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The Central Banks Cannot Control Interest Rates. That's A Mistake. They Can Control A Particular Rate, Such As The Federal Funds Rate, If They Want To, But They Can't Control Interest Rates.

-Milton Friedman

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The Central Banks Cannot

Milton Friedman

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The Central Banks Cannot Control Interest Rates. That's A Mistake. They Can Control A Particular Rate, Such As The Federal Funds Rate, If They Want To, But They Can't Control Interest Rates.

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The Benefits Of A Tariff Are Visible. Union Workers Can See They Are "protected". The Harm Which A Tariff Does Is Invisible. It's Spread Widely. There Are People That Don't Have Jobs Because Of Tariffs But They Don't Know It.

Universities Exist To Transmit Knowledge And Understanding Of Ideas And Values To Students Not To Provide Entertainment For Spectators Or Employment For Athletes.

It Doesn't Worry Me A Bit That China And Japan Hold So Much Us Debt. In A Way, It Seems Foolish For Them To Do It Because They Get Lower Returns Than They Might Elsewhere. But That Is Their Business.

Most Of The Energy Of Political Work Is Devoted To Correcting The Effects Of Mismanagement Of Government.

One Of The Reasons That I Am In Favor Of Less Government Is Because When You Have More Government, Industrialists Take It Over.

Is There Some Society You Know Of That Doesn't Run On Greed? You Think Russia Doesn't Run On Greed? You Think China Doesn't Run On Greed? What Is Greed?

The Growing Role That The Government Has Played In Financing And Administering Schooling Has Led Not Only The Enormous Waste Of Taxpayers Money But Also To A Far Poorer Educational System.

Inflation Is A Monetary Phenomenon. It Is Made By Or Stopped By The Central Bank.

Economic Freedom Is ... An Indispensable Means Toward The Achievement Of Political Freedom.

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.

If A Tax Cut Increases Government Revenues, You Haven't Cut Taxes Enough.

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.

Why Have We Had Such A Decline In Moral Climate? I Submit To You That A Major Factor Has Been A Change In The Philosophy Which Has Been Dominant, A Change From Belief In Individual Responsibility To Belief In Social Responsibility. If You Adopt The View That A Man Is Not Responsible For His Own Behavior, That Somehow Society Is Responsible, Why Should He Seek To Make His Behavior Good?

Only A Crisis—actual Or Perceived—produces Real Change. When That Crisis Occurs, The Actions That Are Taken Depend On The Ideas That Are Lying Around.

The Big Issue Is Whether The United States Will Succeed In Its Venture Of Reshaping The Middle East. It Is Not Clear To Me That Using Military Force Is The Way To Do It. We Should Not Have Gone Into Iraq. But We Have.

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.

The Price Works So Well, So Efficiently, That We Are Not Aware Of It Most Of The Time.

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!

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

Economists May Not Know Much. But We Know One Thing Very Well: How To Produce Surpluses And Shortages. Do You Want A Surplus? Have The Government Legislate A Minimum Price That Is Above The Price That Would Otherwise Prevail. That Is What We Have Done At One Time Or Another To Produce Surpluses Of Wheat, Of Sugar, Of Butter, Of Many Other Commodities. Do You Want A Shortage? Have The Government Legislate A Maximum Price That Is Below The Price That Would Otherwise Prevail.

Governments Never Learn. Only People Learn.

The Argument For The Free Market Is A Complicated And Sophisticated One And Depends On Demonstration Of Secondary Effects. I Have Confidence Market Efficiency Will Win Out.

Market Efficiency

Germany Cannot Get Out Of The Euro. What It Has To Do, Therefore, Is Make The Economy More Flexible - To Eliminate The Restrictions On Prices, On Wages And On Employment; In Short, The Regulations That Keep 10 Percent Of The German Workforce Unemployed.

A Society That Puts Equality - In The Sense Of Equality Of Outcome - Ahead Of Freedom Will End Up With Neither Equality Or Freedom. The Use Of Force To Achieve Equality Will Destroy Freedom. On The Other Hand, A Society That Puts Freedom First Will, As A Happy By-product, End Up With Both Greater Freedom And Greater Equality. Freedom Means Diversity But Also Mobility. It Preserves The Opportunity For Today's Less Well Off To Become Tomorrow's Rich, And In The Process, Enables Almost Everyone, From Top To Bottom, To Enjoy A Richer And Fuller Life.

The Current Oil Crisis Has Not Been Produced By The Oil Companies. It Is A Result Of Governmental Mismanagement Exacerbated By The Mideast War.

A Society That Aims For Equality Before Liberty Will End Up With Neither Equality Nor Liberty. And A Society That Aims First For Liberty Will Not End Up With Equality, But It Will End Up With A Closer Approach To Equality Than Any Other Kind Of System That Has Ever Been Developed.

If We Have System In Which Government Is In A Position To Give Large Favor - It's Human Nature To Try To Get This Favor - Whether Those People Are Large Enterprises, Or Whether They're Small Businesses Like Farmers, Or Whether They're Representatives Of Any Other Special Group. The Only Way To Prevent That Is To Force Them To Engage In Competition One With The Other.

It All Would Have Been Much Better If Individuals Saved For Their Own Old Age.

We Don't Have A Desperate Need To Grow. We Have A Desperate Desire To Grow.

Saying It Is One Thing. Doing It Is Very Different.

If A Country Is An Attractive Place For Foreigners To Invest Their Funds, Then That Country Will Have A Relatively High Exchange Rate. If It's An Unattractive Place, It Will Have A Relatively Low Exchange Rate. Those Are The Fundamentals That Determine The Exchange Rate In A Floating Exchange Rate System.

There's No Doubt In My Mind That Ronald Reagan Was By Far The Greatest. Because He Had Real Principles And He Stuck By Them. He Made Clear What He Was Going To Do, And He Did It. He Didn't Back Down.

Government Has Three Primary Functions. It Should Provide For Military Defense Of The Nation. It Should Enforce Contracts Between Individuals. It Should Protect Citizens From Crimes Against Themselves Or Their Property. When Government-- In Pursuit Of Good Intentions Tries To Rearrange The Economy, Legislate Morality, Or Help Special Interests, The Cost Come In Inefficiency, Lack Of Motivation, And Loss Of Freedom. Government Should Be A Referee, Not An Active Player.

What Is Not Forbidden In Sweden, Is Obligatory.

Richard Nixon Was A Very Intelligent And Able Man. And He Had The Right Ideas. But He Did Not Have The Adherence To Principles That [ronald] Reagan Had. He Did Some Very Good Things. We Owe To Richard Nixon The Volunteer Army - He Got Rid Of The Draft. And That Was A Major Increase In Freedom.

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.

Plato Assumes Somehow That Government Is A Way In Which You Put Unselfish And Ungreedy Men In Charge Of Selfish And Greedy Men. But Government Is An Institution Whereby The People Who Have The Greatest Drive To Get Power Over Their Fellow Men, Get In A Position Of Controlling Them. Look At The Record Of Government. Where Are These Philosopher Kings That Plato Supposedly Was Trying To Develop?

World Trade Depends On Differences Among Countries, Not Similarities. Different Countries Are In Different Stages Of Development. It Is Appropriate For Them To Have Different Patterns, Different Policies For Ecology, Labor Standards, And So Forth.

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?

The Great Virtue Of Free Enterprise Is That It Forces Existing Businesses To Meet The Test Of The Market Continuously, To Produce Products That Meet Consumer Demands At Lowest Cost, Or Else Be Driven From The Market. It Is A Profit-and-loss System. Naturally, Existing Businesses Generally Prefer To Keep Out Competitors In Other Ways. That Is Why The Business Community, Despite Its Rhetoric, Has So Often Been A Major Enemy Of Truly Free Enterprise.

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.

Political Freedom Means The Absence Of Coercion Of A Man By His Fellow Men. The Fundamental Threat To Freedom Is Power To Coerce, Be It In The Hands Of A Monarch, A Dictator, An Oligarchy, Or A Momentary Majority. The Preservation Of Freedom Requires The Elimination Of Such Concentration Of Power To The Fullest Possible Extent And The Dispersal And Distribution Of Whatever Power Cannot Be Eliminated — A System Of Checks And Balances.

We Economists Don't Know Much, But We Do Know How To Create A Shortage. If You Want To Create A Shortage Of Tomatoes, For Example, Just Pass A Law That Retailers Can't Sell Tomatoes For More Than Two Cents Per Pound. Instantly You'll Have A Tomato Shortage. It's The Same With Oil Or Gas.

The Free Market Is Not Only A More Efficient Decision Maker Than Even The Wisest Central Planning Body, But Even More Important, The Free Market Keeps Economic Power Widely Dispersed.

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

Free Enterprise

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.

But On The Other Hand, If You Come Under Circumstances Where Each Person Is Entitled To A Pro-rata Share Of The Pot, To Take An Extreme Example, Or Even To A Low Level Of The Pie, Than The Effect Of That Situation Is That Free Immigration, Would Mean A Reduction Of Everybody To The Same, Uniform Level. Of Course, I'm Exaggerating, It Wouldn't Go Quite That Far, But It Would Go In That Direction. And It Is That Perception, That Leads People To Adopt What At First Seems Like Inconsistent Values.

To The Free Man, The Country Is The Collection Of Individuals Who Compose It, Not Something Over And Above Them. He Is Proud Of A Common Heritage And Loyal To Common Traditions. But He Regards Government As A Means, An Instrumentality, Neither A Grantor Of Favors And Gifts, Nor A Master Or God To Be Blindly Worshipped And Served.

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

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.

The Use Of Quantity Of Money As A Target Has Not Been A Success. I'm Not Sure That I Would As Of Today Push It As Hard As I Once Did.

It Is Taken For Granted That Workers Should Receive Their Pay Partly In Kind, In The Form Of Medical Care Provided By The Employer. How Come? Why Single Out Medical Care? Surely Food Is No Less Essential To Life Than Medical Care. Why Is It Not At Least As Logical For Workers To Be Required To Buy Their Food At The Company Store As To Be Required To Buy Their Medical Care At The Company Store?

There Are Severe Limits To The Good That The Government Can Do For The Economy, But There Are Almost No Limits To The Harm It Can Do.

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.

There Is One And Only One Social Responsibility Of Business - To Use It Resources And Engage In Activities Designed To Increase Its Profits So Long As It Stays Within The Rules Of The Game, Which Is To Say, Engages In Open And Free Competition Without Deception Or Fraud.

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.

You Mustn't Judge A Politician By Talk. You Have To Judge Them By Performance.

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

Keynes Was A Great Economist. In Every Discipline, Progress Comes From People Who Make Hypotheses, Most Of Which Turn Out To Be Wrong, But All Of Which Ultimately Point To The Right Answer. Now Keynes, In 'the General Theory Of Employment, Interest And Money,' Set Forth A Hypothesis Which Was A Beautiful One, And It Really Altered The Shape Of Economics. But It Turned Out That It Was A Wrong Hypothesis. That Doesn't Mean That He Wasn't A Great Man!

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.

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

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.

We Had Much Freer Trade In The 19th Century. We Have Much Less Globalization Now Than We Did Then.

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

A Society That Puts Equality Before Freedom Will Get Neither. A Society That Puts Freedom Before Equality Will Get A High Degree Of Both.

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

We Have A System That Increasingly Taxes Work And Subsidizes Nonwork.

How Did We Make The Transition From Using Wood To Using Coal, From Using Coal To Using Oil, From Using Oil To Using Natural Gas? How In God's Name Did We Make That Transition Without A Federal Energy Agency?

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.

Socialism, In The Traditional Sense, Meant Government Ownership And Operation Of The Means Of Production. Outside Of North Korea And A Couple Of Other Spots, No One In The World Today Would Define Socialism That Way. That Will Never Come Back.

I Believe That The Monetary Stability Is An Absolutely Critical Element In The Satisfactory Operation Of A System.

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.

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.

The Great Advances Of Civilization, Whether In Architecture Or Painting, In Science Or Literature, In Industry Or Agriculture, Have Never Come From Centralized Government.

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.

Legalizing Drugs Would Simultaneously Reduce The Amount Of Crime And Raise The Quality Of Law Enforcement. Can You Conceive Of Any Other Measure That Would Accomplish So Much To Promote Law And Order?

[trade Licensing] Almost Inevitably Becomes A Tool In The Hands Of A Special Producer Group To Maintain A Monopoly Position At The Expense Of The Rest Of The Public. There Is No Way To Avoid This Result.

If Instead Of Looking At Income, You Look At Levels Of Consumption, If Anything That's Become More Equal. The Fraction Of Families That Have A Dishwasher, That Have A Sewing Machine, That Have A Television Set. In Respect To Consumption, It's Very Hard To Avoid The View That People Have Been Getting More Equal Rather Than More Unequal.

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

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?

Society Doesn't Have Values. People Have Values.

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.

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.

Complete Free Trade Is Not Politically Feasible. Why? Because It's Only In The General Interest And In No One's Special Interest.

Political Leaders In Capitalist Countries Who Cheer The Collapse Of Socialism In Other Countries Continue To Favor Socialist Solutions In Their Own. They Know The Words, But They Have Not Learned The Tune.

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... A Steady Rate Of Monetary Growth At A Moderate Level Can Provide A Framework Under Which A Country Can Have Little Inflation And Much Growth. It Will Not Produce Perfect Stability; It Will Not Produce Heaven On Earth; But It Can Make An Important Contribution To A Stable Economic Society.

Central Bankers Always Try To Avoid Their Last Big Mistake. So Every Time There's The Threat Of A Contraction In The Economy, They'll Over Stimulate The Economy, By Printing Too Much Money. The Result Will Be A Rising Roller Coaster Of Inflation, With Each High And Low Being Higher Than The Preceding One.

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

To The Free Man, The Country Is The Collection Of Individuals Who Compose It, Not Something Over And Above Them.

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.

We Measure Poverty By What I Believe Is A Very, Very Crude Concept. We Actually Measure Poverty By Trying To Get Some Kind Of An Estimate Of The Minimum Expenditures On Food That Are Required To Maintain Health, Multiplying That Number By Three, And Saying That's The Level Of Poverty. And It's A Very Crude, Inaccurate Arrangement.

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.

I Think A Major Reason Why Intellectuals Tend To Move Towards Collectivism Is That The Collectivist Answer Is A Simple One. If There's Something Wrong, Pass A Law And Do Something About It.

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

A Society That Puts Equality — In The Sense Of Equality Of Outcome — Ahead Of Freedom Will End Up With Neither Equality Nor Freedom. The Use Of Force To Achieve Equality Will Destroy Freedom, And The Force, Introduced For Good Purposes, Will End Up In The Hands Of People Who Use It To Promote Their Own Interests.

Everywhere, And At All Times, Economic Progress Has Meant Far More To The Poor Than To The Rich.

Our Minds Tell Us, And History Confirms, That The Great Threat To Freedom Is The Concentration Of Power. Government Is Necessary To Preserve Our Freedom, It Is An Instrument Through Which We Can Exercise Our Freedom; Yet By Concentrating Power In Political Hands, It Is Also A Threat To Freedom. Even Though The Men Who Wield This Power Initially Be Of Good Will And Even Though They Be Not Corrupted By The Power They Exercise, The Power Will Both Attract And Form Men Of A Different Stamp.

And Where Are You Going To Get These Angels Who Are Going To Run Society For Us?

I Would Say That In This World, The Greatest Source Of Inequality Has Been Special Privileges Granted By Government.

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.

When A Man Spends His Own Money To Buy Something For Himself, He Is Very Careful About How Much He Spends And How He Spends It. When A Man Spends His Own Money To Buy Something For Someone Else, He Is Still Very Careful About How Much He Spends, But Somewhat Less What He Spends It On. When A Man Spends Someone Else's Money To Buy Something For Himself, He Is Very Careful About What He Buys, But Doesn't Care At All How Much He Spends. And When A Man Spends Someone Else's Money On Someone Else, He Does't Care How Much He Spends Or What He Spends It On. And That's Government For You.

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.

The Collapse Of Communism In Essence Added Tens And Tens Of Millions Of People To The World Labor Supply, And The People Who Were Added Had Previously Been Getting Very Low Income, But They Were Not Unskilled. Many Of Them Were Fairly Well Educated.

Consider Social Security. The Young Have Always Contributed To The Support Of The Old. Earlier, The Young Helped Their Own Parents Out Of A Sense Of Love And Duty. They Now Contribute To The Support Of Someone Else's Parents Out Of Compulsion And Fear. The Voluntary Transfers Strengthened The Bonds Of The Family; The Compulsory Transfers Weaken Those Bonds.

Positive Economics Is In Principle Independent Of Any Particular Ethical Position Or Normative Judgment...in Short, Positive Economics Is Or Can Be An "objective" Science.

Cutting Government Spending And Government Intrusion In The Economy Will Almost Surely Involve Immediate Gain For The Many, Short-term Pain For The Few, And Long-term Gain For All.

Spending By Government Currently Amounts To About 45 Percent Of National Income. By That Test, Government Owns 45 Percent Of The Means Of Production That Produce The National Income. The U.s. Is Now 45 Percent Socialist.

Personal Freedom Has Grown Greatly Within China, And That Will Provoke Ever More Points Of Conflict Between The Individual And State.

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.

I Think It's A Scandal What Has Been Happening In The School System So Far As Lower Income Classes. The Dropout Rates, The Illiteracy Rate, You Know Literacy In The United States Was A Lot Higher In 1890 Than It Is Now.

So Long As Large Sums Of Money Are Involved - And They Are Bound To Be If Drugs Are Illegal - It Is Literally Impossible To Stop The Traffic, Or Even To Make A Serious Reduction In Its Scope.

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.

What You Have As A Result Of Past Policies Is That German Entrepreneurs Go Outside Of Germany For Many Of Their Activities. They Are Investing Abroad Instead Of At Home Because There Isn't The Openness, Fluidity And Opportunity They Find Outside Their Borders.

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.

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.

When They So-called 'target The Interest Rate', What They're Doing Is Controlling The Money Supply Via The Interest Rate. The Interest Rate Is Only An Intermediary Instrument.

Hong Kong Is The Bellwether. If The Chinese Stick To Their Agreement To Let Hong Kong Go Its Own Path, Then China Will Also Go That Way. If They Don't, That Is A Very Bad Sign. I'm Optimistic.

You Could Not Possibly Maintain The Current Level Of Government Taxation Without The Taxes Being Hidden, And They Are Hidden In Two Very Different Ways. They Are Hidden Through Withholding, But They Are Also Hidden By Being Imposed On Business, Supposedly On Business, When Really, Of Course, Business Can't Pay Taxes, Only People Can Pay Taxes.

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.

Significant Changes In The Growth Rate Of Money Supply, Even Small Ones, Impact The Financial Markets First. Then, They Impact Changes In The Real Economy, Usually In Six To Nine Months, But In A Range Of Three To 18 Months. Usually In About Two Years In The Us, They Correlate With Changes In The Rate Of Inflation Or Deflation." "the Leads Are Long And Variable, Though The More Inflation A Society Has Experienced, History Shows, The Shorter The Time Lead Will Be Between A Change In Money Supply Growth And The Subsequent Change In Inflation.

Significant Change

Pick At Random Any Three Letters From The Alphabet, Put Them In Any Order, And You Will Have An Acronym Designating A Federal Agency We Can Do Without.

There Is Not A Line In 'the Wealth Of Nations' That Is Not Still Applicable To This Day.

The Essential Notion Of A Capitalist Society ... Is Voluntary Cooperation, Voluntary Exchange. The Essential Notion Of A Socialist Society Is Force.

The Euro Is Good For Europe. But Only If There Is Flexibility All Around.

Rapid Increases In The Quantity Of Money Produce Inflation. Sharp Decreases Produce Depression.

Freedom Is A Rare And Delicate Plant. Our Minds Tell Us, And History Confirms, That The Great Threat To Freedom Is The Concentration Of Power.

There Is No Place For Government To Prohibit Consumers From Buying Products The Effect Of Which Will Be To Harm Themselves.

To The Free Man, The Country Is The Collection Of Individuals Who Compose It, Not Something Over And Above Them... He Recognizes No National Goal Except As It Is The Consensus Of The Goals That The Citizens Severally Serve. He Recognizes No National Purpose Except As It Is The Consensus Of The Purposes For Which The Citizens Severally Strive.

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 Figure Who Had More Of An Influence, No Person Had More Of An Influence On The Intellectuals Behind The Iron Curtain Than Friedrich Hayek. His Books Were Translated And Published By The Underground And Black Market Editions, Read Widely, And Undoubtedly Influenced The Climate Of Opinion That Ultimately Brought About The Collapse Of The Soviet Union.

Statistics Do Not Speak For Themselves.

Whenever You Try To Do Good With Someone Else's Money, You Are Committed To Using Force. How Can You Do Good With Somebody Else's Money, Unless You First Take It Away From Them? The Only Way You Can Take It Away From Them Is The Threat Of Force: You Have A Policeman, Tax Collector, Who Comes And Takes It From Them.

Making Prohibition Work Is Like Making Water Run Uphill; It's Against Nature.

Americans Know Very Little About Social Statistics, But I Am Not Sure That It's Important That Americans Know About Social Statistics.

Political Freedom Means The Absence Of Coercion Of A Man By His Fellow Men.

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.

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

Our Emphasis Here Is Based Not Only On The Growing Seriousness Of Drug-related Crimes, But Also On The Belief That Relieving Our Police And Our Courts From Having To Fight Losing Battles Against Drug Use Will Enable Their Energies And Facilities To Be Devoted More Fully To Combating Other Forms Of Crime.

I Do Not Believe That The Solution To Our Problem Is Simply To Elect The Right People. The Important Thing Is To Establish A Political Climate Of Opinion Which Will Make It Politically Profitable For The Wrong People To Do The Right Thing. Unless It Is Politically Profitable For The Wrong People To Do The Right Thing, The Right People Will Not Do The Right Thing Either, Or It They Try, They Will Shortly Be Out Of Office.

See, If You Look At The Drug War From A Purely Economic Point Of View, The Role Of The Government Is To Protect The Drug Cartel. That's Literally True.

Freedom In Economic Arrangements Is Itself A Component Of Freedom Broadly Understood, So Economic Freedom Is An End In Itself ... Economic Freedom Is Also An Indispensable Means Toward The Achievement Of Political Freedom.

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.

The Broader And More Influential Organisations Of Businessmen Have Acted To Undermine The Basic Foundation Of The Free Market System They Purport To Represent And Defend.

Every Businessman Is In Favor Of Freedom For Everybody Else, But When It Comes To Himself That's A Different Question. He's Always The Special Case. He Ought To Get Special Privileges From The Government, A Tariff, This, That And The Other Thing.

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.

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

You Had A Flood Of Immigrants, Millions Of Them, Coming To This Country. What Brought Them Here? It Was The Hope For A Better Life For Them And Their Children. And, In The Main, They Succeeded. It Is Hard To Find Any Century In History, In Which So Large A Number Of People Experience So Great An Improvement In The Conditions Of Their Life, In The Opportunities Open To Them, As In The Period Of The 19th And Early 20th Century.

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.

"free Markets" Is A Very General Term. There Are All Sorts Of Problems That Will Emerge. Free Markets Work Best When The Transaction Between Two Individuals Affects Only Those Individuals. Most Often, A Transaction Between You And Me Affects A Third Party. That Is The Source Of All Problems For Government. That Is The Source Of All Pollution Problems, Of The Inequality Problem. This Reality Ensures That The End Of History Will Never Come.

A Free Man Will Ask Neither What His Country Can Do For Him Nor What He Can Do For His Country.

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 Proper Role Of Government Is Exactly What John Stuart Mill Said In The Middle Of The 19th Century In "on Liberty." The Proper Role Of Government Is To Prevent Other People From Harming An Individual. Government, He Said, Never Has Any Right To Interfere With An Individual For That Individual's Own Good.

I Want People To Take Thought About Their Condition And To Recognize That The Maintenance Of A Free Society Is A Very Difficult And Complicated Thing And It Requires A Self-denying Ordinance Of The Most Extreme Kind

Why Is It That Private Insurance Companies Are Not In Trouble Because People Are Getting Older? Aren't They Subject To The Same Demographics? The Difference Is That They've Accumulated A Fund, Not A Pay-in, Pay-out System.

I Know Of No Severe Depression, In Any Country Or Any Time, That Was Not Accompanied By A Sharp Decline In The Stock Of Money, And Equally Of No Sharp Decline In The Stock Of Money That Was Not Accompanied By A Severe Depression.

Every Friend Of Freedom... Must Be As Revolted As I Am By The Prospect Of Turning The United States Into An Armed Camp, By The Vision Of Jails Filled With Casual Drug Users And Of An Army Of Enforcers Empowered To Invade The Liberty Of Citizens On Slight Evidence.

A Private Enterprise System Needs Some Measuring Rod, It Needs Something, It Needs Money To Make Its Transactions. You Can't Run A Big Complicated System Through Barter, Through Converting One Commodity Into Another. You Need A Monetary System To Operate. And The Instability In That Monetary System Is Devastating To The Performance Of The Economy.

If China Don't Free Up The Political Side, Its Economic Growth Will Come To An End - While It Is Still At A Very Low Level.

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.

Nobody Spends Somebody Else's Money As Carefully As He Spends His Own.

Economy And Economics

So Long As It Stays Within The Rules Of The Game, Which Is To Say, Engages In Open And Free Competition Without Deception Or Fraud.

It Is Most Attractive About The Us To People And Countries With Wealth Is That It Can Provide Security, Insurance Really, Against Political Instability. Nobody Is Afraid That The Money They Place In The Us Is At Risk Of Expropriation Or Of In Some Other Way Being Taken Away. For This Safety, The Wealth Holders Of The World Are Willing To Accept A Lower Rate Of Return.

If The Us Government Spends 40 Percent Of The Nation's Income, As It Does Through Either Borrowing Or Taxes, That Income Is Not Available For People To Spend. The Deficit Is An Indirect Method Of Taxation. Of Course, Politicians Prefer To Borrow Instead Of Tax Because Then Someone Down The Road Has To Deal With The Consequences.

Germany's Problem, In Part, Is That It Went Into The Euro At The Wrong Exchange Rate That Overvalued The Deutsche Mark.

People Hired By Government Know Who Is Their Benefactor. People Who Lose Their Jobs Or Fail To Get Them Because Of The Government Program Do Not Know That That Is The Source Of Their Problem. The Good Effects Are Visible. The Bad Effects Are Invisible. The Good Effects Generate Votes. The Bad Effects Generate Discontent, Which Is As Likely To Be Directed At Private Business As At The Government.

If You Pay People Not To Work And Tax Them When They Do, Don't Be Surprised If You Get Unemployment.

The Unions Might Be Good For The People Who Are In The Unions But It Doesn't Do A Thing For The People Who Are Unemployed. Because The Union Keeps Down The Number Of Jobs, It Doesn't Do A Thing For Them.

If You Do Not Force Political Freedom, Economic Freedom Will Be Stymied Sooner Or Later.

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

Humility Is The Distinguishing Virtue Of The Believer In Freedom; Arrogance, Of The Paternalist.

The Evidence Of History Speaks With A Single Voice. I Do Not Know Any Exception To The Proposition That If You Compare Like With Like, The Freer The System, The Better Off The Ordinary Poor People Have Been.

The Argument For Collectivism Is Simple If False; It Is An Immediate Emotional Argument. The Argument For Individualism Is Subtle And Sophisticated; It Is An Indirect Rational Argument. And The Emotional Faculties Are More Highly Developed In Most Men Than The Rational, Paradoxically Or Especially Even In Those Who Regard Themselves As Intellectuals.

I'm Not In Favor Of No Government. You Do Need A Government. But By Doing So Many Things That The Government Has No Business Doing, It Cannot Do Those Things Which It Alone Can Do Well. There's No Other Institution In My Opinion That Can Provide Us With Protection Of Our Life And Liberty. However, The Government Performs That Basic Function Poorly Today, Precisely Because It Is Devoting Too Much Of Its Efforts And Spending Too Much Of Our Income On Things Which Are Harmful. So I Have No Doubt That That's The Major Single Problem We Face.

Whenever We Depart From Voluntary Cooperation And Try To Do Good By Using Force, The Bad Moral Value Of Force Triumphs Over Good Intentions.

Fundamentally, There Are Only Two Ways Of Coordinating The Economic Activities Of Millions. One Is Central Direction Involving The Use Of Coercion - The Technique Of The Army And Of The Modern Totalitarian State. The Other Is Voluntary Cooperation Of Individuals - The Technique Of The Marketplace.

The Free Man Will Ask Neither What His Country Can Do For Him Nor What He Can Do For His Country. He Will Ask Rather 'what Can I And My Compatriots Do Through Government' To Help Us Discharge Our Individual Responsibilities, To Achieve Our Several Goals And Purposes, And Above All, To Protect Our Freedom?

Freedom Means Diversity But Also Mobility. It Preserves The Opportunity For Today's Disadvantaged To Become Tomorrow's Privileged And, In The Process, Enables Almost Everyone, From Top To Bottom, To Enjoy A Fuller And Richer Life.

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

I Do Not Believe There Is A Natural Resource Economics. I Believe There Is Good Economics And Bad Economics.

The History Of Mankind Is The History Of Money Losing Value.

Many People Want The Government To Protect The Consumer. A Much More Urgent Problem Is To Protect The Consumer From The Government.

When Everybody Owns Something, Nobody Owns It, And Nobody Has A Direct Interest In Maintaining Or Improving Its Condition. That Is Why Buildings In The Soviet Union - Like Public Housing In The United States - Look Decrepit Within A Year Or Two Of Their Construction.

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.

Only A Crisis - Actual Or Perceived - Produces Real Change. When That Crisis Occurs, The Actions That Are Taken Depend On The Ideas That Are Lying Around. That, I Believe, Is Our Basic Function: To Develop Alternatives To Existing Policies, To Keep Them Alive And Available Until The Politically Impossible Becomes The Politically Inevitable.

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.

[t]he Burden Of Government Is Not Measured By How Much It Taxes, But By How Much It Spends.

Anybody Who Was Easily Converted Was Not Worth Converting.

The Difference Between Me And People Like Murray Rothbard Is That, Though I Want To Know What My Ideal Is, I Think I Also Have To Be Willing To Discuss Changes That Are Less Than Ideal So Long As They Point Me In That Direction.

The Lesson For Asia Is; If You Have A Central Bank, Have A Floating Exchange Rate; If You Want To Have A Fixed Exchange Rate, Abolish Your Central Bank And Adopt A Currency Board Instead. Either Extreme; A Fixed Exchange Rate Through A Currency Board, But No Central Bank, Or A Central Bank Plus Truly Floating Exchange Rates; Either Of Those Is A Tenable Arrangement. But A Pegged Exchange Rate With A Central Bank Is A Recipe For Trouble.

The Most Important Single Central Fact About A Free Market Is That No Exchange Takes Place Unless Both Parties Benefit.

A Crackpot Theory. Instead Of Saying Labor's Exploited, As Marx Did, Kelso Says Capital's Exploited. It's Worse Than Marx. It's Marx Stood On Its Head.

The Internet Moves Us Closer To "perfect Information" On Markets. Individuals And Companies Alike Can Buy And Sell Across Borders And Jurisdictions Wherever They Find The Best Match Of Supply And Demand.

I Am Favor Of Cutting Taxes Under Any Circumstances And For Any Excuse, For Any Reason, Whenever It's Possible.

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

One Of The Great Mistakes Is To Judge Policies And Programs By Their Intentions Rather Than Their Results.

You Cannot Simultaneously Have Free Immigration And A Welfare State.

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

So The Question Is, Do Corporate Executives, Provided They Stay Within The Law, Have Responsibilities In Their Business Activities Other Than To Make As Much Money For Their Stockholders As Possible? And My Answer To That Is, No They Do Not.

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

Drugs Are A Tragedy For Addicts. But Criminalizing Their Use Converts That Tragedy Into A Disaster For Society, For Users And Non-users Alike. Our Experience With The Prohibition Of Drugs Is A Replay Of Our Experience With The Prohibition Of Alcoholic Beverages.

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