Milton Friedman on What government is for
The SST issue is often presented as if the question were: Should or should not an SST be built in the United States? That seems to me the wrong question. I favor the building of an SST in the United States, if private enterprise finds it profitable to do so, after paying all costs, including any environmental costs imposed on third parties. On the other hand, I oppose the building of an SST in the United States if that requires governmental subsidies. I oppose governmental subsidization of the SST for exactly the same reasons that I oppose governmental subsidization of the production of food, or of automobiles, or of furniture, or of electric power. I believe in a free enterprise system. A governmental decision to produce an SST largely at its own expense is a step toward socialism and away from free enterprise.
Context. From a statement he sent to Senator William Proxmire’s Joint Economic Committee in December 1972 for its hearings on the supersonic transport (SST). The Senate had voted in March 1971 to halt federal funding of an American SST, and the hearings considered whether to revive it.
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Milton Friedman, “Statement on the SST” (Letter to Senator William Proxmire, chairman of the Joint Economic Committee, dated December 11, 1972, submitting a statement for the record of the committee’s hearings on the supersonic transport; printed in full in the Congressional Record, Senate, January 11, 1973, p. 796, inserted by Senator Proxmire., 1972), Congressional Record, January 11, 1973, p. 796. https://miltonfriedman.org/quotes/favor-sst-if-profitable-oppose-if-subsidized-1972
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He also said
Why is it that on one side of an arbitrary line there was East Germany and on the other side there was West Germany with such a different level of prosperity? It was because West Germany had a system of largely free, private markets—a free lunch. The same free lunch explains the difference between Hong Kong and mainland China, and the prosperity of the United States and Great Britain. These free lunches have been the product of a set of invisible institutions that, as F. A. Hayek emphasized, are a product of human action but not of human intention.
Context. From a talk at the banquet celebrating the opening of the Cato Institute’s new building in 1993. Turning around the saying “There’s no such thing as a free lunch,” long associated with him, he has just said that there is an extraordinary free lunch: free markets and private property.
The Real Free Lunch: Markets and Private PropertySpeech, 1993, Remarks at the banquet celebrating the opening of the Cato Institute’s new building, Washington, May 6, 1993 (Cato Policy Report, July/August 1993); reprinted in Toward Liberty: The Idea That Is Changing the World, ed. David Boaz (Cato Institute, 2002), p. 54Checked against the sourceFind the bookThe basic justification for a free enterprise system is that the possibility of profit will lead private individuals seeking their own interests to promote the social interest by producing only those products for which people are willing to pay and producing them at lowest cost. But a profit system can work only if it is also a profit and loss system, only if projects that do not pay are not carried out, and when enterprises make a mistake about a project, they must bear the consequences. If government bails enterprises out, either in advance on the expectation of a loss, or after the event when a loss has been realized, the fundamental justification of a free enterprise system is destroyed.
Context. From a statement he sent to Senator William Proxmire’s Joint Economic Committee in December 1972 for its hearings on the supersonic transport (SST). The Senate had voted in March 1971 to halt federal funding of an American SST, and the hearings considered whether to revive it. He is explaining why he opposes subsidizing the SST.
Statement on the SSTLetter, 1972, Letter to Senator William Proxmire, chairman of the Joint Economic Committee, dated December 11, 1972, submitting a statement for the record of the committee’s hearings on the supersonic transport; printed in full in the Congressional Record, Senate, January 11, 1973, p. 796, inserted by Senator Proxmire., Congressional Record, January 11, 1973, p. 796Checked against the sourceRead the originalWell the first and most important reform would be to eliminate the tax exemption of employer-provided medical care. … There’s no reason and logic, no reason on principle why medical care should be treated differently from other things. Food is just as essential to the life and health of a child. So is shelter and clothing. But those things we more or less let the private market take care of. What differentiates health? You might say, “Well, there are large costs involved. Sometimes you have to have big operations.” Well that’s what the private insurance is for. You have a large cost in a fire in a building. But that doesn’t mean that we have government fire insurance.
Context. From a November 2005 interview with Peter Robinson, conducted for the World Health Congress and printed in the Hoover Digest as “How to Cure Health Care.” Asked how he would reform the U.S. health-care system if he could ignore political realities. The ellipsis marks Robinson’s follow-up (“You’d do that before abolishing Medicare and Medicaid.”) and Friedman’s “Yes.”
How to Cure Health CareInterview, 2005, Interview by Peter Robinson for the World Health Congress, November 21, 2005; printed in Hoover Digest 2006 No. 4Checked against the sourceRead the transcript
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