Milton Friedman on Intellectuals and Businessmen - YouTube

Milton Friedman: You talk about preserving the free enterprise system. Who has been destroying

it? The business community must take a large share of the responsibility. I am going off

my topic for tonight, but you must separate out being pro-free enterprise from being pro-business.

The two greatest enemies of the free enterprise system in my opinion have been on the one

hand my fellow intellectuals and on the other the big businessmen--for opposite reasons.

My fellow intellectuals are all in favor of freedom for themselves. After all if I say

to them, “You know it’s terribly wasteful to have ten people do research on the same

topic. Don’t you think we ought to have a government planning bureau that would assess

the priority of various research projects and decide who should undertake them so we

could eliminate these terrible wastes of competition?” They will say to me, “Why, don’t you understand

the process of scientific research? Don’t you understand the necessity for academic

freedom, for allowing people to choose their own subjects?” Of course I do understand

it and I agree with that, but when they come to the rest of the community it’s different:

it’s terribly wasteful to have four gas stations on four corners; we ought to have

a government bureau that eliminates that overlapping competition, that assigns priorities, and

sees to it that things are done right. So the intellectual is all in favor of freedom

for himself and all opposed to it for everybody else.

The businessman is very different. You cannot get a business man on a podium. I don’t

mean to be talking about all of them but I’m talking about a very large fraction of them.

You cannot get them on a podium without them uttering generalities about the desirability

of free enterprise systems, but when I come to their own business that’s something

else. When the head of U.S. Steel talks about free enterprise, he doesn’t mean free enterprise

for steel. Oh no, he wants the government to step in and protect him from competition,

from those Japanese who are under¬cutting him. When the oil industry talks about wanting

a free market, some years ago they weren’t talking about freedom. They wanted percentage

depletion, they wanted oil import quotas, they wanted the Texas Railroad Commission

to proration oil. When bankers stand up on a platform and talk about the great desirability

of free enterprise and of free markets, and I say to them, “You mean you don’t want

the government to limit the amount of interest that you are required to pay on demand deposits?

You want to have free competition.” “Oh,” they say, “that’s different. We like that.”

So almost every businessman is in favor of free enterprise for everybody else, but special

privilege and special government protection for himself. As a result they have been a

major force in undermining a free enterprise system. So any hope that you’re going to

protect a free enterprise system, do you really mean to say that you expect U.S. Steel stockholders

to propagandize for free trade? Is that what you expect?

Don’t misunderstand me. I don’t blame the executives of U.S. Steel for trying to

get limitations on imports or the executives of some other corporations for trying to

get tariffs. They are doing what they were hired to do. They were hired to make money

for their stockholders, and they’re trying to do it. If the rest of us are such fools

as to let them make money by getting tariffs or by getting import quotas or by getting

other provisions, then we’re the ones to blame not they. But stop kidding yourself

into thinking that you can use the business community as a way to promote free enterprise.

Unfortunately, most of them are not our friends in that respect.