Milton Friedman (July 31, 1912 - November 16, 2006) was an American Nobel Laureate economist, senior research fellow at the Hoover Institution at Stanford University, a professor emeritus of economics at the University of Chicago, public intellectual, and author of many books.
The following is a transcript (condensed by me) of a conversation between Hillsdale College President Larry Arnn (LA) and Milton Friedman (MF) which took place on May 22, 2006. Reprinted by permission from Imprimis, the national speech digest of Hillsdale College, www.hillsdale.edu.
LA: … in ten years, 40% of young men in the world are going to be living in oppressed Muslim countries. What do you think the effect of that is going to be?
MF: What happens will depend on whether we succeed in bringing some element of greater economic freedom to those Muslim countries. Just as India in 1955 had great but unrealized potential, I think the Middle East is in a similar situation today. In part this is because of the curse of oil. Oil has been a blessing from one point of view, but a curse from another. Almost every country in the Middle East that is rich in oil is a despotism.
LA: Why do you think that is so?
MF: One reason, and one reason only - the oil is owned by the governments in question. If that oil were privately owned and thus someone’s private property, the political outcome would be freedom rather than tyranny. This is why I believe the first step following the 2003 invasion of Iraq should have been the privatization of the oil fields. If the government had given every individual over 21 years of age equal shares in a corporation that had the right and responsibility to make appropriate arrangements with foreign oil companies for the purpose of discovering and developing Iraq’s oil reserves, the oil income would have flowed in the form of dividends to the people - the shareholders - rather than into government coffers. This would have provided an income to the whole people of Iraq and thereby prevented the current disputes over oil between the Sunnis, Shiites and Kurds, because oil income would have been distributed on an individual rather than a group basis.
LA: … Is it your view that the introduction of free markets in such places could overcome [theocratic] obstacles?
MF: Eventually, yes. I think that nothing is so important for freedom as recognizing in the law each individual’s natural right to property, and giving individuals a sense that they own something that they’re responsible for, that they have control over, and that they can dispose of.
LA: Is there an area here in the United States in which we have not been as aggressive as we should in promoting property rights and free markets?
MF: Yes, in the field of medical care. We have a socialist-communist system of distributing medical care.
LA: Do you think the Great Depression was triggered by bad monetary policy at a crucial moment?
MF: Absolutely. Unfortunately, it is still the case that if you ask people what caused the Great Depression, nine out of ten will probably tell you it was a failure of business. But it’s absolutely clear that the Depression was a failure of government and not a failure of business.
LA: Do you think our government has learned its lesson about how to manage the money supply?
MF: I think that the lesson has been learned, but I don’t think it will last forever. Sooner or later, government will want to raise funds without imposing taxes. It will want to spend money it does not have. So I hesitate to join those who are predicting two percent inflation for the next 20 years. The temptation for government to lay its hands on that money is going to be very hard to resist. The fundamental problem is that you shouldn’t have an institution such as the Federal Reserve, which depends for its success on the abilities of its chairman. My first preference would be to abolish the Federal Reserve, but that’s not going to happen.
LA: … you have turned much of your attention to education, and to vouchers as a method of education reform. Why is that your focus?
MF: I don’t see how we can maintain a decent society if we have a world split into haves and have nots, with the haves subsidizing the have nots. In our current educational system, close to 30% of the youngsters who start high school never finish… They are condemned to a situation in which they are going to be at the bottom. That leads in turn to a divisive society; it leads to a stratified society
LA: Why do you think teachers unions oppose vouchers?
MF: The president of the National Education Association was once asked when his union was going to do something about students. He replied that when the students became members of the union, the union would take care of them. And that was the correct answer. Why? His responsibility as president of the NEA was to serve the members of the union, not to serve public purposes. I give him credit: The trade union has been very effective in serving its members. However, in the process, they’ve destroyed American education. But you see, education isn’t the union’s function. It’s our fault for allowing the union to pursue its agenda… [Education] suffer[s] from the disease that takes a system that should be bottom-up and converts it to top-down… It isn’t the public purpose to build brick schools and have students taught there. The public purpose is to provide education… In education, we subsidize the producer - the school. If you subsidize the student instead - the consumer - you will have competition. The student could choose the school he attends and that would force schools to improve and to meet the demands of their students.
LA: Do you define self-interest as what the individual wants?
MF: Yes, self-interest is what the individual wants. Mother Teresa, to take one example, operated on a completely self-interested basis. Self-interest does not mean narrow self-interest. Self-interest does not mean monetary self-interest. Self-interest means pursuing those things that are valuable to you but which you can also persuade others to value. Such things very often go beyond immediate material interest.
LA: Does that mean self-interest is a synonym for self-sacrafice?
MF: If you want to see how pervasive this sort of self-interest is that I’m describing, look at the enormous amount of money contributed after Hurricane Katrina. That was a tremendous display of self-interest: The self-interest of people in that case was to help others. Self-interest, rightly understood, works for the benefit of society as a whole.
Similar Posts:
Leave a Reply
You must be logged in to post a comment.
