Home Cultural Issues Other Cultural Issues Prager 5 Minute Videos Milton Friedman: No Free Lunch
Prager 5 Minute Videos

Milton Friedman: No Free Lunch

47
139
0



Few people have had as profound an impact on modern economics as economist Milton Friedman. His Nobel Prize-winning ideas on free enterprise resonated throughout the world and continue to do so. Johan Norberg, Senior Fellow at the Cato Institute, tells Friedman’s fascinating story.

#miltonfriedman #economics #friedman #freemarket

SUBSCRIBE 👉 https://www.prageru.com/join/

📲 Take PragerU videos with you everywhere you go. Download our free mobile app!
Download for Apple iOS ➡ https://itunes.apple.com/us/app/prage…
Download for Android ➡ https://play.google.com/store/apps/de…

Script:

“There is no such thing as a free lunch.”

That’s basically all you need to know about economics—or for that matter, about life.

Everything comes with a price and there are no perfect solutions, only trade-offs.

If you think you’re getting something for “free,” you’re fooling yourself. One way or another somebody has to pay for it—and that “somebody” usually includes you!

This bit of priceless wisdom was popularized in the 1970s by University of Chicago economist, Milton Friedman. And it made him, along with his many other penetrating insights, the most influential economist of his time.

Born in Brooklyn in 1912, the son of two poor Jewish immigrants from what is now Ukraine, Friedman never took the opportunities America offered him for granted. He devoted his life to making the case for free enterprise. No one has ever made it more persuasively.

His scholarly work centered on monetary theory, the idea that the growth or contraction of the money supply has a profound impact on a nation’s economy. The Great Depression of the 1930s, which had caused so much suffering, and which Friedman had lived through personally, made his case.

Friedman showed that the Depression was not a failure of an out-of-control free market, but an out-of-control Federal Reserve—the Fed—the central bank of the United States.

Instead of keeping the money supply stable in a recession, the Fed choked it off. This started a series of “bank runs”—people literally running to get their money out of their bank before their bank ran out of money.

But that, according to Friedman, was not the Fed’s biggest mistake. The biggest mistake was that the Fed existed at all. No Fed, Friedman believed, no Great Depression. The free market would have figured things out on its own just as it had in previous economic upheavals.

But the Fed’s members had no confidence in the market. Their confidence was in their own ability to fine-tune America’s incredibly complex economy.

This confidence was misplaced. The Fed, and the President who dominated the decade, Franklin Roosevelt, made one bad decision after another, and the Depression dragged on.

Friedman saw another grave mistake being done in the early 1970s. He made the bold prediction that the Fed’s efforts to print money to keep the country out of a recession would lead to something worse: stagflation, the combination of high inflation and high unemployment.

And that’s exactly what happened. Many economists who had previously dismissed Friedman now acknowledged that he was right. In 1976, he received the Nobel Prize in Economics, yet another vindication of his work.

But as perceptive as his economic theories were, his special gift was his ability to explain his theories to the public and his willingness, indeed eagerness, to do so.

He wrote best-selling books and had a column in Newsweek for 18 years. In 1980 he hosted the popular ten-part TV series Free to Choose for PBS.

The theme of the show was pure Friedman: while others trusted the government to make good decisions, Friedman trusted people and the market.

Excessive government control, regulation, and taxation, he persuasively argued, distorted incentives and put money in the hands of politicians and bureaucrats who had not earned it and suffered no consequences if their policies failed.

There were other ways government intervention distorted the free market, Friedman said: protectionism, for example, increased prices for consumers and discouraged innovation; overregulation allowed big business with its lawyers and lobbyists to drive out small competitors; minimum wage laws led to fewer jobs for those who needed them most.

It all followed from Friedman’s basic idea that millions of people working for their own purposes could make better decisions than a bunch of unelected bureaucrats who had no stake in the outcome.

But Friedman didn’t just complain about the problem. He had solutions ready when and where they were needed.

For the complete script, visit: https://www.prageru.com/video/milton-friedman-no-free-lunch

source

Click to rate this post!
[Total: 0 Average: 0]
Post Views: 139
Previous Post
1701962194_maxresdefault.jpg

What Were Your Reasons for Not Believing in Jesus?

Next Post
1700001856_maxresdefault.jpg

The Book of Revelation – Session 8 of 24 – A Remastered Commentary by Chuck Missler

Related posts

Leave your comment

47 Comments

  16. was Israel influenced by freedmen ? Israel never recovered entirely from its socialist roots and still taxes too much and overspends too much for its too many ministers who all want power and budgets and doo to it's way to many parties the government has to be corrupts other wise there is no government.

  17. Big business seems to think there's a free lunch. They get millions if not billions in subsidies combined with billions if not more and lower taxes and fees. 2/3 of the Walmart workforce gets paid minimum wage since their part-time no health Care then require government social programs. Who is the real welfare Queen?

  19. " What happened was that from 1929 to 1933 you had a major contraction which, in my opinion, was caused primarily by the failure of the Federal Reserve System, to follow the course of action for which it was set up. It was set up to prevent exactly what happened from 1929 to 1933. But instead of preventing it, they facilitated it. "

    "The Federal Reserve allowed the quantity of money to decline by a third. "

    You are lying and disgracing Milton Friedman's image. In this quote he quite clearly describes how it was the Federal Reserve's LACK of action, and their failure to increase the money supply, that caused the Great Depression. You are implying that the federal reserve engaged in some kind of "reckless spending" in comparison to the "free market". Then you flip the script and point out that it was them "choking" the money supply. That just doesn't make sense.

    You then claim that Friedman opposes the existence of the Fed entirety, which is only partially true. He did believe that in a perfect world the fed would be a computer program, but he still understood the reality that we live in, and that a human managed central bank system is the reality we live in.

    "MILTON FRIEDMAN: We got out of that mess because in 1980 to 1982, newly elected President Reagan supported the Federal Reserve in following a policy of slowing down sharply the rate of monetary growth. No other president in the twentieth century in my opinion would have stood by without trying to prevent the Fed from doing what it was doing, because the only way you could get out of that inflation was by suffering a recession. And the contractionary policy of the Fed from 1980 to 1982 led to a very severe recession, triggered by a later chairman of the Fed, Paul Volcker. And Reagan's courage in your judgment was to back him. At the time, at the depth of the depression in 1982, Reagan's poll standings had gone way down. Every other president, in my opinion, would have brought pressure on Volcker to reverse policy. Reagan did not do so. "

    This is Friedman thanking Reagan for allowing the federal reserve to engage in contractionary monetary policy to save the economy from inflation.

    Dumb video

  21. this video severely lacks the cons of Friedman economics. Cherry picking again, Free market is proposed as a utopian system which just needs to be attained and Capitalism will shed all of its negative points. Why dont you just shove it up your

  35. This man Milton Friedman completely changed my view on capitalism and Prager U changed my view on conservatives. As an African I used to wonder how 50% of the US population can be conservatives meaning racist and support capitalism which exploits the poor but after discovering Milton Friedman and Prager U my view completely changed view. Kudos to both of you.

  36. True, no fed = no Great Depression.
    But, their mistake was in inflating the money supply in the first place, creating the artificial boom of the 20’s. After a boom like that, a recession had to happen. It was an unavoidable result of the boom.

  38. Actually, Friedman didn't originate the phrase. Nor did he really popularize it. The phase was in use in the 30's, but tracking where it came from is difficult.

    What put in popular consciousness was SciFi author Robert Heinlein, with his novel The Moon is a Harsh Mistress. The phrase is central to the novel and put it in popular awareness. That is where Friedman heard it.

    Heinlein published Moon in 1966, nearly a decade before Friedman spoke it.

  39. There is no free lunch because everything requires effort and resources to produce. Nothing magically appears out of thin air. If you are getting something without doing anything in return, you're living off of someone else's labor. Socialists think this is fine because, in their world view, those who need are automatically entitled.

  47. Johan Norberg has always been visible in my life ever since I started being an avid learner of economics, via Free to Choose, and it is profoundly cool that he is one of the voices who lead the charge for a free and prosperous society.

    I remember the time when he answered my comment about the welfare state and how it will lead people to worse situations.