Milton Friedman on Self-Interest and the Profit Motive 1of2

This clip is from the 15-part lecture series, "Milton Friedman Speaks"
http://www.ideachannel.com/product_in...

Transcript available via FreedomChannel: http://freedomchannel.blogspot.com/20...


Summary:

A student poses a series of question on based on Friedman's notion that people should pursue their own self-interest. The student points out that he'd read that Friedman had previously come out against disaster aid for victims of a flood in Pennsylvania. Friedman corrected the questioner and noted that he did not come out against private aid for flood victims but instead was against the Federal Government providing discounted flood insurance in advance to home purchasers which motivated people to build houses in areas where they otherwise would not have been able to obtain insurance privately. If not for the discounted insurance, it's likely many of the flooded houses would never have been built in the first place as it wouldn't have been in peoples self-interest.

The student went on to note that it was recently reported that an old man in Ohio died when the electric company turned off his power when he'd failed to pay his electric bill. Was it moral for the company to act in it's own self-interest to do so? Friedman responded by asking what if the electric company never turned off the power for anyone? Who would pay the cost--the people who own or work at the electric company? It would be unjust to impose that responsibility on individuals who are running an honest business of providing electricity. Friedman suggests that the true responsibility lies on the mans neighbors and friends who were not charitable enough to allow him to meet the electric bills.

Finally the student uses the example of Ford deciding not to install a $13 block of plastic which would prevent it's Pinto cars from exploding in a rear-end collision. Ford estimated such a move would cost 200 lives a year at a cost of $200,000 per life lost. They multiplied and found that it wasn't worth it to install the plastic block. He asked if a corporation seeking it's own self-interest was a good thing in this case? Friedman responded by asking, what if it cost $1 billion to save each life, should Ford have put in the block? It's simply not practical to put an infinite value on an individuals life. If it took $1 billion in resources to keep one individual safe, and acquiring those resources meant that a million people must starve, it's a bad deal. Friedman concludes that he doesn't know if the $200,000 number that Ford used was the right number to maximize the overall benefits, but at the end of the day the principle is that we can't simply protect ourselves from everything and impose that cost on others. Friedman posits that the question the student should be raising, is should Ford be required to attach the statement to the car, "we've made this car $13 cheaper, and therefore it is X% more risky for you to buy it".

See also:

Free to Choose - All 15 episodes streaming online for free
http://www.ideachannel.tv

A history of Free to Choose
http://www.freetochoose.com

• Category

  News & Politics

[Piglatinsuperstar]

and like the child he is, the little boy in him arises refusing to take responsiblity for his misdeeds, refusing to cut the bunk

but 16 yrs of increased deficits. erased surpluses in the name of lowering taxes, says otherwise

the result each time dropping tax rates on the rich? misery for the rest of us cutting services, including the sequester, skimping on airline safety until it came time for the rich to realize they were being inconvenienced by the interruption in those same govt services

[Rulerzful]

"it demonstrated that by lowering taxes, u stretch out deficits."

Do you have any idea what a rational budget means?

"stop blaming govt for your failed practices. you dont even know what government IS! you and people like yourself are part of a cultist movement, looking out ONLY for the interests of the rich"

LOL....... Im quoting this one.

[Piglatinsuperstar]

HELL NO! I would never vote for Reagan! I'm not that naive. He stabbed the voters who were stupid enough to have voted for him, in the back. Double crosser is what he was. Reagan, who was just an actor, like the rest of his party, thought he knew best, put his cultish economic policies into practice, practices that benefitted only the wealthy. then when evidence of his policies began failing, what did he do? He made the middle class pay for it, and the middle class has been paying for it since

[Piglatinsuperstar]

wrong again right wing flunkie. U sang that song before punk and the country keeps rejecting your scam, what do u think Reaganomics demonstrated?

it demonstrated that by lowering taxes, u stretch out deficits. that was the result of what your man did. top down/supply side in practice!

stop blaming govt for your failed practices. you dont even know what government IS! you and people like yourself are part of a cultist movement, looking out ONLY for the interests of the rich

[Piglatinsuperstar]

can't read? I used Reagan's name REPEATEDLY!

not only can you not read you cant do math

I said 16 years

that's eight years of Reagan PLUS eight years of Bush. adds up to 16 yrs of failure. that's why they dont teach our kids this cult crap

[Rulerzful]

George Bush is your reference for free market economics?.... LOL

[Rulerzful]

Less taxing is not the problem excesive spending by idiotic burocreats is the problem.

Keep making excuses for government intervention, it seems thats the only thing you ca do.

[DrTruthiness]

Are you trying to evoke Ronald Reagan as some warrior against the expansion of Big Government and wasteful spending? Because nothing could be further from the truth. Every president from Reagan down to Obama has dabbled out outright fascism: providing government strength, money, and outright favoritism to select big businesses at the expense of a truly free market.

Any true Libertarian will see Ronald Reagan as a man who talked the talk, but never walked the walk.

[Rulerzful]

How can you posibly be THIS STUPID?....... There is only one University of Chicago.

[Piglatinsuperstar]

it's faulty CONSERVATIVE POLICIES that are the problem. Ronald REAGAN proved THAT! George Bush proved that!

that's 16 years of proven FAILURE! is it any wonder why our schools protect our young from this propaganda u like to spread around? There's no research behind it, no science, LOL! NO NUMBERS!!!

I think John McCain said it best. an ignoranant representative of the conservative party & its various branches: "I dont know enough about economics. I wish some one would teach me"