Life is a Highway

Life is a Highway
Source: Haiku Deck

Thursday, December 15, 2011

Soul of Atlas: Milton Friedman on Self-Interest and Profit Motive in 1978

This piece was originally posted at FRS FreeState Now: Soul of Atlas: Milton Friedman on Self-Interest and Profit Motive in 1978

The reason for capitalism or in America the reason for American capitalism, is that in an economy like that, its assumed that the people can make it on their own if given the opportunity. That there’s a limit to what government can do and should do. The whole point of constitutional law and limited government and federalism. That government doesn’t do everything right and when it tries to do too much, like taking so much out of the economy to take care of its people, doing things for the people that they can do for themselves. Like run a business, make their own health care decisions, plan for their retirement, decide where to send their kids to school, etc. And you can go down the line.

That if you give the Federal Government all that responsibility to go along with defending the country and other areas and then you add things like trying to run the lives of people, that you would get in a Marxist-Socialist system like in North Korea. That government will be too expensive and inefficient. Trying to make the decisions for people it doesn’t know. But if you give the people the power to make these decisions for themselves, they’ll be able to make much better choices for themselves, because they know who they are and what they need. Which is what we’ve been in America for 235 years now in this liberal democracy. And that you need profit motive in a liberal democracy. Perhaps not in every area of the economy, but in most sectors, so people have incentive to succeed to be as productive as they possibly can, to be as successful as they can.

You have profit motive in a liberal democracy so people know they can be as successful as they can based on their education, qualifications and production and you have a safety net. Not there to take care of people, but to help then when they fall down to get themselves up. So they know they’ll have to take care of themselves, because government won’t be there indefinitely to take care of them. Just to help them in their need. Which is different from government taking care of people. Which assumes that people in need having nothing to worry about, because government will always be there to take care of them.

But with a safety net you only have that there for people who are in need to help them sustain themselves in their time of need, but also help them get back on their feet. Take profit motive out of the economy, what do we have instead, you want government controlling everything with everyone dependent on government to take care of us? Do you want to make government an absolute power with no one to answer to like they have in North Korea? Or do you want a system where everyone has an opportunity to be as successful as possible based on what they put into the country.

I prefer the last approach and history proves that works better. It’s the old Jack Kennedy line, “not ask what your country can do for you, but what you can do for your country”. Which is why we need what’s been called a world-class education system where everyone in the country has an opportunity to be successful in life. That’s how we win the so-called War on Poverty. By moving people out of poverty into the middle class and to become self-sufficient. Not by having them dependent on government their whole lives. And not allowing for their kids to be dependent on government their whole lives. Living on people who take care of themselves and are productive.