Milton Friedman's Lesson Still Rings True

Wednesday, 09 Jun 2010 09:46 AM

By John Stossel

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
America's current struggles notwithstanding, life here is pretty good. We have a standard of living that's the envy of most of the world.

Why did that happen? Prosperity isn't the norm. Throughout history and throughout the world, poverty has been the norm. Most of the world still lives in dire poverty.

Of the 6 billion people on earth, perhaps 1 billion have something close to our standard of living. Why did America prosper when most of the people of the world are still poor?

Milton Friedman taught me the answer. More than any other American, Friedman, who won the Nobel Prize in economics in 1976, clearly warned the world about the unintended consequences of big government.

"We've become increasingly dependent on government," said Friedman. "We've surrendered power to government; nobody has taken it from us. It's our doing. The results — monumental government spending, much of it wasted, little of it going to the people whom we would like to see helped."

That's from Friedman's PBS TV series "Free to Choose," which aired 30 years ago and became the basis of his No. 1 best-seller by the same name. We'll celebrate the anniversary of "Free to Choose" on my Fox Business show Thursday night.

The title says a lot. If we are free to make our own choices, we prosper. That was a new idea to many back then. At the time — when inflation and interest rates were in double digits and unemployment approached 10 percent — people thought a wise government could ensure economic growth, guarantee full employment, and eliminate poverty.

Friedman explained that the opposite was true, that bigger government had brought us "burdensome taxes, high inflation, a welfare system under which neither those who receive help nor those who pay for it are satisfied. Trying to do good with other people's money simply has not worked."

No, it hasn't. So why, 30 years later, is America doing so much more of it?

Because people still have not learned Friedman's lesson.

Because of that, I give money to a charity (Stosselintheclassroom.org) that offers teachers free copies of some of my TV news videos that explain the benefits of free markets.

The video most popular in high schools is one in which I ask students, "When so many nations remain poor, why did America become prosperous?" Many answer, "Because we have democracy." Yet India has democracy, and India has been poor for years. "India is overpopulated," they say. They don't know that India has the same population density as New Jersey.

Other students suggest that America prospered because of our natural resources. But Hong Kong has no natural resources. It's basically a rock. It is also more densely populated than India. Yet, in just 50 years, Hong Kong went from poverty to American levels of wealth.

How? In "Free to Choose," Friedman explained that it was the free market. Overlooking the amazing Hong Kong skyline, he said: "This miracle hasn't been achieved by government action — by someone sitting in one of those tall buildings and telling people what to do. It's been achieved by allowing the market to work."

Walking down a crowded street, he added, "They are free to buy from whom they want, to sell to whom they want, to work for whom they want.

Sometimes it looks like chaos, and so it is, but underneath it's highly organized by the impersonal forces of a free marketplace."

At the time of his series, India was a symbol of enlightened central planning.

"India has tremendous economic and human potential," Friedman commented. "The human tragedy is that in India that potential has been stifled by the straightjacket imposed by an all-wise and paternalistic government. Central planning has condemned India's masses to poverty and misery."

What counted most for Friedman was that people should be free to try innovative ideas and succeed . . . or fail.

"The free market enables people . . . to trade with whomever they want; to buy in the cheapest market around the world . . . But most important of all: If they fail, they bear the cost."

"Most important of all." It's clear what he would have thought of today's government bailouts.

John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "Give Me a Break" and of "Myth, Lies, and Downright Stupidity." To find out more about John Stossel, visit his site at www.johnstossel.com.



© Creators Syndicate Inc.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Let Private Firms Handle the Roads

Wednesday, 16 Jul 2014 12:43 PM

Roads and bridges need work. But too little transportation money spent by government goes to building and repairing road . . .

Obama Mocked for Telling Basic Truths

Wednesday, 09 Jul 2014 14:22 PM

Wars, plane crashes, mass murder , it's easy to report news that happens suddenly. Reporters do a good job covering that . . .

Get Rid of the Export-Import Bank

Wednesday, 02 Jul 2014 10:17 AM

There's capitalism, and then there's "crapitalism" , crony capitalism. Capitalism is great because it lets entrepreneurs . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved