Milton Friedman - The Role of Government in a Free Society (Q&A) Liberty vs. Socialism

[Applause] [Music] Freeman my question really goes to part 1 of your speech it seems like you you mentioned the word coercion persuasion and exchange about a half a dozen times each and I think I understand the difference between exchange and coercion but I'm confused about persuasion and my question is and perhaps you can answer it as quickly as I offer the question but what is the difference between commanding somebody a commanding B to do something ie coercion and a persuading B to do something that a commands beyond the threat that if D doesn't ility goes to jail or if B doesn't do what he gets hit over the head in my opinion I am going to distinguish between persuasion and coercion entirely on the basis of the you actual use or threat of use of physical force not mental persuasion not my not brainwashing I find it impossible to accept brainwashing except under conditions of physical coercion as well you may have a person held violently in brainwashed dimensions but other than that the fundamental distinction I would draw is a use of force well let me ask you this what you seem to say that coercion is bad and I think persuasion is good because it helps us achieve the necessary cooperation and uniformity that makes the society hold together but what about what are the implications of the freedom of the individual when they are when individuals are Burrage by all sorts of persuasive communications by the media by lawyers by understand business executives by professors we're constantly being what what is what is the what would John Stuart Mill say to to my fear of being so persuaded that I really don't have free choice he would say to you and I would say to you as long as there are alternative channels of persuasion as long as there is freedom of different views to be held well then I'm not worried maybe I should be but I'm not the real problem arises when you only have one thing you hear now it is coercion if you are prevented by force from expressing of you if you're a citizen of the Soviet Union you're addressed with a great deal of persuasion but they the sources are limited and if somebody else wants to come in and try to persuade you differently if the souls in its Anora Sakharov wants to persuade you differently he's prevented how by the threat of physical force well now the fact that we have a great many different channels of persuasion is a very healthy thing as long as there's no monopoly and the real problem arises when we don't have a proper well let me give you a real I mentioned that one of the worst things we have is a control by FCC of radio and television why because it reduces the range and variety and alternatives of persuasive material it gives a special advantage to the advertisers you ought to have a system of radio or TV in which material can be disseminated the same way it is in print in which you could do it through fee TV paying for it or other ways but we use force namely the reading aisle of a licence the fact that a policeman will come away come and put you in jail if you operate in contravention to the FCC rules to prevent alternative means of dissemination in my opinion that's why you have had a wasteland of television and a phrase in Meno use some years ago so I think the fundamental answer to your question is that we must strive to keep all channels open and if we do that then it's very tempting for individuals to say I want to be free of that you know freedom impose costs as well as benefits if you have to make up your own mind that's a terrible thing most people would much prefer to have their mind made up for but if we're going to maintain a free society we each of us have to undertake the task of making up our own money thank you in reference to I'm talking about government's role in a free society you mentioned some of the market failures and I think that you may have just passed over one that is a most importance and that is a poverty and impressing my question I'd like to refer to what President Kennedy said that if a free society cannot help the many who are poor it cannot save the few who are rich and to say that well we are a government of the people and when there is a large sector of the people who are hurting perhaps it is the responsibility of this government of the people to help out my question is my question is is regarding how free are the poor how free are the unemployed and how free are those people who are disadvantaged and so in reference to that what is government's role sheriff first of all [Applause] I'm glad to see one vote for the poor first of all the government doesn't have any responsibility people have responsibility this building doesn't have responsibility you and I have responsibility people have responsibility second the question is how can we as people exercise our responsibility toward our fellow man most effectively that's the problem so far as poverty is concerned there is never in history been a more effective machine for eliminating poverty than the free enterprise system in the free market the period [Applause] in a period in which you had the greatest improvement in the lot of the ordinary man was a period of the 19th and early 20th century those of us in artist's room are the heirs of that we benefited from the way in which our parents and our grandparents were able to come here and by virtue of the freedom that was offered to them were able to make a better life for themselves in our them and us but next if you look at the real problems of poverty and denial of freedom to people in this country almost every single one of them is a result of government action and would be eliminated if you eliminated the bad government failures let me be precise and specific why do we have so high an unemployment rate among black teenagers to disgrace and a scandal why do we have so high an unemployment rate first of all because we give them lousy schooling through governmental schools which make them unqualified to hold decent jobs and second of all we require employers to discriminate against them by not hiring them unless they have unless their productivity is enough to justify a minimum wage the minimum wage rate is the most anti-negro law in the books and it's an entry Negro law because it precisely having first not getting not enabled the young blacks to have a decent schooling so that they can they can have productivity we next deny them the honor to job training that they might get if you can induce employers by a low by being able to hire them for relatively low wages to give them on-the-job training that would make them qualify for a higher payment and higher productivity in the third place we have constructed a governmental welfare scheme which has been a machine for producing poor people we have induced people to come under control of welfare we I'm not blaming the people don't misunderstand me it's our fault for constructing so perverse and so ill shape the monster as the whole set of welfare programs we have under which we encourage people the families to break up we encourage people to move from one part of the country and come to another under which we have in effect made many people porn and yet when all this is said and have I ever been where I have certain of course of course more so than most of the people in this room [Applause] how many of you have worked a 12-hour day and gotten paid 78 cents but let me go back to the because but you know that's all irrelevant is there one of you who is going to say that you don't want a doctor to treat you for cancer unless he himself is head cancer [Music] [Applause] I can throw down the line but when all is said and done while there are people in this country who are worse off than other people by and large the even the poorest people in this country are relatively well-off compared to the conditions in many other countries in the world what we take is our standard of poverty what we take is our standard of poverty is above the average income of all of the people in the Soviet Union let alone of the people in India or China and other countries now that doesn't mean we should be satisfied with it we are a wealthier country and we've been more productive and we should set higher standards by ourselves but by the same token we ought to have a sense of proportion and we ought to recognize both the source and the problem you say that that you believe many people in America agree and believe in your definition of freedom freedom from coercion and I might agree with you but I also believe that many people in America free believe in a different kind of freedom and that is freedom to well being a certain level of standards fair housing at a good price education etc the other thing I want to say is is that the system has built into it the poor remain poor and the rich remain rich and that is an externality of the system it is not built into the system at all it has never been true it's simply a false if you look at the evidence there is an enormous amount of mobility from one class to the other in fact there used to be a saying three generations from shirt sleeves to shirt sleeves which reflected exactly the opposite effect I do it simply is not built into the system on the contrary there's a great deal of mobility within generations and between generations and we shouldn't argue on the basis of false factual premises that mobility well let me continue because I'm not sure it really has an effect on the question because because it is not it is not immediately easy to become in the wealthy class there are certain parts of the system which make that virtually impossible for the real person now I also I believe that this freedom to represents equal represents the the belief in equality as opposed to to Liberty and I wonder is it possible to build a system based on this equality which I believe that many people agree in and would not be willing to sacrifice to the liberty of freedom from let me I'm not going to be able to give a full answer to your question because you've asked a very very complex question and so you're going to have to pardon me if I'm oh if I am a little dogmatic but I only want to suggest that the statements are making or not without some thought and reason behind them in my opinion a society that aims for equality before Liberty will end up with neither equality nor Liberty and a society that aims first for liberty will not end up with equality but it will end up with a closer approach to equality than any other kind of system that has ever been developed now that conclusion is based both on evidence from history across history and also I believe on reasoning which if you try to follow through the implications of aiming first at equality will become clear you can only aim at equality by giving some people the right to take things from others and what ultimately happens when you aim at equality is that a and B decide what C shall do for D except that they take a little bit of a commission off on the way I'd like to ask a question on behalf of the lawyers in the audience you talked tonight a lot about freedom and it seemed to me that one of the types of freedom that was implicit in your talk was the freedom for an individual not to act as well as the freedom for an individual to act and this in light of your discussion of externalities and market failure reminded me of a problem in law that's called the nonfeasance misfeasance distinction and the typical example is the Good Samaritan paradox and that simply is if I'm walking alone on a beach and I look out in the water and there's somebody drowning does society have the right to impose upon me the duty to rescue that person in the water in other words am i no longer free not to act and so the question I'd like to ask you professor Friedman is under what circumstance is made of government in a free society impose upon an individual a duty to act note that the note the shift you've made you started with society and ended up with government are those synonymous that's a rhetorical question that has a implied answer yes you're done let's go back [Music] let's go back because what you're really asking is a very fundamental question and we can leave aside the legal aspects of it the real question is what's the case for believing in freedom in particular is a man free to sin because this is what you're really saying if I see you about to sin am I free to let you sin if I know that you're sinning the answer is no the justification for freedom is that we don't know that who are we to judge for our fellow man humility the beliefs that after all I can try to persuade you but I can't force you must ultimately rest on a recognition of the limitations of our knowledge we don't say that there isn't such a thing as sin all we say is we can't be sure we're right when we think it now you see this man walking on the beach do i how can anybody force him to go out and rescue that film and is it right to force him you know that's a problem then it's not easy to face what we want to do we want freedom in my opinion first because we cannot know we can never be sure we're right and therefore we have no right to force other our views on other people and second because the thing that's really important is the individuals own values in his own beliefs if you're not free to sin then neither are you free to be virtuous virtue is a meaningless concept unless an individual has a free will to choose between one act and another you and I might think very very well of that individual if he move he jumped in and tried to rescue the man sinking and we will impose that value on him through the social process whereby we construct values and transmit them to one another a good society will certainly be one in which people in that position will be strongly inclined to move out and try to rescue Amanda but that's a very different question from saying that if the society is bad we can make it good by using force to drive them out there to bring the other man in I'm not sure that's an answer to your legal question but it's an answer I think to the moral question thank you thank you [Applause] okay in your book capitalism and freedom which I've read cover to cover jr. thank you he presented the thesis that capitalist societies capitalist society was a prerequisite for a free and democratic society but how does this fit with the example of South Africa a nation which fits your criteria for a capitalist society it has relatively unregulated free enterprise market diversification and multinational participation but in no way could be considered free with apartheid discrimination and forced labor by the passbook laws you I'm afraid you read the book from cover to cover but not line by line because you will find that the statement in question is that a free market economy is a necessary but not a sufficient condition for a free society I have never argued that it's a sufficient condition only that it's a necessary condition so I said in there I gave examples of societies which predominantly relied on market economies and market mechanisms for their economy but yet were not by any stretch of the imagination free societies so I don't believe that's a contradiction I think free societies are very rare things and most most societies in most time in human history have not been free so I don't know any simple formula to produce a free society I only know that if you don't have a market economy you won't have a free society I'd like to follow up how do you see the role of the multinational in system like South Africa well I believe we have two separate issues I believe that on the whole the blacks in South Africa have benefited greatly from the multinationals in South Africa so far as their economic you know I want to say something to you people this is Stanford and I want to tell you something that I it seems to me about the multinationals in South Africa I think you missed a great opportunity here in this university a while ago as I understand it there was a commission here that was investigating the question of the costs to Stanford and endowment income if it were required to restrict its investment to enterprises that had no connection with South Africa is that right wasn't there such a group that investigated it and as I understand it they came out with the conclusion that it would cost something like I think it was three or four hundred dollars per student per year and then they made the wrong choice what they should have done is they should have said to the students any students who want to pay three or four hundred dollars more a year we will segregate that part of the portfolio and invested in this way not going into South Africa and of course I should have offered the same opportunity to the faculty because the problem is it's too cheap to get your gratifications at somebody else's expense you pay for them see the real if I may again digress I think one of the real objections people have to the market system the real reason why the market has a bad press and there's an any market mentality is because a market makes people pay for what they get it makes people responsible and of course everybody would rather have somebody else pay for so if you go to this case I remember when I was in South Africa I've been there I'm surprised I haven't been picketed on that account I spent a day I spent a day with a with the leader of the Zulu tribe a very intelligent thoughtful farsighted black man who is there of gotcha blue the lazy extraordinarily impressive person and I have seldom spent a day that I learned more from if you asked him that question there's no doubt what he would say and what he did say what he has said in public speeches that the way to help South Africa is not to cut off the capital which provides the opportunity for expansion and for employment for the blacks but that's not the way to help South Africa that's not the way to help the blacks no he didn't he made a speech of a different kind of month ago he said he had lost a great deal of hope in the possibility of having the kind of multinational multiracial society that he had been expecting to have I don't believe as I say the speeches that he gave some earlier time are available on the record for you to read and to look at it's a in any event as I say I do not believe it as an issue I think it's an issue that each one of us must face separately I think each of us should be willing to put his own money where his mouth is Canon does the marketplace deal effectively with irreversible externalities I'm not sure you've touched for example I'm and this is a hypothetical but maybe true air pollution assuming that the world can only handle so much pollution can we really leave it up to the marketplace to deal with that sort of an irreversible or potentially irreversible externality well insofar there's no difference between irreversible and non irreversible ones if it's a if if the benefits can be identified if you can make it subject to the market if you can make the costs be borne by those people who are involved and responsible for it well then they will have every incentive to take account of the future effects it's the argument of whether the fact that you have let's say finite resources somehow or other prevents the market from providing for the future so that the situation for what you're calling irreversible is I think no different for the non irreversible in the case where you have strong externalities the fundamental answer to you is that there is no good solution you see we must not let the best be the enemy of the good utopianism is a great disease the idea that there's something wrong doesn't mean that there's something better so that in the many of these cases there may be no good solution that's why I stressed that I do not think you can make a hard-and-fast list of what things government can do you have to look at each case and look at its plug pros and cons but you have to be even-handed and in that evaluation include government failure as a likelihood as well as private failure on the whole my impression is that governments have been far less farsighted than private individuals have been that they have been far more willing to play fast and loose with the distant future then have private individuals and private groups [Applause]

Channel: BasicEconomics

Views: 63,735

Keywords: liberty, Milton Friedman, Economy, Economic, Freedom, Economics (Field Of Study)

Id: nv5ldsmyQp4

Length: 25min 49sec (1549 seconds)

Published: Thu Apr 26 2012