Skip to content

Milton Friedman on welfare and the negative income tax

Friedman on why welfare programs fail the people they aim to help, and the negative income tax he proposed instead.

6 passages in the archive2 checked against the source4 not yet checked
  1. The average income of blacks here is far higher than the average income of all the people in the Soviet Union. The official government definition of the poverty line in the U.S. is higher than the average income in the Soviet Union; it’s higher than the income received by 90 percent of the people on the world’s surface. Now, that doesn’t mean blacks aren’t subject to injustice; of course they are.
    Interview with Milton Friedman
    Interview, 1973, Playboy
    Not yet checked
  2. Our problems have arisen from good people who are trying to do good, but trying to do good in a fundamentally flawed way. The welfare state is in many ways a noble construct, a noble concept. It's the concept that we ought to help our fellow men. What flaws it is that it's one thing for you to help me out of your pocket. It's another thing for you to help me out of his pocket. And the fundamental flaw of the welfare state, in my opinion, is the idea that you should do good with somebody else's money.
    The Open Mind
    Interview, 1977, The Open Mind, hosted by Richard Heffner, Episode “A Nobel Laureate on the American Economy” (May 3, 1977)
    Checked against the sourceWatch it
  3. It’s neither one nor the other. But it’s good for freedom. In principle, you ought to have completely open immigration. But with the welfare state it’s really not possible to do that.
    The Romance of Economics
    Interview, 2006, Interview by Tunku Varadarajan, The Wall Street Journal; reprinted in Hoover Digest 2006 No. 4
    Checked against the sourceRead the transcript
  4. The major disadvantage of the proposed negative income tax is its political implications. It establishes a system under which taxes are imposed on some to pay subsidies to others. And presumably, these others have a vote.
    Capitalism and Freedom
    Book, 1962, Ch. 12 The Alleviation of Poverty, 2002 edition, p. 194
    Not yet checked
  5. The nineteenth-century liberal regarded an extension of freedom as the most effective way to promote welfare and equality; the twentieth-century liberal regards welfare and equality as either prerequisites of or alternatives to freedom.
    Capitalism and Freedom
    Book, 1962, Introduction, p. 5
    Not yet checked
  6. In the past century a myth has grown up that free market capitalism—equality of opportunity as we have interpreted that term—increases such inequalities, that it is a system under which the rich exploit the poor. Nothing could be further from the truth. Wherever the free market has been permitted to operate, wherever anything approaching equality of opportunity has existed, the ordinary man has been able to attain levels of living never dreamed of before. Nowhere is the gap between rich and poor wider, nowhere are the rich richer and the poor poorer, than in those societies that do not permit the free market to operate.
    Free to Choose
    Book, 1980, Ch. 5 “Created Equal”, p. 146
    Not yet checked

Looking for something he said on this that is not here? Tell us, orask the archive in your own words.