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China's Productive System Draws Upon The Other East Asian Countries To A Great Extent. The Volume Of Trade Is Much Larger Than The Net Amount Being Exported From China. China Needs Substantial Reserves To Finance All That.

-Milton Friedman

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China's Productive System Draws

Milton Friedman

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China's Productive System Draws Upon The Other East Asian Countries To A Great Extent. The Volume Of Trade Is Much Larger Than The Net Amount Being Exported From China. China Needs Substantial Reserves To Finance All That.

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What Kind Of Society Isn't Structured On Greed?

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So That The Record Of History Is Absolutely Crystal Clear That There Is No Alternative Way, So Far Discovered, Of Improving The Lot Of The Ordinary People That Can Hold A Candle To The Productive Activities That Are Unleashed By A Free-enterprise System.

Doing Good With Other People's Money Has Two Basic Flaws. In The First Place, You Never Spend Anybody Else's Money As Carefully As You Spend Your Own. So A Large Fraction Of That Money Is Inevitably Wasted. In The Second Place, And Equally Important, You Cannot Do Good With Other People's Money Unless You First Get The Money Away From Them. So That Force - Sending A Policeman To Take The Money From Somebody's Pocket - Is Fundamentally At The Basis Of The Philosophy Of The Welfare State.

My Major Problem With The World Is A Problem Of Scarcity In The Midst Of Plenty ... Of People Starving While There Are Unused Resources ... People Having Skills Which Are Not Being Used.

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Self-interest Is Not Myopic Selfishness. It Is Whatever It Is That Interests The Participants, Whatever They Value, Whatever Goals They Pursue. The Scientist Seeking To Advance The Frontiers Of His Discipline, The Missionary Seeking To Convert Infidels To The True Faith, The Philanthropist Seeking To Bring Comfort To The Needy - All Are Pursuing Their Interests, As They See Them, As They Judge Them By Their Own Values.

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That's An Interesting Paradox To Think About. Make It Legal And It's No Good. Why? Because As Long As It's Illegal The People Who Come In Do Not Qualify For Welfare, They Don't Qualify For Social Security, They Don't Qualify For The Other Myriad Of Benefits That We Pour Out From Our Left Pocket To Our Right Pocket. So Long As They Don't Qualify They Migrate To Jobs. They Take Jobs That Most Residents Of This Country Are Unwilling To Take. They Provide Employers With The Kind Of Workers That They Cannot Get. They're Hard Workers, They're Good Workers, And They Are Clearly Better Off.

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If Even A Small Fraction Of The Money We Now Spend On Trying To Enforce Drug Prohibition Were Devoted To Treatment And Drug Rehabilitation, In An Atmosphere Of Compassion Not Punishment, The Reduction In Drug Usage And In The Harm Done To Users Could Be Dramatic.

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Italy May Well Be The Main Problem. It Has Benefited Most From The Euro By Having Been Able To Get The Euro Interest Rate Instead Of What Otherwise Would Have Been Its Own. That Would Be Much Higher Because Italy Has Been Accumulating So Much Debt. In The Past, Italy Has Inflated Away Its Debt. The Virtue Of The Euro Is That Italy Can't Do It Alone. A Tight Ecb Policy Wouldn't Permit That To Happen Again.

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There's No Such Thing As A Free Lunch.

Ecological Crisis

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The Government Doesn't Have Any Money. The Only Power It Has Is To Take From Some And Give To Others.

Thanks To Economists, All Of Us, From The Days Of Adam Smith And Before Right Down To The Present, Tariffs Are Perhaps One Tenth Of One Percent Lower Than They Otherwise Would Have Been. And Because Of Our Efforts, We Have Earned Our Salaries Ten-thousand Fold.

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You Must Distinguish Sharply Between Being Pro Free Enterprise And Being Pro Business.

Free Enterprise

The Internet Is The Most Effective Instrument We Have For Globalization.

I Think That The Internet Is Going To Be One Of The Major Forces For Reducing The Role Of Government.

George Stigler Was A Delightful Correspondent. In A Letter From London In 1948, After Remarking On The Inconvertibility Of The Pound And The Inedible, Still-rationed Food, He Concluded, "so Here I Am Losing Weight And Gaining Pounds.

As A Nation, We Have Been Responsible For The Murder Of Literally Hundreds Of Thousands Of People At Home And Abroad By Fighting A War That Should Never Have Been Started And Can Be Won, If At All, Only By Converting The United States Into A Police State.

If Freedom Led To Wider Inequality, I Would Prefer That To A World In Which I Got Artificial Equality At The Expense Of Freedom. My Objective, My God... Is Freedom Of Individuals To Pursue Their Own Values.

I Am In Favor Of Cutting Taxes Under Any Circumstances And For Any Excuse, For Any Reason, Whenever It's Possible. ... Because I Believe The Big Problem Is Not Taxes, The Big Problem Is Spending.

It Is My View That What Is Important Is Cutting Government Spending, However Spending Is Financed. A So-called Deficit Is A Disguised And Hidden Form Of Taxation. The Real Burden On The Public Is What Government Spends (and Mandates Others To Spend). As I Have Said Repeatedly, I Would Rather Have Government Spend One Trillion Dollars With A Deficit Of A Half A Trillion Than Have Government Spend Two Trillion Dollars With No Deficit.

If You Put The Federal Government In Charge Of The Sahara Desert, In 5 Years There'd Be A Shortage Of Sand.

[u]nemployment Is ... A Side Effect Of The Cure For Inflation.

Never Try To Walk Across A River Just Because It Has An Average Depth Of Four Feet.

There Is Still A Tendency To Regard Any Existing Government Intervention As Desirable, To Attribute All Evils To The Market, And To Evaluate New Proposals For Government Control In Their Ideal Form, As They Might Work If Run By Able, Disinterested Men Free From The Pressure Of Special Interest Groups.

For One Thing, There Are Many "inventions" That Are Not Patentable. The "inventor" Of The Supermarket, For Example, Conferred Great Benefits On His Fellowmen For Which He Could Not Charge Them. Insofar As The Same Kind Of Ability Is Required For The One Kind Of Invention As For The Other, The Existence Of Patents Tends To Divert Activity To Patentable Inventions.

Hell Hath No Fury Like A Bureaucrat Scorned.

All Of The Progress That The Us Has Made Over The Last Couple Of Centuries Has Come From Unemployment. It Has Come From Figuring Out How To Produce More Goods With Fewer Workers, Thereby Releasing Labor To Be More Productive In Other Areas. It Has Never Come About Through Permanent Unemployment, But Temporary Unemployment, In The Process Of Shifting People From One Area To Another.

The Power To Determine The Quantity Of Money... Is Too Important, Too Pervasive, To Be Exercised By A Few People, However Public-spirited, If There Is Any Feasible Alternative. There Is No Need For Such Arbitrary Power... Any System Which Gives So Much Power And So Much Discretion To A Few Men, [so] That Mistakes - Excusable Or Not - Can Have Such Far Reaching Effects, Is A Bad System. It Is A Bad System To Believers In Freedom Just Because It Gives A Few Men Such Power Without Any Effective Check By The Body Politic - This Is The Key Political Argument Against An Independent Central Bank.

You Can Travel From One End Of The Industrialized World To The Other And Almost The Only People You Will Find Engaging In Backbreaking Toil Are People Who Are Doing It For Sport. To Find People Whose Day's Toil Has Not Been Lightened By Mechanical Invention, You Must Go To The Non-capitalist World.

The Facts Never Speak For Themselves. They Have To Be Interpreted In Terms Of Some Understanding Of Where They Come From And What The Relation Between Them Is.

There's No Way To Avoid A Burden On Your Freedom. The Costs Themselves Are A Burden On Your Freedom. The Restrictions That Are Necessary In Order To Get Rid Of The Terrorists Are A Burden To Your Freedom. So There's No Way In The Short Run To Avoid A Restriction On Your Freedom.

There Is No Person, No Theorist So Reckless As He Who Says That The Facts Speak For Themselves.

Government Is A Way By Which Every Individual Believes He Can Live At The Expense Of Everybody Else.

Most Economic Fallacies Derive From The Tendency To Assume That There Is A Fixed Pie, That One Party Can Gain Only At The Expense Of Another.

Had Drugs Been Decriminalized, Crack Would Never Have Been Invented And There Would Today Be Fewer Addicts... The Ghettos Would Not Be Drug-and-crime-infested No-man's Lands... Colombia, Bolivia And Peru Would Not Be Suffering From Narco-terror, And We Would Not Be Distorting Our Foreign Policy Because Of It.

If Freedom Were Not So Economically Efficient It Certainly Wouldn't Stand A Chance.

The Only Reason Free Markets Have A Ghost Of A Chance Is That They Are So Much More Efficient Than Any Other Form Of Organization.

The True Test Of Any Scholar's Work Is Not What His Contemporaries Say, But What Happens To His Work In The Next 25 Or 50 Years.

I Start ... From A Belief In Individual Freedom And That Derives Fundamentally From A Belief In The Limitations Of Our Knowledge, From A Belief ... That Nobody Can Be Sure That What He Believes Is Right, Is Really Right ... I'm An Imperfect Human Being Who Cannot Be Certain Of Anything, So What Position ... Involved The Least Intolerance On My Part? ... The Most Attractive Position ... Is Putting Individual Freedom First.

Adam Smith's Key Insight Was That Both Parties To An Exchange Can Benefit And That, So Long As Cooperation Is Strictly Voluntary, No Exchange Can Take Place Unless Both Parties Do Benefit.

Every Person Shall Be Free To Do Good ' At His Own Expense.

I Know Of No Example In Time Or Place Of A Society That Has Been Marked By A Large Measure Of Political Freedom, And That Has Not Also Used Something Comparable To A Free Market To Organize The Bulk Of Economic Activity.

The Argument For Collectivism Is Simple; Free Market Is Not.

The Word 'free' Is Used Three Times In The Declaration Of Independence And Once In The First Amendment To The Constitution, Along With 'freedom.' The Word 'fair' Is Not Used In Either Of Our Founding Documents.

What's The Difference? How Can People Be So Inconsistent? Why Is It That Free Immigration Was A Good Thing Before 1914 And Free Immigration Is A Bad Thing Today? Well, There Is A Sense In Which That Answer Is Right. There's A Sense In Which Free Immigration, In The Same Sense As We Had It Before 1914 Is Not Possible Today. Why Not?

The Rule Of Law Does Not Guarantee Freedom, Since General Law As Well As Personal Edicts Can Be Tyrannical. But Increasing Reliance On The Rule Of Law Clearly Played A Major Role In Transforming Western Society From A World In Which The Ordinary Citizen Was Literally Subject To The Arbitrary Will Of His Master To A World In Which The Ordinary Citizen Could Regard Himself As His Own Master

Because We Live In A Largely Free Society, We Tend To Forget How Limited Is The Span Of Time And The Part Of The Globe For Which There Has Ever Been Anything Like Political Freedom: The Typical State Of Mankind Is Tyranny, Servitude, And Misery.

In The 1960s, The National Education Association Changed Its Character. The Nea Changed Into A Union. And From That Point On You Can See Deterioration In The Quality Of Schooling In The United States.

The Great Depression In The United States Was Caused - I Won't Say Caused, Was Enormously Intensified And Made Far Worse Than It Would Have Been By Bad Monetary Policy.

Great Depression

Inflation Is Always And Everywhere A Monetary Phenomenon In The Sense That It Is And Can Be Produced Only By A More Rapid Increase In The Quantity Of Money Than In Output.

I Believe The Role That People Like Myself Have Played In The Transformation Of Public Opinion Has Been By Persistently Presenting A Different Point Of View, A Point Of View Which Stresses The Importance Of Private Markets, Of Individual Freedom, And The Distorting Effect Of Governmental Policy.

The Only Relevant Test Of The Validity Of A Hypothesis Is Comparison Of Prediction With Experience.

For Example, The Supporters Of Tariffs Treat It As Self-evident That The Creation Of Jobs Is A Desirable End, In And Of Itself, Regardless Of What The Persons Employed Do. That Is Clearly Wrong. If All We Want Are Jobs, We Can Create Any Number--for Example, Have People Dig Holes And Then Fill Them Up Again, Or Perform Other Useless Tasks. Work Is Sometimes Its Own Reward. Mostly, However, It Is The Price We Pay To Get The Things We Want. Our Real Objective Is Not Just Jobs But Productive Jobs--jobs That Will Mean More Goods And Services To Consume.

When You Argue For Free Markets, You Are Arguing Against The Trend.

Now That I'm 60, Every Morning I Look In The Mirror And Say, "i Don't Know Who You Are, Stranger, But I'm Gonna Shave You Anyway".

If You Continue To Use Monetary Policy To Attempt To Promote Full Employment The Result Would Be That You Would Have Higher Inflation, And That You Would Not Have Lower Unemployment.

I Can Spend Somebody Else's Money On Somebody Else. And If I Spend Somebody Else's Money On Somebody Else, I'm Not Concerned About How Much It Is, And I'm Not Concerned About What I Get. And That's Government. And That's Close To 40 Percent Of Our National Income.

History Suggests That Capitalism Is A Necessary Condition For Political Freedom. Clearly It Is Not A Sufficient Condition.

My Monetary Studies Have Led Me To The Conclusion That Central Banks Could Profitably Be Replaced By Computers Geared To Provide A Steady Rate Of Growth In The Quantity Of Money. Fortunately For Me Personally, And For A Select Group Of Fellow Economists, That Conclusion Has Had No Practical Impact… Else There Would Have Been No Central Bank Of Sweden To Have Established The Award [nobel Prize] I Am Honoured To Receive.

In The Us, The Problem Is Primary And Secondary Education. We've Had Such An Increase In Inequality Because A Quarter Of American Kids Don't Finish High School!

Concentrated Power Is Not Rendered Harmless By The Good Intentions Of Those Who Create It.

The Problem In This World Is To Avoid Concentration Of Power - We Must Have A Dispersion Of Power.

How Can Thinking People Believe That A Government That Cannot Deliver The Mail Can Deliver Gas Better Than Exxon, Mobil, Texaco, Gulf, And The Rest?

The Only Way That Has Ever Been Discovered To Have A Lot Of People Cooperate Together Voluntarily Is Through The Free Market. And That's Why It's So Essential To Preserving Individual Freedom.

The Great Virtue Of A Free Market System Is That It Does Not Care What Color People Are; It Does Not Care What Their Religion Is; It Only Cares Whether They Can Produce Something You Want To Buy. It Is The Most Effective System We Have Discovered To Enable People Who Hate One Another To Deal With One Another And Help One Another.

The Problem Is That, In A World Of Floating Exchange Rates, As Italy Was Before The Euro, If One Country Is Subjected To A Shock Which Requires It To Cut Wages, It Cannot Do So With A Modern Kind Of Control And Regulation System. It Is Much Easier To Do It By Letting The Exchange Rate Change. Only One Price Has To Change, Instead Of Many.

The High Rate Of Unemployment Among Teenagers, And Especially Black Teenagers, Is Both A Scandal And A Serious Source Of Social Unrest. Yet It Is Largely A Result Of Minimum Wage Laws. We Regard The Minimum Wage Law As One Of The Most, If Not The Most, Anti-black Laws On The Statute Books.

Politicians Will Always Spend Every Penny Of Tax Raised And Whatever Else They Can Get Away With.

By Encouraging Men To Spy And Report On One Another, By Making It In The Private Interest Of Large Numbers Of Citizens To Evade The Controls, And By Making Actions Illegal That Are In The Public Interest, The Controls Undermine Individual Morality.

In Response To A Suggestion That Total Free Trade Would End In Cheaper Foreign Products Flooding The Market And Causing Unemployment.

What Central Banks Can Control Is A Base And One Way They Can Control The Base Is Via Manipulating A Particular Interest Rate, Such As A Federal Funds Rate, The Overnight Rate At Which Banks Lend To One Another. But They Use That Control To Control What Happens To The Quantity Of Money. There Is No Disagreement.

If You Cannot State A Proposition Clearly And Unambiguously, You Do Not Understand It.

Few Trends Could So Thoroughly Undermine The Very Foundations Of Our Free Society As The Acceptance By Corporate Officials Of A Social Responsibility Other Than To Make As Much Money For Their Stockholders As Possible.

The Most Important Ways In Which I Think The Internet Will Affect The Big Issue Is That It Will Make It More Difficult For Government To Collect Taxes.

The Fall Of The Berlin Wall Really Demonstrated Beyond The Shadow Of A Doubt That There Was A Bad System, And What Subsequently Happened In The Soviet Union, That That System Was A Failure.

Undoubtedly Internet Has Reduced The Possibilities Of Taxation. Why Should I Buy Something Here If I Can Buy It From A Company In Japan Or England Or Brazil With A Lower Tax?

What Most People Really Object To When They Object To A Free Market Is That It Is So Hard For Them To Shape It To Their Own Will. The Market Gives People What The People Want Instead Of What Other People Think They Ought To Want. At The Bottom Of Many Criticisms Of The Market Economy Is Really Lack Of Belief In Freedom Itself.

There Is No Good Way Of Measuring Poverty.

The Existence Of A Free Market Does Not Of Course Eliminate The Need For Government. On The Contrary, Government Is Essential Both As A Forum For Determining The "rule Of The Game" And As An Umpire To Interpret And Enforce The Rules Decided On.

There Is One And Only One Responsibility Of Business: To Use Its Resources And Engage In Activities Designed To Increase Its Profits So Long As It Stays Within The Rules Of The Game.

Government Power Must Be Dispersed. If Government Is To Exercise Power, Better In The County Than In The State, Better In The State Than In Washington. If I Do Not Like What My Local Community Does, Be It In Sewage Disposal, Or Zoning, Or Schools, I Can Move To Another Local Community, And Though Few May Take This Step, The Mere Possibility Acts As A Check. If I Do Not Like What Washington Imposes, I Have Few Alternatives In This World Of Jealous Nations.

When A Private Enterprise Fails, It Is Closed Down; When A Government Enterprise Fails, It Is Expanded. Isn't That Exactly What's Been Happening With Drugs?

Anything That Government Can Do, Private Enterprise Can Do For Half The Cost.

To The Best Of My Knowledge, There Has Never Been A Monetary Union, Putting Out A Fiat Currency, Composed Of Independent States.

The Fed Was Largely Responsible For Converting What Might Have Been A Garden-variety Recession, Although Perhaps A Fairly Severe One, Into A Major Catastrophe. Instead Of Using Its Powers To Offset The Depression, It Presided Over A Decline In The Quantity Of Money By One-third From 1929 To 1933 ... Far From The Depression Being A Failure Of The Free-enterprise System, It Was A Tragic Failure Of Government.

...theories Should Be Judged By Their Ability To Predict Events Rather Than By The Realism Of Their Assumptions.

The Great Depression, Like Most Other Periods Of Severe Unemployment, Was Produced By Government Mismanagement Rather Than By Any Inherent Instability Of The Private Economy.

Economic Freedom Is An Essential Requisite For Political Freedom. By Enabling People To Cooperate With One Another Without Coercion Or Central Direction, It Reduces The Area Over Which Political Power Is Exercised.

There Is Likely To Be A Lag Between The Need For Action And Government ["an Individual's" Or "a Team's"] Recognition Of The Need; A Further Lag Between Recognition Of The Need For Action And The Taking Of Action; And A Still Further Lag Between The Action And Its Effects

The Fall Of The Berlin Wall Did More For The Progress Of Freedom Than All Of The Books Written By Myself Or Friedrich Hayek Or Others.

I Think Almost Every Economist Would Agree That Government Gets Itself In Trouble When It Tries To Interfere With Voluntary Behavior.

You Can Only Make Money If You Buy A Product, Whatever It Is - Maybe A Currency, Maybe Wheat And Maybe Something Else - At A Relatively Low Price And Sell It At A Higher Price Than You Buy It At. There's No Other Way To Make Money.

I Say Thank God For Government Waste. If Government Is Doing Bad Things, It's Only The Waste That Prevents The Harm From Being Greater.

There's Only One Thing That All Of The Central Banks Control And That Is The Base, Their Own Liability, And They Can Control That In Various Ways. They Can Control It Directly By Open Market Operations, Buying And Selling Government Securities Or Other Assets, For Example, Buying And Selling Gold, Or They Can Control It Indirectly By Altering The Rate At Which Banks Lend To One Another.

When You Start Paying People To Be Poor, You Wind Up With An Awful Lot Of Poor People.

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