no real role for unions in protecting workers in general I am nine-iron an impact on the Christian Right an iron Rand I think there's much in what what the caller said and because iron Rand was very dogmatic in philosophy in temperament she fits in was the Christian right and with people who are who are very dogmatic in their beliefs but she herself not written not religious at all she was a complete agnostic New York City for Milton Friedman you're next I have a question for you it's a bubbling world in our current economy and will it burst or deflate and what would happen if would burst but I'm talking about overvaluation of the stocks in the United States well there it depends on what you mean by is there a bubble if you take them usually that's referred to the market to the stock market and if you take the stock market as a whole it's a mixed bag I think there definitely has been a bubble in Internet stocks and perhaps in some high tech stocks but if you take the rest of the market the non high tech non-internet it it hasn't shown much of a bubble at all so I'm not sure that there is a bubble certainly do exist you had an extreme one in Japan in 1980 but so far as the United States today is concerned I don't think we need to be concerned much about the bubble another Milton Friedman book is from 1994 yes that's collection of articles really on money on various aspects of money you know money is such a fascinating subject because everybody knows everything he has to know about money and nobody knows very much about money what about this one University of Chicago Press yes that has to do that's Milton Friedman the monetary framework and it has to do was a sort of a intra professional dispute between myself and several critics let's go to Pensacola Florida knacks go ahead please professor Friedman I would like you to briefly summarize your views on economic science which you laid out in your famous essay the methodology of positive economics and to summarize it and tell us how that approach differs from other views of economic and social sciences let me ask the caller from Pensacola have you read dr. Friedman before oh yes yes I I read in graduate school and and to this day I still read him occasionally and what do you think of his theories oh I like it very much I liked his capitalism and freedom very much but I also liked very much his his methodology as saying oh I've also read the freedom to choose book well so far the what the caller is talking about is it si that's in a book essays in positive economics that green book that you have there we have not shown the audience this one yet when did this come out oh I don't remember I'll check sometime in the 50s I think I think it was one of the earliest and I have an essay in there called the methodology of positive economics which was not published anywhere else that's the original publication and what the caller is referring to is that in that essay I tried to argue that economics as a positive science is no different from Natural Sciences and that what economics is concerned with is constructing hypotheses simple hypotheses to explain complicated facts and that the test of a hypothesis is not in the assumptions that are made in deriving it but in the implication but in whether it makes predictions that are confirmed by evidence and it goes back to a big argument within the economist about the proper methodology it really ties up again what's Ludwig von Mises you were talking about earlier he and many of his followers had have a philosophy which is called by a strange name proxy ology pra xeo are ogy and their argument is that economics is fundamentally different from the natural sciences because economists have a source of information which they know to be true which the internal beliefs and knowledge and Whedon were trying to study human beings and we are human beings so we know ourselves in a sense in which a physicist can't know a piece of metal or a physicist can't know or biologists can't know a rat and that economics is a science is to be derived from this internal knowledge which we have the subjective knowledge it's a subjectivist approach to the methodology of economics and the my essay in positive economics is an attempt to argue against that and to argue that that's a very unreliable source of information that it may be a good way to derive hypothesis but you cannot accept what you come out with unless you can produce predictions which were not known before and which turned out to be correct and confirmed and as the as the caller said that was a source of a great deal of argument within the economics profession Milton Friedman and his wife Rose live here in San Francisco and have for the last 20 years and as we established earlier he spent 30 years at the University of Chicago as a teacher here at the University of Minnesota for a while University of Wisconsin for a while UCLA for a while Columbia ever teach yes I was there for a year as a visiting professor we're in the itn studios at near the Embarcadero I guess you fell in battery battery on battery street and we're gonna be here for another two hours as we continue this discussion with the audience dr. Friedman's wife Rose will join us in about an hour we'll talk to her for a while and then continue the calls we have this by the way is the 1953 copy rises from the University of Chicago is it still available for people oh yes sure how many of your books are still being sold you know I have no idea is it still a good income oh no well I shouldn't say that the reasonable income from some of the better sellers but in the main no Irvine California go ahead please the only ones of these which ever gave a reasonable income though we're capitalism and freedom and free to choose all the other it's it's peanuts go ahead or vine you're on the air thank you very much I'd like to ask about a theory or a proposal for taxation at the national level it was proposed by Professor Edmund lpj I believe it's pronounced professor emeritus of economics at the University of Wisconsin I note in reading a paper of his that dr. Friedman was somebody who helped comment on this paper at one time or another and dr. fides theory is called taxing all transactions or an automated payment transaction tax it sounds like an interesting approach because it broadens the taxation base considerably and reduces the incidental rate of taxation at age transaction could you comment on that if you recall his paper sir I don't recall his paper but I know what you're talking about and the transactions taxes has often been wired to used it's a very bad tax not a good tax it seems to have a low rate but that's because when you come to the final thing that you're taxing you're taxing an automobile let's say but if you use the transactions tax you earlier taxed when the rubber was purchased by the people who are going to make the tires when the when the tire was sold to the manufacturer of the car etc so that there may be ten or fifteen or a hundred transactions involved before you get to the final product which is what you're really imposing the tax on and the result of that is that you get very unequal taxation depending on how many transactions enter into the process of creating a final product moreover the transaction tax encourages on economic combination of stages in order to avoid the tax you get vertically integrated and so the same company grows the rubber makes the tire and does all the other operations and that may or may not be economical and if it's done only to avoid the transaction tax surely on economical Russia for many many years used to have a transaction sack in fact that was the main tax that Russia used during its calm said should say the Soviet Union used during its heyday you have a foundation what does it do yes we established a foundation a few few years ago to pursue one of our prep that causes and some some forty five years ago I wrote an article on the role of government and education in the course of which I proposed a the use of a voucher as a way to enable parents to choose the school to which their children went and we've been interested in the voucher business in the voucher idea ever since when a couple of years ago we decided we weren't gonna be able to play much more of a role in it because of our age and so instead we decided to set up a foundation which is called the Friedman foundation for personal choice and why is it based in Indianapolis because the person we found to run it who does a marvelous job and running in Gordon st. Angelo happened to be living in Indianapolis and doesn't matter where it's based the idea and purpose of it is to try to educate the public at large about the issue the only foundation was so far as I know has this exclusive function trying to develop a greater understanding about the important of parental importance of parental choice of schools and of various ways in which that can be done and we have set it up I want to add one more thing we set it up so it will terminate it terminates five years after the last of the we have three people myself my wife and Gordon st. Angelo who runs it and after the death of the last of those it's got a terminate in five years one of the things I very strongly object to are these indefinitely little I've lived foundations I think all foundations order bought a terminator at a limited how old is Gordon st. Angelo well he's younger than we are but not that much younger he's doing this after retirement I should say he was employed at the Lilly Foundation that's how we got to know him over we knew him for many years and Gordon is now I'm not sure what his exact age is it's in the early seventies smithfield rhode island for dr. milton freedman go ahead please hello dr. Friedman it's an honor I've read on the Hoover Institute website I'm one of the transcripts for uncommon knowledge where you were talking about the deficits of the 80s yes and you said they weren't caused by tax cuts nor by increased spending but by the administrators effectiveness and controlling interest rates and I was wondering if you can elaborate upon that I'm not sure I recognize what you've interpreted me as setting we're talking about the deficit of the eighties after Reagan cut taxes and they were not caused by that's right what you say the first thing you say is absolutely right in my opinion they were not caused by the the tax cuts nor by the increase in spending for the military but they were caused by the success in reducing inflation all of the estimates that have been made none of them attributed as much none of them thought of responsible to reduce inflation as much as it was reduced from 1980 to 1984 the reduction of inflation meant the tax receipts were reduced very much because the main thing that had been driving up tax receipts had been bracket creep that inflation was pushing people into higher income tax brackets and hence requiring more and more money to be going to the Treasury and when you reverse that when you had negative attacks you had a decline in inflation instead of capital gains coming in you had capital losses coming in instead of income tax going up very rapidly you had them going down so the main source of the deficits was a mistake in the estimates which people had made of the amount of taxes that would be received I noticed that you were at one time on the board of directors of is it al Deen o company yes who is it named after and here's a book published by the al Deen company the Optima coin yeah that's right the optimal quantity money another well al Deen publishing company was started by a friend of mine I may say I have long had the policy of not serving on boards of directors and that's the only club corporate board of directors I ever served on and I only served on it because it was a friend of mine who started that company and we in fact invested money in the company so still company no the company was that company was later liquidated or was sold to de Gruyter so it's now it's still being published but it's being published by essentially a different publisher but under the same name of Aldo now I forgotten why al where the name al dine came from San Diego California you're next yes well I'd like to uh first I say thank you to both of you gentlemen for contributing to the public good and both your particular endeavors and now you've teamed up and for the dynamic duo on Sunday here I must say that as far as mr. Friedman you're a long life thank God that you are still alive because such a source of honesty integrity and just correct reason is rather refreshing in these days of all the economic gibberish that everybody seems to be throwing around I had earlier you mentioned that everyone seemed to think that Reagan was some sort of half-witted and I certainly don't agree with that and one example that I don't have very much information on that perhaps you can enlighten the United States people of would be that there was some sort of a conservative element that wanted to perhaps curtail government spending by going back to a gold standard in the early Reagan presidency and I believe they issued a gold Commission report some sort of committee must have informed on it and it mentioned something that the that would be a very bad idea or perhaps not a good idea because the United States Treasury owned no gold supply or very little perhaps that's what I'm not exactly sure about something about that all the gold perhaps was put in Fort Knox was owned now by the Federal Reserve as collateral on our current national debt and I wasn't sure if that was an accurate statement but I just wanted to get your opinion on that since you you know may have been involved closely in the Reagan administration and would you as a you know Martin Luther King had a dream and I got my own fantastical delusion myself and I was wondering it what do you think the possibility would be instead of the central banks running the world and placing the the middle class what would you think about if every country around the world produced its own debt-free money supply from their Treasuries and somehow there could still be a mutual exchange rate you know Sebulba economics could work out fine but in the end that would save the middle class and poor you know untold sums of money and so I was just wondering about that that fantastic idea and also about the gold Commission of 1980-81 well but every country every country in the world does now do what you're saying every country in the world no no country in the world now has a gold standard no country in the world now has a currency which is backed by anything than the Faith and Credit of a government that is producing it so your ideal money standard in the way it is inexistent going back to the gold situation it is true that there was a gold Commission that was set up during I guess in the eighties some time and it presented a report and a report in which I think there was a majority report in a Minority Report and the majority report argued that there was no no basis for having a gold standard with which I agree with I think the gold standard was not a bad system in the 19th century and had many virtues but it existed at a time when governments were spending about ten percent of the national income when governments were playing a very minor role in the economy I do not believe a real honest-to-god gold standard is possible in the 21st century when governments around the world are spending something like forty to sixty to seventy percent of national income and when governments everywhere are playing a very important role in in the economy now as to the situation of the gold in Fort Knox after all the Federal Reserve System is really a branch of the government it's nonsense to think of it as a private private enterprise it isn't it was set up sort of as a private corporation and technically speaking it's owned by the member banks which have shares the stock which they can't separate or do anything with but that's strictly a fiction it's it's essentially a government agency and so you really have to consolidate the Treasury and the Federal Reserve all of the gold in Fort Knox is owned by the US government and would be available until under mine to to support a system of gold currency but that isn't going to happen and shouldn't happen yeah I have long been in favor of the United States having a big auction take the total gold stock we have divided into five parts and auction off one fifth of it every year and get rid of it we have no more business owning gold and and biggest having a storehouse for gold than we have for owning whedon and having a storehouse for wheat for owning sugar and having a storehouse for sugar we should get out of the business by the way we have callers that probably call at least once every couple of days and they're very concerned about the Council on Foreign Relations the Trilateral Commission and the Bilderberg Group totally is you're on the conservative side of American politics are you concerned about those groups no I'm not concerned about those groups they're perfect I am not involved in any of those groups and I'm not on the conservative side I am NOT a conservative I am a libertarian I am NOT a member of the Libertarian Party but I am a libertarian I always say when I'm asked this question I am a libertarian was a small L in a Republican with a capital R as I'm a member of the Republican Party but I'm not I'm not a conservative so you don't think any of those groups around the world none of those groups run the world there are all groups of people many of them Council on Foreign Relations is an eminently respectable outfit it consists of people who are who are fine people and who have they published a good journal what's called a foreign I've forgotten the title of the journal you did an important policy journal and there's two of them I thank you oh yeah yeah no I don't think any of them are running the world let's go to Durant Iowa go ahead please yes dr. Friedman I wanted to tell you that your book free to choose is a book that I require my students to read I've taught college several times before and it's a wonderful book for freshmen and sophomore level free to choose is highly recommended by me for kids that show up and raw minds that you want to turn them on to what's really going out in the world going on in the world outside you want to understand that always ask them to certainly read free to choose by Milton Friedman I want to tell you that I really enjoy the book where do you teach taught at Kirkwood Community College and Peter Rapids and what's the reaction from your students to a book like this that are really interested in education it's wonderful and they come up to me and tell me that they really appreciate the reading that we're getting turned on to it and I always tell them that you want to really know what's going on in the world certainly in America and what's going to happen in the world stage as we westernized the entire globe free to choose what you need to read because it's so simple or read it so easy to read tried to read the affluent society by John Gilbreth it's terrible to have and get through it free to choose it's so easy to read it's a book that I would recommend to anybody my question to mr. Friedman is one that might be a little a little outlandish but I I tell all my students that if we can survive socially science holds the promise to eradicate all the Z's a mankind the the problem we have is will we survive socially and of course economics tie it so close to to our society and social matters down the road if if this comes true if we do find the secret to aging which I believe we really will someday discover the secret to aging through genetics if we do I like for dr. Freeman maybe to comment a little bit on how it would affect our economy and the world stage into this century and made the next thank you well I don't know if by surviving aging curing aging you mean that we would live indefinitely I have no idea what the world would be like with people who had no hope and no expectation of dying it would be so utterly different a world you know I don't have enough imagination to figure that if you mean living to a ripe or older age so that I'm not on the only lucky one who can live to 88 years old or to 100 years old I will make that but assuming you can get to that well then the world will be not very different from the way it is now it will be different in many ways some ways the big industries will be recreation industries rather than the child care industries the the age population of the world will be very differently distributed but fundamentally it will look very much like the present world does I don't think it will have any major economic implications well I want to go back to one more thing though about that book for you to choose because of what this caller said he said it was a simple to read and the reason is a very directly related to your business unlike most cases or we did a TV program a ten-part TV program called free to choose that was done before the book the book was based on the program not the other way around and as a result the we started writing the book with the transcript of the program and when you talk you have to be simple and straightforward and so that book is the only one of our books which started with talk and ended with words on pages where all of the other books start with words on pages can you still see those television programs oh yes well there's a website I know that you can buy the oh yes you can't see the television program in the sense that I don't think they're being broadcast but videotapes forum are for sale from each editor gee I wish you come on the screen actually it's it's the idea channel table is where they can go for information that's right and then they can find out where to buy them yeah you tell a story in your autobiography that the New York public television station didn't run those programs at a time you thought was where they ran it with the next of the Superbowl do you think he did it on purpose yes oh there's no doubt they did it on purpose why well because for the same reason that the French television channel never showed them they had shown John galbrace program the age of uncertainty the year before but although they were under great pressure and people offered to pay for it and so on they refused to show our program because they were it was not ideologically correct you know political correctness it's really important and we weren't ideologically correct and the New York station but like the New York Times like New York in general is a left-wing collectivist socialist we were from their point of view right-wing individualist the free market and so they weren't very favorable to it dr. Friedman's been with us for an hour and 25 minutes he's got an hour and 35 minutes to go and he's going to be joined by his better half here in about 35 or 40 minutes before let me take a call I want to ask you about ageing Seattle Washington go ahead please good morning Brian and thanks so much for c-span and I love this format dr. Friedman as a fellow small-l libertarian I was thrilled that the tide the ideological tide and political tide seemed to be running in your direction during the 80s anyway especially if Al Gore is reelected what would it take to and the Republicans seem to be running away from Friedman ISM too right now what would it take to swing it back to Friedman ISM people like you people like all of us I don't believe you'll swing it back by necessarily voting but I think you'll swing it back by persuading other people so what's going on is something that should not be going on I think the growth of the role of government in determining our life the idea that the only way you can give a tax cut is if it's a reward for doing something that some government bureaucrats thinks you want to do it's disgraceful and it's about it's only if people like you and other people recognize how disgraceful it is you know the idea the biggest corruption in the world is the idea of buying votes with the money of the voters that's what both parties are engaged in one worse than the other the Democrats no doubt go carry it much farther than the Republicans but the Republicans are not averse to buying voters votes with the voters money earlier talking about aging you and you're talking about your father died when he was 49 years old what have you done and you think in your life that you and your wife have lived to be 88 anything special it's not what we've done it's what the science of medicine is done mmm my father died from angina pay if I'm going from a heart attack from angina pectoris II the closing of the arteries I would have died from that too I would have died at the age of 60 from that even hadn't been for the invention of bypass surgery I was lucky the first bite I had my first bypass surgery I've had two of them I had my first one in 1972 and the first bypass surgery done in the United States was in 1966 six years before then so I was just lucky I have lived as long as I have because medicine has made such wonderful strides the thing that interests me about medical care is the contrast between the enormous advances in the science of medicine and the terrible not advances but the opposite of advances in the organization of medical care care you have wonderful scientific achievements which have been of great benefit to people on the other hand government spending spending total spending on medical care has skyrocketed it's gone from about 5% of the four to five percent of the national income in 1945 to 17% now it's incredible what's happened in in in 1945 we spend twice as much on food clothing and food clothing and drinks as we did on medical care today we spend twice as much on medical care as we do on all of those combined and in addition do you know any other item in our lives about which there's so much dissatisfaction and about which people click complain so much as they do about the organization of medical care why that's what's really interesting about the subject well I believe the answer is because government has been playing too big a role for dr. Freeman Blytheville Arkansas go ahead please yes about a year ago I took a class at the London School of Economics called the European Union and the New World Order and what surprised me many things surprising about the class but what surprising was how the European Union thinks nothing about manipulating prices government intervention they don't allow them forces of supply and demand to take hold and in essence they don't play fair and it concerns me that you know if the European Union really pulls us off and gets us going we're gonna be at a great disadvantage with them what do you think about this oh I don't think we're gonna be at a great disadvantage with them the European emulation of prices within if not within the European Union alone it's within individual countries in the European Union has led to the fact that the European Union countries have had unemployment for years now up in the range of 10 percent that they have had very slow growth they are hurting themselves not us and we would benefit if they would loosen their if they would if they would reduce regulation deregulate and privatize and have a better economy because then they would be better customers for our products and they would have better goods to sell us so European economy and as a matter of fact they're doing reasonably well but I share your criticism of them but not because it's going to alter it bother us I have a little book here that was published back in 1969 by Norton called monetary versus fiscal policy and it's you debating Walter Heller who was active in the John F Kennedy administration and Lyndon Johnson but he starts off by saying it is difficult to work up anger or even indignation in a discussion a debate with Milton Friedman he is always so charming and so disarming even when he's dead wrong it's almost what you said of John Kenneth Galbraith listening to Milton I was reminded of a postcard I got in Washington from a Montana observer whose message was quote don't you go getting reasonable with me while I'm busy getting mad at you you remember I remember that debate very well these debates oh yeah that debate concerned what was really a very central issue in the whole Keynesian non Keynesian monetarist you dispute what matters what is it that most affects the course of the economy is it the ins and outs of fiscal policy is it the level of surplus the level of deficit or is it what happens to the quantity of money and my position in that debate was it was happen what happened to the quantity of money and water's position and waterers again a good friend of mine that's a more interesting story because I'll come back to it but Walters position was that it was fiscal policy and I think by now things have settled down and it's pretty well agreed the monetary policy is much more important than fiscal policy for the purpose not for some purposes but for the purpose of keeping the economy on an even keel but the funny thing I was going to say when I was at the University of Wisconsin for the one year this was a long time ago 19 for 40 to 41 there was a kind of a dispute got involved people wanted to have me fired into the fire and Walter Heller was a student at that time in University of Wisconsin and he carried he carried signs in the pickets on my behalf is he still alive no unfortunately Walter died in a relatively early age Cody Wyoming you're next for dr. Milton Friedman yes dr. Friedman I'm a small L libertarian also I'd sure like to know your observations and opinions about the Libertarian Party and it's a presidential candidate Harry brown and secondly if you were to design a or change this tax system to support the federal government what would it be like thank you I'll hang up if I were to design the taxes tax system taxes there's no question on the that's easy to answer I think the tax system I would decline design would be a simple flat tax on all income above a minimum from whatever source derived period it would be a single flat rate and unfortunately given how much government spends now it would have to be a flat rate around 25 or 30 percent which is much too high but that would be better than this incredibly complex system that we have now now in addition to that flat rate tax the only other thing that you should have or really taxes it can be regarded as payment for services that is for example there is an argument for a gasoline tax as a way of paying for the highways for taxes which are specifically devoted to services that some people use and other people do not now on the first question now I think very highly a hairy brown I think his program is not one that is feasible politically at the present moment but that would be desirable if it could be adopted I have never myself been active in the libertarian party not for any reason not for any particular objective reason but only because I thought I could be more effective and influential by working within the Republican Party I have here the essence of Friedman and did did the Hoover Institution think this was your swan song back in 1980 no but Hoover has been putting out a whole series of book they have the essence of Hayek the essence of Stigler they're going to have or have already the essence of Dekker they are simply collecting the major writings of the people who are on the staff at the Hoover Institution now you're now that shows the difficulty accounting books is that a new book everything in it has been published somewhere else that was 87 and you were 75 yeah and how long you been associated with the Hoover Institution what is it the Hoover Institution is at Stanford University but it's a separate institution which was established by Herbert Hoover in the 20s I guess and mostly as a repository for the documents and the material he had accumulated during his service during World War one when he was running the Belgian food the the food program and what it is is a research institution devoted to analyzing it's a Hoover Institution on war and peace I think I've got it roughly right and its purpose is in Hoover set for it was to study the sources of conflict among nation the sources of and try to promote programs that would eliminate war and promote peace and what it is is a general research agency that studies all sorts of economics and social and political problems as I say it's at Stanford but it's independent an independent institution at Stanford it is not a teaching institution it's entirely a research institution George Shultz Thomas Sol Peter Robinson others who who else is down there yeah hey John Cogan John rezian is the director of it you do meet you do you go there yeah they're very frequent I used to go there much more frequently than I do recently because it's become more difficult for me to travel just from aging but I go down there I have an office there and a secretary there and it's enormous be useful to me as a place and there there are seminars almost every week there are two or three or four seminars in which papers will be given there's some discussion every afternoon there people meet for coffee you know you know it's a usual academic kind of an environment it's a very productive environment it's been very productive Hoover scholars have produced an enormous amount of writing and have affected public policy in many ways we go to Fairfax Virginia next hi dr. Friedman my girlfriend and I are young economists at George Mason University and we're learning so much so quickly and it's just it's you can get frustrating I was curious if anything still gets you angry that people think a certain way or certain things are happening and what you think of the current situation thank you well what we think of our what current situation current situation well current situation in the United States is on one level very good economic output is hard it's growing rapidly we have very low unemployment we have relatively low inflation it's too good to last and it won't last but I'm not not making a prediction in terms of time we know too little to know how long it could last there's no reason it can't go on for a while but sooner or later you're going to accumulate difficulties you're going to accumulate problems and it's going to we're going to have temporary periods of recession and of decline but not major depression so far as I can see anything make you mad anymore anything make me mad well I learned a long time ago that it doesn't do any good to become mad so when nothing has really made me mad I may object strenuously to certain things but that's not the same it's big mad what makes me mad if you want to use that phrase this goes back to the idea that I might is it is incredible that we can continue with a system under which we elect people to Congress well once they got there try to figure out how they can get us how they can use our money to buy our votes Vancouver Washington you're next dr. Friedman it's such a pleasure to talk to you I appreciate you taking my call and I wanted to start by saying after reading your your book free to choose I decided to major in economics at the University of Washington it was in a low-level economics class that I read that and I think it's two economics what Stephen Hawking's book a brief history of time is two astrophysics but my question has to do with with deficit spending and the national debt and their actual versus perceived impact on on interest rates and and the economy as a whole I wanted to get your opinion on that well the question about national debt the national debt is really a situation under which in the main we tax some people to pay interest to other people and but in some cases the same people because the national debt is in the main owned by residents of the United States the national debt is a pretty has some virtues as well as some disadvantages for example we now issue in the national debt purchasing power securities that is issue securities that are indexed against inflation that's that was a pet project of mine for many many years I remember one of the things I was disappointed with in the early Reagan administration I was trying to persuade the then Treasury Secretary Donald Regan that the Treasury should issue purchasing power securities it's something that's a great advantage to the public at large it enables them to have some way in which they can have some assets that are fully protected against inflation and it would have enabled the government to borrow at a lower interest rate but unfortunately Don being a creature of Wall Street and having had all his experience in Wall Street couldn't see it and he was unwilling to do it but finally it's happened and we have since purchasing Birk securities and that part of the national deficit debt from my point of view he's a great benefit to the country do you know what the the letter woops about the letter series is on that as it it's not the p-series is it I don't I don't know I've heard the advertisements but you can get them I mean any broker will buy them for you and that moves with inflation they bet that's right they both the payment is adjusted for inflation and the capital value is adjusted for inflation so it's a completely purchasing power corrected security but to go back to the what the caller is asking about I think what he's referring to all this present talk about paying off the national debt now I believe that we would be much better off rather than paying off the national debt to reduce taxes and the reason I say that is because we won't continue to pay off the national debt as soon as the political situation changes a little that money will be spent by the government it will not be used to pay off the national debt all of these predictions that the national debt will be gone three five years from now I would be willing to wager ten to one that will never happen Rose Friedman will join us in about 25 minutes how long have you two known each other again oh we've known each other since 1932 how many years is that 68 years how long have you been married 62 years what's the been the secret of staying together and tolerance I think the most important single world word for living is tolerance in every area intellectual political personal Oklahoma City you're next hi dr. Freedman I just want to say that I admire you very much if everybody would read your book in the United States I think they would understand and and see you know see through the forest I also want to say that next to FA Hyack you're you're one of the greatest people in the economics profession that I've ever read specifically my question is do you ever worry about our trade deficits they've continued to grow over the years you know could you expound on that a little bit sure do you think that we're in the middle of a credit expansion that could could collapse possibly and I just want to say thank you so far is the last there's no sign of an unsustainable credit expansion the best index of that is to see what's happening to the quantity of money and the quantity of money has been going up for the past year or so only at a rate of about 5 3 to 5 6% it's been going up at about the rate that you need to have it go up to match the growth and output so I don't think there's any problem of accredited expansion and now on the first part it I guess I'm my age is showing what was the first part of it I was going to tell you that both of our I will think about it in a minute why don't we go on and we'll come back to it when when by the way before I take the next call how many times in your life have you told the pencil story I don't know that pencil story is a wonderful story it originates with Leonard Reed who was at the time ran the foundation for economic education when what year oh he that goes back to about 1950 I would say something like that and you know the pencil story do you want me to tell it again I take it let me take this call because we're waiting and then we'll come back yeah before this is over I want you to tell you some book knows the depth held again Aberdeen Maryland go ahead please oh yes sir thank you Brian I have to say as well it's a great pleasure for me second only to the possibility of going to a driving range with Tiger Woods dad's gun I questioned sir specifically with the Kings Ian's a lot has been said written and lectured about your economic model vice john maynard keynes can you expound a little bit on your views of monetarism the use of it in overcoming what economists call a liquidity trap especially with the recessions and depressions and can you give us your views a little bit on this concept of a liquidity trap and and I'll hang up now and unless you have a further question for me and listen to your answer sir before you talk about liquidity traps when did John Maynard Keynes live John Maynard Keynes lived he was born late in the nineteenth century I'm not sure just when and he died what 1955 something like did you ever meet him no I never met him and he lived in Great Britain all we lived in Britain like all the time you he John commander Kings I did let me make it clear he was a great economist the very grady tournament many of his works are valuable today a book on monetary reform that he wrote in 1925 he's still worth reading today for what I was in it he was a great economist his book the general theory of employment exchange and money which is what really made him world famous and and it's what's known as Keynesianism is a it's an important book I believe it's fundamentally wrong but that doesn't mean it isn't important you know most you get developments in science only by people putting forth hypotheses most of which are wrong and it's out of the revisions that come out from correcting the wrong hypotheses that you get could get closer to the truth you never get to the truth you're still always going there but you get closer what about liquidity trap so on the liquidity I'm the liquidity trap was something that came came out of Keynes's work out of that book general theory and I believe there is no such thing what the liquidity trap was the idea that you would get to that if interest rates got low enough people would get to a point where they didn't care whether they held bonds or money or cash so that if you tried to stimulate the economy by increasing the quantity of money and the way you increase quantity of money is by buying bonds people would simply accept that additional money hold it in cash and not spend it so that you wouldn't have any stimulating effect from the increasing quantity of money no I believe that it and and let me emphasize Keynes raised that possibility but he himself said we have never observed one so far and to the best of my knowledge we never have observed from the closest we've come to it is in Japan currently and that's because of bad Japanese monetary policy not because there's really a liquidity trap I got a couple more books here just quickly so that we can get them all and this is one that you did it with Robert Russa that's a debate with Robert ruse on free first that's an interesting case the free versus fixed exchange rate at the time we had that debate everybody was in favor of fixed exchange rates except a relatively few crazy people from the University of Chicago today nobody is in favor a favor of them in that same sense there's Walter Cohen another debate yes that was a debate about Social Security about whether Social Security should be universal or selective these these books sell any and I mean of any degree in it where they have any income babies well no income tracker those books no no most of it I should say I get royalty on very few of these books free to choose some of your autobiography and the but on the major scientific books I don't get any royalty on those they were published by the organizations that sponsored the research those two books of debates were sponsored by the American Enterprise Institution in Washington they were published by the American Enterprise Institute and then so far I'm sure they lost money on them but if there were any royalties they got it I didn't Lewisburg Tennessee for dr. Milton Friedman you're next yes I got a question for you and you just held up the book there on social security so that's kind of what interests me because I'm a younger person and I politicians of course I try not to listen to them too much because I don't get many facts but as far as Social Security there's a debate going on in that arenas at whether or not I can take some of my money and invest it I'd like to personally take it on that's it because then I can see a profit but is this viable I mean we're my I don't know your arguments are good on this from my point of view I believe Social Security should be a hundred percent privatized not simply 25 percent privatized I believe that Social Security is not a good system you know people talk about being fair and just here we have a system under which you're a young man but let's suppose let's take a different case a hard case here's somebody who's forty-five years old and ADEs he's got ten years to live at the most if he's lucky and the government comes along and says you have to put aside 16 percent of your wages for your old age does that make any sense it's a crazy thing for him to be doing why don't we let people decide for themselves what fraction of their income they want to save for their old age and the form in which they want to save it Social Security came out of the Great Depression and the Great and it came out of the theater the idea that people were not able to save and provide for their own retirement the difficulties in the Great Depression were not due to bed to to unwise behavior by individuals it was due to unwise behavior by government and once you cured that unwise behavior by government from my point of view the ideal situation would be to let people save for themselves then people will say well but some of them will be imprudent and they'll end up in their old age as the charges upon the state well I agree we ought to have a program to make sure that nobody starts oh you want to have a program a basic safety net at the very bottom but why should that be different for people who are there because their own or because they're disabled or because I had accident or be for other reasons so in my ideal world every individual would decide for himself you would decide for yourself at the moment that's not politically feasible but privatizing part of it would be at least a step in the right direction we're coming to you from San Francisco at the itn studios dr. Milton Freedman is our guest three-hour in-depth program Connie Rhoads book TV Connie is our executive producer and back in Washington on this day and Susana Frankel is here as our producer on scene with our director Brett Bethel and we're looking at all these books that dr. Friedman has written or he's a part of including his new autobiography called two lucky people new meaning the last couple years how did it sell was it satisfactory for you I really don't know quite but no it wasn't satisfactory of course we it's sell in the millions and souls in the tens of thousands and what was the approach that you and your wife took on this book well what would the approach we took with the decide that instead of writing it jointly we would write it in selective pieces so most of it each piece is labeled either Milton or rose so we can speak in two voices that was the suggestion of our editor at Hartford brace let's go to Long Beach California next for dr. Friedman good morning gentlemen my name is Gregg and I just like the same a disciple of dr. Friedman and I like his comments specifically on the negative income tax for a replacement of welfare and a comment on how the Democratic candidates in popular culture keep pushing class Envy well on the latter part of that I think it's too bad to push class Envy we one of the great things about the United States is that we really don't have classes all right I entered this world in the lowest class in our society I entered in what was my parents were poor immigrants neither one of them ever graduated from high school he's showing me pictures that I like to say what's due which one is this right here what are you talking about I mean that's the Nobel Prize in in Stockholm 1976 and that's a queen that's the king of Sweden leaning over to shake my hand and you were talking about class Envy I didn't mean to interrupt you but no no I just I'm not sure what that is yeah I gotcha Bluto lazy great man talking about class envy as I say my parents neither one of them ever graduated from high school or from anything like that so I was in the bottom class but I'm not in the bottom class anymore and that's true for a great many people very few people who were in the United the United States a great thing about the United States is openness the fact that people aren't stuck where they start this is a great contrast to Europe in most European countries they're still a good deal of rigidity it's much more difficult for a person from a working class it's possible but it's much more difficult and unusual for person from a working class to work himself or his children up into a higher class than living in the United States I need to take a call they know if you make it relatively brief want you to tell the pencil story before we break to bring your wife on border Bel Air Maryland you're next Brian abuse as quick as I can I just wanted to know if the doctor could comment on a recent actually earlier on c-span I believe it was the Economic Policy Institute a think tank in DC that just released a study they do it every two years if you could perhaps help me up right on the title that and the gentleman you had on I believe it was on just c-span a few hours ago Eastern Standard Time yeah I wasn't calling I saw a little bit of it but I don't remember the titles of everything yes and he referred to the growing disparity and income and I was wondering if a doctor could speak to that as well as that I think the doctors view is that taxes have not remained a constant as in terms of relative income over the last 20 years whereas this report I do believe showed that the taxes have remained the same over the last 20 you know income on taxes has remained the same over the last 20 years that's what the report was saying would the doctor agree with that is the question and if I can anyone want to ask one more and have you respond no no no no let me take these up first so far as I'm not sure what you mean by taxes on income have remained the same if we take the total tax receipts of federal state and local governments they are at the highest point as a fraction of national income that they have been since World War two and indeed I believe they are roughly equal to the level reached at the height of the World War two so I don't know what what's your quick follow up call I'm speaking about the actual personal income it was was what the study this was about workers this is for released on Labor Day about workers and the other question was can speak to education as an investor and I'll hang up listen well let me go back to your first question about inequality if you look at the statistics of inequality they do show growing inequality in wage but that's inequality in one year's income not in lifetime income moreover the statistics in the United States are very much affected by the fact that over the past 10 or 20 years we've had some 16 million immigrants come in to the United States and they have mostly come in from countries in which they were at relatively low income level they mostly come in at the bottom income level in the United States if you take those out there's much less evidence of a widening inequality of income but in any event we should there's nothing to be worried about about the inequality of income so far as I can see as long as we're open so that people who rise can also fall and people who fall can also rise what we want is openness it would be an awful world in which everybody had exactly the same equal income and it was a set equal in every way you wouldn't want to live in a world in which everybody was your duplicate pencil story then you want the pencil story this is a story which was told by Leonard read as I said before and it's his question of nobody it's the original story was labeled a pencil nobody knows how to make me there's no single individual in the world who knows how to make a simple yellow LED pencil with a piece of what's called lead which is really graphite OLED pencil with a piece of what's called lead which is really graphite in the middle thousands of people are involved in making this one pencil after all the wood comes from timber which is from maybe trees cut down in Oregon or California in order for those trees to be cut down there had to be saws in order for the saws to be made there had to be steel mills in order for the steel mills to be there they had to be and so on the graphite comes probably from Chile which is where somebody had to discover the graphite minds and minds it out the little red eraser at the top and that comes from trees which were originally native to Brazil and which businessmen some people who found him transfer them to Malaysia and they grew the rubber trees in Malaysia and then he went on about the little tin strip and he went through and saying there are thousands of people who cooperated to make this one little pencil which you can go down to the store and buy for a diver $0.15 those people cooperated with one another in making it even though they didn't know one another even though they were of different religions they might have hated one another if they met maybe they'd fight with him but they cooperated what brought them together to cooperate was there somebody up high who was sending orders down to the people in Chile to dig the graphite to the people in and in Malaysia that to take the rubbers no they were all coordinated through the marvels of a free market price system in which if there wasn't enough wood the price of wood would tend to rise and that would encourage people to produce more wood there wasn't enough graphite the price of graphite was rise and so on it's a marvelous example of the way in which the free market enables people to cooperate together for a common good when you go to the store and get one of those pencils without knowing you were trading a few minutes of your own time for a few seconds of the time of each of the thousands of people who went into that thing consider the how complex it would be for some one person to give orders out for all that isn't it a wonderful story I told it much better on TV because I was bribing for dr. Milton Friedman and in depth will continue with his wife rose for another hour in just about five minutes book TVs live in-depth conversation with Milton Friedman resumes at about five minutes next month a live in-depth conversation with novelist playwright and essayist gore Vidal join us the first Sunday of each month at noon Eastern for book TV's author interview series in-depth book TV on c-span to join us for a look at the world of nonfiction books and the publishing industry Saturday morning at 8:00 through Monday morning at 8:00 Eastern 48 hours of nonfiction books all weekend every weekend on book TV now from Book Expo America and Chicago the country's largest book industry trade show a preview of some of the new books coming out this fall David Rosenthal among the titles that Simon & Schuster is coming out with this fall is this book an invitation to the White House by Hillary Rodham Clinton tell us about this book this is a book mrs. Clinton has been working on for some time because she feels strongly that the White House is more than a presidential residence but it's that it is really the people's house and she feels that one of the accomplishments of their administration has been Americanized in the White House Americanizing the type of entertainment the type of cuisine that's been served there the type of functions that the White House has been used for not just for foreign press conferences but of course for meetings of civic leaders for meetings of a think tanks and whatnot and she really feels and I think she believes that this book is part of her legacy as first lady in Abbott Entrance legacy in terms of leaving this house to the public filled with wonderful behind-the-scenes photos how functions are put on at the White House and about how they've changed over the years did she approach you or did you approach her we've had a long relationship with her Simon & Schuster published it takes the village also published the socks and Buddy book about letters to the White House so this was something I think that was talked about mutually but she really felt strongly it has been a passion of hers making the White House more contemporary making it more of a people's house that everybody could be proud of right next to it is another book very different book Hunter s Thompson the gonzo letters vol 2 he does not live in the White House as you probably know hunter hunter is also as American in some ways as the Clinton star he is a national treasure his first book of letters proud high was published about four years ago and that covered the beginning of his childhood almost in Louisville to the late 60s this one takes us through sort of vintage Hunter Thompson through the Fear and Loathing in Las Vegas years until the fall of Saigon in 1975 well I note here that it's edited by Douglas Brinkley foreword by David Halberstam - pretty pretty pretty big names there that they are not as big as hunter himself of course but Doug Brinkley has worked with hunter on a number of projects including the first volume of letters he really has treated Hunter as one of the great natural American writers and halberstam really goes back to those days of Hunter of being just one of the great new journalists of our time and he has always been an enormous fan as I think anybody who loves fun writing and and recklessness certainly likes I noted also Steven Ambrose has a new book what's that Steven Ambrose is writing in a way what is in some ways the natural sequence the natural sequel to undaunted courage because what this book is is really the opening of the American West by the railroad this is the history of the Transcontinental Railroad and in some ways it picks up where Lewis and Clark left off titled nothing like it in the world nothing like it in the world and excuse me what Ambrose has been particularly wonderful at is not only telling the story of the building of the railroad but really the people who built the railroad this is the telling of the building of the railroad in a way from the point of view of the laborers of the engineers of sort of the smaller people who created this thing it's the same way he dealt with d-day and with World War two he's dealing with the creation of the railroad it's an utterly majestic and splendid book the next book much more contemporary I witnessed a power by David Bergen David Gerken some people think was there when they built the railroad actually but rather instead he has been there through the last five administrations and what's wonderful about Bergen is that he's been able to work for obviously not only Nixon and Ford who is the extremely fond of in the book and who he really feels history is underrated and President Reagan but was the way that he was able to come in and advise President Clinton he really is one of those people in washing who has seen it all and he's very good-natured man but also a very astute observer of what goes on there any other particular titles that you yourself are particularly excited about one book that I think is a real sleek or in a wonderful book for us is a book call today I am a boy and this is by an author named David Hayes who wrote a book called my old man in the sea which was a book about sailing around the world on a boat with his son which was a big bestseller a few years ago widely widely praised and this is a book about how this man in retirement at age 70 decided to go to Hebrew school and become bar Mitzvahed which he had never done as a child and it's really looked at exploring how it is to get old how it is to try and find what you might have missed and you used it's one of the most related beautifully written books I've seen in some times David Rosen Paul Paul vice-president at Simon and Schuster thank you very much thank you what's a good book be read a good book I read recently as Matt released the genome which is a study of genetics and the whole new science of micro microbiology and I'm not a scientist I'm a historian but I found it very interesting and very lively very interesting flow rich it accessible and one of those books you understood it is that went along but I couldn't explain it once I was through do you think that the book had any implications for politics or public policy oh sure because this is all the stuff about genetic engineering is in there and I mean material about that about the possible search on cures for cancer the idea being certain genes all that's discuss yeah those are lots of pitfalls the probably policy at this book but he's English man so he's not you know inside the Washington Luke but he's talking about pitfalls can really globally about this whole experiment also some of the excitement ever cultural imperialism right other side my dissertation that I'm writing it's all about how culture and art literature are affected by politics imperialistic politics specifically is what that looks about great book I've read and sort of keep returning back to his Edward IV's fool's progress I read it when it first came out a number of years ago right after his death it encapsulates everything that Edward Abbey was about sort of the disgruntled Godfather of the earth first movement apologizes the American environment American people salt of the earth Robert Huffman's Bowling Alone a sociological study that I feel is comparable to David Riesman famous the low lonely crowd many years ago he emphasizes the greater fragmentation and atomization of American people in return as a reflection of their culture cultural conditions the breakdown of community and the fact that the value system is no longer coherent organized by Loren Sorrell which consists of four books and I very much enjoyed that and I also recently completed Hermann Hesse is the second one I prefer to read classics so now we continue our live in-depth conversation with author and economist Milton Friedman for the last two hours Rose Friedman your husband's had all all the same your I never like to talk very much why is it does the talking I don't know it's in my genes so what role I mean your pictures are on the cover of a couple of these important books I have an equal role in writing it and I've done most of everything I've done is by what I add in writing but I never couldn't go out to speak about it why not and I refuse to be on the television program free to choose I was very careful to stay I did a lot of the planning we planned all the discussion while we were doing the program nothing was done in advance and then I got out of the way do you have any reason why you don't like the speaking part no I think maybe I didn't I don't really like to compete he speaks well and he's done it all his life and so why should I compete with him I asked him why has worked all these 60 that's one of the reasons we've never competed with one another and what about economics in your life have you are you training he comes I was trained fine but when we got married my idea of being married at least at the beginning was very different from what people these days feel about being getting married what was it I did not intend to have a career that attempted to equal my husband's and that was one of the sources of our success and where did your family come from my family came from what was Russia when we were there and we it's now I don't know somewhere in somewhere in Russia well it's not Russia anymore it's the Ukraine I guess I've never really kept much track of what's happening to it because I was an infant when I left I really have no ties to that part of the world where did you grow up in Portland Oregon and how did your parents get there under what circumstances I mean why did they get yeah well I guess the only reason was that our relatives were there my father came before we did in fact he came to the United States twice and on the second at the second time he earned enough money to send for the rest of us and you went to Reed College out there for a couple years why did you transfer well primarily because my brother was really responsible for my complete education and he wanted me to go with him to Chicago when he first went there on a very modest salary if something like I don't know where there was as much as $2,000 a year but he thought we could both live on it but my mother thought I was too young and she wouldn't let me leave when I graduated from high school so I went to read for two years and by that time my my brother persuaded her that I was old enough and he was going to be there too so I went to Chicago do you remember the first time you met this man yes I do where was it University and the first graduate course in price theory professor Viner arranged the you've heard this story so many times probably arranged the class alphabetically so he could identify people once he saw them a few times Milton's name began with F mine with D so we sat next to one another and I always complete that story with I was the only girl in the class only one in the dark I was that the same kind of racial you found in other classes there in Chicago mostly in economics there were very few very few the women was graduate school in the 30s very few women went into graduate school you told me briefly before we went on the air that you completed your work for your doctorate but didn't get your PhD that's right why not why not hmm I worked on it for one year after we were married but during that year I also had a job and so I didn't get a great deal done after that we moved around from one place to another one year in Wisconsin one year in Washington one year in New York I forgotten what the sequence was and then I decided we decided we wanted to have a family and that took a long time how many kids only two but we lost the first one yeah three week the first one was lost at delivery so that took one year out of my life and I we went back to Washington and I went to work again and then quit with the hopes that that would help producing to produce a child where are you two children today oh they're in California at last well a daughter has been in California ever since she went to Berkeley she decided then that she was never going to leave California and she never has she graduated from Berkeley and then she went to Berkeley law school got her degree there and consitent started practicing in San Francisco as a matter of fact we were not here yet and she stayed here and what about your son David we've had on booknotes in Chicago at the University of Chicago for five or six years and finally came out to California to he's now at the University of Santa Clara we're gonna go to the phones very shortly and our guests here on our special in-depth program from San Francisco on book TV dr. Milton Friedman and his wife Rose Friedman who is also here on the cover of free to choose which is I guess your most successful book yes what are you money wise that anyway yeah what what do you remember about working together on this particular book well that was very easy as Milton has already said we had the television program notes and the book is written really from that and so we we each started with one chapter and then handed it to the other person to go over the chapter and we went back and forth that way so that in the end we really don't know who wrote which words which is true about all the books we've written and that was probably finished in shortest time because we had a deadline for it we wanted to have it out in time to be available when the fruit TV program the television program was was shown and so we started on it in March of 1979 and we got it to the publisher by the flavor day and they got it published by January which was when the TV program started when you're working together on these projects what is she do that you don't and what does he do that you don't think there is any nothing both your type we both use the computer now and before we take our first call we've talked a little bit about aging both of you 88 years old are you surprised at how well you do I mean for those who can't see these two people they are they move around as well as everybody says we are bouncing around I don't feel frankly there are many things I can't do today that I used to be able to do I don't have the energy I used to have so getting old is no fun is there any advice you have for people as they they knew they're gonna live to be 88 would you do anything differently if what yeah if you knew you're gonna live this long would you have done anything different I don't well I think we would have lived more extravagantly we were always saving our pennies my brother used to say we were saving our pennies for a rainy day that never came no he used to say I was saving I saved my pennies he would say you're saving your pennies for a rainy day and living in a perpetual drizzle okay Phoenix Arizona yes yeah I really love this program first time I've ever been able to get through so it's really nice and also everything on c-span is great I have a question for dr. Friedman I know exactly how to phrase this but the gross national product is like a I don't know it's a connect economic thing that involves all the positive inputs from government and and in industry and everything but it has nothing to do with negatives like fighting forest fires and earthquakes and the vironment pollution and I just you know I just wonder if maybe there's a better way to to deal with those kinds of things instead of having a gross national product have something that shows negatives instead of just positives Thanks color well what you call negatives enter into the gross national product as positives after all part of the gross national product consists of the money and resources are spent in fighting fires that's a component of the gross national so that ends up as a product not as a negative it's a cost of averting the negative there have been your suggestion is is a very important one and it's been very widely considered trying to have an alternative measure which would give you a measure of the gross national goods as it were of the good part of the product unfortunately it's so hard to separate the one from the other what some people would record as fighting evil other people with regard is good for example there are many people who would regard the money spent on cigarettes as part of the evil component but to those who smoke cigarettes they regard it as part of the good component there are many people who would put their hive many of the high calorie foods we eat as part of the evil part but to those who eat them that's part of the good part so it's extremely hard to make such judgments after all the judgments of what's good and evil are in vigil well gross national products is intended to be an objective measure so it's really a measure of input rather than output Rose treatment do you disagree with your husband economic on economic theory in any way very rarely rare occasions did you start from the same point did you agree in the beginning that's right we learn from the same teachers our home we grew up very much in the same kind of home and there was no reason by which one should go one way and one should go the other way New Orleans you're next go ahead please which dr. Friedman's I've been morning I have a question that I have been wanting to ask someone knowledgeable about this situation for a long time it seems to me with all this push for a minimum wage that that's going to automatically lead to galloping inflation I haven't heard anyone comment on this it's just my own idea what do you think it's a scream what you want the question is whether or not the minimum wage will lead to galloping inflation if you raise it if you raise it yes I don't think it'll lead to galloping inflation but it'll lead to a lot of unemployment why because people who are hiring the entrepreneurs that are hiring these people can't don't feel that they can pay them more and therefore they would cut out they would reduce their their employees at this time in the discussion in Washington there's a sense and it's just a distant sense that they're going to pass an increase both Republicans and the Democrats why are the Republicans gonna go along with this do you know with everything these days well the Republicans are going to go along with it because it's superficially politically profitable you know the problem with these things is that on the surface things look very good after all what's wrong with raising the minimum wage isn't it nice for people have a higher minimum way the problem is that the indirect effects which are unseen the unseen more than counterbalance the good effects because as Rose says if you raise the price you'll buy less of it whether it's sugar automobiles whatever the higher the price the less people will bar and if wages are higher people will buy less ways now how would that lead to inflation there is an element of truth in what this gentleman is saying and that is that if you raise the minimum wage too much and created massive unemployment there would be a great pressure to do something about that unemployment what would that pressure lead to it would lead to inflation as a way of reducing of really reducing the real value of that minimum wage you asked about why the Republicans will agree to a dollar minimum wage increase over two years part of the reason they long agreed to it is because it isn't really a road race it's a raisin in nominal terms but prices have been going up you bet you haven't had much inflation but you had three or four or five percent inflation over the last few years so six dollars and fifteen cents two years from now is probably about the same level of real minimum wage as $5.15 was two years ago santa lorenzo california go ahead please and good morning to your distinguished guests the Friedman's my wife is from the republic of the philippines and now she's awfully awfully concerned about the future there and she has a remaining brother that still lives there with his family what can your guest offer us - the solution that the problems that exists there now thank you part of the problem is where we Rose Friedman cannot hear very well so if we could use the the speakers it would be helpful out here did you understand the question yes I understood the question it has to do with this Philippine the the measures that the Philippines need to take in order to improve we're the same as for all underdeveloped countries and those measures consist of first of all freeing trade reducing tariffs restrictions on trade second of all reducing government spending and lowering taxes deregulating those are the measures which have been found everywhere to lead to an improvement in the average in the income of the country and the average income of the people and without taking those measures there's little likelihood of improvement Greenville South Carolina let's try this one and see if you can okay go ahead please dr. Friedman earlier you made the comment that the wage earner paid 16 percent of his income towards Social Security I was impressed that you you said that because that's one of my pet peeves as most people don't realize they think they only pay seven percent or seven and a half percent and the employer has to pay the other half so my question is currently as I understand it the government we are taxed for Social Security we pay Social Security benefits today and then we have an additional amount there were attacks for for future shortfalls now when those when it comes time for those shortfalls to be paid how will we pay for those shortfalls if we're not if we don't have a surplus in in our economy in our up you're absolutely right that's one of the great fallacies in this area this is purely paper the so-called surplus available for Social Security is a pure paper entry it's what one part of the government owes another part of the government and when the time comes that current receipts from Social Security taxes are not enough to make current benefits the difference will be paid either by reducing other spending or by increasing taxes or by borrowing from the public there is no the lockbox is a bunch of is a fiction of the fiction a figment of the imagination you don't have pieces of paper in there yeah you have pieces of paper in there saying the government of the United States owes this locks box so much money how can the government get that money either from taxes or from cutting spending or from borrowing from the public no other way Rose Freeman in your opinion what's the best way to learn economics be married to Milton Friedman do yourself read about economics anymore all right well I don't read anybody anymore about economic theory I read about the things that you read in the journals some of them although the journals more recently it become so mathematical that even he doesn't read them what do you read when you have time yourself I read when I have time by the time I finish reading all of the journals that come into the house and the Wall Street Journal from page 1 to page X I'm just about through occasionally I will read a good mystery but not very often and you do you read the New York Times any more than he does even as much as he does because I don't read the paper the night before on this - on the NIP I should say that the last book I read was Bill Buckley's recent book the novel or the novel speeches yeah laughs you did yeah I read to the speeches that's a wonderful book of speeches I think Bill's book I think bill is a remarkable character Lafayette Indiana you're our next caller go ahead please yes thank you for for dr. Milton Freeman in the last 10 to 15 years farmers the farm income and farm economy has lagged behind a general economy do you have any solutions for this situation thank you and I've enjoyed your work there is no solution to it if you think you know it's interesting to take the long view on this when the United States became a nation 19 out of 20 people were on the farms to growing the food for the remaining one person today one or two percent of people are on the farms growing food for the remaining 98 and with enough to export abroad in large measure because of the technological changes and improvements that have come along agriculture has been a declining industry for 200 years and it will continue to be a declining industry because the demand for the food that agriculture grows is not very elastic after all there's a limited amount of food of the physical kind the luxury elements of food go into the preparing of it the chefs the fancy restaurants and so on but so far is the actual products of the farms are concerned that demand goes up relatively slowly so unfortunately the agriculture will not not be a growing industry in your lifetime Rose Friedman what do you think of the just the overall stage on that we're also importing a great deal of our food these days that we never imported before you go to the store most of the fruit comes from either Chile or Peru or you name it good or bad I well it's good if it didn't come so hard that you had to keep it for two weeks before it was edible but it's very good because it means that we have food at a lower price and plenty of it people get eat things now that we never even dreamed about years ago how many of these different books sitting out here have you had something to do with no I don't know I mean which one oh yes that one would never have appeared if I hadn't started it frankly yeah started it I hadn't started writing it right is that right well that was based on a series of lectures I gave at a summer session of a foundation and she took the notes the the transcript of those lectures and it was her initiative that organized the transcripts of those lectures into the book and how did this book do was it a good time well didn't do very well at the beginning because it was not a popular yeah the ideology and it was not very popular what was the main thing the main thing that main theme was freedom of markets and freedom of people ethic of New York you're next yes hello in regards to economic theory you both are very influential to the libertarian party I was wondering are you libertarians and if not why as I said earlier we're we're libertarians was a small L but we're not members of the libertarian party and that's tricky for practical reasons how about your politics any different at all my politics are the same I'm a libertarian in the sense that I believe that people ought to be free to make their own decisions and plan their own life how much government should there be as little as possible and what things we can't get away with like the Army has to be government when people are really so poor that they can't that they don't have place to live and food to eat it's up to the government it's up to the people really years ago it was done individually by people in doing their own charity it didn't go to the government for charity the same thing is true of medical care you know the big argument now is that poor people when they get old have medical care people have always had medical care they didn't didn't use it to the extent that we do today but they were just as well-off and the doctors did a lot of charitable medical work which they don't do anymore Corona California go ahead please hi Brian love your show then a lot of respect for the Freedmen's I've heard from several different people now that in America today for a young man and woman starting out earning 30 40 $50,000 a year getting married buying a home saving for college for the kids then it's virtually impossible for them to save and accumulate enough money after taxes to have them retire at age 65 in the same world that they've become accustomed to and I'd like to comment on that I think people can't afford to live and do save for their children's education so on on thirty forty fifty thousand dollars a year because they're their desires have become so much greater than they used to be people feel the year after they're married they should own their own home we never owned our own home and then it was only because when we moved to Chicago they had a regiment rent control and we couldn't we couldn't find an apartment or a house to rent so we bought a miserable house that we could only kept we did what little we could and we kept it for about a year and a half and then it was a matter of either keeping the house or one another in one of your books she talked about Chancellor Earhart taking controls off in like 1948 after the war and it had a you think a big impact oh it's Remender impacted no question the way Germany in Germany the week before there was nothing in the windows of stores people of the week before people in the factory making pots and pans we're putting some pots and pans on there back in going into the country to see if they could get some from farmers to see if they could get potatoes or some other kind of food to be a week after he took off controls the student everything was different stories were open there was me kids goods in the stores people to go to stores to buy that was a German miracle of 1948 why did they recognize this such he took him off I should add he took off price and wage controls on a Sunday because he knew Liam the the American offices would be closed and they couldn't contradict it Omaha Nebraska you're next I'd like to ask Milton Friedman if all the dollars that are outside of the United States such as in Argentina and elsewhere in the world as their currency were to come back to this country what would happen and I would like to inquire as to what kind of circumstance would that shift of money be after of course I'm gonna hang up and listen thank you you have to ask how they would come back how would the money you have to ask how the dollars from Argentina would come back in the main que wasters the way they would come back they would end up by being destroyed they wouldn't affect the situation at all at the moment in effect the dollars in Argentina are a zero interest rate loan from the people of Argentina to the United States we get senior rich on that currency how could they come back they could only come back if people in Argentina used them to buy goods and services in the United States in that case they would end up in the banks in the hands of the public and whether they effected the total amount of money would depend on the monetary policy that the Federal Reserve was buying what was pursuing in short they are not a danger on the contrary they are a free gift to the United States Rose Friedman you wrote a series of articles some time ago in the oriental economist economists in Japan what was that how did that come about that was really the beginning of our autobiography but I did that all by myself and they published them in a book in Japanese and wanted to do them in English I let them publish it in Japan it didn't make any difference to me but as far as doing it in in this country I wasn't I didn't give them permission to do that because I planned that one day we were really gonna write a real box autobiography what were the articles about in Japan my life was with Milton Friedman why did they want to know about that well Milton was very popular in Japan at that time we spent three months first and then we'd been go we went back more or less at least once a year and Milton was working with The Economist's there with the Bank of Japan and so his name was very important let's go to port on our again next go ahead please yes I had a question on that its effect on the economy of the United States and it's effect on the economy of Mexico and all hang up listen effective the CAFTA on the economy well now the NAFTA is a step toward free trade it's not a free trade and the idea of the NAFTA is a free trade agreement although it says now FTA means free trade agreement it really isn't a free trade agreement because it has all sorts of restrictions and really free trade agreement would be an opening of the border completely it wouldn't mean any Goods could go back and forth without any tariffs but the free trade of good but it has been a step toward free trade and as we saw a result it's been very beneficial to both Mexico and the United States it's benefited Mexico by enabling them to have a greater degree of capital investment from the United States in New Mexico which has provided jobs for Mexicans its benefit of the United States by enabling us to produce various goods and services more cheaply and to provide a more plentiful e to the American people so we have benefited and they have benefited it's been a good thing it would be even better if we were a real honest-to-god free trade agreement and swept away all barriers to the movement of goods and services across the boundary Rose Freeman how many times have you been to China three I believe for that right yes the first time we were under the auspices of the government or one agency in the government and we had a China Chinese man that traveled with us and an interpreter of the travel with us and we saw a great deal and but what year that was 1980 80 and what was the impact on you of seeing China in 1980 maíam mud that my feeling at that time was the China was going to make it and Russia was not he'd spent we also spent a week in Russia in so in the Soviet Union earlier what did you see the difference in the two what did I see of the difference we didn't feel that there was security people around us all the time we could take as many pictures as we wanted to when in in the in Moscow when we went out to take a picture we were immediately accosted by a policeman we were just taking pictures of the buildings around and there was a the people didn't quite feel the same about talking to you as the people in the Soviet Union so I don't know Chinese are so much friendlier people are seem to us at any rate than the Russians were naka mice Florida is that right that's okay dr. Friedman and in connection with the eyepencil story you mentioned Leonard Reed and I remember meeting Leonard Reed years ago at a C seminar which kind of got me interested in economics ever since then and right now I'm reading my way through Ludwig von Mises human action I never hear much discussion of von Mises in the media or anywhere and I was wondering if you had any comments on mister von Mises von Mises was a very great economist his writings are well worth reading though it's a chore to read through human action and I give you high merit high merit marks for doing so Leonard read was played a major role in enabling von Mises to come to this country from Europe and in supporting him when Mises another of these cases were fan bases his ideas were very we're not politically correct at all and he had great difficulty getting a respectable position in an American University he was able to stay at NYU only because of private money that helped support him there he was never really an employee at full time full class tenured professor at NYU it's a disgrace and it's shame that that should have been the case because he is a great economist now I I have many differences with von Mises but I have no doubt about his importance as an economist his major contribution was not in human action but in a much earlier book on money and credit which was the part of the source of what's called the Austrian theory of the business cycle it's a very interesting theory it's another of these theories like Kansas which I believe is wrong but which was important as a stepping stone to the development of the right ideas Rose Freeman and your travels with your husband all the places you've been all the books people you've met did people treat you differently than they treat him did you ever did you ever notice that varies from country to country some places we're equal in Japan pretty much we're equal except for you know if he goes to a conference on money I don't go with him well it's a small conference but I don't know I got into the bank in Switzerland I think where no woman had ever entered because I was with him I don't know I was being discriminated against have you ever taught no never wanted to meet her have a favorite professor all those years I had a favorite professor I worked for Frank with Frank Knight for two years that's when I finished my graduate work as well and he was a delight to work at Chicago University Los Angeles you're next go ahead please I've got a question for dr. Friedman um you said that the closest we've come to a liquidity trap is currently in Japan and that's because of bad Japanese monetary policy rather than alert quiddity trap could you just expand upon that a little bit say what it is that the Japanese government have done wrong and also what policy recommendations would you give to the BOJ or to the Japanese government well I die no difficulty in answering that question what the what the Bank of Japan has been doing wrong has been following too restrictive a monetary policy they are following what they call a zero interest rate policy instead of paying attention to what happens to the quantity of money they should be increasing the quantity of money more rapidly in order to get out of the deflation Airy predicament but so far as Japan as a whole is concerned the major mistakes they've been making in my well there it's the combinations things there are really three things that are involved there fiscal policy the state of the banking industry and their monetary policy on fiscal policy they've been more Keynesian than Keynes they've had about eight or ten different fiscal stimulus policies all of which have been a failure and in my opinion have done more harm than good because they have misinterpreted the Keynesian message on the banking situation as the result of the collapse of prices of land particularly and of other items after 1989 every bank in Japan became essentially bankrupt and on if they had been really valued reasonably if all of their assets had been marked a market they would all of them bankrupt and it was absolutely essential to clean up the banking industry as a base for further expensive but you know Japan is a country in which they face counts for a lot in which they move as a group not as individuals in which they're very unwilling to recognize a situation like that and the government stood by until about a year or two ago when it took measures to solve the banking crisis on the monetary policy side as I say they should have been increasing the quantity of money more rapidly and I believe at the moment they should start doing that by buying governments to keep government securities and increasing their high-powered money Buffalo New York you're on with Roseanne Milton Friedman hello good afternoon to Brian and his guests the Friedman's Brian if I may I'd like to discuss three issues I don't know if you'd allow me to do all of that at the fastest Social Security the second is the tax burden and the third is the sauce envy I would like to start with social security and address mr. Milton Friedman mr. Friedman you answered two questions prior to this on Social Security the first one you said you to privatize it well the second caller you did agree that there is an unfunded mandate and there is no such thing as a lockbox there is no money in there and we all could have a shortfall later on while privatizing it might be nice idealistic lis with the situation as it is currently where current pay workers are paying for current retirees there's going to be a transaction cost that has to be talked about and therefore what I would ask you to look into is as the system is set up now privatizing it is going to cause further problems down the line instead we should look at the qualified plans the 401k is the 403 B's but you're also through the government because they do allow people to have pre-tax dollars and use that and maybe ask 3% of all employers employees to at least put 3% into their qualified plans and allow them to build wealth through that trying to shift this into the social security problem when we already have a three to five trillion dollar unfunded mandate is a real problem I can continue or do you want to answer that in the first place privatizing it does not involve an extra cost it merely involves recognizing an unfunded cost we now have unfunded liability and the appropriate way to privatize it would be fun to fund those at the same time you are right that is not enough we we now we have had a large increase in average length of life but we keep retirement age the same recently it's been increased a little bit to 67 you need a further increase in retirement age you need some adjustment and benefit arrangements in order to make it ultimately economically viable but beyond that you could privatize tomorrow and that would not involve any additional cost what it would involve would be recognizing as a funded line ability what today is this five or seven trillion dollar unfunded liability now it's a very complicated issue she's raising it's not one that I can handle in a sentence or two she's got a very real point don't misunderstand me and the president talked about it is largely very unrealistic what's your second point caller my second question is talking about taxes and I realized the Freedmen's a Republican so we're kind of at odds but the Republicans say we have the largest tax burden based on revenues as a percentage of gross domestic product across a GDP but that is really revenues as opposed to tax but revenues because we've had 22 million new jobs our higher the tax burden I am talking specifically regarding the federal tax burden it's really one of the lowest if you look at the top marginal tax rate there were years when the top marginal tax rate just be like 98 percent on the dollar on the top dollar and 82 percent the top marginal tax rate today is not thirty nine point six percent which is even lower than what was in the first Reagan term at 50 percent yes first of all so far as tax the marginal tax rates are concerned you're right that they lower than they were immediately after World War two when during the war you had the attacks up to 95 98 percent they are lower at that level at that marginal level however overall for public at large as you say the tax receipts are higher I thought you were getting a different point the burden of the tax is more than what people pay it's also the cost of obeying the tax and the the adjustments that people make in their life to avoid the tax and that burden is certainly much higher than it has ever been the what you need to do in taxes is to get those marginal rates down to get all rates down you've got to cut taxes the Third Point and we have to move on but the third point she was want to talk about class envy and right now in the political debate it's all about class right now absolutely do you think it's unfair well it doesn't make any sense after all it is true that the people with a higher incomes pay the hot most of the taxes and but then they talk about which they're gonna have a tax lowering the tax it's not fair to lower at the top she said that you to a Republican now would you call yourself a Republican today I don't know I'm a conservative I guess in a way I'm a registered Republican are you happy with the Republican race no why not we're even less happy with a Democratic race why are you not happy with the Republican race because it's not really the Republicans in general I think have become so downgraded that they're they want to be popular and so everything that that Clinton suggests well will do most of it and that isn't what the Republicans are supposed to be doing you aren't as of the moment the Republican Party is not standing on the principles that are really the basic element of the Republican Party principle of limited government private and not in governmental initiative an individual choice not collectivist choice as compared with the Democrats are much more on that side than are the Democrat but they really aren't sticking to the level of principle that for example Ronald Reagan did Sidney Nebraska you're next yes I wanted to disagree with mrs. Friedman in a comment that physicians today don't provide free medical care there are 45 million Americans without insurance if you've ever couldn't covered in an emergency room as I do a lot of the patients appear there without any insurance at all and then I disagree with your attitude toward the minimum wage I think the rising tide lifts all boats and they disc screamed and hollered when they raised the minimum wage last time they thought all the McDonald's would go broke you walked down the street of an American city and every fast-food place I sign help wanted and another thing I think that your philosophy is wrong because you think that government shouldn't really do anything except providing an army and I think that like Medicare and medical and Social Security and wonderful programs I've been a fan of dr. Friedman for years and I admire his work thank you help wanted signs in the shops those people aren't going on go to work for the minimum wage they're places that will they have no relationship to the minimum wage they pay what they have to pay to attract workers what about what he said about emergency rooms and the care that people get well I don't know you see I came I grew up in a different era in that era we lived we were we were certainly what would today be in the lower poverty level but we never felt that we if we were sick if we needed a doctor we they couldn't have one my mother used to pay the bills out three six months at a time she didn't pay them at once she is to talk to the doctor at the very beginning about how much he was going to charge it was all her doing and doctors did a great deal of emergency work in the county hospitals in those days they spent a certain fraction of their week in the hospital so I don't know there are two different things about the charity work the the pattern used to be that there was a sliding scale for that physicians would charge people we charge people more or less according to what they thought they could pay and it was charity work in that sense what this gentleman is related is talking about our emergency rooms in hospitals which are being financed and the physicians who are working in those emergency rooms are getting a salary they're getting paid it's not charity work in the same sense at all on the minimum wage my favorite question to people who talk as this gentleman does is to ask him if for six if a $5 and 15 minimum wage is okay well and you think it should be higher why are you so niggardly why do you stop at $6 why not ten why not $20 an hour what's wrong with that last call for our guest Great Falls Virginia go ahead please the energy secretary has been gotten to by his bureaucracy and he said mr. president this is too complicated and President Reagan we certainly had a clear vision story did did you have much access to presidents as your husband was meeting with them over the years did you have any desire to be involved in that kind of world no I was very happy with what I was doing but you met you met Reagan several times I met Reagan I met Nixon what in your life of 88 years have you been the happiest that's a good that's a very good question during the years of Chicago in 1919 60s mostly because we were much more active than we've traveled very very little now our traveling consists of going on a cruise which is good for old people we don't have to take plane the only one way we always only take cruises that either start or end in San Francisco so we have only one flight we see a lot a lot of people at least more than we used to in Chicago we see everybody from Chicago because San Francisco is a place that everybody wants wants to come to but life is kind of as it should in those years 50 60s our children are growing up they were today and you talk about being a TA talk about our aches and our pains now and then not very often cuz you said earlier that it's tough getting home well sure you can't do all the things you want to do you can't fly on planes the way you used to have you missed the name again yes sure have you messed up and until the age of 82 I was both playing tennis and going skiing and I can do neither now but if you missed anything in your life I mean things that you wanted to do either one of you oh I think we've had a very satisfying life I find it hard to think of anything I really miss feel that we've been discriminated in our life we've had we've had a good life we've been very lucky that's why we titled that two lucky people well thank you both for joining us and this is the book that tells the story of their lives Milton and Rose D for director Friedman and thank you both for spending time with us today in depth from San Francisco and our producer County Brody in Washington and here's Susannah Frankel and Brett that's what our director have a nice day thank you joined book TV for a rebroadcast of our in-depth conversation with Milton Friedman tonight at midnight Eastern next month

Channel: BasicEconomics

Views: 132,511

Rating: 4.8545456 out of 5

Keywords: liberty, Milton Friedman, Economy, Economic, Freedom, Economics (Field Of Study), Inflation, Money, Taxes, Tax, Policy, Free, Trade, Free Trade, Consumer Protection, ralph nader, Gas, Oil, Energy, Environment, Free Society, Justice, Enlightened, Iceland, Debate, Finland, Estonia, Chile, Federal Reserve, Monetary policy, fiat, money, sound, Gold, Standard, College, University, Education, Canadian Healthcare, Single Payer, Ayn, Rand, Ludwig, von, Mises

Id: OZWsPgBtGDs

Length: 179min 6sec (10746 seconds)

Published: Sun May 27 2012