Speaker: In reference to 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 of poverty. In prefacing my question I would like to refer to what
President Kennedy said that if a free society cannot help the many who are poor it cannot
save the few who are rich, and to say that while we are a government of the people and
when there is a large sector of the people who are hurting perhaps it is the 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?
Friedman: First of all....
(audience applause)
Prof. Friedman: 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 exercise our responsibility toward our fellow man most effectively? That’s
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.
(audience applause)
The period in which you had the greatest improvement in the lot of the ordinary man 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 to them were able to make a better
life for themselves and us.
But next, if you look at the real problems of poverty and denial of freedom to people
in 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 an unemployment rate among black teenagers? It’s a disgrace
and a scandal. Why do we have so high an 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 of precisely
having first not enabled the young blacks to have a decent schooling so that they can
have productivity; we next deny them the on-the-job training that they might get if you could
induce employers, by being able to hire them for relatively low wages, to give them on-the-job
training that would make them qualify for higher payment and higher productivity. 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. I’m not
blaming the people; don’t misunderstand me. It’s our fault for constructing so perverse
and so ill-shaped a monster as the whole set of welfare programs we have under which we
encourage people, families to break up--we encourage people to move from one part of
the country and come to another, under which we have in effect made many people poor...
(Interrupted) Have I ever been where?
Speaker: Have you ever been on welfare or poor?
Prof. Friedman: Of course, of course! More so than most of the people in this room.
(audience applause)
How many of you have worked a twelve-hour day and gotten paid 78 cents? But, you know, that’s
all irrelevant. Is there one of you who is going to say that you don’t want a doctor
to treat you for cancer unless he himself has had cancer?
(audience applause and laughter)
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 and large even the poorest people in this country are relatively well-off
compared to the conditions in many other countries in the world.