Milton Friedman: The Rise of Socialism is Absurd

it's the funny thing after the fall of communism everybody in the world agreed that socialism was a failure everybody in the world more or less agreed that capitalism was a success in every capitalist country in the world apparently deduced from that that what the West needed was more socialism and it doesn't matter whether you're talking about the United States or you're talking about Germany or you're talking about Britain or any of many another country toward Japan for that matter but let's that's obviously absurd and let's look right now the opportunity to we have to it's closest thing to a free lunch that you can conceive of President Clinton has said as part of his program that what we need is widespread sacrifice and concentrated benefits he done the stress is much the fact that there would be concentrated benefits as he does that we absolutely have to have higher taxes and and sacrifice in order to get this so-called deficit under control the fact is that we need exactly the opposite what we need and what we can have and what is the nearest thing to a free lunch is widespread benefits and concentrated sacrifice it's not a wholly free lunch but it's close to it let me give you a few examples the rural electrification administration was established in the 1930s in order to bring electricity to farms when about 80% of the farms did not have electricity we now have a hundred percent of the farms have electricity they shifted to telephone service now 100 percent of the farms of telephone service and the rural electrification administration keeps on going Maryland suppose you just abolish the REA all its joy is making making low interest rate loans to concentrated interest mostly to so-called public utilities the electric telephone companies the people of the United States would be better off they save a lot of money that could be used for tax reduction but not only would they be better off who would be heard two handful of people who deserve to be heard [Music] they have been living high on the hog they have been getting getting government subsidies at the expense of the rest of the population I call that pretty nearly a free lunch let me give you another example this illustrates Parkinson's law in agriculture in 1945 there were 10 million people employed on farms 10 million both either family or hired workers then the Department of Agriculture had 80,000 employees in 1992 there are 3 million there are 3 million people employed on farms and the Department of Agriculture has 122 thousand employees if we take the part of it that's most specifically agricultural the money that is classified is being spent for the stabilization of farm prices and farm incomes we were spending $1,500 in 92 prices adjusted for inflation we were spending $1,500 per person employed in 1950 and $5,500 in 1990 now supposed to we just abolished that program completely most consumers in the United States would benefit food would be cheaper they'd be less of their tax money going to encourage farmers to produce goods to be stored in warehouses to be destroyed and given away isn't that almost a free lunch not even the farmers who get these mother these monies now would really be as badly off as they think they would do because most of the money they get they just spend on producing things they shouldn't be producing buying fertilizers they shouldn't be fertilizing and so on down the line so we have a free lunch there and you can keep on going there's hardly an item in the budget which does not offer such an opportunity it is said what the Liberals will tell you about this what the Clinton people will tell you is that while all of those things are there because if people want the goodies but they're just too stingy to pay for that's utter nonsense the people don't want these goodies suppose you put up to a referendum of the American people a simple proposition you buy sugar and you have two choices we can set up things so you buy sugar that is produced out of beets beet growing on American farms and cane sugar and American farms and so on or you can get the sugar from El Salvador Philippines or somewhere else now of course if you insist on having homegrown coke sugar it will be twice as expensive or three times as expensive as if you have sugar from abroad suppose you had a referendum on that do you think you'd get an overwhelming vote to have a higher price sugar and not the lower price nonsense the people don't want that a very small group of special interests of selected group that concentrated benefit group wanted and the people never hear from it the people never have a chance to express their vote their will we are not governed by the people that's a myth that carries over from Abraham Lincoln today we don't have government of the people by the people for the people we have government of the people by the bureaucrats for the bureaucrats [Music] again let me take another myth President Clinton says that he's the agent of change that without asking what kind of change and whether it's good chickens or bad change but leave that aside for a moment that simply is in the economic area for the moment that's false and the reason why he gets away with it he's because of the great mistake of talking about the twelve Reagan Bush years as if they were one period they weren't [Applause] you had Reaganomics Bush anomic s-- and now clintonomics Reaganomics had four simple principles lower marginal tax rates deregulate regulation restrained government spending monetary policy devoted to stable prices not inflationary monetary policy well Reagan did not achieve all of those he made good progress on as you all know what was Bush's policy it was exactly the opposite as judged from what happened higher tax rates more regulation increased government spending so that was a reverse now what is Clinton's policy higher tax rates more regulation more government spending so far from being an agent of change Clinton's economic problems is Bush anomic writ large he is a true proper successor of mr. Bush we know what the results of the reverse Reaganomics would I hope we don't see the results of British anomic writ large on a more fundamental level if we get below this immediate surface our present problems both economic and non-economic the rise mainly from the drastic change that has occurred in my lifetime that in the lifetime of many you hear about the relative importance of two markets to different markets for determining who gets what one where now we have two such markets we have the economic market operating under the incentive of profit and we have the political market operating under the incentive of power and what has happened in my lifetime was it the relative importance of the of the economic market has declined in terms of the fraction of the country's resources that it is able to use and the importance of the government market of the political market has greatly expanded to summarize but I want to go but go on it a little greater length but say in advance what we have been doing in my lifetime is to be starving the market that has been working and to be feeding the market that has been failing

Channel: PhilosophyInsights

Views: 496,984

Keywords: Milton Friedman, Friedman, socialism, capitalism, communism, reagan, clinton, bush, economics, politics, society, welfare, state, liberal, free trade, libertarian, economy

Id: mKhfR8WC4Eo

Length: 10min 25sec (625 seconds)

Published: Mon May 15 2017

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