Greatest economists

My Top 10 Favorite Insights from One of the Greatest Economists of the 20th Century [Videos]

Craig HueyEconomics, Government, Congress, and Politics Leave a Comment

The late Dr. Milton Friedman profoundly helped educate millions of people about freedom and the free market.

With great clarity and simplicity, he taught people why socialism is immoral and unsustainable … and only freedom and free enterprise helps lift people out of poverty and creates prosperity.

Here are 10 of Friedman’s top insights:

1. There is nothing as permanent as a temporary government program.

The goal of all government bureaucrats and bureaucracies is to expand and increase their funding and their authority over our lives.

Many government tax increases and programs are sold to voters on the pretext that they are only temporary – until such-and-such problem is fixed or eliminated…

But the problem is never solved. It just gets bigger, requiring more money and a larger bureaucracy.

2. Many well-meaning people favor legal minimum-wage rates in the mistaken belief that they help the poor.

Those who argue for increases in the minimum wage confuse wage rates with wage income.

People are not better off unemployed at $15 per hour than employed at $7.50 per hour.

Friedman says, “The rise in the legal minimum-wage rate is a monument to the power of superficial thinking.”

3. First of all, the government doesn’t have any responsibility to the poor – people have responsibility.

“Second, the question is how can we as people exercise our responsibility to our fellow man most effectively? That’s the problem. So far as poverty is concerned, there has never been a more effective machine for eliminating poverty than the free enterprise system and the free market. The period in which you had the greatest improvement in the lot of the ordinary man was the period of the 19th and early 20th century.”

4. The government solution to a problem is usually as bad as the problem.

There are many reasons for this. Here are 3 of the most obvious:

  • The Law of Unintended Consequences – politicians and government bureaucrats fail to see the big picture. They don’t look forward and analyze what impact their “solution” will have in other areas of society.
  • The politicians and bureaucrats who create “solutions” for societal problems aren’t experiencing the problems themselves. They are too far removed from the problem they are trying to solve.
  • The politicians and bureaucrats have no “skin in the game.” Since they aren’t suffering from the problem themselves, there are no adverse consequences for them if their solutions fail. They are rarely held accountable for failed policies and “solutions.”

Increasing the minimum wage to “solve” the problem of poverty is a good example of the cure being worse than the problem. See our previous article on how the minimum wage is hurting, not helping, the poor. Click here.

5. The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.

The Great Depression was caused by government mismanagement of the Federal Reserve System – created in 1913 in an effort to create a more stable and secure financial system.

Guess what?

Another example of the “solution” being worse than the problem.

6. President Kenedy said, “Ask not what your country can do for you – ask what you can do for your country.” Neither half of that statement expresses a relation between the citizen and his government that is worthy of the ideals of free men in a free society.

Friedman explains:

“What your country can do for you” implies that the government is the patron, the citizen the ward. “What you can do for your country” assumes that the government is the master, and the citizen the servant.

7. If you look at the drug war from a purely economic point of view, the role of the government is to protect the drug cartel. That’s literally true.

Think about how the government protects the big pharmaceutical companies – the drug “cartel” of legal drugs. All the myriad government regulations of the pharmaceutical industry are designed to control the market and prevent any new competitors from entering the market.

8. What most people really object to when they object to a free market is that it is so hard for them to shape it to their own will.

The market gives people what they want rather than what other people think they ought to want.

Friedman says, “At the bottom of many criticisms of the market economy is really a lack of belief in freedom itself.”

9. The great achievements of civilizations have not come from government bureaus.

Albert Einstein didn’t construct his theory of general relativity under orders from a government agency. Nor did Henry Ford revolutionize the automobile industry under government mandate.

The only examples in recorded history in which the masses have escaped from grinding poverty have been societies where capitalism and free trade have existed.

Says Milton Friedman, “…there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.”

10. The problem of social organization is how to set up an arrangement under which greed will do the least harm. Capitalism is that kind of a system.

By nature, humans are greedy. In any developed, industrialized nation, the government is greedy. Politicians are greedy. Bureaucrats are greedy. Businessmen are greedy.

Greed can’t be legislated out of human nature. The issue is not to try to eliminate it, but to subdue it as much as possible without eliminating freedom.

Milton Friedman appeared on the Phil Donahue show in 1979 and discussed this…

He challenged Donahue to name one modern country in which greed didn’t exist. Donahue couldn’t give an example.

Watch the entire interview here (45 minutes).

Or watch a shorter excerpt in which Friedman explains to Donahue why socialism fails (2 ½ minutes).

To learn more about Milton Friedman … and to access his collected works,click here.

What do you think? Email me at

Here are the rest of this week’s articles:

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