Friday, September 12, 2008

Why Milton Friedman is RIGHT and Donahue WRONG...

When you initially look at the video posted below, Phil Donahue (“Mr. Compassion”) comes across as "caring" and "kind," while Professor Milton Friedman’s basic message WOULD come off, to many people, as far more cold and analytical without Dr. Friedman’s great sense of humor and innate decency.

The exchange highlights the fact that “things are not always what they seem,” in other words, “You can’t judge a book by its cover.”

Phil Donahue is ALL kindness and compassion devoid of any pragmatism or practicality.

Dr. Friedman’s views appear cold and analytical, but they are, in fact, rooted in a fairness that supports a system (free market capitalism) that consistently provides the MOST prosperity for the MOST people.

Liberalism/socialism is rooted in two major fallacies, that are, in effect, FALSE COMPASSIONS.

The Static Economy or “the FIXED Economic Pie”

The first is that their view is based on the fallacy that we live within a “fixed economic pie,” or static economy,” in short, that there is “only so much wealth available at any given time,” so that disparities in wealth (a natural result of capitalism) harm far more people than they benefit.

The second major fallacy in their view is that the first fallacy (the “fixed economic pie”) mandates that government MUST divide or redistribute the wealth up more equitably in the name of “social and economic justice.”

In fact, we live in a dynamic economy that is constantly changing (expanding and contracting), one in which wealth is both created and destroyed by human action. There is no “fixed economic pie” because the money supply is ever-changing, as the amount of wealth created/eradicated constantly changes.

Some would argue, “You mean there’s NOT a fixed amount of jobs, of housing, land, finite resources, etc.?

I mean EXACTLY that.

There is no “fixed number of jobs in our society.”

We can see that jobs are both created and destroyed daily.

Our housing stock is continually changing, both expanding at times and contracting at others.

Even the amount of resources available is CONSTANTLY changing. We find new veins, new sources of natural resources all the time ad technology renders old sources obsolete and newer sources more practicable.

“Well what about the fact that so many of the rich are born to money, power and privilege and few others have any chance of aspiring to better lives?”

Based on what?On the FACT that less than 5% of those with a net worth (not counting one’s primary residence) of $5 Million have inherited their wealth?

The Whole World “Runs on Greed”?

Yes, I believe Milton Friedman is right, the entire world is run by people seeking their own personal gain.

That can be good, as when diverse people get together without any coercion or direction, via the market to produce goods that provide a mutual benefit to all of them.

That can also be bad, as when people in government seek to exert power and control over people who have an innate right to autonomy and self-direction that comes with self-ownership.

Behaviors lead to poverty and wealth.

Self-discipline, astute skills and the ability to see patterns in current events that should impact the future lead to wealth creation, while impulsivity, recklessness, irresponsibility and a predisposition to violence lead inevitably to poverty.

BUT people CAN and DO change! It happens all the time and one of the best motivators or incentives to introspection and personal change/improvement is poverty and economic distress.

How can compassion be bad

Compassion can be bad when it’s impractical, when it inadvertently rewards bad behavior or inabilities at the expense of productivity.

Good intentions count for NOTHING.

The ONLY thing that counts is results.

Marxism ALWAYS delivers poor results because its built on the flawed foundation of expecting productivity FROM people “according to their abilities” and rewarding people “according to their needs.”

That’s a prescription for a society filled with gluttonous people with ten kids and chronic bad backs, as it rewards dysfunction and disability at the expense of productivity.

Whenever sloth, indolence and disability is rewarded, we get more of all of them.

I see it every day in New York City’s Civil Service. Disability pensions for NYC cops and firefighters pay out three-quarters of one’s salary tax-free. The result is predictable. EVERY FDNY physician, doctor’s who sat behind desks get ¾ tax-free pensions as a matter of course, as a “perk” of their jobs. So to, do Chief officers and that has encouraged all sorts of “angling” and finagling” on the part of workers in those jobs to get out “the right way.” The very existence of those pensions incentivizes disability and even some degree of dishonesty.




Not so much.

It's the same with any program that seeks to benefit "the poor" and others without a strict set of parameters that mandates specific behaviors in order to change the behaviors in individuals that have led to poverty. The primary problem with Liberalism/socialism is that it expects nothing from the individual and, in turn, ultimately does nothing to change that person's self-destructive behaviors. In fact, Liberalism ENCOURAGES dependence and dysfunction, as those things show a "need" for more government action...more government intrusion into all of our lives.


WomanHonorThyself said...

hiya JMK..Marxism ALWAYS delivers poor results because its built on the flawed foundation of expecting productivity FROM people “according to their abilities” and rewarding people “according to their needs.”..yes yes..well stated!..and irrefutable actually..based on history.

JMK said...

THAT is why socialism/Collectivism ALWAYS fails Angel - it ultimately ends up with a society filled with gluttonous people, with large families (HUGE needs) and bad backs (very limited abilities).

That's just human nature.

Today's Leftists begrudgingly claim, "We admit that the market-based economy works the best, BUT, it has to be heavilly regulated (even more than Europe's is now) and harnessed so that it's focus is changed FROM mere profits to creating jobs and delivering an ill-defined public good."

In other words they STILL revile the market, but acknowledge only that the "command (government-run) economy" doesn't work, so they fight for a heavilly government-managed one.

Well, France and Germany both had economies similar to ours in the 1970s - when Nixon famously said, "We are all Keynesians now," and Carter presided over the implosion of that failed system.

The result was a ground-up revolution by the people in both those countries that replaced supporters of those Keynesian principles (Chirac and Schroeder) with two leaders who promised a "more American-styled economy" - Srakozy ("Sarko the American") in France and Angela Merckel in Germany.

Firefighter's Voice said...

you mentioned a video conversation between Phil and Friedman in your article but I didn't find a link to it. do you still have that link?

JMK said...

I had to look back here, but I was referring to an earlier post in requiem for Milton Friedman, which was in the form of a YouTube clip of Milton Friedman talking with Phil Donahue.

It's a GREAT clip that really expresses Libertarian values incredibly well.

Here's the link to that earlier post with the video;

American Ideas Click Here!