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.

Avoid Third Party Purchases

Here is a great that describes why government can't fix healthcare.




Here is another video describing the same problem.

There are four ways in which you can spend money.
[1] You can spend your own money on yourself. When you do that, why then you really watch out what you're doing, and you try to get the most for your money.
[2] Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I'm not so careful about the content of the present, but I'm very careful about the cost.
[3] Then, I can spend somebody else's money on myself. And if I spend somebody else's money on myself, then I'm sure going to have a good lunch!
[4] Finally, 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.

Milton Friedman: Capitialism Fosters Harmony & Peace

An example of a pencil and how the price system causes thousands to cooperated to make a pencil available to you for a trifling sum.

Free Will Offering vs Charity from Tax

My friend Emily is happy that Obama's health care reform (HCR) has passed. It reminds me of a quote from Milton Friedman (numbers added)

There are four ways in which you can spend money.

[1] You can spend your own money on yourself. When you do that, why then you really watch out what you're doing, and you try to get the most for your money.

[2] Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I'm not so careful about the content of the present, but I'm very careful about the cost.

[3] Then, I can spend somebody else's money on myself. And if I spend somebody else's money on myself, then I'm sure going to have a good lunch!

[4] Finally, 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.

The bill just passed spends money like number 4. It is wasteful and more likely to breed corruption. We are running headlong into mountains of debt and have not considered repayment. It is irresponsible. It will prompt the health care givers to get out of the business or move elsewhere.

A better alternative is a plan by Rep. Paul Ryan of Wisconsin. Some points are:

- health care portability from job to job

- create state health insurance exchanges - a marketplace to compare difference policies will increase competition

- Increase transparency through a Healthcare Services Commission that relies on a public/private partnership

More details of the Patient Choice Act are here.

This is a more sensible plan. I cannot believe that we think raising taxes is going to get us out of this recession.

There are many that are out of jobs and also don't have access to health care. The best way to accomplish this is by free will offerings. Giving willingly either directly to someone you see in need or to charities that will offer relief.

Joseph Smith did not believe in Socialism.

Joseph accepted the economy of private property and individual enterprise. Even under the consecration of properties, individual stewards operated independently in a market economy, though they were obligated to return their "surplus" to the bishop

...

But capitalism never ruled Nauvoo as it did Chicago, a city that in 1844 was the same size as Nauvoo. The original name of the Nauvoo site, Commerce, was dropped after the Saints arrived. Rather than promising entrepreneurs great wealth, Joseph asked that "money be brought here to pay the poor for manufacturing." Profits were secondary to creating jobs.

(Joseph Smith: Rough Stone Rolling, Richard Lyman Bushman, 2005, pages 502 and 503, view online)

It can also be noted that he did not practice Capitalism in the same way. The focus was on lifting those in a poorer position instead of enriching yourself. Yet it was all voluntary. The obligation he refers to comes after I covenant to obey the law of consecration. Yet it is a voluntary covenant. I recognize my position as a beggar before God (Mos 4:16-27). I then promise to do my best to help others both physically and spiritually.

Socialism or charity from tax, promotes wastefulness and corruption. On the other hand, greedy, unchecked capitalism leaves the poor and poorest without relief. The ideal is the accountability and reward that comes from capitalism along with free will offerings lifting up the unfortunate among us. We assist them to become self sufficient. This is best achieved by capitalism and persuasion to acknowledge our positions as beggars before God.

"capitalism is the least worst system available to us — until Zion can be achieved" Geoff B.