TAKE IT TO THE LIMITS: Milton Friedman on Libertarianism

welcome to uncommon knowledge I'm Peter Robinson our show today libertarianism our guest the Nobel prize-winning economist Milton Friedman for millions of Americans motorcycles represent freedom rugged individualism the pleasures of roaring along the open road while the wind streams streams through your hair well if wood stream through your hair if you didn't have a helmet on when he gets on his bike every motorcyclist has a choice to make wear the helmet and achieve greater safety take the helmet off and have more fun every motorcyclist has a choice to make that is except in the more than twenty states including this state of California that require the use of a helmet by law and that's just the kind of issue we'll be talking about with Milton Friedman today as a libertarian dr. Friedman believes in the maximum possible freedom for the individual yet he also recognizes the need for certain government functions which functions how does he decide when it's legitimate for the government to take some of our freedom away dr. Friedman and I won't be talking about motorcycle helmets but we will be discussing the larger issues of how a libertarian looks at public safety protecting the environment or deciding the right size of government itself we begin by asking dr. Friedman just what is a libertarian the typical definition of libertarianism in my mind is that a libertarian wants the smallest least intrusive government consistent with considered existing with a maximum freedom for each individual to follow his own ways his own values as long as he doesn't interfere with anybody else's doing the same okay consistent with a maximum freedom of it each individual as long as he doesn't interfere with under other individuals pursuing their own freedom but as a matter of fact there are two really different versions of libertarianism the more extreme version of libertarianism has one central principle it is it is immoral to initiate force on anyone else that's the prime view at the prime at the iron ran type libertarian Asst so the coercive power of the state is immoral in and immoral in and of itself and you know all you need to know to know that something of the state is immoral is whether it involves the initiation of force that's one brand now there's another brand which is one I would be favorable to which you could call consequentialist libertarianism and it's the one you've just defined well you've just defined it but thank you I'll take the credit I see the way you work with graduate students now if I may let me take you through a series of questions that are floating around in the modern mind and ask how a libertarian addresses them question number one the environment now it would strike a lot of people living in Manhattan that Central Park is very important to their lives and that if Milton Friedman had his way it would be turned over to the market and buried under skyscrapers and parking lots within 18 months or however long it takes Donald Trump to put the structures up it doesn't take a a governmental agency to maintain the theaters in New York it doesn't take a government agency to maintain the the the museums the art museums in New York the Museum of Modern Art is not a government museum it's a private it happened to be there two kinds there are private for-profit enterprises they're not not-for-profit enterprises like the museum like the Opera House and so on right in the same way if if Central Park were not owned by the government it never would have become the filthy place it became you forget what happened to Central Park that we for years for some years were a long long time ago live it on Central Park West when we were in New York it's pretty good out during the war even then it was a very good address it wasn't a bad I dress but it wasn't particularly good all right but we were able to take our children down to the park and when I knew they were babies and let them leave them with a teenage sitter and nobody was worried about safety but in more recent years until the very recent years Central Park came to be a place where you wouldn't dare to do and it wasn't safe that was because it was a government part the central principle is that nobody takes care of somebody else's property as well as he takes care of his own if Central Park were privately owned it would be advantageous to provide a recreational space now you just touched on something very important because one of the things I'm trying to distinguish here is the extent to which your libertarianism is effectively a moral position you do it because it's right and just it creates the greatest conditions of justice and the extent to which you do it because it works and it sounds to me as though you have both reasons pretty well wrapped up absolutely if it didn't work the main thing is if it didn't work it would be an impossible goal the only reason there's any chance of keeping government limited is because government is so inefficient and does so poorly now let me just try during the industrial revolution of the 19th century government in Britain was very limited and economic Enterprise went all but unregulated yet that wasn't exactly a golden age now was it again and again and again you'll hear we've tried the Western world has already tried let a fair let her rip economics and it ended up with the London that Charles Dickens portrayed dirty filthy child labor just a terrible mess how what do you do with well how do I come to be it was a terrible mess but what cleaned it up it Israeli and his social the the child labor laws and no no what cleaned it up was a progress of private enterprise because you had a the reason it was so messy was because you had to burn coal and the kind of coal that was available in Britain was very smoky and messy and once you were able to use oil natural gas better furnaces all of those things is what made it possible to clean the London up now so far as child labor is concerned right what happens is what happens in the picture that's drawn of Britain of 19th century right is that there is no image of what went before of why is it that all of these people from the farming from the rural areas came to the city did they come to the city because they thought it would be worse or because they thought it would be better and was it worse or was it better in the early days there you know there are no very few things that are 100% black or a hundred percent white right there are various shades of grey and what we aim for is the least shade of grey that's possible I'm not going to say that all was rosy in Britain at that time it wasn't but look around the world today where is at least rosy in those countries where things are run by the government not in those countries where private enterprises are so you're the same thing was true in Britain the conditions on the in the rural areas on the farms were far worse than the conditions in the city but they were not visible they're hidden nobody saw what can I come to consider did Dickens didn't stroll around the country with this alright alright so what you're saying then is that this mental image that drives even to this day so much of the environmental debate is simply it may be true as far as it goes but you'd advise greater historical understanding but not only historical present where are the most polluted areas in the world today today in Russia Russia right why because everything in Russia was controlled by the government there were no and I keep emphasizing nobody is going to take care of somebody else's property as well as he'll take care of his own okay property but who should take care of the resources that we all share such as the air we breathe I want to push you one more time on the environment air here in California it turns out there are 30 million people who like to breathe and we have particularly in the LA basin smog beginning in the 1970s that the environmental movement begins to listen long went back 100 years there are stories you the Indians describing that as a smoggy area so part of what's going on is it's natural but no doubt the thing about that is there is a argument for government requiring those who impose costs on third parties to pay for and the point is with respect to smog the efficient way to do it is did you use the market elm how do you create property rights in the air say well you do it now by selling the right to emit a certain amount of pollutants into the air you now have a market in effluent right for large manufacturing concerns for manufacturing concerns which is where most of it comes from and you do the same by charging essentially making making it a requirement that automobiles have to have the catalytic contaminating converters well and that's effectively making individuals be responsible for costly impose on others remember what I said is the key feature of a libertarian view is that you should be free to do what you want provided you don't prevent other people from doing the same thing and so the only case for government is when it is not feasible for market arrangements to make individuals pay compensate others for any harm they impose on them if you and I enter into an agreement to buy or sell something well that's our businesses right you may lose I may lose or more likely we're both going to win we're not going to enter into it unless both of us think it's better for us but there are cases like the power plant that emits smoke that dirties my shirt in which the power of the company is imposing a cost on me for which I'm not I'm not being compensated those are the only cases but you have to qualify that by noting that when government image enters in it also is emitting smoke it's also imposing costs on third parties because it's it's it's always a very imperfect arrangement and moreover it always has to collect taxes and in the process of collecting taxes it's as I always say there's a smokestack on the back of every government program a smokestack on the back of every government program by that you mean a distortion right in the marketplace in an imposing of course on third parties for which the third parties are not compensated so the key characteristic in which you find a circumstance where it's legitimate for the government to intervene would typically be where property rights are vague or diffuse is that correct and where it's almost impossible to establish size that is a problem in the case of the power plant all right is that there's no way in which you can say you have to get the agreement of each of the persons whose shirt you're going to dirty right and pay them for the privilege of dirtying in their shirts before you can do it so on the environment the Greens actually do have a point that is one area where there is a strong case but in most cases in practice when you look at it and there are some people up with FERC as you know Lee right who have Terry Anderson who I'm sure has been on your programs right who have demonstrated that there are many many cases in which market arrangements are far more effective than command and control arrangements all right so now we've got a little bit of a lap but there must be some areas food and drugs for example where public safety can only be ensured through government involvement right the Food and Drug Administration which regulates everything from the drugs that pharmaceutical companies may put on the market to the ingredients in items that we purchase off the grocery store shelves let me give you an example the lid amide mmm Lidda might mark everything everybody's favorite example well I'm well I may be leading with my chin on this one but I'm going to lead with it anyway 50s and 60s it is marketed in Europe as a drug to help women get through the nausea that they sometimes experience during pregnancy the Food and Drug Administration said it had been inadequately tested in the United States and for batted to be marketed in this country with the result that thousands of children were born with horrible birth defects in Europe to mothers who had used the lid amide but that didn't happen to American children because the FDA had intervened and kept that drug off the market thank God for the FDA right wrong alright why this is a case in which they did save lives this was a good case but I suppose they are equally slow in adopting a drug which turns out to be very good and very beneficial how would you ever see the lives that are lost because of that you're an FBI official right you have a question of whether to approve or disapprove a new drug if you will prove it and it turns out to be a bad drug like the little mind you're in the soup you're going to your name is going to be on every nutjob I get hauled up drivers to testify on the other hand if you disapprove it but it turns out to be good well then later on you approve it four or five years later nobody is going to complain about the fact that you didn't prove it earlier except those greedy pharmaceutical companies and want to make profits at the expense of the public as the saying goes everybody will say and so the result is that the pressure on the FDA is always to be late in approving and there is enormous evidence that they have caused more deaths by bitter they're late approvals than they have saved by their early approvals so your view is abolished the FDA absolutely and what comes up well usually is it's in the self-interest of pharmaceutical companies not to have these bad things do you think the manufacturer thalidomide made a profit out of the letter my door long I see and you have to have people should be responsible for harm that they do the match should have been possible tort law it takes care of a lot of this absolutely all right if I if Lily or Merck or somebody else comes up with a drug that does me harm they have I go after them I do a join a class action with everybody else who's taken that pill and we sue them for billions of dollars and wipe out their shareholders equity absolutely and then that they have every interest to be extremely rigorous in testing that drug before they make it available let me give you a different oracle the rules imposed on on Airlines for safety suppose who has a most interest in preventing airline acts after the passenger themselves the airlines well it's not even clear that the procedures have more enters in the airline all right because included in the passengers are the pilots right of course why is a government going to improve airline safety how are they going to do it how do they add any incentive to anybody to improve airline safety so far as I can tell says Milton Friedman really opposed all health and safety regulation let me try this one on him doesn't the public have the right to know about the nutritional content of the food it buys obesity is a big problem in this country but up until of recent years it was very tough for a dieter to pick up a package in the grocery store and figure out what the ingredients were what the carbohydrate content is the fat calories and so on and so forth so the government imposes quite modest rules for posting the nutritional values on packages in the grocery store now you can say this has so much fat this has less fat I'll buy this now isn't that a modest and completely acceptable government intervention let's keep going alright and the government also prevents useful information from being passed on let me give you the simplest example all right aspirin we you are know and I know even under that is you're well advised to take an aspirin every other day to reduce the danger of heart attack right but the but that's not allowed to be stated on an aspirin package on account of FDA prohibited they they control the information that can be stated on a label right now there are some libertarian manufacturers of drugs who have proposed who've tried to push through the idea that they can put on their thing this is what the FDA says and this is what we say choose and they are not being allowed to do it they're not even being allowed to do this so that if if customers really wanted to know about the ingredients it would be in the self-interest of the people producing it to put it on their packages those packages that had the ingredients on it would be more attractive to consume supposin didn't but now it's always a mystery to me why people think that some experts in a Washington office who don't know you don't know me don't know our children know better than you and I do what we want to have on our packages and what we want our children to know once again on balance get rid of the FDA app get rid of these government regulation solutely the FDA initially had the requirement to assure the safety but not the efficacy of the drugs that they approved which is so-called Kefauver amendments and came in as a result of thalidomide in which you brought up the FDA's was expanded its mandate that it is required to assure both the safety and the efficacy of the drugs and that has enormous ly raised the cost of getting drugs of Brut I mean if you wanted to have a halfway house you could go back to the earlier standard where the FDA had to certify the safely but did not have to express a judgement on the efficacy the FDA simply ensures that pharmaceutical companies live up to the old dictum first do no harm right this pill name may not change your life but it won't hurt you therefore it may be marketed again okay now let me move to another case and this one this one I think is pretty tough know for a libertarian all right so you may you're allowed to take a deep breath before I hit you with this one if you want to civil rights swing ran by civil rights if I what I mean by civil rights is to take a raw case the South under Jim Crow in the 1950s but that was a case of government of too much government it was little I thought the South in those days had relatively low tax rates relatively low really no but the government provided for a separation it was a government that enforced separate areas for blacks and whites it was a government that enforced the law that the blacks had to sit at the back of buses those are all government laws in the absence of those government laws that wouldn't have taken place in other words when the equations of government laws you would have had a gradual development wouldn't taken place somewhere and not there were and you would have and look what happened in the north where there weren't those government law right there may have been they undoubtedly don't misunderstand me there is prejudice there's no question right and undoubtedly it has bad effects on various people but there but in the absence of the laws in the south it would have broken down much faster and much earlier that's if you could cite any case for libertarianism that's it all right so my strong Milton Friedman has told us why the government's role in our lives should be limited but how limited let's ask him about the structure of the federal government itself I have a list here of the 14 cabinet departments now 14 is a lot for television so I want to just go right down the list quickly and have you give me a thumbs-up or thumbs-down keep them or abolish them Department of Agriculture Bob bhavish gone Department of Commerce abolish gone Department of Defense keep keep it Department of Education apology gone energy abolish how except as energy ties in with a military well then we shove it under defend that a little bit that handles the nuclear right that ought to go on lutonium and so forth goes under defense but we abolish the rest of it Health and Human Services there is some putt there are there is room for some public health activities to prevent the contagion such a thing as for example so you keep the National Institutes of Health say and no no these are not internationals you know those are mostly research agencies no no that's a question of whether the government should be involved in financing research and the answer is no well that's a complicated issue and it's not an easy answer with respect to that will eliminate half of the Department of Health Services ok one half there we go Housing and Urban Development about Oh didn't even pause over that one Department of the Interior oh well but the Housing and Urban Development has done an enormous amount of harm my god if you think of the way in which they've destroyed parts of cities under the rubric of eliminating slums Jack can you know you remember at Martin Anderson wrote a book on the federal bulldozer describing the effectively urban development there have been many more dwelling units torn down in the secundus in the name of public housing that have been built Jack Kemp has proposed selling to the current inhabitants of public housing their unit their townhouse their apartment for $1 apiece and just shifting the ownership to the Getty we live got rid of the Department of Housing and Urban Development it would be worth doing that all right done that's gone Department of the Interior your beloved National Park Service well given that the problem there is you first have to sell off all the land that the government owns but just what you should do but it could be done pretty quickly done yes you should do that there's no reason why government owned the government now owns something like one-third of all the land in the country and that's too much she's go down to zero should go down well not entirely zero they ought to own the land on which government buildings are okay terrific Department of Justice oh yeah keep that point that Labour know gone state keep keep it transportation gone gone the Treasury you have to keep it to collect taxes all right collect taxes through the Treasury Veterans Affairs you can regard the Veteran Affairs as a way of paying essentially salaries for services of those who have been in the armed force but you ought to be able to get rid of it you should buy it buy a it off a it off pay off lump sums for that's right and just get rid of it okay Milton Friedman if you are made dictator for one day the next day the other Iowa no no I don't want to be married dictator you wouldn't I don't believe in dictators okay I believe we want to bring about change by the by the agreement the for the citizens I don't I don't believe in arbitrary let me put it this way then your I can persuade if we can't persuade the public that it's desirable to do these things we have no right to impose them even if we had the power to do it all right from 14 departments down to two or basic fundamental and function what are its fundamental functions of preserve the peace defend the country provide a mechanism whereby individuals can adjudicate their disputes that's the Jeff Justice Department Department protect individuals from being coerced by other individuals the police to function right and now this is both the central government and the state and local governments the police function is primarily local and central right and those are the fundamental functions of government in my opinion Milton Friedman thank you very much dr. Friedman believes in limited government very limited government if I understand his principles correctly he'd say that the choice whether to wear a motorcycle helmet shouldn't be between me and the state government in Sacramento but between me and if any one my insurance company better keep those premiums down I'm Peter Robinson thanks for joining us

Channel: Hoover Institution

Views: 987,819

Rating: 4.8652325 out of 5

Keywords: Milton Friedman, libertarian, freedom, government, economics

Id: JSumJxQ5oy4

Length: 25min 34sec (1534 seconds)

Published: Fri Dec 17 2010