I love how Milton treats Donahue like a persistent grad student, entertaining his quest to understand

This 5 part session is by far the best explainantion I've seen on capitalism. I wish someone could take it and make a movie our documentary out of it.

@Wormtail81 Thank you for this.. It reminds me of one of my favorite quotes.

I disagree with Milton on what you can do about inflation. Buying gold and silver would help keep your purchasing power to some degree. So there is something you can do. Milton is a great economist. Thanks for posting these videos!

Milton droppin BOMBS.

Nothing fazed him! His grasp of his subject was so profound there was no question no matter how sneakily worded that seemed to throw him.

That "little old man in the shoe shop" then becomes a valuable employee of the larger company, and his innovation is made available to ever more people than possible when he was in just one little shoe shop.

My God..... this is watching a master at work. Donahue looked miserable the way Milton tore through his questions like a machine.

I don't agree with almost anything Donahue says....but you have to give him credit for putting this show on. No talk show host today would put someone on who has such a different opinion than them.

The funny thing is that you would never see a guy like Milton Friedman on a show today like Phil Donahue's. Imagine shows like Ellen, or MSNBC that featured a guy like Milton on their show. the media has gone so far left, they would never let a guy like this explain things to the average American in simple, common sense terms like he did 30 years ago.

DAMN RIGHT Milton is the man!! Holy shit...hell I can watch all his videos and debates...he just fucking rules!!!

The "little shoe shop" example was used on Seinfeld. Kramer walked into a little shoe shop and noticed bad wiring, and suggested the mom and pop have an electrician look at it. The electrician says he has to completely redo the wiring, or report them. This causes mom and pop to lose their business.

Great Charles!

Why didn't anyone listen to this guy? He was a genius!!!!!

"We're working on a federal amendment - an amendment to the federal Constitution that would give the federal government a budget. I think the most important single step that can be taken to stop inflation is to cut down government spending." -Milton Friedman, 1979 32 years later, we're worse off. It's probably a good thing that Professor Friedman died in 2006, as the auto and bank bailouts would be a slap in the face to him.

@UponInfinity That also doesn't include the problems created by a lot of the federal grants to colleges and universities as well.

Brilliant.

You can go into the detail all you want, but the fundamental principle is this: NO company has a competitive advantage in a truly free market.

I believe the WSJ posted an online article of the price of oil. If you priced oil in gold the price did not bounce up and down very much. In fact, it hardly bounced at all. But in dollars the price went up exponenetially over time. You can thank people like Brigadier B2 bomber Ben Bernanke for that.

SCHOOLED!

@anthonydavisinc Have you seen 'Free to Choose' by Milton Friedman? It's easy to find on the net and very goodl

Milton is the man

Damn, Friedman schools the whole audience!

to the transaction costs, the storage company could possibly just take a percentage of the gold that you're storing as payment. Same goes for delivery etc. =)

How specific.

The first 9 seconds, "General Motors can not get a penny out of your pocket unless you turn it over"

3:50 - such a beauty

@ast453000 There used to be plenty of sweatshops in the US as well. There used to be sweatshops in Singapore, Japan, Western Europe and Canada. My great-great grandparents on my father's side worked in sweatshops. I do not. What happened? When I was a teenager, I got a job in sub-minimum wage jobs. That gave me the experience and good record of discipline on my CV so that when I finished my education and joined the job market, I had the basic work skills to match my qualifications.

In a Capitalist Economy there's no such thing as making too much money. Because people are able to make as much money as their skills and production will allow.

@Myndir I'm sorry, I guess I overlooked all the examples you've given of development that don't fit your worldview. I'm not entirely against free markets. What I am against is ideologies. Free markets are assumed to be obviously good. I like to question assumptions which seem obvious. A lot of "apparent" evidence is brought forth in support of free markets, but why not look a little deeper and see if free markets are really the cause of prosperity, or whether it's something else as well?

ahh.. milton is owning in this show. if there is a "best of friedman" this would be it.

@jeffersonianideal exactly. Government = force, Free Markets = Choice.

OK, I have a really good question. Is his jacket pink, green, or blue? I guess my color vision is going........or I am hallucinating.....

Free To Choose

This video proves that he was more right then we could have ever imagined. Look at the favor our government shows to large corporations like GE, even though our president claims to be anti-corporation.

Donahue summarized his behavior at 0:15 here.

Kmart beating Sears ... gives you an idea how long ago this was.

@NOMADdaf

7 жыл бұрын

Pre Walmart. Thats how long.

damn, this guy is on fire!

perfect sense, this should be educated to everyone !

Friedman was pure genius

@timbosforporn He explained that.. no price controls and no enormous gov bureaucracy. The cost to tax payers and consumers plays a role

I felt the same way. Then I found the libertarian party!!! Milton Friedman was a libertarian and because of him I too am now a libertarian!!

The woman at 6:40 is so studiously attempting to stop at "some people are richer" and not let the discussion move past that. It's very funny.

The funny thing is you people fail to realize a public sector deficit is a private sector surplus, and if there's ever a time for our government to undertax and overspend it's RIGHT NOW. Given that we aren’t approaching the forecasted levels of growth necessary to eventually pay off our debt, doesn’t it make sense that the public sector is coddling the private?

No, sir. It was and is excessive spending that did that. The consequence of cutting tax rates was an increase of revenue to the government. As to Pres. Obama, he himself in his 08 campaign said that raising taxes is bad thing to do during a slowed economy.

The Federal Reserve introduces money to circulation by paying cash(that they've created) for T-bills. The Fed's stock of T-bills, as of a couple years ago when I ran the numbers, was about $700 billion. All-time US spending at the time was around $70 trillion. Government debt, exclusive of the Fed and money owed to itself(e.g., SSTF) was something like $6 billion. The numbers will have changed some in the last couple years, but not a lot.

The REAL problem with a our society is witnessed by the fact so many people never ever heard Milton before. Can you imagine if his thoughts were allowed to be discussed in school where they belong?? Sadly children in public schools will never ever hear of Adam Smith or Milton Friedman. Rather they are taught what a terrible country we are.

@232009jordan If you're working in a corporation, there's little you can do as an ordinary worker, because corporations have a top down, non-democratic, structure. The idea that you can vote with your dollars, might work in some cases. But overall the situation is more complex than that. E.g. if all manufacturing plants are polluting, how are you going to get them to stop? By not buying manufacturing goods? Even if some are better than others, such "voting" usually has very unfair costs.

What constraints dictate precisely how much our society can *afford* to spend given that my spending is your income and your income is my spending, and also my debt is your collections and vice versa? To rule out the success of debt-financed national economies on principal is to neglect the last century of history.

@232009jordan The idea of voting with dollars is also highly inegalitarian. It means rich people have more of a vote than others. And this, I think, is what Milton Friedman, and all the other free-market ideologues really want.

well, it's a way to reduce the impact of inflation on you, in that way, what you say is correct. But it won't change inflation itself, in that sense, it was okay for Friedman not to mention it. Also, it is likely that transaction costs (intermediaries, storage, delivery...) etc would make this rather an impractical solution for many people.

@itcanbecheezcaketime Because there are people who learn how to manipulate those who are not economically and governmentally informed with promises of being handed more and more "free" things. The idea that government intervention will help you is one of the easiest things to convince fools of.

@Wormtail81 "f you cannot achieve your goals, don't have the government hold a gun to my head to give you what you want." Well said!

I talk to people in the Chicago area all the time and they truly believe that the government has it's own money and it can just distribute it around.

Idk when interest rates will rise and make our national debt (owed mostly to ourselves) a higher priority than our output gap and private sector debt -the real debt crisis this country is facing- but at the moment the problem is that people aren't spending enough. Also, spending your way out of a recession isn't supply-side, It's Keynsian.

@jjrglobal The "free market", which you love so much, gave us the financial meltdown of 2007. The only thing that rescued Wall Street was MASSIVE government subsidy. The only reason we got out of the Great Depression of 1930s (caused by the "free market") was, once again, MASSIVE government subsidy and intervention. Are you seeing a pattern here?

@jinheneamerican, Look at some inflation adjusted charts for minimum wage and compare them to unemployment rates. There is no evidence to support the theory that increased wages increase unemployment. I'm looking at charts going back all the way to 1938. In fact, in 1968 minimum wage set a record high (inflation adjusted of course) and unemployment was quite low.

That is not the problem. Wealth does invest. But as long as the invested capital is used as security to finance further bank lending, money supply grows disproportionate to real assets. That means the most profitable investments become stocks, bonds and various financial assets. This diverts productive capital into these non-productive inflation driven "securities", effectively propping up the valuations of the owned firms, so they can become less and less productive, without going bust.

The point is that millionaires *don't* hoard it in their mattresses because that earns no return. Saving becomes investment which replaces capital and makes everyone better off.

@carnabyfudge In a way it makes sense. Planners would have an easier time controlling a handful of big companies than an overwhelming multitude of small ones.

@elsoultero and why do they go offshore? because government tries to supress business through high taxation and overregulation.

I wonder why Donahue doesn't get it?

@umbilicaltapeworm Your point being? I simply pointed out Friedman is wrong in implying ethics has something to do with business. And more money in the hands of rich certainly does not mean more money in the hands of poor. Just compare income gap between rich and poor in more socialistic countries (Nordic) and less (USA) (though I don't know what the hell this has to do with anything).

Friedman is awesome, but that guy in the background at 7:51 scares me

@HandyMan101 If by inflation you mean deflation. Or by something you meant money, not goods.

The thing to learn from this clip is how great our federal system is where the states have most of the power and if they use it wrong by implementing policies that destroy their economy, then it is only one state that goes under, not the entire United States. It is the same with companies; the more the better. Who will bailout the U.S. if we fail? The answer is more like who will buy us out not bail us out. It is better to keep the Federal government out of the states business.

I don't own any corporate stock and neither do my neighbors. Thus things will not likely get better for me.

@ast453000 There used to be a lot of sweatshops in South Korea. Now, it's a first world prosperous economy. What happened? The Free Market happened. The reason why I don't have to work in a sweatshops is because the Free Market happened. No-one needs to work in sweatshops in the First World. Businesses pay wages in response to rising productivity and better options for workers. It has nothing to do with generosity and everything to do with supply & demand.

The problem with that is you don't take into account other factors and simply point to his legacy. I would argue that many things like the internet, PCs, and other new things were a result of the his legacy with capital investment. Rather was the policies of the US government and federal reserve with banking and the housing bubble. The part of the economy that crashed was the parts with heavy US government/Fed involvement and regulation. This is the governments fault, not the free market

This audience must have been selected.

@ugotpimp Patriotism has nothing to do with it, friend. He's simply speaking truth. The principles apply in this country and any other.

I do find it funny how he said that the way to kill inflation is to fight government spending. You'd think a Nobel-winning economist would have a better idea of the difference between monetary and fiscal policy. (This is especially funny when you realize that we killed inflation - it had already started when this was filmed - and government kept growing throughout)

And yes, I'm well aware of what inflation is and why it exists - government prints money, which debases existing money insofar as the rate of printing exceeds the rate of economic growth. I'm entirely in agreement with Friedman on the cause of inflation - it is "always and everywhere a monetary phenomenon". Which makes me very confused as to why he blames *fiscal* policy for it in this video. Even in the depths of 70s inflation, printed cash was a trivial income source for the government.

GOOD! WAKE UP!

That lady after 6 minutes walked right into Milton's Trap

Its crazy how people just blank out and don't understand how the free market would work. They are just scared, and want a comfy blanket like a child does, and the government provides that feeling.

@xsumuhdihx .........phil is a consumate interviewer . ..he was not debating milton , he was interrogating miltons views

The Constitution only guarantees the American people the right to pursue happiness. You have to catch it yourself. ~Benjamin Franklin

Adam Smith would have PRAISED Reagan for Reaganomics and FDR for both New Deals. Both were Side Supply Economics at it's very very best!

By the invisibe hand i mean the forces in play that you don't actually realise are at play. Such as Facebook's chat function that has completely destoryed Microsoft MSN. The pre-installing (in dell) and wider availablity of linux OS in computers. The explosion in open source software and bit torrent downloading. Microsoft i.m.o has not adapted enough and has been playing catch up with both google &apple. it cud however sudnly make some kick ass new technology (doubtful) if it did tht it cud stay

Don't forget Walter E. Williams and Tom Woods!

I never said that MS office was beating open office, merely that open office is a new force upon it (as well as linux). Firefox is not owned by Netscape. It was given a start-up donation by them, but is solely owned by the Mozzila Foundation and has relied on voluntary donations from its users since its inception. That enough details for you? Also, Competition laws are expensive and simply pick and choose the winners and losers. you are obv. not for free markets.

So if you were an employer, and you found out you could PAY LOWER SALARIES for your employees. You would panic, writhe in horror, bar the windows and doors, yank the phone from the wall, and shut yourself out from the world, to avoid the mere possibility, that SOMEONE might try to convince you, that you should give them a job. - The thought of you offering a job to someone, a job they asked for, and desire, at a price BELOW what you've had to pay before. You're right, that is one scary thought.

@Freedom21stCenturi Amen that's right! People covet what other people have worked for, think that they got there overnight. I think it's a combination of ADD, laziness and covetousness that frustrates some people.

That's called the natural reality where you have to eat to survive. Free Market Capitalism facilitates that need the best. Also, it's not as bad as you're making it out to be. There is a lot you learn about yourself from working and personal character development.

@gotmyfingerrscrowsed Why is that?

Milton Friedman was once bitten by a zombie. But, instead of Milton Friedman turning into a zombie, the zombie turned into a Milton Friedman.

@romans58snrsvd Ron Paul, Thomas Sowell. Your welcome.

what most people don't like about capitalism is: outcomes every outcome of an individual is predicated on his personal choices victims like to excuse the choices when it doesn't go the way desired no one is entitled to happiness, only the pursuit of happiness and even that is inherent

Milton was no fan of the FED, but I think his position would have been far less diplomatic, had he lived today. - His biggest difference from the Austrians, was his partial acceptance of the use of a "monetary policy". He also found a return to gold standard too extreme. - But I read somewhere that apparently, he came around and embraced the gold standard a couple of years before he died.

Friedman is wrong on inflation. Inflation is a product of debt. Yes, this is due in part to deficit spending by the government, but the consumer also plays a huge role in inflation because they also get into and out of debt. The rules for this are simple, when two people have access to the same money it is the equivalent of printing money. This is what happens in the fractional reserve system. The borrower and savings account owner both have access to the same money.

1:52 Cooporations really are people.

Milton assumes that wealth invests. The typical 'trickle down' argument. over 30 years later, we can see this hasn't happened. Milton's economics took root in the UK and USA and the deregulation of finance and capital movement reulted in wealth investing in wealth - i.e.: financiers creating 'credit' (debt) and multiple derivatives. This accumulation and focusing of so much wealth in the hands of the top 1% and reducing the capacity of the consumers to consume.

If you add up the US government's historical spending, about 90% has been taxed, 9% has been borrowed, and 1% has been printed. Did you think your income taxes went into a bonfire somewhere?

Yeah, it's true. America has become more donahued. And Donahue himself has become yet more radical since this was recorded, though he doesn't have the same platform. But I would agree that even the modicum of respect that Donahue shows Friedman here is now virtually non existent.

What can a citizen do to stop inflation? Stop supporting the fractionalized reserve banking system, by not taking out loans, and buy gold and silver to stop supporting fiat currencies that lead to too much monetary expansion. That'd be a start....

Donohue was pretty rational here.

@jtrue71 Haha........Maobama!!!! That tickled me.

He would eliminate minimum wage???? Oh boy! We would all be working for crumbs.

@Floridanon407 There's no question that Fanny and Freddie contributed to the sub-prime lending, but all the banks were in on the game. That's why they all needed to be saved by the Government, using tax payer's money. In a true free market economy they would have been allowed to fail. What got us out of the Great Depression was the Massive Government spending required by WWII. Only small minds think insults improve their arguments.