Milton Friedman on Intellectuals and Businessmen as the Biggest Enemies of Free Enterprise

How can we protect free enterprise? Will the intellectuals help us? How about the businessmen?  There is a dramatic difference between saying you are pro-business and saying you are pro-free enterprise or pro-capitalism. Do you want lots of competition for yourself or do you want special treatment while everyone else faces competition? Milton Friedman explains the difference.

Translated by: Jadranko Brkic

(see video at the bottom of transcript)

transcript:

You talk about preserving the free enterprise system. Who has been destroying it? The business community must take a large share of the responsibility.

I am going off my topic for tonight, but you must separate out being “pro free-enterprise” from being “pro-business.” The two greatest enemies of the free enterprise system in my opinion have been on the one hand my fellow intellectuals, and on the other hand, the big businessmen – for opposite reasons.

My fellow intellectuals are all in favor of freedom for themselves.  After all, if I say to them: you know it's terribly wasteful to have ten people do research on the same topic.  Don't you think we ought to have a government planning bureau that would assign or that would set the priorities of various research projects and decide who should undertake it, so we can eliminate these terrible waste of competition?  They will say to me: why don't you understand the process of scientific research?   Don't you understand the necessity for academic freedom for allowing people to choose their own subjects?  Of course I do understand it and I agree with that.  But when they come to the rest of the community it's different.  It's terribly wasteful to have four gas station on for corners, we ought to have government bureau that eliminates that overlapping competition and that assigns priorities and sees to it that things are done right.  So the intellectual is all in favor of freedom for himself, and all opposed to it for everybody else.

The businessman is very different.  You cannot get businessman on a podium.  I don't mean to be talking about all of them, but I'm talking about very large fraction of them.  You cannot get them on a podium without them uttering generalities about the desirability of free enterprise systems.  But when I come to their own business that's something else.

When the head of US Steel talks about free enterprise, he doesn't mean free enterprise for steel.  Oh no, he wants the government to step in and protect him from competition from those Japanese who are undercutting him.

When the oil industry talks about free market, some years ago they weren't talking about freedom, they wanted percentage depletion.  They wanted oil import quotas.  They wanted Texas Railroad Commission to put a ration on them.

When bankers stand up on a platform and talk about the great desirability of free enterprise and the free markets, and I say to them: you mean you don't want the government to limit the amount of interest that you are required to pay on demand deposits, you want to have free competition?  Oh. They say, that's different.  We like that.

So almost every businessman is in favor of free enterprise for everybody else, but special privilege and special government protection for himself. As a result, they have been a major force in undermining the free enterprise system.  So that any hope that you're gonna protect the free enterprise system, you really mean to say that you expect US Steel stockholders to propagandize for free trade?  Is that what you expect?  

Don't misunderstand me, I don't blame the executives of US Steel for trying to get limitations on imports, or the executives of some other corporation for trying to get tariffs, they are doing what they are hired to do.  They were hired to make money for their stockholders, and they are trying to do it.  

If the rest of us are such fools as to let them (large companies wanting special treatment for themselves) make money by getting tariffs or getting import quotas or getting other provisions, then we’re the ones to blame, not they.  But stop kidding yourself into thinking you can use the business community as a way to promote free enterprise. Unfortunately, most of them are not our friends in that respect.

Video: 

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
To prevent automated spam submissions leave this field empty.
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.