The Most Effective Machine for Eliminating Poverty

"Milton Friedman - Poverty and Equality", https://youtu.be/fKc6esIi0_U

Partial transcript from "Milton Friedman: Government's Responsibility to the Poor", Jadranko Brkic

Student:

In reference to your own talking about government's role in a free society you mentioned some of the market failures, and I think that you may have just passed over one that is of utmost importance and that is in poverty. I would like to refer to what president Kennedy said that if a free society cannot help the many why are poor, you canot save a few more who are rich. And to say that well we are the government of the people and when there is a large sector of the people who are hurting, perhaps it is responsibility of this government of the people to help out. My question is regarding how free are the poor, how free are the unemployed, and how free are those people who are disadvantaged, and so in reference to that, what is government's role?

Milton Friedman:

First of all... I'm glad to see one vote for the poor. First of all, the government doesn’t have any responsibility. People have responsibility. This building doesn’t have responsibility. You and I have responsibility. People have responsibility.

Second, the question is how can we as people excersice our responsibility to our fellow man most effectively? That is the problem. SO far as poverty is concerned, there has never in history been a more effective machine for eliminating poverty than the free enterprise system and the free-market.

The period in which you've had the greatest improvement in the lot of the ordinary men was the period of the nineteenth and early twentieth century. Those of us in this room are the heirs of that. We benefited from the way in which our parents and our grandparents were able to come here, and by virtue of the freedom that was offered they were able to make a better lives for themselves and us.

But next, if you look at the real problems of poverty and denial of freedom to people of this country, almost every single one of them is the result of government action, and would be eliminated if you eliminated the bad government failures. Let me be precise and specific: Why do we have so high unemployment rate among black teenagers? It's a disgrace and a scandal. Why do we have so high unemployment rate? First of all, because we give them lousy schooling through governmental schools, which make them unqualified to hold decent jobs.

And second of all, we require employers to discriminate against them, by not hiring them unless their productivity is enough to justify a minimum wage. The minimum wage rate is the most anti-negro law on the books. And it's an anti-negro law because it precisely having first not enabled the young blacks to have a decent schooling so that they can have productivity, we next deny them the onto job training that they might get if you could induce employers by being able to hire them for relative low wages to give them on the job training that would make them qualify for a higher payment and higher productivity.

And in the third place, we have constructed a governmental welfare scheme which has been a machine for producing poor people. We have induced people to come under control of welfare, we've..., I'm not blaming the people, don't misunderstand me, it's our fault for constructing so perversed and so ill shaped a monster as a whole set of welfare programs we have under which we encourage people, families to break up, we encourage people from one part of the country and come to another, under which we have in effect made many people poor. And yet when all this is said and done... have I ever been where?

Crowd: Have you ever been poor?

Milton Friedman:

Ofcourse. Ofcourse, more so than most of the people in this room. How many of you have worked a twelve hour a day and goten paid 78 cents? But let me go back to the...but you know that's all irrelevant. Is there one of you who's going to say that you don't want a doctor to treat you for cancer unless he himself has had cancer? I could go down the line, but when all is said and done, while there are people in this country who are worse off than other people, by an large even the poorest people in this country are relatively well-off compared to the conditions in many other countries in the world.