Milton Friedman on Donahue #2

I am pleased to once again play host to Milton Friedman who is now attached to Stanford that I don't know attaches and we were looking for the Hoover Institution which is what academic oh yes Hoover Institution is was set up an honor of President Hoover it's been there for a long time and it's called the Hoover Institution for war Revolution and peace and they decided a while back they had enough peace so they invited me to be his fellow there for a while uh would Herbert Hoover be pleased with what the with a dialog that's going on under the aegis of his name oh I'm sure he would he was a great student he was not only an engineer yeah but the library the who it was founded as a library based initially on the collection of my documents and manuscripts he had collected in his public career yeah am I to assume that you wish that he had defeated FDR in 1930 well that's a very very complicated question but you're not all crazy about the New Deal I trust on the contrary I think the situation in 1932 is a very terrible situation but it had been produced by the failures of the Federal Reserve System in the prior four years it was not a failure of capitalism was a failure of government and Herbert Hoover himself in his memoirs at the end of that time said he had learned to his sorrow that the Federal Reserve was a was a weak Reed for a nation in time of trouble so that it you can't blame Hoover for the depression you can't blame business for the depression but Hoover has to take some of the blame all right much of what Roosevelt did in the New Deal was unwise but much of it was necessary you can't again give a black and white I'm judgment all right let's try some black and white questions although there I know in a thematic Animists one of the wonderful things about you is that when you speak I almost always understand you and that that's a real breakthrough for for you and for me as well the government should help save Chrysler we need three auto companies the governor government has been helping to kill Chrysler but it should not help to save Chrysler of course not cry this is a private enterprise system it's often described as a profit system but that's a misleading label it's a profit and lawsuits system and the lost part is even more important in the profit because it's what gets rid of badly managed poorly operated companies what does losses when Chrysler loses MO I see so alright one loses money it's got to do something when Amtrak loses money it goes to Congress and gets a bigger appropriation the question at issue is should the people in this country bail out Chrysler by taking money out of their pockets not to buy cars which they want to buy but to pay for whatever has been the cause of the losses at Chrysler government has been responsible for many of those losses by unrealistic regulations and rules but they've affected all of the companies you're not going to condemn regulations regarding a mission and I certainly am of course I'm going to condemn them why not because if we don't have them you're going they're not going to be able to breathe and you and I will not be in our senior years able to sit around and argue with each other well those are assertions there are statements that are made but they are far from being correct the fact is that the pollution was going down long before we had any emission requirements and it would go down without them there is a case for doing something about pollution but the way we've been going about it is the wrong way is there a case for the government to do something yes there is a case for the government to do something about it because there's always a case for the government to some extent when what two people do affects a third party there's no case for the government whatsoever in mandating airbags because airbags protect the people inside the car that's my business if I want to protect myself I should do it at my expense but there isn't but there is a case for the government protecting third parties protecting people who have not voluntarily agreed to enter so there's more of a case for example for emission control than there is for airbags but the question is what's the best way to do it and the best way to do it is not to have bureaucrats in Washington write rules and regulations saying that a car has to carry this that or the other the best way to do it is to impose a tax on the amount of pollutant power pollutants emitted by a car and make it in the self-interest of of the car manufacturers and of the consumers to keep down the amount of pollution in that way but how would you put a monetary value on particulate matter which is admitted from the end of an exhaust but you do it now what do you mean how do you do it you now require people to spend something like five hundred dollars per car for the purpose supposedly of reducing predicted particulate matter which means for the purpose of giving them an incentive to disconnect me equipment that supposed to reduce pollution you mean the owner does people are going out of their way same with the buzzer I assume that you have you ever met Ralph Nader of course and I've debated Ralph Nader many times and I assume you feel that what is it that troubles you about him I think he's wrong I think I think I don't have any doubt about his sincerity but I think sincerity is a much overrated virtue I think what troubles me about him is that he wants to run my life for me instead of letting me run my life let's just take a couple of things if it weren't for Ralph Nader we would still have those ornaments on the hoods of cars which impale babies and women and children crossing streets we would still have an auto industry which is totally focused on cosmetics at the expense of sound automotive engineering we would still have an auto worker we'd still have an automobile business and its ancillary supplier of tires with difficulties that would be sent out to the public without without regard to any problem at all of being asked to account for them you know the front problem with claims like that is that they don't stand up to the facts now take the most famous case you know Ralph Nader got his start by a book called unsafe at any speed it referred to the Corvair do you know that ten years after he launched his attack and persuaded the public at large that the Corvair was an unsafe car the federal government finally got around to investigating the safety of the Corvair and it's official report concluded that the Corvair was a perfectly safe car just as safe as the alternatives available and that Ralph Nader's claims were completely unjustified why'd oh that similarly with all those extravagant claims which I know you're not making on your own behalf you're the devil's advocate and a very good devil to thank you I think and a very good advocate so but the troubles I just want to make this point professor Friedman you are using the United States government whose post office is often referred to by you in columns and speeches and in writings as an example of what happens when you give but ought to be the private enterprises business to the United States government now you turn around and use this United States burek bureaucracy to support your defense of Ralph Nader I mean why should I have any more confidence in the in the government's review of the Corvair than in the government operation of the postal you shouldn't I have no more confidence will you certainly cited it to do just apart and I just have as much confidence in as I do in Ralph Nader's evaluation so we're even Z's there that's right so then either there is no evidence no one neither Ralph Nader nor anyone else has ever presented any evidence that justifies his charges no one has presented evidence to justify the kind of charges you're making and those charges are simply untrue it is not a fact that the world would have come to an end but for Ralph Nader but more important take one of those charges that cars would be devoted to Cosmetics if people want to spend their money on cosmetics why shouldn't I you mean to say you should be prohibited by the government from doing whatever you do to have a to give a nice cosmetic image to your viewers now I guess I'm thinking that if we just leave it to Detroit if we had just left it to Detroit in your own laissez faire and you're wearing your Adam Smith tie today always wear it on David I know let me tell you what I think let's just you tell me what's wrong with this chair if we just you know it's telling out Ralph Nader go somewhere else and complain and let's let Detroit and the free enterprise system handle this here's what we would not have we would not have collapsible steering wheels we would not have padded dashboards we would not have spring-loaded ornaments that been back so that you minimize injury in the case of hitting a pedestrian you would you would not have first of all I have no reason to suppose that's true long before Ralph Nader came on the picture the automobile industry had made cars increasingly safe brakes had become better the protection and the bumpers had become better the doors had become better they when it turned out they were defective the automobile industry introduced him almost all of the developments in automobile in that direction had arrived and were on the way long before Ralph Nader came along but if you didn't have Ralph Nader if you hadn't had that movement you also would have cars considerably cheaper you'd have them available to a much wider range of people they would be using less gas than they do now not more gas than they do now you after all the thing that amazes me about people who make statements like this is they're neglected history we this country went for close to 200 years without a Ralph Nader and without these regulations and that was a period in which this country had its greatest growth in which people stream to it from all over the world and we're able to make a better life for themselves and their children if you take the automobile industry in particular since Henry Ford really revolutionized it it transformed the nature of life in this country the automobiles improved tremendously they came down and cost relative to other goods the effect of the kind of regulations you now have have has been to make automobiles not more safe but less safe why because by making them more expensive they make it pay to keep an old car on the road longer the average age of cars on the road has gone up and old cars are less safe than new cars by making it more expensive you've reduced the amount of foreign competition we have a lot of foreign competition but you probably know that there are many foreign made cars and make no attempt to export to the United States because the cost of meeting all the particulars and standards making on economic to do so well they certainly haven't discouraged enough to make Detroit happy of course but I don't want to make Detroit happy that's not my aim I want to rank the best don't make the citizen happy I want to make the customer happy the last thing in the world we want to do is to make Detroit happen let's just if Chrysler folds now we're left with two automobile companies and not not at all we're now have even more power and they'll say love it or leave it non naked or nonsense if we don't have any tariffs on cars from abroad of way of free trade the automobile industry of the world is in competition with Chrysler do you think that it was really and with General Motors and Ford who offered the greater challenge to General Motors and Ford Toyota Toyota and Volkswagen so where's this nonsense about there'll be only two car companies yeah but I have no objection of there being a hundred car companies if the market stands it but I don't believe you ought to artificially prop up a third company in order to say we got three companies this is Milton Friedman professor economics the Nobel Prize winner and just let me step for just Iran we're gonna let me try and see if I can't get somewhere in the next segment dr. Friedman is our guest and we hope you'll join us let's just review for a second because and I don't want to bore you to death here but this is really I am fascinated by the dialogue and just to characterize dr. Friedman's position and which I should put him do here is enter you won't succeed ah just tell me how I'm doing here here is a man who feels that definitely there's too much government intervention and everything and that if we just take Adam Smith's notion of the 19th century and let things that let the laws of supply and demand work without all these bureaucratic rules and regulations that that we would have you think we can eliminate the gas shortage if we do the only reason we have the gas shortage because it's made in Washington there's no need for the gas shortage there's a problem in oil oil is expensive the fact that the OPEC nations have formed an effective monopoly and quadruple the price of oil purchase no question we pay more but we have multiplied the injury to ourselves by our bad government policies here's Japan we were talking about a moment ago Japan it's a hundred percent dependent on foreign oil it has no gas lines why because it's less it hasn't tried to prevent prices from adjusting things we if the OPEC nations had been hiring our energy regulators as their agents they could have done a better couldn't have done a better job but they didn't have to they got it for free mm-hmm give me that speech about maximum minimum now the way to create shortages is to create a maximum price which is below what the free market would have otherwise all right so that even though we're appalled at gasoline which is more than a dollar a gallon your point is to get the government out of this game of regulation is to you acknowledge allow the gasoline to go higher excuse me it makes them it may make the price at the pump higher but it will make the cost to the consumer lower who do you suppose is paying the over 10 billion dollar a year budget of the Department of Energy which amounts to 9 cents a gallon for every gallon of gasoline we can sell you can you prove that of corn cents a gallon for the corn are there 20,000 people in the Department of Energy yes 20,000 people all of them making trouble all of them hey let me give you a very simple example because it's hard to go on here's counter to the next door why is it there are no gas shortages in Canada and the price of gasoline in Canada is lower than it is in the United States Canada's in competition with the world but it doesn't have the same kind of Department of Energy we did if we had no price controls you have to ask where you start if right now the only thing you did was to eliminate the price controls the price of gasoline at the pump would go up right if simultaneously you also D controlled crude oil and eliminated the regulation over the oil industry in this country the price of oil would go down because you would unleash the protect a productive potential of the American oil industry explain to me why it makes sense to propose that we produce synthetic fuels that costs estimated up to $40 a barrel while we will let people who pump oil out of the American land oil well some of them can only get less than six dollars a barrel for their oil others can only get $14 a barrel but we're going to spend the taxpayers money to produce $40 a barrel oil is that sensible you're saying that's they get that because of regulation that's all they get because of regulations the regulation the limit on the price fixing the limit on the price which they may receive from now where do you suppose the difference between that price and the world price goes to okay let me just how do you speak to this nightmare let's let's do your thing your girls are will make you a czar and you're going to say look the free enterprise system is going to work I'm not crazy about the oil Peck monopoly either but this is the facts of life it's the geography and that's the way we got to play this game and let's let it happen as it happens $3 a gallon now we have truckers shooting each other right now because there of their frustration I believe excuse me the only reason they're shooting each other is because the government will let them be free to set their prices you have the ICC the Interstate Commerce Commission in turn fixes air prices the Interstate Commerce Commission in turn decides who may and may not haul Freight do you know that if you want to haul Freight between certain places you may have to buy the rights from a company that doesn't own any trucks there are many people in this country who get income out of the accidental fact that they own ICC licenses to transport goods between point A and point B which they don't use but they rent out for others to use the total cost the total value of all of those rights a purely artificial monopoly value that has no economic counterpart is in the billions of dollars so if you could simultaneously reduce the cost of trucking as well by simply abolishing the interstate commerce you want to do that too of course now we've got off but now isn't there is wouldn't the result be chaos with trucks coming from all different directions and obviously obviously not why would the result be chaos trucks are gonna come from all different directions and bump quite the opposite I don't mean an ami bump I mean in the sense that in the how do well but I would say I'm moving into the well how don't you trouble by multinationals in the size of companies and that's not what that's not what Adam Smith meant Adam Smith didn't mean for Exxon to have a 60 and 70 percent profit if if you if you had first of all of course I'm troubled by multinationals in the sense I would rather have a world in which there were a larger number of small companies the question at issue is not that the question is what are your alternatives and how do you promote such a world one of the major reasons you have multinationals and large companies now is precisely because of the roles role which government plays here is Chrysler get back to it the chairman of Chrysler is spending full time has hired a whole group of lobbyists in Washington he is engaging in a political campaign to get the government to bail him out mm-hmm now is that a productive use of effort if he that weren't doing that if he isn't bailed out will the effect be the Chrysler will disappear not at all most bankrupt companies come back into operation with a new management and a clean slate financial slate and are more efficient the fact that Chrysler goes bankrupt doesn't mean that his factories are going to go up in smoke if they're worth using they'll be blocked by people to be used like GM actually have a strong they might be in that bother you as compared with what as compared to have the government own the factory in producer you know ken considers by Kmart to and yours in your roof course you think so Sears has been one of the great protectors of the consumer all over all during its period existence in the matter of fact you say can Sears by Kmart the way Kmart has been growing the question is going to be concave I see it yeah but alright but but that's an example now take that other words you you really do want the Justice Department out of this too I mean you don't have any problem at all with with a super connected antitrust measure you could take in this country would be complete free trade and the Biggie's will eat up the little ones that is not we've already seen the demise scuse me that has never happened there have been very careful studies made of what has happened to the concentration of industry in this country over the past hundred years and except in those areas where government has stepped in it is not true that the Biggie's have eaten up the smallest in fact it's often been the other way and Kmart is a good example that started from nothing Sears was already a major conglomerate then Sears has been losing losing ground and going downhill and Kmart has been rising alright just one question before this audience is anxious to ask you when you sit in your study and throughout your your career as an actor you've met students and you've you've probably dealt with every kind of question stupid through I guess I want to know whether you've ever tempt been tempted to become politically revolutionary here's my question when you see around the globe the maldistribution of wealth the the desperate plight of millions of people in underdeveloped countries when you see so few haves and so many have-nots when you when you see the greed and the concentration of power with it daren't you ever did you ever have a moment of doubt about capitalism and whether Greed's a good idea to run on well first of all tell me is there some society you know that doesn't run on greed you think Russia doesn't run on greed you think China doesn't run on greed what is greed of course none of us are greedy it's only the other fellows this the world runs on individuals pursuing their separate interests the great achievements of civilization have not come from government bureaus Einstein didn't construct his theory under order from a from a bureaucrat Henry Ford didn't revolutionize the automobile industry that way in the only cases in which the masses have escaped from the kind of grinding poverty you're talking about the only cases in recorded history or weather where they have had capitalism and largely free trade if you want to know where the masses are worth it worse off worst off it's exactly in the kinds of societies that depart from that so that the record of history is absolutely crystal clear that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by free enterprise so it seems to reward not virtue as much as ability to manipulate the system and what does reward virtue you think the Communist commissar rewards virtue you think a Hitler rewards virtue you think excuse me if you'll pardon me do you think American presidents reward virtue do they choose their appointees on the basis of the virtue of the people appointed or on the basis of their political clout is it really true that political self-interest is nobler somehow than economic self-interest you know I think you're taking a lot of things for granted and just tell me where in the world you find these angels who are going to organize society for us well I don't even trust you to do that well we let alone let alone myself one of the nice things about having your own show is when you you're able to say at any time any time we'll be back in just a moment Milton Friedman The Economist is here yet yeah I first of all I want to say I loved my Corvair I would have helped a whole lot to get to this where how do people like Ralph Nader get to do the things the great things they do does somebody hire them you know is it asked puts these people and do whatever it is that does it of course it's will you do it we do it by providing them with assistance we do it by providing them with political clout by electing people whom they recommend and that's a good thing I don't object to that we want a free society a free democracy in which if somebody if a ralph nader has certain views he ought to be free to express them people who agree with them ought to be free to contribute money to help him pursue his objectives they ought to be free to vote for people he recommends if he doesn't have that freedom how can I expect to have the freedom to argue the opposite point of view so I don't believe there's anything wrong at all in the fact that Ralph has been able to get so much influence except I wish he had been he had been using his extraordinary powers and a better cause we should also make the point that for all your misgivings about Ralph Nader he is not crazy about regulatory agencies either and he for a long time and maybe even before you wondered aloud about the appropriate function of the CA B in regulating airline fares and if any any thesis has been demonstrated it's that it's but certainly been that over these past several months with deregulation suddenly what do you know there are no empty seats on an airplane no no you're quite right I say B has been a marvelous accidental example but so far as Ralph Nader and regulation is concerned you are quite right some of the groups under his concession have produced reports on ICC and so on that are excellent reports and the evils of regulation the problem is that his solution is more of the same his solution is to substitute a different kind of regulation his only objection is not read a regulation but that the wrong people have been doing the regulating and so when you ask not what's wrong with what we've been doing but how should we improve matters he doesn't really have an effective alternative what do you think is going to happen with the inflation will it continue it's the same rate that we've been having well inflation doesn't ever continue quite at the same rate we've been having but unfortunately I cannot bring you any good news about inflation inflation has been on the rise it's now running about 13 percent 12 percent on a year-over-year basis we may get some minor relief in the next year or so I think it may go down to 8 or 9 percent at the lowest but I am afraid that we will then be off on another round of the rollercoaster the path we have been on for the past 20 years is a rollercoaster we get up to a peak we come down we get up but each peak is higher than the prior one each trough is higher than the prior one and until the American people have the political will to stop it that's going to continue give us the will tell us how we get that there's only one way you can stop inflation and that's by having the government create less money and spend less money and the reason we have inflation is because of public at large wants inflation you people want inflation you don't say so no one of you will say I want inflation but I ask you do you want the prices at which you sell things to go down not the prices at which you sell them you want the prices at which you buy them to go down what everybody wants is for the prices of the things he buys to go down and the prices of the things he sells to go up but that's a neat trick if you can manage it but isn't it isn't it good old Adam Smith isn't that what he course it's good old Adam Smith provided you have a control in terms of the total amount of money available but it's not good old Adam Smith for those printing presses to be pouring out paper money which which you and I and the government in particular can use we don't we don't create inflation by our personal behavior we create inflation by getting our legislatures the people in Washington to vote for more and more spending and by objecting to extra taxes and therefore by having it financed by printing money let me just ask you one more basic question here and I promise we'll get this audience in the act here did Adam Smith or do you pursue feel about this desk need to grow we have we have no desperate need to grow we do we brag about our gross national product it's going to be a desperate guys got two franchises you want six a man has three hamburger stands he wants 12 we have no desperate need to grow we have a desperate desire to grow and those are quite different I believe that the level of growth in this country ought to be whatever people wanted to be if the people is large if each and every person separately was satisfied with where he is and didn't want to grow fine I have no objection I don't want to impose growth on anybody I want people to be free to pursue their own objectives but it so happens that the American people have been a very dynamic forward-looking people and they have wanted to improve their conditions but doesn't doesn't wanting to strike just numbers necessarily improve it heaven hasn't the last 30 years demonstrated that that doesn't work no we haven't had an increase in numbers in the last 30 years has not demonstrated that most people in this country are better off today than they were 30 years ago although they're worse off than they were six or seven or eight years ago or just one let me chase you down one more time in this General Motors wants to grow as well that's okay with your core they have a natural desire to grow all right Oh God other people haven't also a natural desire and other people check it the check to General Motors growth is Toyota and Volkswagen its checker Carol I think it's interesting that the chairs have come from outside this country they have are they haven't always gone so gentlemen but the point I'm making is General Motors has more power to grow no General Motors cannot get a dollar out of your pocket unless you voluntarily pay it over the government here and that's the fundamental difference all right here's where I'm going with this you're having Emma you give me a hard time trying to get there as General Motors grows grows I see the possibility of abuse or as any company grows as the Donahue show grows suddenly I decide I've got all the answers and start preaching now your point is some gal come along and shoot me down pretty good and I lose and that's the way they are the harder they fall good gotcha Dow Katy grads being an enormous ly big company didn't keep it from going bankrupt the new york central being a big company didn't keep it from going bankrupt Chrysler Corporation may be the third on 'mobile company but it's a thirteen billion dollar company it's one of the biggest companies in this country that is going to keep it from going back here's the killer though when somebody does come with a better mousetrap the multinational mousetrap company buys it and now we're back to mediocrity again and the intuitive the initiative and the talent of the little old man in the shoe shop who came up with a better is gone temporarily there are new people coming up with a little old men in the shoe shops in one of the major reasons as I was saying before why multinationals are able to occupy the position they are is because government rules and regulations favor multinationals almost all government regulation favors big companies over little company and you think Exxon probably you think Exxon ought to be able to buy reliance electric cars and now and what else you want them to buy the whole the hotels - I mean well are we going to stand look if you say to Exxon look one thing we're going to do is to make it impossible for you to make any money producing oil what do you think their stock have a hard time getting the American people are great to agree with that all right but first of all Exxon doesn't buy anything there isn't any exile there are people Exxon is a corporation owned by individual people it's the stockholders of Exxon who ultimately are buying it and if we had if they don't like what Exxon is doing with their money they have a perfectly good alternative they can sell the stock and as the stock went down if the cut if the stockholders didn't like it it would pay somebody to change the policy which Exxon is following we have a far greater degree of control over what Exxon does then we have over what a lot of our government corporations do Milton Friedman returns in a moment dr. Friedman you've spoken a lot today about corporations what does the average citizen do to help the inflation or to fight it there is nothing the individual citizen can do to help or fight inflation in his personal behavior all attempts to tell you it's the consumer who's doing the wasteful consumer is producing inflation is an attempt by the government to ship shift the blame to somebody else as a citizen you can do a great deal as a citizen you can exercise your influence on your congressman at the elections to try to elect people who are committed to cutting government spending as you may know a group of us have been working for a long time on constitutional amendments to set a limit to total spending such amendments have now been passed in five states we're working on a net federal amendment an amendment of the Federal Constitution that would give the federal government of budget I think the most important single step that can be taken to stop inflation is to cut down government spending and you can play a role in that your personal life you cannot do a thing and don't let anybody catch you mm-hmm yes goodness I work for Sears for two and a half years and every day I went past a little board that said Kmart 31 Sears 1921 uh-huh and I was just wondering what have you the price of the stock yeah yeah it quoted it yeah I know that was in private cheering and I kind of started to wonder with all Sears pushing to sell and to produce and just to be marvelous what happened what wise came out why is Cameron I'm not a I'm not a business exec spurt I don't know why Kmart uh went ahead of Sears huh I knew that I'd be in a different business all I know is that they managed to they managed to appeal to the consumer they made better decisions about what products to sell than seriously now who was responsible or why you'd have to be an expert what button away I'm not Kmart was better at discounting than Sears well fine that's what consumers wanted fine then they serve the consumer didn't when when series decided that it would you know approach broach the issue of the arena of discounting their sales went shot up well they said but their profits diminish I don't know anything about the details for all I know sears is a streamlined it's going to go and beat Kmart I don't have the slightest idea let the market decide the oil which Arabs are buying an awful lot of businesses in this country and farmland and things do you think it'd be wise for this country to institute law like Mexico did in the 50s and 60s were required that any company and land they had to be at least over fifty percent owned by Renault surely I believe in individual freedom on a net on an international basis and not on a national basis I think you ought to be free to buy land if you want to in Mexico or anywhere else and I would like those governments to let you this country did not become great by preventing people from coming here from abroad and buying land and setting up businesses quite the other way around and the reason we are making it so advantageous for them to buy here is because we're following such silly counterproductive policies it didn't do a lot of damage in Mexico though when gentlemen much more damage to Mexico when they nationalize the oil industry on the contrary their measures to keep foreigners from acquiring assets in Mexico did a great deal of harm to Mexico not good yeah you must distinguish between what looks on the surface and what it really is underneath over here why is it we have so many millionaires in everything in the United States and we still have so many impoverished people who try to get up into the world why is it we have this lack of money where people who can't support themselves decently and get a decent job where all these big men are up on top making oils and all these money they don't need it they can only eat that much it's innocent what is that I do it if I don't eat it and don't slit a don't using what I suppose I say pardon what are you man I put it under their pillow that's right no they keep investing it investing in them that's right yeah what are they invested in well in oil and everything we're I mean all these other people what are they invested in don't get off the subject yeah I invested in well he invested in a lot of different things that the little people need well do they invest in factories yeah some of that money end up in machine do those factories and machines provide ordinary working people with jobs or not what do you suppose the productivity of this country would billion of the or the wage rate would be if the total amount of capital in this country today was what it was a hundred years ago where do you suppose the improvements in productivity come from except from the investment by people of their savings but let me go to your fundamental question first place Nirvana is not for this world there is no paradise of course we've got a lot of people who are poorly off but if you look at it over time if you get a sense of proportion the well-being of the ordinary people has been the main thing that has been improved by economic progress and economic growth and development and residual most residual hard cases of poverty today are the result again of a failure of government why do we have a teenage black teenage unemployment rate in 30 to 40 percent because of two failures of government one affair to provide decent schooling which is a governmental responsibility has been whether it should be or not it hasn't and second because of a minimum wage rate which prevents those kids who haven't had decent schooling from getting jobs at low pay at which they can earn the skills on the jobs that would enable them to rise to higher pay if you look at the sources of poverty you will find a very most of them are derived from bat what I regard as long headed government policies look ahead because I'm almost going to retire yes and it's pretty hard go now before you know you're covering a lot of issues here I might say if fill will pardon me I'm going to cover all of these issues yeah I please let's get this plug in because it is an important program which is that's all I need I just wanna stop completely with Geoff hook guess who he's got his own TV show I mean I'm not insecure enough this is on PBS and your first shows in January January 11th there will be ten one-hour shows covering all of these issues and can iterable depth half-hour documentary half our studio discussion with people from the other side and they say we invited Ralph Nader but I don't believe he's accepted just before we break here and we have to I want to make sure I understand you because the government sets a minimum wage with what does McDonald's do McDonald's it can't hire as many teenagers it improves its capital equipment to serve it does less business because it has to charge higher hamburger prices in the absence of a minimum wage McDonald's would be able to offer a larger number of jobs to a larger number of youngsters and they would be able to acquire some skills and not only McDonald's so we hire more people more people get work younger actually younger people would work and they get a chance to develop their skills to become productive members of society instead of being driven into a cycle of poverty and of welfare which is absolutely deplorable Milton Friedman The Economist returns in a moment I want to know if you charge a lot for your services in other words how much do you get paid much as I as a multiple stand I believe I believe in a market price and I tell you something I think people value what they get at what they pay for it and what are you doing with your money that is my business and not yours dr. Freeman yeah I'd like to know your view on the busing situation especially with the guests course I'll be glad to tell you my view on the buzzing situation at the general very little time my the fundamental idea is that people should be free to choose that's the title of our TV series incidentally is free to choose they should be free to choose whether they want to send their child to this cooler that's cool or any other school and the way to do it is to introduce a voucher scheme so they're quite people can have freedom to choose I am not in favor of compulsory busing I am not in favor of compulsory integration I am favor of freedom well what'd you say about voucher the voucher what I would have a voucher system you said I had to keep it brief so I can only mention it a system under which parents who chose not to send their child to a particular public school would be entitled to a payment like the GI Bill oh right a voucher which they could use in any school of their choice you know what I'm gonna do I'm gonna open a school very good and I'm gonna hire an advertising agent but wonderful and I'm gonna have cheerleaders saying go to Donahue high because it's got the best football team and I'm get all these vouchers I'm gonna have the biggest school in the whole county wonderful Marvis you know you can if you can succeed you cannot succeed by advertising what's not true Ford Motor Company couldn't sell an Edsel that way and I don't think even Phil Donohue could sell lousy education that right yes you know I should think the public at large are a bunch of of stupid people they're not yeah doctor is there anything they have average citizen can do to protect himself from the ravages of the rising inflation unfortunately there is very very little he can do the owner it's a it's a bit I hate to say this and yet it's true the most effective protection against inflation is high living how do you mean that how do you mean that I mean that unfortunately there are no assets which you can confidently acquire with the expectation that they will provide you a hedge against inflation on the other hand if you buy yourself a nice house you buy yourself a nice suit you buy yourself a picture to hang on the wall you are protected against the ravages for of inflation so in other words convert your money into material thing unfortunately it's not a very desirable thing to do don't convert all of it you've got to have some reserve for emergency I'm not saying this is a good thing I'm saying that inflation is the kind of thing which leaves you with no good choices but that sounds like playing the violin while Rome is burning well tell me see the alternative the question was not what the nation ought to do here I have no difficulty in saying what our governmental policy ought to be to end inflation that's a different question the question is what can i as an individual do and unfortunately given the uncertainty of inflation given the fact that real estate has proved a good hedge and it's proved a bad hedge that stocks have proved a good hedge and they've proved a bad hedge that government bonds are a snare and a delusion that they have proved a very very poor investment for the poor suckers that were induced by Uncle Sam to come into them unfortunately there is no good way in which the ordinary citizen the ordinary person can really protect his assets against inflation dr. Friedman I want to point out that a lot of people will agree that medical care costs are terribly expensive these days and some hospitals that I know of particularly in the south have cost containment program programs that are voluntary are these feasible and if they are why don't other businesses start them well in the first place every business has a cost containment program there is no business in this country that doesn't unless it's on the verge of bankruptcy in the second place in all of these questions one shouldn't look at the symptoms one ought to go back and ask what the sources are the reason why medical costs have been rising so rapidly in the country is again I sing the same old tune but it happens to be true because whereas some 15 or 20 years ago Herman spending on medical care accounted for something like 1020 percent of the total amount spent on medical care that was mostly in public health and for veterans today it amounts to something like forty or forty percent or more of the total spending and that's what's been driving these prices on Milton Friedman returns in a moment you'd be against mandatory wearing of helmets for motorcyclists - horse I think people ought to be free to do what they want what's it what what's wrong with the why can't the government be patterned allistic and maternal istic and care for its citizens well that depends on what kind of government you want of course it can be but it turns out that the paternalism tends to serve the interests of the people who are being paternal and not the people whom they're supposedly protecting I am and it's expensive I am NOT I don't misunderstand me I'm not against all government measures I'm not an anarchist I believe we need a government for certain basic functions we need a government to protect this country from foreign enemies we need a cut government to protect me from being bashed over the head by you and because but because you can find some valid function of government doesn't mean that everything government does is valid and the problem today is not that we have too little government but much too much government Milton Friedman can be seen on PBS next year in several one-hour shows many thanks to this Nobel Prize winner for bringing his enthusiasm to our show and thank you for your participation have a nice day a year ago

Channel: EdChoice

Views: 1,079,304

Rating: 4.8673239 out of 5

Keywords: Milton, Friedman, Greed, Donahue

Id: DvNzi7tmkx0

Length: 46min 28sec (2788 seconds)

Published: Wed Aug 26 2009