Glenn Reynolds quotes my fellow University of Virginia School of Law Federalist Don Boudreaux who in his centennial appreciation of the Nobel-prize winning economists offered this contrast between Mr. Friedman’s ideas and those of the incumbent President of the United States:
Note that Friedman would heartily agree with President Obama that no one prospers in today’s economy exclusively through his or her own individual efforts. Where Friedman would disagree – and disagree strongly – is with Obama’s suggestion that the main source of help that each of us gets from others is government. While government might supply some necessary pieces, such as highways and law courts, the vast bulk of what society supplies for each person’s sustenance and success comes not from government but from the ongoing private efforts of millions of individuals acting in free markets.
Milton Friedman is my personal god. But I think he would agree that government wouldn´t be able to provide the pieces if there weren´t businesses and individuals who gave money to the government in the form of taxes. Government just didn´t pull money out of the air. Government is a parasite. Government must understand that government exists for the people, not people for the government. Barak Obama, and socialist in general, probably sees it the other way around.
Not probably, Roberto, definitely.
That’s a weak argument, actually. There is no real reason why highways can’t be supplied by private enterprise, and no real reason why government can’t take over (and thus “supply”) the majority of the private economy.
A lot of people do a certain fallacy, I don’t have a pithy name for it yet, but it runs like “I see Y doing X, therefore only Y can or should do X.” I see government doing highways and prescription drug regulation; therefore only government can or should do highways and prescription drug regulation. I see private enterprise growing food; therefore only private enterprise can or should grow food. Perhaps I should call it the Argument from Lack of Imagination.
It would be stronger to argue from the nature of things. Because of government’s nature, there are certain things that only it can do – and a multitude of other things that it should not do.
Government is: a territorial monopoly on the use of physical force. Its purpose (that is, the only purpose which can morally justify the existence of such a monopoly) is to protect people’s rights. Only government can do police, courts and military, because having them done by competing private enterprises would be civil war.
But highways? Sorry Boudreaux, there is no reason that private entities couldn’t do them better than government. Economic activities must not be done by government, again because of government’s nature as a monopoly on the use of force. When an entity which can get away with the use of physical force engages in economic activities, we call it “mob rule”, or (in advanced cases) “fascism”.
Economic stuff should (on a practical level) and must (on a moral level) be done by private actors, each acting on their own best judgment, voluntarily, not in response to force or the threat of force. Any other system is immoral (as well as inefficient). That is why we need free markets.
ILC
When I lived in Hollywood, I remember there was a toll road to be built between Anaheim and Los Angeles. The Jersey and Pennsylvania turnpikes are toll roads, while operated by the states were financed by bond issues. The fact that the bondholders are either private citizens or in portfolios of mutual funds investors, could we not consider these as private enterprise using state government to accomplish the purpose. As the in the case of the California project the roads would have to be toll roads, to recover the cost of construction, maintenance, and overhead. Being private enterprise the roads would have to be profitable.
I’m a bit confused when people say “the government builds roads.” There seems to be road construction going on constantly here, but the people building the roads quite visibly work for a private business. It isn’t government employees doing the construction. I’m sure the businesses that are doing the construction won a government contract, but the government still isn’t doing the actual work. I’m not sure if this is maybe an exceptional occurrence, but I suspect it isn’t.
Another thing, there are often large construction projects going on in Vancouver, but there always seems to be a controversy over how the project is going to be funded. I’m sure it is the same everywhere else. In Vancouver, they’ve opted for tolls recently, which has people upset. At the same time, most of the municipalities in Greater Vancouver, as well as the regional government and its transportation agency, seem to face constant budget shortfalls. So, I’m thinking the government probably isn’t very good at handling the role it does play.