Says Federal Reserve should be abolished, criticizes Keynes. One of Friedman's best interviews, discussion spans Friedman's career and his view of numerous political figures and public policy issues.
[Autism Intensifies] this recording is from 1994. Over 24 years ago now. I love to listen to Mr. Friedman. I only wish more, less-educated and more arrogantly-opinionated people, would really investigate his ideas. A great mind truly missed.
Heaven forbid he sees how "much less safe" we are. Friedman was already talking about race issues and the drop in personal security directly related to lack of education in ghettos and urban areas all these years ago. We need education and opportunities for minorities so criminal behaviour isn't an option and to reform our police forces. (notice the spelling and you'll know my background)
You understand nothing about economics. You need centralization around a currency. That doesn't mean government fiscal as well as central bank policy should serve the interests of an international financial oligarchy, which is does. But take away government regulation and oligarchy will wither and die? Heard of 1929? The problem isn't '"Let productive capital do its thing.." The problem is the financialization of everything. 180% debt to GDP?? Friedman was a grand wizard overseeing the orchestration of a trillions-of-dollars wealth transfer from the middle class. You know I would love to have no government too but for thousands of years there have been governments encroaching on the free market because states were, before elective representation came along and muddled things up, a concentrated polity of a military and a nobility. Civilization would just as soon end as we see anything like a free market. Friedman provided new justifications for a virulent internationalist strand of crony capitalism, neoliberalism cough* cough* He was its architect. People listened to Friedman. They followed his instructions. Greenspan was a Friedman acolyte. Bernanke was a Friedman acolyte. What don't you understand about this? When you come to Friedman in search of some wisdom of the Edenic 'free market' you are so wrapped up in ideology your cure for dehydration is drinking rat poison.
Rohme Giuliano Did you ever extensively read Friedman? Because you imply that he advocated for "no government" or anarchy. This is simply not true, he only understood a very simple fact and based everything more or less off that. A person will always take the course of action that he sees as most beneficial to himself. This means that the bigger and more powerful the central government is, the more beneficial it is for a particular interest to control it. This is the very thing that we define as "crony capitalism". Milton's solution to this problem was to keep the government as small as possible with it still being able to function as the few roles society deems it to be necessary. And then place extraordinary safeguards to prevent the bloating. This is obviously only a tiny sliver of his train of thought, but it addresses at least one of your more glaring mistakes about Friedman's philosophy.
We love them too, but not here in Vancouver BC because of protectionists here who believe al should suffer with crappy service and have no choice because central tyranny is preferable.
It is the classic battle of a protected worker class (Taxi driver protected by government cab licenses) against modern development (Uber, Lyft). In Germany back in the days the inventor of the steamboat was murdered by the workers of the horse-pulled-cargo-boats. Same deal...
"Everybody is persuaded that socialism is a failure, and yet in practice we keep moving down the socialist road" -- and nowadays (2018) in practice we don't even call it "socialism" any more, we call it "liberalism". This is not liberal kind of liberalism, it does not have liberties, much the opposite. But still we name it that way. The naming is as contradictory as the actions.
Actually, I don't know why liberalism has been associated with the left in the English language. In spanish language, liberalism always refers to what Friedman supports (free markets).
“Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded - here and there, now and then - are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty. This is known as "bad luck.” ― Robert A. Heinlein
I first saw this interview here on RU-vid back in 2013, even though the interview originally aired in November 1994, and has I remember watching it was a red pill moment for me that dramatically changed my line of thinking and years later I haven’t looked back since.
Milton was the reason I went into Economics as an Undergrad. His appeal was the simplicity of his messaging. His communication style was just as important as his knowledge. He clearly articulated, while ow you can look at different economic models, but when you apply those to humans, the one model that provides the greatest opportunity for people to realize their dreams and elevate their standards of living is under a free-market system, with absolute minimum involvement by government.
As all he said, but his remakes on "savings bonds" are still very accurate in today light of the QE Unlimited, Real Estate Inflated sustained prices and zero rate environment, Friedman was a great man, if only the socialists of Europe could listen to him in their arrogant and unmatched stubbornness..
I like Friedman, but he was a utilitarian type of libertarian and would accept government intervention up to some limit. As Henry Hazlitt pointed out (The Inflation Crises and How To Resolve It, Chapter 12 Where The Monetarists Go Wrong) Friedman wanted inflation but could never decide what level was "just." To paraphrase H.L. Mencken, Friedman was for a little looting of A to satisfy B, but just could never quantify how much looting. Taxation is the same; it is a crime no matter the level, hence it is best in a moral/ethical sense to just contract for services and don't use voting power/force to authorize government/politicians to impose one's beliefs that are contrary to those of others, such as one's friends, family and strangers and then sanction the use of force to make those people pay for one's goody-two-shoes ideas.
I've watched numerous videos of this man. His ability to conger up examples to get his point across is amazing. What he does starting at about 21:15 to 22:50 relative to Rutgers is superb. It makes the point spectacularly.
Thanks Messrs Hayek & Friedman : By continuing to pursue an argument, we can discover new questions, explore new wonders and grasp new truths. We might say what is self-evident is that ' open mind ' does not come easy, but when achieved it makes us better, for having it. If one believes they possess a truth, why the fear of an opposing view. The fear is saying to the individual, that they are unsure of what they believe. Truth does set one free.
Puraskar Chakrabarti The interviewer is Brian Lamb, the founder of C-SPAN. If you watch his Booknotes series you come to realize that he conducts interviews from the complete ‘layman’s’ point of view. A lot of basic questions so as not to talk over the audiences head.
Wow. As a School Board Director questioning if the government-run school system is broken by design and serves only to keep status quo, amazed to hear Milton's take on "public school" in 1994. Nothing has changed. Despite the billions (trillions?) of taxpayer funding.
1. Skip Marx altogether. It's toxic nonsense. 😁 2. Henry Hazlitt's "Economics in One Lesson". 3. The Sowell book recommended above. 4. Expand your horizon. You can read some Marx now that you are vaccinated. I find Joseph Stiglitz interesting for a serious perspective on the limitations of the free market even though he tends to consider that since Government intervention theoretically _could_ be beneficial, it somehow has some bearing on the real world. 5. Watch every Uncle Milty video, of course.
The microwave oven was invented more or less, by accident. Radar was invented by the British with the development of the cavity magnetron. The story of the microwave as a cooking device, was that a man had a chocolate bar in his pocket, and he walked in front of a radar transmitter, and the chocolate bar melted.
When you add the existing limitations on freedom when this was recorded, to the NEW limitations on freedom (freedom not related to the two very limited topics of getting high or who you can marry) I am no longer able to call the USA "The Land of the Free". I live abroad now, and every patriotic American holiday just makes me angry and sad.
Remember that government plays an important role in public services that no one would pay for individually, that was admitted for Hayek and Friedman. You cannot let the market decide everything that kind of idea leads to the weakening of governments, to the concept that government is intrinsically inefficient (a fallacy) and translates in a tragedy for the poor. A good government also plays a role in the reaching of consensus and balance which is key for development as shown in east Asia.
Big Bill, stop blaming the subprime crisis solely on private sector, as if GSEs didn't hold 40% of all mortgages. Their official mission is to provide housing for low income people. If GSEs didn't exist, good likelihood that there'd have been no bubble. Plus, government regs made the fallout worse. Just as government policy (shrinking of money supply) during the Depression prolonged it and made it worse.
Look, buddy, you have no case. In fact, I rarely hear that argument anymore, which I attribute to knee-jerk conservatives who must, simply must, convince themselves that government is the reason for all free market failures. The commercial real estate market experienced an even bigger bubble in the years 2006-2008, and corresponding fall, with no government entity involved. The sub-prime mortgage market, which were not government sanctioned, and the derivative products connected to them, caused the Great Recession. THAT was the tail that wagged the dog, dragging everyone else with them, including Fannie and Freddie. Period. This argument ended in economic circles at least two years ago, your side lost, and everyone else has moved on except Know Nothings like yourself and Tea Party types. Second, I agree the Fed exacerbated the problems following the crash of 1929 by doing nothing. (They didn't actively try to shrink the money supply, that happened naturally through widespread bank failures.) They should have taken a more active role to prop up banks; that is, responded more like the Fed did in 2008. But the Fed was hamstrung then because they had to keep the money supply tied to gold. But I have to ask, do you want an activist Fed, or don't you?
***** You can spare me the ad hominem attacks. "The sub-prime mortgage market, which were not government sanctioned, and the derivative products connected to them, caused the Great Recession." Thanks for the expert insight. Except I don't know what you mean by "not government sanctioned." No they were not regulated the same way prime mortgages are. So? GSEs still securitized, sold, and insured a huge portion of them, after originators such as Countrywide, which was in bed with Chris Dodd, passed them along. "With that self-assurance, the company (Fannie) announced in 2000 that it would buy $2 trillion in loans from low-income, minority and risky borrowers by 2010....Between 2001 and 2004, the overall subprime mortgage market - loans to the riskiest borrowers - grew from $160 billion to $540 billion, according to Inside Mortgage Finance, a trade publication. Communities were inundated with billboards and fliers from subprime companies offering to help almost anyone buy a home. Within a few years of Mr. Mudd’s arrival, Fannie was the most powerful mortgage company on earth...********Between 2005 and 2007, the company’s acquisitions of mortgages with down payments of less than 10 percent almost tripled.********** As the market for risky loans soared to $1 trillion, Fannie expanded in white-hot real estate areas like California and Florida. "www.nytimes.com/2008/10/05/business/05fannie.html?pagewanted=3&_r=0 The crisis had a snowball effect. Take out 40% of the loans at any point of the "snowballing" before the collapse and, like I said, it's likely the collapse wouldn't have happened. The GSEs started the snowball, before I-banks and non-bank lenders (New Century) even thought of the idea of MBSs for subprimes. It's what happens when you privatize the rewards and socialize the risk - how much dough did Raines or whatever his name make? Conservatives often blame it all on the CRA but they don't really know the details.
Thomas Headley So do I. Markets are an efficient way to allocate capital, but they aren't infallible. Markets are made up of humans, after all, and large systemic market failures litter human history. The crisis of 2008 could have been over with in about 18-24 months with the right economic policies. Instead we had the "austerians" in Europe, and to a lesser extent in the US, who held held back effective fiscal policy because they simply _must_ prove government is _always and everywhere_ the problem.
Thomas Headley Piketty's book (Capital in the Twenty-First Century) empirically shows that capitalism does not naturally allocate wealth in a socially acceptable way, unless you think socially acceptable is wealth and capital consistently funneled to the a small minority at the top, giving them ever increasing political power, leaving the rest chronically behind. It isn't a matter of capitalism being manipulated by governments or gamed through fraud or cronyism, it is the nature of the capitalist system itself -- r>g. Returns on capital and wealth outpace economic growth by a multiple of two or three; the past devours the future. The book's historical data is exhaustive. There has been no real substantive pushback from the right, at least so far. The Forbes.com hacks have predictably attacked the book, in their usual dumb way, and there was a short-lived controversy about the data collection, which Piketty responded to vigorously, but the book has held up to scrutiny. The question might be: why did we think capitalism would distribute wealth in the best possible way in the first place? Faith or reason? Today's US Census data is more evidence of Piketty's thesis: "Gap Between Higher- and Lower-Wealth Households Widens, Census Bureau Reports" www.census.gov/newsroom/releases/archives/income_wealth/cb14-156.html
One nit-pick. The internet is the direct result of military research, sponsored by government. The military needed a reliable, telecommunications network, that would be able to survive a nuclear attack. The result was the development of communications protocols like X.25 and TCP/IP.
Charles Martin Yes you are partially correct. In such that the seed of the internet was planted by a state funded institution, however it grew to the glorious internet of today because of the free market. Simply put, the original designers of the protocols saw it as a file transferring system between two departments/locations of a particular institution. It was only after some private companies (also later released publicly) got access to the network and protocols that it was molded into a peer to peer transfer system of information. Also there is good argument to be made that it would've been invented either way. Computer usage and the access to a computer was going through the roof, it was inevitable that someone would've thought about developing such a network system. (Especially since the basic ideas were being discussed in the 1940's already) If the internet would've been invented by a socialist government, how much would it have progressed without the free market incentives to help it along?
No it didn't, get your head out of your ass --- your government made the internet as well as a lot of the technologies you see before you. Your petty free market doesn't take any risks in the economy, only the government does, and it is why the government is the best source of new technologies. Companies only steal and tweak ideas, never come up with the big ones.
After Korean Air Lines Flight 007, a Boeing 747 carrying 269 people, was shot down in 1983 after straying into the USSR's prohibited airspace, in the vicinity of Sakhalin and Moneron Islands, President Ronald Reagan issued a directive making GPS freely available for civilian use, once it was sufficiently developed, as a common good. As with just about everything used by the military, GPS was designed by civilian contractors.
Prof. Friedman mentioned near the beginning of this video how wartime requires an increased level of central planning and this made me wonder what a peacetime economy would look like. Has it been because we've never experienced peacetime that our government seems always to grow in scope and scale? Surely it's a combination of this and the successes of authoritarianism but since I don't even know what a free marketplace (of goods, services, and ideas) would look like I say, please advise. Peace.
Bro, the only reason war is even incentivised is the fact that money is already centralized. The govt has all the gold and prints dollars every year, and substantially more during wartime and "pandemics". The cost of printing of money is borne by folks in the form of inflation, which we all have been brainwashed to believe is "natural" and "essential". Its like the chicken living in a coop because they're told its good for their health.
The recession of the early 1920s was over in a very short time and the recession of the late 1920s took a decade. The difference was the large government intervention implemented for the first time in a very large scale resulting in the great depression. The same is happening today. Government intervention causing the Nasdaq bubble then the real estate bubble and now the bond bubble.
thompson haire Chomsky is very hard to debate because everything he says is true from a purely factual basis. In order to effectively counter Chomsky's arguments you must develop a holistic understanding of human history and development. Meaning, Chomsky is only unreasonable if his arguments are put into enormous context. For an average audience, it is easy to understand Chomsky, and difficult to understand why Chomsky has huge shortcomings in his judgement. The same is true about economics and politics. It is easy for someone to understand, "Be good to your neighbor," but very difficult to explain to them why a thriving market system is the best thing for their neighbor. I consider conservatives to be at an intellectual disadvantage. It requires no knowledge to understand Chomsky or Socialism, it requires enormous knowledge to understand human development and economics. =/
Wayne Vernon Chomsky is very good, but to declare that "everything he says is true" is, itself, untrue. He is a master cherry-picker, and ignores facts that do not support his position - a sigh of intellectual dishonesty. It is not to say we should dismiss him, but it requires a set of knowledge to know when he is speaking bull vs. something valuable.
BlackFlag2012a Agreed! The point of my statement was to highlight the difficultly of providing an average audience with the context necessary to understand why Chomsky's argument is narrow. =)
In theory Friedman is right about free markets and such, but in reality business interests undermine free market capitalism by monopolizing open markets and governments. Friedman has even alluded to that himself, and I don't understand why he never reconciled that fact with his political philosophy.
+Dave Wolf There's a vast middle ground between what he's advocading and the authoritarian socialism we're experiencing in the West nowadays. No one says free market capitalism would be perfect. But it's always better than the rest. Today's governments are socialist, but they don't even break up the giant monopolizing corporations, because they get paid by them. Why the hell do we need them at all then?
You are refering to crony capitalism which is when BECAUSE of government regulation the "big fish" prevails, usually by finding ways to manipulate the system (the aforementioned regulation to be precise) eradicating small competition. It's all in his books. Try "Free to choose" for starters and his example of train companies in the 1800s.
***** The two have a very distinct definition. Crony capitalism is what happens when large companies take advantage of an invasive and over-regulating state by buying influence so they can use the regulations for their advantage. There are no companies that are "too big to fail" in a capialist system.
***** That's what happens in a free society. There are smart and stupid people, strong and weak people. The smart and strong will take advantage of the stupid and weak. You're the one who thinks that involving the state will make everything better. It just makes it worse. Your arrogance really doesn't help you.
What a childish logic--competition frees all economies, and Marxism was always a failure. Imagine a brilliant businessman earning no more than a custodian. Read some Hayek, and harken back to the Soviet Union to see how evil Marxism was. Grow up.
Here's a quote from Reagan: "For liberty to expand, government must shrink." Free markets allow people to exchange goods and services. Free market in the past enabled our personal liberties to expand and diversity to grow freely. We must protect the abilities for fellow citizen to exchange and engage in productive work just as much as we want it for ourselves.
I was referring to the European debt crisis. I even specifically pointed that out. The housing bubble was created by the govt by lowering lending standards.
Friedmans economics never offered a mechanism within its theoretical structure that would prevent corporations or monopolies from forming much less dismantle them once they come into existence. This may be related to Miltons romantic conception that the US economy is run by the government which is part political ideology and part theoretical model that has no correspondence with the economic history of the past century and a half about which he apparently knows little or nothing. An Economics degree remains the most dismal excuse for an education I can think of. Capitalism which provides the metaphysical object of Economics but remains analogous to one of those luxurious Jaguar sedans that just oozes style but blows your grocery budget at the repair shop. I cannot recall a time when the economy was not in a crisis recovering from one or in the lead up to another. Whatever is wrong is always explained by economists as the fault of some force external to Capitalism. The parenthetical free-market vanishes behind moral philosophy every time it breaks down.
I agree. I honestly think libertarianism/anarcho-capitalism is silly on its face. But I am not so down on economics in general. I do believe the intial response to the 2008 crisis was pretty good, just that the followup response by lawmakers was poor. I believe we could have bounced back much quicker from the housing crisis with a Keynesian approach, which at least recognizes the "zero lower bound."
I also think the many bubbles of the last few decades, with their mini-crises, have more to do with unwise banking deregulations than the Fed. I am fairly optimistic that the disasterous "austerian" policies -- while in a recession -- will finally be thoroughly rejected. The evidence is in and it is pretty obvious that approach failed.
***** I think you have this right and as economists go John Kenneth Galbraith and Michael Perelman between them have produced several dozen books referring to the myth of the self regulating market. This subject could use some levity however. Years ago Francois Mitterrand was quoted as saying when Ronald Reagan asked him why his government had imposed such tight regulatory control over France's banks Mitterand explained," It was our assumption going into the negotiations with the banks on this issue, that if the laws allowed bankers to steal from their depositors and investors, they probably would.". I am of the opinion that Economics has some seriously overblown pretensions to being a natural science that historians are in the process of deflating, which is a far more interesting development than anything that has been produced by the field of Economics in the past century..I think the debate we hear is pretty disingenuous, a conversation would be more productive if it was not kept in-house. Expecting economists to discover truth by argument is a little like trusting police departments to investigate themselves when faced with charges of corruption, There is a real political danger in vesting expertise with authority.
Thanks for sharing those ideas. To me the free market is how much of the wealth those who are in control of the economy can take from those who generate wealth but have no control. Corporate governance in the United States is akin to old British rule and is the anti-thesis of the american revolution.
Beta K Your point is well taken. Friedman speaks for what in American society is roughly equivalent to the landed gentry in England 200 years ago. His vision of society reminiscent of a time when the manor house could afford to keep hundreds in servitude on an income extracted from colonial holdings in the Spice Islands. He relates to the working poor in the abstract or as social inferiors with the moral impunity of a missionary preaching to the savages or to aristocrats as an advocate, a courtier in silk breeches and a powdered wig.
Milton Friedman's policy has sent us on the road to serfdom, thank you Hayek. Thanks to his thinking we have been cutting funding to education, healthcare, and infrastructure to cut taxes for the top 2%, corporate welfare, deregulation, the bailouts, and perpetual warfare. Thanks to Friedman, when the rest of the industrialized world went to a single payer healthcare we buckled down only to have the most expensive healthcare system on the planet.
Unfortunately none of what you wrote above is true. Even when adjusted for inflation, per pupil spending is much higher than when Friedman was in his heyday, in the 1970s and 1980s. Yes, it has declined since 2010, but 2010 was the high water mark for educational spending in the history of the country and happened because of the large amount of money allocated in the one time economic stimulus package in response to the recession. In the long run educational spending per pupil is much higher than in the past. Healthcare spending has been rising at a pace above inflation for many years. Medicaid spending rose 11% in 2014 alone, so it's ridiculous to say there have been cuts in funding. CMS estimates that with the ACA expansion, federal, state and local governments will finance 47% of all health spending by 2025, an increase of 2 percent from 2014. Expenditures of government for healthcare are going up, not down. Spending on infrastructure has remained steady in terms of share of GDP, around 2.4 percent. It has not declined in recent years. Its peak was in the 1950s, when the interstate highways were being built. It rose briefly in 2009 and 2010, again because of the attempts to stimulate the economy, but overall has remained fairly constant. If you take 2010 as your start point, then yes, spending has gone down, but taking a single artificially high year and acting like its the norm is dishonest. None of your assertions are factual. I realize that harping on these issues is convenient politically and sounds good for people who think in soundbites, but the numbers are just not in your favor. Moreover, Friedman did not advocate any of the policies you are demonizing, save two. He was against corporate welfare in very strong terms. He would also have been against bailouts (as well as the policies that led to them) and he certainly was not in favor of perpetual war. He was absolutely in favor of deregulation, but I'm unsure how deregulation has led to any decrease in spending (which I have already shown hasn't happened in any event). Friedman would certainly have been in favor of cutting taxes, but not exclusively for high income earners as you maintain, but again cutting taxes has not, in fact, led to spending decreases. If you disagree with the man, fine, but at least base your argument in facts.
pebutts If you disagree with the man, fine, but at least base your arguments on facts. How can someone expect that from leftists? After all, they call themselves liberals, which is the furthest thing from what they are.
+pebutts Friedman was a hypocrite, he talked free market, but what he really admired was *absolute control.* He wanted a rigged system, that subjugated the masses, and to keep them demoralized to the point to where they can no longer afford to even speak out. Milton Friedman was the master teacher of double speak. Like his so called "Miracle of Chile" or even the concept of shock doctrine, which they had perfected with Japan in the 90's in the name of "privatization", and are utilizing with the NHS in the UK. Not one of his concepts have done any good to humanity or has shown any true economic strength. It's as if in his youth he learned how people profited from the Great Depression then read 1984 and decided he new how to fix the world. When it comes to education you have to remember that even Friedman himself got his education from social programs as well as his father. Even his tenure as a professor is an example on how he truly didn't believe in a "free" market, he certainly didn't want a "fair" market. Medicaid "spending" has gone up, however it's "funding" has gone down. Yes there is more money involved, but there are also a lot more people involved as well. There are over 4 times the population in our time, as compared to Friedman's time in Chicago, and the tax system is completely different as well, in fact it's the exact opposite thanks to Friedman. FYI the '08- '09 bailout was actually based on Friedman's theories. www.pnhp.org/sites/default/files/Funding%20HR%20676_Friedman_7.31.13_proofed.pdf
Interestingly enough, Friedman does not mention that Hayek and he were both vociferous defenders of the brutal military junta of General Augusto Pinoche in Chile. Knowing this and hearing either economist pontificate on freedom seems surreal. Of the two it was Hayek I believe who was the true inspiration for the capitalist crusaders who slaughtered untold thousands of peasants trade unionists and even Roman Catholic nuns during a US backed reign of right wing terror that spread across Latin America during the 1980's. The junta justified this program of rape torture and mass murder on the advice of Chicago School economists, as necessary to correct fifty years of terrifs, state subsidies to small farmers capital controls labor legislation and social welfare provisions which Hayek referred to as,"half a century of errors". After reading The Road to Serfdom I am left with the impression that Hayek considered Democracy an "error" as well and his vision of capitalist utopia as the path to salvation. It has certainly been a bloody road we have taken in pursuit of that mirage.
Your views must be verified but your exagerating on his intentions. Well the process to change from a socialist policy goverment to a more free market sense is the hardest question to complete. Then again, what the lesser of 2 evils? Communism and socialism has murder millions and the most evil acts in history where done under communist control. You will say then a blance between 2 systems is the right course to take. No gary, the true evil is government. The are men in goverment with their best intentions but is irrelevant. All of their actions cannot be considered as the posible way to make a more productive society. If i have to advocate for a type of goverment I will say the smallest as possible the better.
Friedman's success in beguiling audiences to believe they agree with him is predicated on our willingness to accept his Manichean vision in which we are offered a choice between either Friedman's or Stalin's utopian models of society. Friedman was part of a thought collective of economists, the Mont Pelerin Society who along with the cult following of Ayn Rand, I believe succumbed to hysteria and spent the post war period hiding from their own authoritarian shadows. .
gary morrison I see you even watched and commented on the video in which Friedman cleared up the confusion about his supposed relations with the Chilean government under Pinochet. As stated in the video, he never supported, got paid by or otherwise advised the Chilean government. However, the junta willingly adopted some free market approaches to the economy and economists educated at the university of Chicago were to a great extent responsible for influencing and implementing these changes. To say that Friedman endorsed the violent takeover by the junta on the basis of him supporting their subsequent economic policies is like blaming a supporter of glasnost for supporting Lenin's violent persecutions of dissidents during the revolution. Just as Gorbachev was willing to change the course of the nation, Pinochet was willing to do the same with regards to economics.
Utopia takes its leave of humanity when it sets out to transform society by rational means concentrating power as it produces improvements to repressive technology. In the pursuit of efficiency, human beings who get in the way of such totalizing movements are disposed of in a legal, systematic and orderly fashion. Utopian Capitalism is familiar from previous utopian visions as it promises to free us from the past but the road to freedom is again paved with bones and democracy is once again, its principle adversary. Economists like these who dabble in theories of social engineering are dangerous because they have no other real purpose.
I agree with you there, servicing US federal is 6% of the budget NOW. The problem is once we initiated loose monetary policy, we cut off any possibility of tightening. We've been able to keep yields on the treasuries down because the Fed publishes its POMO calendar in advance, guaranteeing hedge funds and investment firms a riskless profit by frontrunning. Whenever the Fed indicates a return to the norm, whether it be by reverse repo ops, Bernanke giving press conferences,
Agreed and agreed. The right thing for any one person is almost always what preserves their life, or their genetic line. This inherent survivalism makes the free market the most unbiased and efficient distributor of resources.
The false Narrative presented here is that Capitalism does not consolidate power and resources... Over and over we hear the practitioners of capital use examples of non freedoms as their justification... simply put your level of liquidity defines your level of freedom in the capitalist state. The idea that there's an equal opportunity without a heavy dose of regulation is ridiculous... !!! Once the regulation is introduced the cronyism starts. There is simply no way to tame the destructive forces of Capital as a social structure. Competition is only as good as the competitors, and when you are looking at a population of Billions we see the refining process of capital creating ever finer points on everything.. well of course these points are really the tips of Pyramids that are shouldered by the working classes and poor.. along with a reckless squandering of precious resources. I challenge any fan of Capitalism be it the Hayek or Keynsian versions to show where the majority of humanity was served in the long term and not immediately jump to false variations of Communism to do it... Do not lecture me about Stalin or Mao as neither of these men practiced anything other than State Capitalism ...I do not suggest that Communism is better or a solution... I do not believe that it is, but using it as binary prop to propel an either or mentality is simply brain washing manifesting itself.. break out of the box
"I challenge any fan of Capitalism be it the Hayek or Keynsian versions..." Keynesian Capitalism? That's quite the oxymoron. "..to show where the majority of humanity was served in the long term" Currently, electronics and the internet are the best examples of this. It does not exist in a purely free market, but it's certainly more free than most in America today.
MrLibertyFighter Of course Keynesian capitalism. Keynes SAVED capitalism from itself, so you are welcome. Because you don't have the facility of mind to understand well regulated capitalism doesn't mean others can't grasp it.
***** Keynesianism, like the arrogant elitist that its named after, is on extremely shaky grounds, both morally and practically; it is a pseudo-scientific approach to economics, and we can see why when we discover that Keynes himself knew very little of economics. The Keynesian approach generally just equates to government (that is, centralized) interference with the economy via institutionalized debt, inflation, etc. The inherent nature of these principles leaves Keynesianism as diametrically opposed to a moral system of free exchange. An ideology that assumes any group of people can legitimately control and regulate something as profoundly complex and interwoven as a large-scale modern economy, is obviously preposterous on its face. Capitalism is starkly opposed to this. It is simply a FREE market, free of institutionalized coercion, and fundamentally recognizes that all exchanges are between individuals, and does not conflate the discussion to a meaningless goal of the good of "society", that conveniently vague term utilized by socialists across the board to appear to fight for a higher goal than individual liberty....as if there ever could be such a thing! "Keynes SAVED capitalism from itself" This is meaningless at best, morally repulsive at worst. It is akin to saying "coercion saved freedom from itself". It might sound nice, but you need to define your terms. I don't want to put words in your mouth, but perhaps you're thinking of corporatism, or perhaps even fascism?
MrLibertyFighter Indeed, pure capitalism does not worry about the good of society and it shows. More than half the US lived below the poverty line in the year 1900. The 19th century is about as close to pure capitalism as US society will accept, and it was the age of monopolists who bent the government to their will, leaving the rest of us poor saps shut out. A morally bankrupt age marked by slavery, shocking pollution, rampant graft, a financial calamity of one sort or another about every ten years, and exploited industrial workers. Oh yeah, plus gunboat diplomacy protecting monied interests, nevermind human rights, and our unregulated food supply was often just filth mixed in with some meat. Old people didn't have to endure the 'slavery' of Social Security, though, thank God, they got to enjoy the 'freedom' of starving to death. Workers enjoyed the "freedom" to be killed for organizing and given the great 'liberty' to be locked into burning buildings by business owners. The Keynesian approach post-World War II -- which is not a total rejection of capitalism's virtues, despite your cartoonish notions about it -- produced the greatest middle class in world history. It lead to greater social and financial freedom for all, except perhaps aspiring oligarchs. Those are the real world facts, not your pie-in-the-sky libertarian fantasies. When guys like you talk, I wonder what planet you grew up on to believe such silly things. But then I remember guys like you are brainwashed fools who believe right-wing billionaires and their paid representatives when they claim cutting THEIR taxes is good for YOU. Mitt Romney pays a 13% tax rate while I pay over 20%. You are a sucker; I am a realist.
"capitalism does not worry about the good of society" The best you can hope for in an economic system, which is consistent and moral, is that it allows free human action, rewarding effort that produces what individuals voluntarily determine to be the most desirable products and services from a limited amount of resources. This is capitalism to the T. "the good of society" is merely a nebulous phrase, convenient for the purposes of selling a flawed ideology, in this case, Keynesianism. It's irrational to apply the characteristics of an individual human actor to a blob of people, since every person is unique and acts based on certain reasons known only to them (and perhaps a handful of others at times). Only individuals can have rights, as they are the only final and concrete actors within a society. To apply rights or moral imperatives to a construct, such as a group of people, is to be logically incoherent. "More than half the US lived below the poverty line in the year 1900. The 19th century is about as close to pure capitalism as US society will accept" Where does this come from? Who defines the poverty line? Modern poverty line, or the 1900 poverty line? I'm not disagreeing, I simply don't know if this is true. Most importantly, to connect it to the effects of capitalism ad hoc doesn't take full account of the events and history of the time. There were many factors in play, and this a huge topic to delve into in itself. "it was the age of monopolists who bent the government to their will, leaving the rest of us poor saps shut out. A morally bankrupt age marked by slavery, a financial calamity of one sort or another about every ten years, and exploited industrial workers." This does not necessitate the conclusion that the culprit is capitalism. If this is your logic, then certainly you see this happening today, and the culprit is Keynesianism. Slavery is not overt and obvious like it was then, but debt is certainly a very real form of slavery. Is there too much capitalism today still? Too much capitalism since "The Keynesian approach post-World War II"? To label actions of certain groups that seek to coerce others, in collusion with the government, as "capitalist" is highly disingenuous. This is better termed fascism, or corporatism. This is a prime reason that I advocate, as reason would suggest, for the separation of money and State. With the monopoly control on money, and a system that requires constant debt, discourages savings, and utilizes inflation to artificially keep currencies level, it should be clear that State and money control do not mix, at least not well for the people. Keynesianism does not fix this issue, as it takes the opposite approach of free human action based in strict property rights. Keynesianism, with its assumption of centralized economic control, is what screws over the middle and lower classes as it creates an environment that encourages abuse of the massively powerful machinery of the government. It also caters to the ability for large masses of capital to influence that very same government, which in turn produces the effect that you mistakenly ascribe to capitalism. This is done by inflationary policies, which always precede a bubble of some sort, the effects of which are the destruction of wealth, waste, and bailing out the connected at the expense of the unconnected. Also, as debt is encouraged to be the solution for a depressed economy, the future wealth creation and productivity of masses of people effectively creates debt slaves of the unborn. That's all for now...I'll hopefully address the rest of your post later.
"the existence of a free market does not of course eliminate the need for government. On the contrary,government is essential both as a forum for determining the "rule of the game "and as a umpire to interpret and enforce the rules decided on"-Milton Friedman
The Federal Reserve has some impact on interest rates, but the key thing that is keeping interest rates low is the fact that capital opportunities which will expand production to meet the needs of people with money are becoming rarer while dollars chasing those opportunities are expanding without bound. Low interest rates are the only possible outcome of consumer demand shrinking drastically compared to capital opportunity demand.
long live hayek, Mises and friedman. Both chicago school & austrian school are right and are useful in different ways. We can't project as austrians say but we can use empirical evidence and stats in history to show how on economic freedom is the answer to everything as chicago school does.
The UCLA report that was published in 2004 claims that the economy was "poised for an economic recovery before the New Deal to recover completely by 1936." Keep in mind that in 1932 Unemployment was already at 25%. The rate of growth necessary to end the great depression in 4 years, that the UCLA claims, is completely unprecedented throughout world history. Those who remember history as it happened, will note that FDR policies had reduced unemployment to 12.5% by 1936.
Big fallacy here at (17:29) to point out one instance. It WAS government (directed) tax payer dollars that provided development of much of the technological advancement that gave us all the goodies including eg. micro wave - not just ovens - but communication systems and devices thereof. The corporate entities adjacent to and involved in those development programs (typically in service to the military) ended up owning those technologies, not the original investors (taxpayers)!
"You cannot simply point to the GDP growth for the same period and assume all was well and dandy." You cannot simply point to Reagan's GDP growth and assume that all was well and dandy.
Countries that pursued expansionary fiscal policies have performed better since 2008 than those who didn't. In fact, the evidence is overwhelming that cutting government spending in a recession is the exact wrong thing to do. That is why Keynes' reputation has experienced such a sudden resurgence the last five years. Have you noticed that? He has a lot to say about depression economics. Hayek's reputation has taken a major blow.
The reason why people do not abandon socialism is simple: It is, in its various forms and permutations, a form of religious movement. Dennis Prager talks about this some, Eric Voegellin talks about it at great length (and much more eloquently).
I am a progressive and I have spent many hours and days learning about free market fundamentalism and "real" liberalism. I do this to have a holistic understanding of the best way to move forward as a nation economically and politically. Call progressives and liberals all the names you want but real progressives are often much more open minded to counter ideas than real conservatives in my experience. One reason why the minority (conservatives/republicans) have any power at all is because of their fundamental belief that they are undoubtedly correct and every other way of thinking is wrong.
+Chris alaniz I have found both conservatives and liberals/progressives (in the modern usages of those words) who have marked intolerance of other ideas, usually in direct proportion to how dedicated they are to their respective ideology. In other words, the more diehard liberal or conservative someone is the more they tend to reject all other opinions as being manifestly incorrect. I'm not sure what in your opinion qualifies "real progressives". I do have to say that most of the die hard progressives I have debated were very quick to label those who disagreed with them as sexist, racist, homophobes, or some other perjorative label, enabling dismissal of the opposing argument out of hand rather than engaging and destroying it logically. I've had conservatives do much the same with labels such as traitorous, socialist, and so forth. Unfortunately, your last sentence seems to betray some level of this sort of thinking on your part. I fail to see how a belief held by someone that they are correct translates into political power. Perhaps you could explain your statement.
The conservatives have all the power? Please explain that. From my experiences the people with power are the people who work the hardest, are the smartest, and the most creative. Politics has nothing to do with it. There are exceptions. Inheritance is one. But money isn't always power. Just a perception of it.
If politicians from both sides, including President Obama, would read and actually understand Keynes we would have avoided a lot of the misery we are going through right now. Instead, we have this misguided obsession with deficits. Deficits are a problem but you DO NOT cut government spending when you have high unemployment. You cut government spending during good times. That is the heart of Keynesian economics and people just can't intuitively grasp it. Our leaders, however, should know better.
thank you for provide evidence to proove my claim. The new deal lasted from 1933 to 1938 and it looks like unemployment went down. Also it was cut back in the later 2 years.
it can only be uplifting because it is simply freedom, the natural and ideal state of man. It is a state where each and every person can do the most good to help his/her situation in an uplifting manner which does not infringe on the equal rights of others.
Thanks for pointing that out. Many people must have missed that class, or school house rock which taught the way the government works between Saturday morning cartoons.
You are correct, what we have here is called a democratic republic or representative republic if you will. Instead of him being appointed he's voted in but somewhere along the line got kinda screwed up. Some of us are trying to bring that back, Please don't assume we are like our politicians, we're not, we usually dislike or even hate some of them. thank you for pointing out this grave mistake, we are trying to rectify it.
Another way of looking at single payer healthcare is, Canada pays an average of about $4000 a person in taxes on health care and 0 people die of lack of insurance. US pays about $4000 a person in taxes each year plus another $3000 in premiums, medical bills, etc., and 45,000 people a year die of lack of insurance.
The GDP growth holds almost constant, despite wild fluctuations in the tax rate. The growth rate fluctuates, with less volatility since about 1985, again, regardless of the income tax rate.
Hayek was the darling of the political right, as was Friedman. In fact Friedman became a consultant to the Chilean dictator Pinoche' after the duly elected president of Chile, Allende was overthrown. Being a 'monotarist', Friedman was hired to resolve a problem with hyper- inflation. Pinoche was responsible for the brutal murders of thousands of Chileans.
Through most of my life, I have ran a deficit. I bought a house that was about 150% of my yearly GDP. Add on the car payment and my student loans, I was pushing about 200% of my GDP/debt ratio. (~) The US is at about 90% GDP debt/ratio right now, if we are comparing people to governments as John Beohner was doing this morning. Well, the "American People" do NOT pay ALL of their debts every month. They make payments, just like the government.
Pardon my english, im German, but I try to be as precise as possible.... So far I understand, that for Hayek Freedom is the Freedom of private property. What exactly is this freedom? It is the right of the owner of private Property to exclude everyone else from it, and use it for his/her own benefit. I agree, that this IS actually freedom. But I disagree with the notion that Freedom is a good thing. A mode of Production should be judged by its capability of producing what a society needs, with the least effort, so that, after the necessitys of labor are done, people have disposable time. This exactly NOT what the Sowjet Union did. They used their economical plan in order to get most value out of the peoples labour for their state power. They even had money, to seperate the workers from their products. These are just a few fundamental differences to the critic that Marx had on capitalist mode of production. As for the Nazis. Yes they had 'socialist' in their partyname. But what was their political programm? Organizing strict exploitation of labour and strenghening the big capital, by crushing the labour movement. For them in their "völkische" Ideologie 'socialist' meant, to strenghten the german nation. In both systems you can see, that the peoples needs are subordinate to the common interest of the state. So both systems stood in fundamental contradiction to the critic of Marx, and his yardstick for a rational mode of production. Needles to say, that Libertarism also doesnt accept this yardstick. Since its an ideologie of Freedom it is not interested in a mode of production that serves the people, but a mode of production that serves the owning class.
"Productivity growth was high, but a lot of this was "fake" productivity from paying workers less instead of real productivity from building more. " Then why; "Economic growth in the 1920s was impressive. Ownership of cars, new household appliances, and housing was spread widely through the population. New products and processes of producing those products drove this growth." Hardly "fake" growth. And the income tax merely shows that the top pay the most, this has always been the case.
Who Hayek or Milton? Milton i havent read much on...really havent gotten to him yet. As i understand it, he argued in favor of the Fed to a certain degree, which ofcourse is an inslovent policy. Please clarify a question before you pose it, ill be happy to answer.
Finally, a market is collection of people bidding on things. Freeing a market doesn't necessarily free individuals. You may remember there was such a thing as the slave trade. Capitalism did NOT solve that.
you are so dumb. For real. In order a capitalistic society to work, you need to have individual rights. Slavery is the anti-thesis of individual rights. 2. Machines would've eventually made it more expensive to keep and maintain slaves.
It is also important to note the GDP and GDP growth rates for the same periods. For the data available, there is an upward trend in most countries, following similar boom-bust cycles as the US, sometimes earlier, sometimes later and all with different tax structures. Compare per capita GDP for Hong Kong and the UK, with vastly different tax rates, they have very similar outcomes, with HK doing better in the long run.
For example, comparatively little was done in response to the dot-com crash, and the following recession was relatively short and shallow. The response to the housing bubble and its ties to major banks has been quite expensive and aggressive, yet the unemployment rates remain stubbornly high and growth rates stubbornly low for much longer than projected had the government done nothing. In other words, tinkering and bailouts made the situation worse.
Indeed Piketty states that r>g, which, if you look around you, seems to have truth in it. In my mind Friedman points out this issue as well, although implicitely. He states that due to all the governmental regulation, conditions have been created that protect the ones "on top". It has become very difficult to get in between if you are small. The solution therefore, is not to increase government but to reduce government and its regulations. This would enable others to join in a real system of competition. Furthermore anti-trust is a tool to reduce the size of for example financial institutions. The call for more government is call for sure failure. That is an historic fact that does not need another thick book.
That is not what PIketty or the data says. It says r>g because that is the natural way capitalism works, not because of government intervention. Piketty recommends that governments raise taxes on inherited wealth and capital accumulation, the exact opposite of what you are saying. Maybe you should actually read the book, your comment betrays your ignorance.
arjanv45 Glad you could get back to me so fast. Point is Piketty doesn't agree with you. At least I think, I was a much younger man when I wrote that post. ;)
"And another thing...to think government run health care will be efficient and cheaper is living in fantasyland." Actually, to think government-run health care will be cheaper is to be in possession of the actual costs anywhere where it is implemented, currently.
It's in capitalistic countries that all of these { child labor, monopolies, unsafe food and water and environmental degradation } have the most improved over the last 100 years. Not to mention the medical benefit from pharmaceutical drugs.
"It wasn't government that produced microwave/computers" - could he be more wrong? Microwave is a product of British government research, so are computers.
Several interesting details in that article. Union membership went from 18% to 10%. I take this as confirmation of the free market bias over that period. Productivity growth was high, but a lot of this was "fake" productivity from paying workers less instead of real productivity from building more. The article also lists income tax returns by bracket and it confirms that all the growth of the 20s was at the top.
The government didn't fund the Internet. Bitnet, IBMnet, Compuserv, and others provided "internets" for business and private users that served millions of customers outside of the government funded ARPAnet. I had a Compuserv account for ten years before the Internet was opened to the great unwashed public circa 1994.
The artificially low interest rates in the late 20s were caused by the federal reserve, which again, is counter to the Fed's purpose which is to maintain a stable money supply. But in any case, the bubble popped, but that wasn't the cause of the depression, it was the interventionist response to the pop, which led to the destruction of about a third of the money in the country. Other countries, such as Britain, had a less aggressive response to the crash and recovered faster.
The government at that time wanted to give greater credit access to those who would normally be denied loans/mortgages.The greater access to credit is what caused the housing crisis.Fannie Mae and Freddie Mac were involved in many of the mortgage issuances that were sold in bond packages by subprime players.If the government had not gotten involved in the mortgage market,the crisis probably wouldn't have happened in the first place.But the crisis DID depend on big bank greed.so i somewhat agree
In Canada, people pay $4000 in taxes each for health care and 0 die because of lack of insurance. In US, people pay $4000 in taxes each year for health care, then pay another $3000 on insurance premiums, medical bills, etc., and 45,000 people die because they don't have insurance.
With respect to Greenspan, he had the misunderstanding that Corporations can have motivations. Corporations do not have motivations, what they have are CEOs. The system did not fail, but rather did exactly what it was intended to - put millions of dollars in the pockets of the people running the corporations. Anybody sloppy enough to think that a corporation is a separate collectivist entity that makes decisions on behalf of it's own self interests deserves to be deceived.
In actual fact, Hoover raised taxes and Kennedy lowered them. Clinton raised the income tax, but lowered the Capital Gains Tax and has more recently called for the lowering of the corporate income tax. Eisenhower raised the top income tax rate, while Reagan lowered it. Nixon and FDR had wage controls. And, of course, Bush 43 and Obama spend like mad-men. Both issued bailouts, both expanded entitlements, both went to war.
Of course food stamps went up after 2008. That is the whole point of the program! It is meant to help people in need. Unemployment is MEANT to help unemployed people. It goes up when more people are unemployed. But the GOP painted this as a failure of government when the entire cause of our collapse was PRIVATE debt, unregulated banking, not public debt. I shake my head.
