Milton Friedman on Trade and tariffs
The fallacy with that argument is that it begs the real question. Why should there be laws that in effect prevent you and me from buying in the cheapest market? When anyone complains about unfair competition, consumers beware. That is really a cry for special privilege, always at the expense of the consumer. … As consumers buying in an international market, the more unfair the competition, the better. That means lower prices and better quality for us. If foreign governments want to use their taxpayers’ money to sell people in the United States goods below cost, why should we complain? Their own taxpayers will complain soon enough, and it will not last for very long.
Context. Narrating the episode, he answers Richard P. Simmons of the specialty steel industry, who has just argued that asking the government to bring cases against foreign producers for unfair competition, such as steelmakers subsidized by their governments, is no different from reporting a theft to the police.
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Milton Friedman, “The Tyranny of Control” (PBS, 1980), Free to Choose (1980), vol. 2, at 20:11. https://miltonfriedman.org/quotes/more-unfair-the-competition-the-better-1980
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He also said
If we restrict you to home-grown sugar, it will be two or three times as expensive as if we include sugar from abroad. Which do you really think voters would choose? The people don’t want to pay higher prices. A small group of special interests, which reaps concentrated benefits, wants them to, and that is why sugar in the United States costs several times the world price. The people were never consulted. We are not governed by the people; that’s a myth carried over from Abraham Lincoln’s day. We don’t have government of the people, by the people, for the people. We have government of the people, by the bureaucrats, for the bureaucrats.
Context. From a talk at the banquet celebrating the opening of the Cato Institute’s new building in 1993. Answering the claim that programs stay in the federal budget because people want them, he has proposed putting to the American people a simple choice: sugar grown mainly on American farms, or sugar that can also come without limit from abroad.
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. 56Checked against the sourceFind the bookGammon’s theory is more than a smart-aleck curiosity. It is a direct consequence of the pursuit by all of us of our self-interest. In a market, we can pursue our self-interest only by persuading people to buy what we have to sell, hence we are driven to serve our customers’ interests. In a government bureaucracy that is exempt from competition, the customers have nowhere else to go. Their interests are largely irrelevant. Hence, the bureaucrat can serve his self-interest at their expense by expanding his empire and reducing his workload.
Context. From a 1977 Newsweek column on the British physician Max Gammon, whose study of Britain’s National Health Service found staff rising while the number of hospital beds occupied fell, and who called the pattern “bureaucratic displacement.” Friedman applies it to American medical care and schooling.
Gammon’s “Black Holes”Column, 1977, Newsweek (1977); reprinted in the Congressional Record, Extensions of Remarks, November 30, 1977, p. 38195, introduced by Representative John Ashbrook of Ohio as “Mr. Friedman’s article on Gammon’s theory of bureaucratic displacement as it appeared in Newsweek.” The reprint gives no issue date, Congressional Record, November 30, 1977, p. 38195Checked against the sourceRead the originalIn my opinion, the strongest argument for free enterprise is that it prevents anybody from having too much power, whether that person is a government official, a trade union official, or a business executive. It forces them to put up or shut up. They either have to deliver the goods, produce something that people are willing to pay for, or willing to buy, or else they have to go into a different business.
Context. In the panel discussion that closes the episode, after saying he is pro-free enterprise rather than pro-business. These are the last words of the discussion.
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