Milton Friedman on Self-Interest and the Profit Motive 2of2

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

[gman2013]

Debating Milton Friedman...one big assed mistake

[samsamm77]

I've only just discovered these clips and those of Christopher Hitchens I must have been living in a cave not to have heard about these earlier! I want to coin a new word, The Miltslap!

[Rulerzful]

Probably working for multinational corporation XD

[324wilson]

I also came here because of the Hitch. And I like "Miltslap."

[Logan West]

Unless you have other info, it's not "Michael Moore". There's an identical clip to this one where the guy titled the video that but said in his description that he meant he was like a young version of Moore.

[321xanatos]

Michael Moore. Yes HIM. I begin to see why he hates capitalism, that made him rich beond his wildest dreams. Milton haded his ass to him in that debate and others.

[Florida Cracka]

"The Pinto's legacy was affected by media controversy and legal cases surrounding the safety of its gas tank design; a recall of the car in 1978; and a later study examining actual incident data that concluded the Pinto was as safe as, or safer than, other cars in its class."

[madreus]

The only argue here IMO would be if there is an obligation on the auto make (or some auto industry authority) to make that information public (the fact that the gas tank is in that location/unsafe/etc).

[hoosd42]

Who is the kid in this vid? Where is he today?

[geauxtigers454357]

so let me get tis strait this guy belives that its perfectly fine to spend 350$ to kill a life

but he wants to call ford over not putting a 13$ part on a car.....he has a choice to buy the car but the baby dosent have a choice to live....

[runinamok93]

Ya I feel bad for him he didn't even know the principle of his own argument, but he's just a kid

[PRINCECOUNTYBEATS]

love it