Milton Friedman: There sort of is a two way
relationship between political freedom and economic freedom. In a way, a growth in economic
freedom tends to promote political freedom for the reasons you’re saying. As in China
now, where there’s real protests in the villages about having to, having to have the
bureaucrats named by Beijing run them and they are beginning to be elections for local
leaders is the first step. So in that sense economic freedom promotes political freedom. On the other hand, political fre – grow-
you have the situation that political freedom promotes a lack of economic freedom. Opposes
economic freedom, promotes a growth in government. You take a case like the United States, we’ve
had complete political freedom but the extent of economic freedom has been declining not
increasing and it’s been declining precisely because we have political freedom. So I don’t
think you can give a simple answer because it’s a two way relationship. Gary Becker: No, and I also think it’s,
there’s a fair bit of evidence now that as countries evolve economically you have
a tendency to go toward political freedom. Now I think you’re raising an interesting
complication, once you get the political freedom there may be forces that are set up that begin
to throttle some of the economic freedom, the governments get bigger and that’s why
I wanted to move to a subject where that’s the center of the subject. As you know, there’s
been some opinion in recent years called ‘The End of History’, that somehow the whole
world had moved and now we move toward free markets and political democracy and that’s
been the goal of all this historical forces and the future looks very rosy. Uh, I can
guess your views on that but I think it’d be nice to hear how confident are you about
that and what do you see are the problems in the future? Friedman: I don’t believe that that’s
valid at all. The – first of all the people who put out that view have a very generous
interpretation of a free economy. From their point of view, as long as you have markets
of some kind, it’s a free economy. It doesn’t really matter how one of those markets are
manipulated, it doesn’t much matter if the government has extensive controls over those,
it’s still a free democracy. In the second reason, place, my view of history is very
different. My view of history is that it runs in long, long swings and that the question
of a free economy is entered into that. You start with Adam Smith in 1776, it was at a
time when you were highly controlled economy, were catalysts in that case, in which the
belief was that the strength of a nation depended on how much gold it could have and the way
to get gold was to keep out the products of other people, but to sell as many of your
products as you could. Something which was possible for a few countries but which was
self-defeating on the world scale. Adam Smith started an intellectual revolution toward
a, toward a world of freedom. He would have been in favor, of course, of economic freedom,
political freedom, and civic freedom, all sorts. But it took about what, forty, sixty
years? 18, when were the corn laws… Becker: 1840s.. Friedman: 1840s. So it took about sixty years Becker: Yup, took a long time. Friedman: And then, from then in the 19th
century, that kept going, and Britain really moved toward more economic freedom and more
political freedom. But then, about the 1880’s or so you had the Fabian society form, I’m
not sure exactly what date it is, but its sometime.. Becker: Around that time… Friedman: Sometime around that time, and intellectual
opinion started to shift away from a Cobden Bright belief in free markets, no tariffs and
I say repeal the corn laws and you started to have a movement that’s already obvious
in the early 20th century. In – toward greater government involvement. That’s about the
time when the government took over the schools, and it’s also the time where you had the
movement toward imperial preference, toward social insurance, early stages of Social Security
system. It, one of the most interesting books I know is a book on law and public opinion
by Dicey.. Becker: Oh yeah, right, I know… Friedman: And in the – 19 4 – in the preface
he wrote to the 1914 reprint of his book he essentially predicts the welfare state that came
in the 30s and 40s as a result of that. Well, that set in motion, that movement set
in motion another trend. That trend which was – the main names you’re going to associate
with that one are Friedrich Hayek, Ludwig von Mises, Lionel Robbins… Becker: Milton Friedman..(chuckles) Friedman: Well, a little later, a little later.
And that was a movement toward pointing out the difficulties were, which were arising.
It was, I think, best encapsulated by the title of Hayek’s great pamphlet ‘The Road
to Serfdom’, and you started to have a movement in public – in opinion – back the other
way, but that movement of opinion again which I would say started oh at the – something
like 19 late 30s or early 40s something probably that late that movement of opinion
had no effect at all for 20 or 30 or 40 years. But then, as government grew and as the public
at large became dissatisfied with what was happening with government growing you got
more and more backing, more and more it affected the opinion more generally and finally around
1980 it started to have a real effect. With the fall of the Berlin Wall and the collapse
of the Soviet Union it became – you got the doctrine you were talking about. But again,
that’s a wave. It hasn’t worked itself out yet by any matter of means, but when it
does I have no doubt that there will be wave in the opposite direction that will come along
and you’ll move back again.