Friday, 16 December 2011

Milton Friedman's "Free To Choose": Part 2

Via "Commonsense Capitalism".


  1. I liked the woman with the glasses. She made some points about the East Asian State-led model, but I didn't think Friedman responded to it, at all.


  2. I also think Friedman is way wrong on England's labor history, as well as Japan's 30 years of free trade.

    I like his statements...

    "It's only in the general interest, and nobody's special interest", when referring to political possibilities of reducing trade barriers.

    "The harm a tariff does is invisible."

    "Free Enterprise prevents anybody from having too much power."
    Great quote.

  3. On Helen Hughes...

    Her counter-example of successful economies having had higher government intervention (e.g. Taiwan and Korea) was answered by Friedman: he said that in those countries the government had intervened in a limited way by providing infrastructure rather than opt for large-scale central planning per se. She came back at him on Korea and said that the Korean government had indeed gone in for central planning - but actually this was of a limited kind; the Korean government had an overall strategy of encouraging the development of export industries, but not one of planning and controlling them per se.

    It's somewhat curious that she should have tried to cite Korea as an example of successful central planning because just before that little exchange
    (at the 40min mark) she says that developing countries have not had central planning, but have had some planning, which really begs the question - was it centralized? And of course the answer is yes. It may have been that the point that she was trying to make there was one of scale, i.e. a greater or lesser degree of central planning (but in either case, the arguments against central planning still apply).

    On her other point about Hong Kong and the government providing roads and so on... Friedman says that he himself makes this point in the video (and this is true), but that doesn't touch upon the question of whether infrastructure can be provided by the market. The argument typically runs that, although there may be sufficient economic incentive for the construction of say ports and major roads for the transport of goods, there isn't sufficient economic incentive for the construction of roads out into the smaller, more remote places in the countryside - leaving those people cut off and exacerbating unequal economic development. There are counter-arguments to this too, but if you pursue them far enough you end up in the realm of counter-factual speculation (you may be able to supplement this with evidence from other historical periods, but the comparisons are obviously difficult to sustain).


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