4 vs 1 | Milton Friedman faces FOUR British Leftists in HEATED Debate (1980)
Summary
TLDRIn this debate, Professor Freedman faces criticism for his free-market stance, with opponents arguing that government intervention has been crucial for economic success, citing Japan, Germany, and Sweden as examples. Freedman counters by advocating for the freedom of individuals to trade, not businesses, and uses Hong Kong as a case for free trade's benefits. The discussion highlights the historical context of economic policies, with critics asserting that protectionist measures have been essential for industrial development, while Freedman argues that free trade ultimately raises the standard of living for all.
Takeaways
- 🏆 The speaker initially held high expectations for Professor Freedman due to his reputation, but was disappointed with the level of economics discussed.
- 🤔 The speaker accuses Professor Freedman of advocating a 'religion' of free markets, with 'the Hidden Hand' as a divine presence, and criticizes the lack of substantial evidence in his arguments.
- 🗣️ There is a debate on the effectiveness of government intervention, with examples of Japan, Germany, France, and Sweden being used to argue that strong government policies have led to success.
- 🌏 The speaker challenges the premise that government intervention is inherently bad, citing improvements in the British standard of living as a result of such actions.
- 📉 The discussion highlights the economic miracles of the Industrial Revolution in the U.S., Germany, and Japan, which occurred under protectionist policies, contradicting the idea that free trade is always beneficial.
- 🔄 The speaker argues against the notion that exports are inherently good and imports are bad, emphasizing the balance and benefits of both for a country's economy.
- 🏭 The development of industries in Japan is discussed, with a focus on how they were founded and supported by the government, contradicting the idea of free enterprise without intervention.
- 📉 The speaker points out that countries like Japan and Germany have been successful with protectionist policies and government intervention, challenging the one-size-fits-all approach of free trade advocates.
- 🌾 The example of U.S. agriculture, which has been successful without protection, is used to argue that protectionism is not always necessary for economic success.
- 💡 The debate touches on the historical context of economic theories, suggesting that the principles of Adam Smith may not fully apply to the complexities of modern economies.
Q & A
What is the main disagreement between the speakers regarding economic policies?
-The main disagreement is whether free trade and minimal government intervention are beneficial or if government intervention and protectionist policies are necessary for economic success.
What examples do the speakers provide to support their views on government intervention in the economy?
-The speakers mention Japan, Germany, France, and Sweden as examples where government policies have been successful. They also discuss the historical development of industries in these countries and the role of government in fostering growth.
How does the speaker challenge Professor Freedman's views on free trade?
-The speaker challenges Professor Freedman by pointing out that successful economies like Japan, Germany, and the United States have often been protected economies or have had significant government intervention, contradicting the idea that free trade alone leads to success.
What historical economic period does the speaker claim was not solely based on free trade?
-The speaker claims that the Industrial Revolution in the United States at the end of the 19th century and early 20th century, as well as similar developments in Germany and Japan, took place behind high protectionist walls, not solely based on free trade.
What is the 'Hidden Hand' mentioned in the script, and how does it relate to the discussion?
-The 'Hidden Hand' is a term used to describe the self-regulating nature of free markets, an idea often attributed to Adam Smith. It relates to the discussion as the speaker accuses Professor Freedman of advocating a religion-like belief in the infallibility of free markets.
What is the speaker's argument against the effectiveness of government intervention in Japan's economic history?
-The speaker argues that Japan's economic success was not due to free trade but rather due to strong government intervention and protectionist policies, especially in the 20th century, which contradicts Professor Freedman's assertion.
How does the speaker critique the idea that government intervention is always detrimental?
-The speaker critiques this idea by providing examples of countries where government intervention has led to economic success and by arguing that it is not a blanket truth that government intervention is bad, but rather it depends on the specific circumstances and implementation.
What is the speaker's view on the role of government in the economy?
-The speaker believes that while there is a role for government in the economy, it should not extend to import controls, tariffs, or central planning. They emphasize the importance of considering the well-being of ordinary people and the potential benefits of government intervention in certain areas.
What historical examples are given to support the argument that government intervention can improve living standards?
-The speaker cites the improvement in living standards during the 19th century in the United States and Britain, attributing it to a combination of capitalist enterprise and government interventions such as public health legislation and labor laws.
How does the speaker respond to the claim that free trade is always beneficial?
-The speaker counters this claim by arguing that free trade can lead to the destruction of industries that are not competitive and that government intervention can sometimes be necessary to protect and develop industries that have long-term benefits for the economy.
Outlines
🤔 Debate on Government Intervention vs. Free Market
The first paragraph presents a debate between two economists, one critical of the other's free-market stance, arguing that successful countries like Japan and Germany have strong government policies. The critic accuses the free-market advocate of promoting a religion-like belief without substantial evidence, citing historical examples where government intervention improved living standards. The advocate counters by emphasizing the freedom of individuals to trade, not businesses, and argues that free trade benefits both consumers and producers by providing access to cheaper goods and raw materials, thus raising the standard of living.
🌏 Discussion on Trade Policies and Comparative Advantage
In the second paragraph, the debate continues with the critic arguing that protectionist policies have been effective in developing modern industries, contrary to the free-trade advocate's claims. The advocate insists that free trade is beneficial, citing examples like Hong Kong and the historical development of the textile industry in Britain and Japan. The critic contends that the advocate overlooks the indirect effects of trade restrictions, such as job losses in more productive sectors, and criticizes the advocate's reliance on unsupported assertions rather than logical arguments.
📚 Historical Analysis of Economic Theories and Practices
The third paragraph delves into a historical analysis of economic theories, with the critic challenging the advocate's views by pointing out that Adam Smith's principles, formulated during the Industrial Revolution, may not be fully applicable to modern complex economies. The critic argues for a nuanced approach to economic management, suggesting that extreme laissez-faire policies have led to disasters, such as in totalitarian regimes. The advocate defends capitalism's historical benefits but acknowledges the importance of government's role in areas like public health, suggesting that improvements in living standards were partly due to government interventions and social struggles.
🏭 Reflections on the Impact of Capitalism and Government Policies
The fourth and final paragraph wraps up the discussion by reflecting on the impact of capitalism and government policies on the well-being of ordinary people. The critic argues that public health and labor improvements were often the result of government intervention and social movements, not just free enterprise. The advocate agrees that capitalism has improved living standards but emphasizes the importance of considering the broader context, including the role of government and social changes, in understanding economic progress.
Mindmap
Keywords
💡Free Trade
💡Protectionism
💡Government Intervention
💡Comparative Advantage
💡Industrial Revolution
💡Economic Miracles
💡Invisible Hand
💡Tariffs
💡Imports and Exports
💡Structural Deficit/Surplus
Highlights
Professor Freedman's economic theories are critiqued as being akin to a religion, with a 'divine presence' and 'wicked principle'.
Japan, Germany, France, and Sweden are cited as examples of successful countries with strong government policies.
The necessity of government intervention is argued, with the British people's improved living conditions as evidence.
Free trade is advocated as beneficial for both consumers and producers, with historical examples provided.
The Industrial Revolution in the United States, Germany, and Japan is attributed to high protectionist walls, not free trade.
The role of government in founding and supporting major Japanese companies is highlighted.
The argument that free trade always leads to growth and employment is challenged with counterexamples.
The importance of considering indirect effects of import restrictions on exports and jobs is emphasized.
The claim that countries like Japan and Germany would have been better off without protectionist policies is disputed.
The historical context of Adam Smith's theories is discussed, with a critique of their applicability to modern economies.
The improvement in living standards during the 19th century is acknowledged, but the role of government intervention is also recognized.
The visibility of poverty during the Industrial Revolution is contrasted with conditions before and after.
The role of trade unions and government legislation in improving working conditions is highlighted.
The debate concludes with a discussion on the role of government in managing the economy and the misconceptions about capitalism.
Transcripts
say this professor Freedman I really
thought when when originally before I
ever met you and heard your arguments
that because you're no Nobel Prize
winner you really were something special
I have to say you haven't even reached a
level economics in this country I have
to be quite blunt about well that says
something very bad about a-level
economics in this
country I find it very difficult really
to argue with Professor fredman because
he's advocating essentially a religion
and like all religions he has a sort of
divine presence in this case The Hidden
Hand and so forth and he has the wicked
principle and the wicked principle being
governments and by S balancing one off
against the other he can really turn the
argument anyway he likes Japan is a very
successful country uh Germany's a very
successful country another country where
the government has had very strong
policies or modern France is another
case or Sweden all of them are ones
where the government has succeeded
visibly and it's not enough for you to
say the government in a few places has
made major mistakes therefore the
government is terrible because I can
provide all these other examples where
governments have been very effective I
think we're all being too polite because
I see why Professor Freedom has become a
world figure he doesn't allow anyone
else to get a word in edgeways he plows
on he plows on with unsupported
assertions which had really got a very
tenuous connection just here and there
you can just see the tentac Ping down to
a bit of fact where are the support
would you give me a supported assertion
sir there must be government
intervention and the condition of the
British people has fundamentally changed
despite all our problems our people live
at a totally different level now now and
that could have only been done because
of government intervention so I don't
accept your premise at all I think it's
a totally false premise I put it to you
that the three I suppose greatest
economic miracles of the last 100 years
in uh the Industrial Revolution in the
United States at the end of the 19th
century early 20th century same thing in
Germany at the same time and in Japan
since 1948 took place behind very high
protectionist walls so what evidence do
you have that freedom of imports
contributes to growth and employment
freedan your argument is that free trade
is always good let me start by saying
that I am not in favor of the freedom of
business to export and import but of the
freedom of people to buy goods and sell
wherever it is cheapest and to sell
their products wherever they can get the
highest price business has no interest
business is an intermediary between
people in their capacity as workers and
producers as investors and in their
capacity as consumers so the freedom I
am interested in is a freedom of
individual people people now if we look
at the history of various episodes as
you have done you've left out some very
important ones you left out the
experience of Japan from 1867 to 1897
which was discussed in the film a period
immediately after the ma restoration
when they had complete free trade they
were prohibited by law by an agreement
with Britain from having a tariff of
more than 5% they had great many Imports
Imports of textiles that destroyed in
large measure their hand Loom weaving
industry
but the result of a free market was that
people were better off both as producers
and as consumers they are better off as
producers because you cannot export
without importing to say that you should
export and not import is a prescription
for denuding a country of its wealth for
transferring it to other people exports
are the cost that you incur in order to
get Imports if you get Imports if you
get cheap Imports that benefits people
as consumers but it also benefits them
as producers by providing them with raw
materials to work with to exercise their
skills on to use their capital on the
consequence is a higher level of living
for everybody in the country you also
left out I might say Hong Kong which has
had complete free trade has had a
tremendous rise in the standard of Life
of its people here's an a Barren Rock in
which the population is Multiplied
tenfold since the end of the war and per
capita real income allowing for price
changes has gone up about fourfold so
there are many examples I believe of the
great virtue of free trade for both
people in their capacity both as
consumers and as workers you use an
extraordinary line of argument because
what you say is you say well people have
made mistakes in the past governments
have made mistakes therefore government
intervention is wrong and the point is
that you can you can get all kinds of
examples as for example in Germany
Brazil today Japan where in fact
governments have been very effective at
fostering the development of modern
Industries now if they were as
incompetent as us as as you say this
would never have happened in fact if you
look at the Japanese economy to go back
to it there many big efficient companies
almost all of those companies were were
were founded by the government they were
provided money by the government they
provided special privileges and they've
had those privileges to this day the
formula of both of these gentlemen is a
formula for the
impoverishment of Britain and
particularly for an attack on the
consumer this is the most anti-consumer
measure you can take is a measure me to
limit Imports and protect uh inefficient
Industries I don't know where that maybe
the textile industry should have been
destroyed maybe it's not an area in
which you have a comparative advantage
if it should there would be some other
industry that would develop in which you
would have a comparative advantage
abroad look at the situation in the
United States where I know better what's
our major export industry it's
agriculture not because of Any
protection it has never been protected
very much if you look at the history of
Britain when Britain developed the
textile industry in the 19th century
there were no tariff walls here was
Japan had no tariff walls at that time
at all and yet it was able to develop an
effective textile industry destroy the
textile industry of India of course
that's we had all our
many manufacturing so destroy just as
you say the Japanese IND but again are
you going to tell me that no industry
every vested interest must be protected
that you must have no
change in the American steel industry
there is no no doubt that the protection
from Imports has had the effect of
causing them to be slow and introducing
new techniques has had the effect of uh
make having essentially agreements with
labor which is meant
overstaffing there is no doubt in my
mind that if in the United States we
threw the steel industry open to The
Winds of competition you would end up
with a somewhat smaller steel industry
but a much more efficient one you see
Professor Freedman your argument is that
free trade is always good now it's quite
clear there are some countries in the
world that have done very well on the
basis of free trade that's undeniable
but your film for example resting
entirely on the uh example of Japan and
in actual fact the Japanese economy for
the last 100 years has been either a
very highly protected economy or else it
has had an extremely large degree of
government intervention in Industry that
is not correct it was true in the 19th
century there was there no there was
free trade in the 19th century which by
the way was not chosen by the Japanese
leaders as you as you say it was forced
upon them at gunpoint by the United
States in 1854 followed by Britain and
France they did not choose it they
resented free trade very bitterly
Japanese leaders they fought a long
agitational battle against it and when
they were Strong Enough by the end of
the 19th century they went over to
protection and through the whole of the
20th century Japanese industry has been
highly protected and the modern
industries of Japan we know today
Electronics uh engineering for example
all developed on the basis of very
strong government intervention and very
strong protection and yet in your film
you get no other serious example other
than Japan and as far as I can see that
is an extraordinary incompetent
performance in the sense that you do not
discuss in any way how uh Japanese
industry developed you just imply
throughout the film that it was based
upon completely free trade and Free
Enterprise in the 19th century in the 30
years after the ma restoration there
were some government in was some
government involvement primarily in
sending people abroad to be trained
primarily also in the steel industry
uh and the uh Navy ship building for
military purposes that was costly to
Japan and did not benefit Japan you have
the other examples we gave in the
earlier film the example of Hong Kong we
have given the example of Britain in the
19th century but in any event let me go
back to your point you know I find this
a very amusing situation in one respect
25 years or so ago when I was in Britain
I was arguing with the people at Oxford
at that time mostly and they were
arguing that there was a structural
dollar shortage that the United States
was a strong country that everybody else
had to protect themselves against now we
have the argument coming from Cambridge
I guess it shifts from Oxford to
Cambridge exactly the opposite that
there's a structural uh dollar Surplus
or that uh Britain has a structural
pound uh Sur shortage that Japan is
somehow structurally uh uh to be feared
but let's look at the situation of Japan
just in the the past few years Japan has
shifted from a large balance of payment
Surplus on current account to a large
balance of payment deficit on current
account because of the changes in
exchange rates and the effect which that
had the real fallacy in all of your
arguments is not to take account of the
indirect
effects if you restrict Imports here you
restrict exports there if you save jobs
here you lose jobs there and you save
jobs that are less productive
you lose jobs that are more productive
Professor Freedman Are you seriously
arguing that countries like Japan and
Germany for example Japan in the 20th
century when it protected its major uh
Industries to build up a modern
industrial base or or Germany in the
19th century or may I say the United
States in the 19th century or Brazil in
uh the last 20 years are you saying that
these policies were completely useless
because the of course that's what I'm
saying I'm saying that those countries
would have been far better off yes but
they had provided let me go back to the
American wait but you provide the
interesting thing about this is you
provide no evidence of this whatsoever
other than assertion and in your film
for example you relied on example you
didn't rely upon argument you relied
upon example you kept on referring to
Japan and what I'm saying is that Japan
is a bad example and in fact you can
point to many other countries that have
developed on the basis very successful
on the basis of very strong government
intervention into industry and very
strong import controls and the point is
that since those countries succeeded it
seems to me that what you're doing is
asserting as in fact Lord Kon said a
religious view you're saying things
would have been much better if they
hadn't done it on the basis of no
evidence there no major country excuse
me the logic logical argument was fully
developed by Adam Smith and The Wealth
of Nations 200 years ago Smith the was
relating to a situation when we had an
industrial revolution he was really
relating to a position when we had
Village black Smiths about the largest
Enterprise and so forth and this idea
that each chap following his own private
interest essentially of single Artisans
working with themselves is applicable to
the modern world is just not so his
basic principles are applicable and you
know the funny thing about this kind of
an interchange is that what you want to
do is to go back to the period before
Adam Smith when you had a meral societ
adducing to us extreme views the fact
that I am not 100% free Trader under all
conditions doesn't mean to say I'm
absolutely all for import control in in
a massive sense what I'm saying is in a
very complex situation which different
countries find themselves at different
times you've got to have some overall
management of the economy and the idea
you can you can leave it to the
so-called invisible hand just seem to be
a bit of the high nonsense well all that
I can say is that wherever you've had
overall management of the economy in the
extreme case it's been a disaster the
most extreme cases of course are cases
that fortunately we're not faced with
here are the totalitarian countries
countries like uh uh Russia China Etc
nobody would say that that kind of over
a oil management has been successful if
we take the case of Britain let's take
the case of Britain you've had overall
management for the past 20 or 30 years
Britain is not exactly in a state of of
prosperity listening to the arguments
and listening particularly to your
arguments about the position of Britain
in the last century and so on one would
get the impression that the mass of
ordinary people did very well in that
Society they didn't a few people at the
top did very well the mass of Ordinary
People many of them lived in abject
poverty had to struggle in order to find
a job they had no sort of support in any
way and it was only when the state began
to intervene did the Ordinary People of
this country begin to live decently and
even before the second world war we can
take you to areas of Britain where there
was misery mass m misery under the free
enterprise system to such an extent that
one of our Tory Prime Ministers Harold
McMillan actually wrote a book called
the middle way in which he looked at
where he represented and said we have to
have government intervention in order to
help us out of that sort of thing which
was never happen again in the first
place your description of the 19th
century is wrong there has in the past
several decades been a reconsideration
by economic historians of the experience
of the 19th century and what that has
shown is that what happened during the
Industrial Revolution was to take people
out of agricultural areas where poverty
is invisible and bring him into
industrial and urban areas where poverty
exists and is visible there is no doubt
that there was a great deal of poverty
and difficulty and misery the question
is whether conditions were improving or
not during the whole of the 19th century
both in the United States and in Great
Britain there was a very great
Improvement in the lot of the ordinary
person and not merely those people at
the top as evidenced by everything that
was happening to population uh to health
standards and the like the thing is that
what happens during a period like that
is that poverty the the exceptions the
areas which have been held back the bad
things that happen because of course
always things are mixed there some bad
and good become much more visible A
Dickens could not have written his
novels 100 years earlier because what he
would have been describing would not
have seemed exceptional but in the 19
century he could write his novels if we
take the America during the 19th century
uh the evidence for the Improvement in
the lot of the people is the way they
voted with their feet we had millions of
people my own parents who came from uh
Europe from and flooded into the United
States they didn't flood into the United
States to be exploited they flooded into
the United States because they lot their
lot and a lot of people like them was
being improved a great deal interrup PMS
as well which you have had some point
Professor Freedman is not you see
whether capitalism has not brought
benefits to the world there's no doubt
whatsoever that has done there's no
doubt whatsoever that in the 19th
century the position of the mass of the
people improved as a result of
capitalist Enterprise I think there's no
doubt about that the point about it is
whether their condition also improved
for example because of things like trade
unions or government intervention the
point is that many of the things you
point to like public health improvements
were not just because the standard of
living was high due to capitalism it's
the fact is there was public legislation
on it for example many of the
improvements that took place in the 19th
century in Britain followed things like
legisl over Maximum working day over
things like working conditions and so on
and you can't say those are all the
result of free enterprise because in
fact they were they were struggles to
force the government to intervene
against free enterprise look in the
first place let's be clear about one
thing I am not an anarchist I believe
there is a very important role for
government to play the question that
we're talking about here is whether that
role includes import controls tariffs
Central planning decisions about which
activity uh uh which area industry
should move again I want to
emphasize that the the interest I have
is in the well-being of the ordinary
person and I think there's a great
misconception about free enterprising
about capitalism there's a misconception
which regards it as oblivious to the
problems of the disadvantage if we go to
the 19th century again it was the
greatest period of alinary activity in
the history of the world
浏览更多相关视频
Free To Choose 1980 - Vol. 08 Who Protects the Worker? - Full Video
How to Enrich a Country: Free Trade or Protectionism?
The real reason manufacturing jobs are disappearing | Augie Picado
Pasar Bebas (Pengertian, Ciri, Tujuan, Dampak, Kelebihan dan Kekurangan)
Economist Joseph Stiglitz on Pro-Palestine campus protests, Trump and rethinking freedom
Mercantilism | An in-depth history of European imperial economics
5.0 / 5 (0 votes)