Milton Friedman - Too Many Millionaires?

Milton Friedman outwits a lady who thinks there are too many millionaires. The same argument is being fronted today by the Occupy Anything But a Bar of Soap crowd envious of other peoples success. From a 1979 Donahue Show.

Source: Lew Waters YouTube channel.

Transcript:

Question from a spectator in audience:

Why is it we have so many millionaires in the United States and we still have so many impoverished people who try to get up into the world? Why is it we have this lack of money where people who can’t support themselves decently and get a decent job, where all these big men are all on top making oodles and oodles of money? They don’t need it. They can only eat that much.

Milton Friedman:

And what do you suppose they do? If they don't eat it and don't use it, what do you suppose they do with it?

Answer from the spectator in audience:
They hoard it.

Milton Friedman:

What do you mean they hoard it? You mean they put it under their pillows?

Answer from the spectator in audience:

That's right. No. They keep investing it.

Milton Friedman:

Investing it and why?

Answer from the spectator in audience:

That's right. Yea.

Milton Friedman:

What are they invested in?

Answer from the spectator in audience:

Well, in oil and everything. I mean, where all these other people …

Milton Friedman:

What are they invested in? And don't get off the subject. What are they invested in?

Answer from the spectator in audience:

Well, they invest it in a lot of different things that little people need.

Milton Friedman:

Well, do they invest it in factories?

Answer from the spectator in audience:

Yes.

Milton Friedman:

Does some of that money end up in machines?

Answer from the spectator in audience:

Yes.

Milton Friedman:

Do those factories and machines provide ordinary working people with jobs or not? What do you suppose a productivity of this country would be and the wage rate would be if the total amount of capital in this country today was what it was a hundred years ago? Where do you suppose the improvements in productivity come from except from the investment by people of their savings?

But let me go to your fundamental question. First place, nirvana is not for this world. There is no paradise. Of course we've got a lot of people who are poorly off. But if you look at it over time, if you get a sense of proportion, the well being of the ordinary people has been the main thing that has been improved by economic progress and economic growth and development. Most residual hard cases of poverty today are the result, again, of a failure of government. Why do we have a black teenage unemployment rate in 30 to 40 percent? Because of two failures of government. One, a failure to provide decent schooling, which is a governmental responsibility. Has been. Whether it should be or not, it has been. And second, because of the minimum wage rate. Which prevents those kids who haven't had decent schooling from getting jobs at low pay at which they can the skills on the job that would enable them to rise to higher pay. If you look into the sources of poverty, you will find that most of them are derived from what I regard as wrong headed government policies.