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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.

-Milton Friedman

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You Could Not Possibly

Milton Friedman

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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.

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The Government Solution To A Problem Is Usually As Bad As The Problem.

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

The Great Depression Was Not A Sign Of The Failure Of Monetary Policy Or A Result Of The Failure Of The Market System As Was Widely Interpreted. It Was Instead A Consequence Of A Very Serious Government Failure, In Particular A Failure In The Monetary Authorities To Do What They'd Initially Been Set Up To Do.

Great Depression

Is It Really True That Political Self-interest Is Nobler Somehow Than Economic Self-interest?

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

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

On Aging Societies, There Is No Reason Why A Country That Has A Lot Of Old People Can't Be Prosperous If, During Their Working Lives, Individuals Provide For Their Retirement.

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

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

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.

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

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.

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

There Is No Other Complex Field In Our Society In Which Do-it-yourself Beats Out Factory Production Or Market Production. Nobody Makes His Or Her Own Car. But It Is Still The Case That Parents Can Perform The Job Of Educating Their Children [homeschooling], In Many Cases Better Than Our Present Education System.

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

The Long-range Sloution To High Unemployment Is To Increase The Incentive For Ordinary People To Save, Invest, Work, And Employ Others. We Make It Costly For Employers To Employ People; We Subsidize People Not To Go To Work We Have A System That Increasingly Taxes Work And Subsidizes Nonwork.

With Some Notable Exceptions, Businessmen Favor Free Enterprise In General But Are Opposed To It When It Comes To Themselves.

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.

The State Of Our Educational System Is A Disgrace To Our Country. We Have An Elementary And Secondary School System In Which Close To Half Of The Youngsters Never Graduate Properly. It's A Disgrace That There Is More Illiteracy Today Than There Was 100 Years Ago.

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.

Education Spending Will Be Most Effective If It Relies On Parental Choice & Private Initiative -- The Building Blocks Of Success Throughout Our Society.

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

Economy And Economics

In A Bureaucratic System, Useless Work Drives Out Useful Work.

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

Money Is A Very Powerful Thing, Which You Hardly Notice When It Goes Right, But Which Can Create Havoc When It Goes Wrong.

Every Economist Knows That Minimum Wages Either Do Nothing Or Cause Inflation And Unemployment. That's Not A Statement, It's A Definition.

I'm In Favor Of Legalizing Drugs. According To My Values System, If People Want To Kill Themselves, They Have Every Right To Do So. Most Of The Harm That Comes From Drugs Is Because They Are Illegal.

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

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.

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

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.

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

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

You Cannot Simultaneously Have Free Immigration And A Welfare State.

Higher Taxes Never Reduce The Deficit. Governments Spend Whatever They Take In And Then Whatever They Can Get Away With.

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

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

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.

What Does It Mean To Say That Government Might Have A Responsibility? Government Can't Have A Responsibility Any More Than The Business Can. The Only Entities Which Can Have Responsibilities Are People.

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.

If The Government Is To Try And Ban Private Consumption Of Alcohol And Tobacco, It Must Surely Ban Such Activities As Hang-gliding, Skiing, Rock-climbing And So On. Where Should It Stop? Rugby? American Football? Ice Hockey? Insofar As The Government Has Information Not Generally Available About The Merits Or Demerits Of The Items We Ingest Or The Activities We Engage In, Let It Give Us The Information. But Let It Leave Us Free To Choose What Chances We Want To Take With Our Own Lives.

If You Have Free Immigration, In The Way We Had It Before 1914, Everybody Benefited. The People Who Were Here Benefited. The People Who Came Benefited. Because Nobody Would Come Unless He, Or His Family, Thought He Would Do Better Here Than He Would Elsewhere. And, The New Immigrants Provided Additional Resources, Provided Additional Possibilities For The People Already Here. So Everybody Can Mutually Benefit.

[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.

And What Does Reward Virtue? You Think The Communist Commissar Rewards Virtue? You Think A Hitler Rewards Virtue? You Think, Excuse Me, If You'll Pardon Me, American Presidents Reward Virtue? Do They Choose Their Appointees On The Basis Of The Virtue Of The People Appointed Or On The Basis Of Their Political Clout?

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

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

The Only Corporate Social Responsibility A Company Has Is To Maximize Its Profits.

The Countries That Have Risen And Separated Out As A Result Of The Collapse Of The Soviet Union Are, On The Whole, Following Freer Economic Policies. Most Of These States Have Freer Government And Less Restrictions On Trade.

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.

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.

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

Reality Ensures That The End Of History Will Never Come.

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?

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?

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

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.

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.

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.

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

The Real Tragedy Of Minimum Wage Laws Is That They Are Supported By Well-meaning Groups Who Want To Reduce Poverty. But The People Who Are Hurt Most By Higher Minimums Are The Most Poverty Stricken.

The Euro Is Going To Be A Big Source Of Problems, Not A Source Of Help.

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.

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.

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

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.

If You Really Want To Engage In Policy Activity, Don't Make That Your Vocation. Make It Your Avocation. Get A Job. Get A Secure Base Of Income. Otherwise, You're Going To Get Corrupted And Destroyed.

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?

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.

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.

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.

China Has Seen A Great Deal Of Economic Progress. It's Certainly Rather Of A Miracle. The Growing Role Of The Market In The Economy Will Force China To Open Up Its Political System Over Time And To Move Toward A More Democratic Society. So Taken As A Whole, The One Real Failure In This Whole Business Has Been Russia.

In This Day And Age, We Need To Revise The Old Saying To Read, "hell Hath No Fury Like A Bureaucrat Scorned.

Hell Hath No Fury

I Cannot Disagree With You That Having Something Like 500 Economists Is Extremely Unhealthy. As You Say, It Is Not Conducive To Independent, Objective Research. You And I Know There Has Been Censorship Of The Material Published. Equally Important, The Location Of The Economists In The Federal Reserve Has Had A Significant Influence On The Kind Of Research They Do, Biasing That Research Toward Noncontroversial Technical Papers On Method As Opposed To Substantive Papers On Policy And Results

The Important Issue Is Not How Much Inequality There Is But How Much Opportunity There Is For Individuals To Get Out Of The Bottom Classes And Into The Top. If There Is Enough Movement Upward, People Will Accept The Efficiency Of The Markets. If You Have Opportunity, There Is A Great Tolerance For Inequality. That Has Been The Saving Grace Of The American System.

It's A Moral Problem That The Government Is Making Into Criminals People, Who May Be Doing Something You And I Don't Approve Of, But Who Are Doing Something That Hurts Nobody Else.

Indeed, A Major Source Of Objection To A Free Economy Is Precisely That It... Gives People What They Want Instead Of What A Particular Group Thinks They Ought To Want. Underlying Most Arguments Against The Free Market Is A Lack Of Belief In Freedom Itself.

What Kind Of Society Isn't Structured On Greed?

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

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.

I Have Long Been A Critic Of Social Security, Basically Because I Believe That It Is Not The Business Of Government To Tell People What Fraction Of Their Incomes They Should Devote To Providing For Their Own Or Someone Else's Old Age.

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.

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.

The Big Problem For A Democratic Government - Democrat With A Small "d" - Is How To Hold Down Government Spending.

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.

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 Think In Some Ways It Would Make More Sense To Have As A Poverty Level A Relative Concept And Say, The Level Of Poverty Is That Level Of Income Or That Level Of Consumption Below Which 10 Percent Of The People Now Are.

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.

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.

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.

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.

Only A Crisis, Actual Or Perceived, Produces Real Change.

A Free Society Releases The Energies And Abilities Of People To Pursue Their Own Objectives. It Prevents Some People From Arbitrarily Suppressing Others. It Does Not Prevent Some People From Achieving Positions Of Privilege, But So Long As Freedom Is Maintained, It Prevents Those Positions Of Privilege From Becoming Institutionalized; They Are Subject To Continued Attack By Other Able, Ambitious People.

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

Germany Has A Very Able And Productive Workforce. It Has High-quality Products That Are Valued All Over The World. It Has Every Opportunity To Be A Productive, Growing State. It Just Has To Give Its Entrepreneurs A Chance. It Has To Let Them Make Money, Hire And Fire, And Act Like Entrepreneurs.

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.

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.

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.

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.

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.

It Is True That A Competitive Market Is Not The Whole Of Society. A Great Deal Depends On The Qualities Of The Population And The Nation In How They Organize The Non-market Aspects Of Society.

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.

Anybody Who Was Easily Converted Was Not Worth Converting.

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.

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

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.

There's No Point In Comparing An Actual, Operating System With An Ideal System That Doesn't Exist.

Operating Systems

Columbus Did Not Seek A New Route To The Indies In Response To A Majority Directive.

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.

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

In The Current World, With The Skills Needed, Dropouts [like No Secondary Education] Are Condemned To Being Members Of The Underclass. In My View, This Is A Fault Of The American School System, Which Is A Government Monopoly.

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.

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

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.

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.

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.

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

To Really Understand Something You've Got To Reduce It To Its Principles.

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.

Even The Most Ardent Environmentalist Doesn't Really Want To Stop Pollution. If He Thinks About It, And Doesn't Just Talk About It, He Wants To Have The Right Amount Of Pollution. We Can't Really Afford To Eliminate It - Not Without Abandoning All The Benefits Of Technology That We Not Only Enjoy But On Which We Depend.

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

John Lott Documents How Far 'politically Correct' Vested Interests Are Willing To Go To Denigrate Anyone Who Dares Disagree With Them. Lott Has Done Us All A Service By His Thorough, Thoughtful Scholarly Approach To A Highly Controversial Issue.

The Way You Solve Things Is By Making It Politically Profitable For The Wrong People To Do The Right Thing.

Now Here's Somebody Who Wants To Smoke A Marijuana Cigarette. If He's Caught, He Goes To Jail. Now Is That Moral? Is That Proper? I Think It's Absolutely Disgraceful That Our Government, Supposed To Be Our Government, Should Be In The Position Of Converting People Who Are Not Harming Others Into Criminals, Of Destroying Their Lives, Putting Them In Jail. That's The Issue To Me. The Economic Issue Comes In Only For Explaining Why It Has Those Effects. But The Economic Reasons Are Not The Reasons.

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. And The Thing That I Will Really Be Proud Of Is If Some Of The Work I Have Done Is Still Cited In The Text Books Long After I Am Gone.

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.

Governments Never Learn. Only People Learn.

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

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.

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

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

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.

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.

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.

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.

What Works For Sweden Wouldn't Work For France Or Germany Or Italy. In A Small State, You Can Reach Outside For Many Of Your Activities. In A Homogeneous Culture, They Are Willing To Pay Higher Taxes In Order To Achieve Commonly Held Goals. But "common Goals" Are Much Harder To Come By In Larger, More Heterogeneous Populations.

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.

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.

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.

What Makes It [economics] Most Fascinating Is That Its Fundamental Principles Are So Simple That They Can Be Written On One Page, That Anyone Can Understand Them, And Yet Very Few Do.

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

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

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.

Society Doesn't Have Values. People Have Values.

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.

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.

When You Have A Time Of Crisis What Happens Depends On What Ideas Are Floating Around, And What Ideas Have Been Developed, And Thought Through, And Are Made Effective.

Times Of Crisis

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.

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.

The Only Reason There Is A Crisis About Social Security In The Us And Pensions In Europe And Japan Is That You Cannot Maintain A "ponzi" Scheme Indefinitely. We Have Collected From Today's Young To Pay Today's Old And Counted On Tomorrow's Young To Keep Doing So. That Was A Fine Scheme As Long As The Number Of Young People Was Rising Faster Than Old People. When That Ratio Comes To An End, Such A System Also Has To End.

We Do Not Influence The Course Of Events By Persuading People That We Are Right When We Make What They Regard As Radical Proposals. Rather, We Exert Influence By Keeping Options Available When Something Has To Be Done At A Time Of Crisis.

Times Of Crisis

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.

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.

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

Nobody Spends Somebody Else's Money As Carefully As He Spends His Own. Nobody Uses Somebody Else's Resources As Carefully As He Uses His Own. So If You Want Efficiency And Effectiveness, If You Want Knowledge To Be Properly Utilized, You Have To Do It Through The Means Of Private Property.

There's A Smokestack On The Back Of Every Government Program.

Government Programs

The Black Market Was A Way Of Getting Around Government Controls. It Was A Way Of Enabling The Free Market To Work. It Was A Way Of Opening Up, Enabling People.

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.

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.

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 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.

Economists May Not Know How To Run The Economy, But They Know How To Create Shortages Or Gluts Simply By Regulating Prices Below The Market, Or Artificially Supporting Them From Above.

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

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

How Do You Hold Down Government Spending?

Government Spending

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.

Theories Can Be Based On Any Assumptions, However Bizarre.

There Have Been Unions Based On Gold Or Silver, But Not On Fiat Money - Money Tempted To Inflate - Put Out By Politically Independent Entities.

The Great Danger To The Consumer Is The Monopoly -whether Private Or Governmental. His Most Effective Protection Is Free Competition At Home And Free Trade Throughout The World. The Consumer Is Protected From Being Exploited By One Seller By The Existence Of Another Seller From Whom He Can Buy And Who Is Eager To Sell To Him. Alternative Sources Of Supply Protect The Consumer Far More Effectively Than All The Ralph Naders Of The World.

They Think That The Cure To Big Government Is To Have Bigger Government... The Only Effective Cure Is To Reduce The Scope Of Government - Get Government Out Of The Business.

You Cannot Be Sure That You Are Right Unless You Understand The Arguments Against Your Views Better Than Your Opponents Do.

I Think That Nothing Is So Important For Freedom As Recognizing In The Law Each Individual’s Natural Right To Property, And Giving Individuals A Sense That They Own Something That They’re Responsible For, That They Have Control Over, And That They Can Dispose Of.

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.

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.

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.

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.

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.

The Most Unresolved Problem Of The Day Is Precisely The Problem That Concerned The Founders Of This Nation: How To Limit The Scope And Power Of Government. Tyranny, Restrictions On Human Freedom, Come Primarily From Governmental Restrictions That We Ourselves Have Set Up.

The Strongest Argument For Free Enterprise Is That It Prevents Anybody From Having Too Much Power. Whether That Person Is A Government Official, A Trade Union Official, Or A Business Executive. If Forces Them To Put Up Or Shut Up. They Either Have To Deliver The Goods, Produce Something That People Are Willing To Pay For, Are Willing To Buy, Or Else They Have To Go Into A Different Business.

With Respect To Teachers' Salaries .... Poor Teachers Are Grossly Overpaid And Good Teachers Grossly Underpaid. Salary Schedules Tend To Be Uniform And Determined Far More By Seniority.

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.

You Know There Are Very Few Marxists Left In The World... They're All In American Universities.

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.

Inflation Is Always And Everywhere A Monetary Phenomenon.

Monetary Policy

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.

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

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.

Underlying Most Arguments Against The Free Market Is A Lack Of Belief In Freedom Itself.

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

The Preservation Of Liberty, Not The Promotion Of Efficiency, Is The Primary Justification For Private Property. Efficiency Is A Happy, Though Not Accidental, By-product - And A Most Important By-product Because Liberty Could Not Have Survived If It Had Not Also Produced Affluence.

Nothing Is So Permanent As A Temporary Government Program.

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.

Not All Schooling Is Education Nor All Education, Schooling.

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.

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?

The Federal Reserve The Privately Owned U.s. Central Bank Definitely Caused The Great Depression By Contracting The Amount Of Currency In Circulation By One Third From 1929 To 1933.

Great Depression

Federal Reserve

The Stock Market Crashed In October 1929. But That Was Not The Cause Of What Caused The Great Depression. It Was, In My Opinion, A Very Minor Element Of It. What Happened Was That From 1929 To 1933 You Had A Major Contraction Which, In My Opinion, Was Caused Primarily By The Failure Of The Federal Reserve System, To Follow The Course Of Action For Which It Was Set Up. It Was Set Up To Prevent Exactly What Happened From 1929 To 1933. But Instead Of Preventing It, They Facilitated It.

The World Runs On Individuals Pursuing Their Self Interests. The Great Achievements Of Civilization Have Not Come From Government Bureaus. Einstein Didn't Construct His Theory Under Order From A Bureaucrat. Henry Ford Didn't Revolutionize The Automobile Industry That Way.

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.

A Society Based On The Freedom To Choose Is Better Than A Society Based On The Principles Of Socialism, Communism And Coercion.

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