Milton Friedman: Economic Freedom and The Welfare State

Milton Friedman on the value of economic freedom and addressing the problem of transitioning from a welfare state to a free society. “Economic freedom is part of total freedom and for most people it’s the most important part. Freedom doesn’t mean very much to a starving man. And if a free society could not help the starving man, it would be very difficult for it to remain free very long. That’s why the ability of a free society to improve the lot of the ordinary person is a very, very necessary condition for its remaining free but it’s not the fundamental reason why I want a free society. I want a free society for the human and ethical and moral values that you stressed as pertaining to freedom.” This video is an excerpt from the episode 10. “How to Stay Free” of the famous "Free to Choose" documentary series. Source: LibertyPen YouTube channel.

(see video below transcript)

Transcript:

Milton Friedman:

Economic freedom is a necessary condition for a human, all human freedom, but it is not a sufficient condition. You can have an economy that is largely free with large elements of restrictions. For example, let me take the American experience before the Civil War. We had a mixture of a largely free economy, with a segment of the population, the slaves, held in the condition of involuntary servitude. But even where you don’t have complete political freedom in the case of a Singapore or a Taiwan, human beings are much freer than they are in those societies where there is no economic freedom either. If you compare the conditions of people in a place like Singapore with the conditions of people in a place like Red China, or for that matter, Indonesia, you will see that the economic freedom is a very important component of total freedom. It’s not something different, it’s not something separate. Economic freedom is part of total freedom and for most people it’s the most important part. Freedom doesn’t mean very much to a starving man. And if a free society could not help the starving man, it would be very difficult for it to remain free very long. That’s why the ability of a free society to improve the lot of the ordinary person is a very, very necessary condition for its remaining free but it’s not the fundamental reason why I want a free society. I want a free society for the human and ethical and moral values that you stressed as pertaining to freedom. Freedom really rests, the value of freedom.

Lawrence E. Spivak:

But suppose the moral values mean a lot to me. But, again, as I say, they mean nothing to the man who is hungry. It means absolutely nothing to him. What are you going to…. well do you think it does mean something to him.

Milton Friedman:

No. At first I think it means something to many of them. Of course, many men have died for their moral values, have put those moral values much above life itself. But I, you and I are citizens of a free society, will not stand the sight of people starving…

Lawrence E. Spivak:

… Well let me put it a different way, suppose you turn and you made a speech to all the people on welfare and you said to them, look there are, freedom is much more important than the welfare money that you are getting. Their ethical concepts, their spiritual things about the, men have died for this things. What if you told them all that and then said and we’re going to withdraw welfare now from you. What do you think would happen now?

Milton Friedman:

Would tell them something else. I would tell them.

Lawrence E. Spivak:

I know also what you’d do.

Milton Friedman:

I tell them both what I would do and what I would tell them. I would tell them welfare has been corrupting you. Look at what it is doing to you. Look at what it’s doing to your children. You would be far better off in every respect….

Lawrence E. Spivak:

But suppose they said to you, I don’t see that at all. Without that welfare we’d be in an awful mess.

Milton Friedman:

You are wrong, you wouldn’t be in an awful mess, but I understand your feeling and I do not propose to withdraw assistance from you like that all at once. I think it would be intolerable to throw the millions of people who are now depending on welfare on to the streets. We’ve got to go gradually from here to there. That’s why I proposed a negative income tax as a transitional device. That it would enable us to give help to people who really need help while not at the same time having the kind of mess we have now where most of the benefits go to people who are not, but look at the way in which the welfare system has been corrupting the very fabric of our society. We have put people in a trap which is of no part of their own making. I don’t blame them, but they’ve been put in a trap where we are inducing them to become dependents, to become children...

Translated by: Jadranko Brkic