Milton Friedman, former presidential advisor, Nobel prize winner, and coauthor of Income from Independent Professional Practice, was a world-renowned economist, well known and respected throughout the economic community for prominent advocation of free markets in society. In Friedman’s video ‘There Is No Such Thing as a Free Lunch’, Friedman discusses many popular political aphorisms, as well as one particular aphorism that he helped popularize with the title of his book, published in 1975, ‘There’s No Such Thing as a Free Lunch’. Friedman also examines how many economists believe there is no such thing as a free lunch because everything has a cost. For example, working long hours may increase income, but in the long run, so much time was wasted that could have been used to do something else. Additionally, he adds that governments control many aspects of our lives because they control taxes, government spending, federal benefits, and government programs; though well-intentioned, these regulations can cause unexpected problems. However, he goes on to explain that, in reality, there is a free lunch in the form of free markets.
Friedman argues in his speech that there is a free lunch in both the real and economic worlds. He defines a free lunch as an economic system with free markets and private property. A free market is a free lunch because there are no forced transactions or conditions; they allow people to capitalize on their own creations, ideas, and talents. In a capitalist market such as the United States, anyone can utilize their talents and efforts to sell products and services they want to sell, rather than create products that the government mandates; the laws of supply and demand regulate production and labor, rather than government policies and systems. Private property is another example of a free lunch because it allows people to be independent and live free from excessive government control without having to share the land with other people. When people own their own property, they are safe from the government overstepping its boundaries and taking land from citizens; people can also use their property to grow crops that they can live off of, providing them with a free lunch.
To exemplify his claims, he discusses the difference between East Germany and West Germany. After World War II, East Germany was communist, while West Germany was a republic and had a free market system. The only difference between the two parts of the country was the economic and political systems they employed, and West Germany prospered while East Germany was riddled with poverty and suffering; this proves that countries prosper from free lunches. Friedman also asserts that government intervention is almost never the catalyst for growth and prosperity; when a government is actively trying to orchestrate a positive outcome and does not allow the free market to run its course, it is detrimental to the overall health of the nation.
In 1993, as Friedman was delivering his speech, the United States was in a deficit of 255 billion dollars, and he asserts that the views of the president at the time, Bill Clinton, were detrimental to the economy. President Clinton and his administration preferred a method that increased taxes for the American people, as well as sacrifice. Friedman’s views were that the American people should have less sacrifice and more benefits, using the Rural Electrification Act (REA) as an example. The REA helped install communication lines for the rural Midwest in the mid-1900s. He mentioned that if we stopped funding this area, the American people benefit from having to pay less in taxes compared to the few in the rural Midwest that would be hurt. The farmers are already receiving subsidies for producing food for the United States, so their sacrifice would be minimal. In some ways, one can consider their situation a free lunch.
Additionally, Friedman argues that businesses and companies receiving government subsidies are practically acquiring a free lunch. At the time, the car industry could get special government funding if it could reduce emissions. After the vehicle was produced, the car manufacturer would sell it and people would most likely buy it because it was more environmentally friendly and possibly more efficient. These car manufacturers were getting a free lunch for the fact that they profit from selling their vehicles and the government has given them aid to produce these vehicles. This is similar to how the government is pushing for electric vehicles currently.
Friedman believes that foreign-produced goods should not be purchased. According to Friedman, liberals tend to not buy American goods if it is more expensive, but in doing so, American producers are being harmed, which in turn hurts the economy; this results in more money leaving the country instead of staying in our economy. Special interes
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