Milton Friedman: Government's Drive for Power

Milton Friedman explains the dynamics of government, power and the free market. The video is a series of excerpts from C-Span's book discussion on The Road to Serfdom with Milton Friedman, October 28^th, 1994. The entire interview can be viewed on C-Span here.

Video source: LibertyPen YouTube kanal

(see video at the bottom of transcript)

transcript:

Milton Friedman:

The collapse of the Berlin Wall, for example, was undoubtedly the most influential action for the last hundred years because it put finis to an attitude. The general attitude had been that the future was the future of government, that the way in which you got good things done was by having government do it. I believe the collapse of the Berlin Wall and the exposure of what was happening in Russia, the contrast between East Germany and West Germany has been made a lesson; more recently, the experience of East Asia, of Hong Kong, of Singapore. So that today people may not behave in accordance with their knowledge, but everybody knows that the way to develop and to improve the lot of people is through private markets, free enterprise and small government. We're not practicing what we should be preaching. I've been saying that the former communist states are trying as hard as they can to go to where we were 50 years ago, whereas we're trying as hard as we can to go to where they were 10 years ago.

Brian Lamb:

Why?

Milton Friedman:

Because of the inertia and the drive for power. It's very hard to turn things around. The big problem with government, as Hayek points out, is that once you start doing something, you establish vested interests, and it's extremely difficult to stop and turn that around. Look at our school system. How is it our school system is worse today than it was 50 years ago? Look at the welfare state. We've spent trillions of dollars without any success. But unsuccessful experiments in government - I've said if an experiment in private enterprise is unsuccessful, people lose money and they have to close it down. If an experiment in government is unsuccessful, it's always expanded.

Brian Lamb:

What is it that government does that you like?

Milton Friedman:

I would like government to enforce law and order. I would like government to provide the rules, effectively, that guide our life, that determine what's proper and to do very little other than that.

Brian Lamb:

What kind of a grade do you give to the American system of government today? How is it working?

Milton Friedman:

As it was in 1928 or as it is in 1994? It's a great system. The fundamental system is great, but it hasn't been working in the last 30 years.

Brian Lamb:

Why not?

Milton Friedman:

Because we've been departing from its fundamental principles. The founders of our country believed in individual freedom, believed in leaving people be, letting them be alone to do whatever they wanted to do. But our government has been increasingly departing from those constitutional principles. You know, there's a provision in the constitution that Congress shall not interfere with interstate commerce. That provision had some meaning at one time, but it has no meaning now at all. Our courts have ruled that anything you can think of is interstate commerce, and so the government exercises extensive control over things that it has no business interfering with.

Brian Lamb:

Another one of our "Booknotes" guests in this series is John Kenneth Galbraith.

Milton Friedman:

Yes.

Brian Lamb:

If you put the two of you in a room together, which one's the happiest with what's happened over the last 50 years?

Milton Friedman:

Ken would be much happier than I would be.

Brian Lamb:

Why would he be?

Milton Friedman:

Because he's a socialist.

Brian Lamb:

Why do you think he's happier and why do you think his side's been more successful?

Milton Friedman:

Because the story they tell is a very simple story, easy to sell. If there's something bad, it must be an evil person who's done it. If you want something done, you've got to do it. You've got to have government step in and do it. The story Hayek and I want to tell is a much more sophisticated and complicated story, that somehow or other there exists this subtle system in which, without any individual trying to control it, there is a system under which people in seeking to promote their own interests will also promote the well-being of the country - Adam Smith's invisible hand. Now, that's a very sophisticated story. It's hard to understand how you can get a complex interrelated system without anybody controlling it. Moreover, the benefits from government tend to be concentrated; the costs tend to be disbursed. To each farmer, the subsidy he gets from the government means a great deal. To each of a much larger number of consumers, it costs very little. And consequently, those who feed at the trough of government tend to be politically much more powerful than those who provide it with the wherewithal.