Living Within Our Means

The following 30 minute video depicts Milton Friedman at his best.  This interview allows Milton to discuss several of his most important topics.  One of his famous quotations is near the beginning of this video “One of the great mistakes is to judge policies and programs by their intentions rather than their results”.  His ability to present uncomplicated answers to complex questions is superb.  This video is now listed in the permanent links on this blog to the right of this text under “View these videos”.

This video is from the PBS show "The Open Mind", Moderator/Host Richard D. Heffner, Guest: Milton Friedman, economist, Sunday, December 7, 1975:

PBS Open Minds

You should invest 30 minutes of your time to watch this video in its entirety, if for no other reason to see how fluidly Milton is able to think through these questions and give such easily understood answers.

If you do not have the time now here are some of the highlights:

One of the great mistakes is to judge policies and programs by their intentions rather than their results. We all know a famous road that is paved with good intentions. The people who go around talking about their soft heart, I admire them for the softness of their heart, but unfortunately, it very often extends to their head as well, because the fact is that the programs that are labeled as being for the poor, for the needy, almost always have effects exactly the opposite of those which their well-intentioned sponsors intend them to have.

Let me give you a very simple example. Take the minimum wage law. Its well-meaning sponsors — there are always in these cases two groups of sponsors. There are the well-meaning sponsors and there are the special interests who are using the well-meaning sponsors as front men. You almost always when you have bad programs have an unholy coalition of the do-gooders on the one hand and the special interests on the other. The minimum wage law is as clear a case as you could want. The special interests are, of course, the trade unions, the monopolistic craft trade unions in particular.

You see, I think there’s been one underlying basic fallacy in this whole set of Social Security and Welfare measures. And that is the fallacy — this is at the bottom of it — the fallacy that it is feasible and possible to do good with other people’s money. Now, you see that fallacy — that view — has two flaws. If I want to do good with other people’s money I’d first have to take it away from them. That means that the welfare state philosophy of doing good with other people’s money, at its very bottom, is a philosophy of violence and coercion. It’s against freedom, because I have to use force to get the money. In the second place, very few people spend other people’s money as carefully as they spend their own.

But if you take the road that we have been on, we are heading towards a destruction of our free society and towards a totalitarian society.... we still have time to avoid it. But we will not avoid it unless the people of this country recognize the danger and take very difficult and important steps to set a limit on the extent to which they are going to permit government to interfere with their lives.

Well, I say thank God for government waste. If government is doing bad things, it’s only the waste that prevents the harm from being greater. And the waste of government has two very important elements. Number one, if government were now spending.…efficiently, we’d be slaves now. And in the second place, the waste is so obvious that it arouses a counter­movement on the population at large, people are disillusioned with government and it increases the chance that they will recognize where this road is taking them and get off that train before it goes all the way.