“There’s No Such Thing as a Free Lunch” and Other Friedman-isms

Today marks Milton Friedman’s birthday. Described by The Economist as “the most influential economist of the second half of the 20th century … possibly all of it,” Milton Friedman lives on in his ideas.

At the Charles Koch Institute, we’ve named our classrooms and conference rooms in honor of 28 men and women who spent their lives defending and promoting the ideas of a free and open society.

Milton Friedman is one of the figures we honor, and his conference room displays an etching of his quote: “A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.”

Below are additional “Friedmanisms” that demonstrate how his words are still relevant today.

The fact is that the Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.

In A Monetary History of United States, 1867-1960, Friedman and co-author Anna Schwartz argue that the Great Depression wasn’t a failure of capitalism, but a failure of government. The Federal Reserve’s mismanagement early on in the crisis only made problems worse. To learn more about how the failure of government led to the Great Depression and is contributing to current economic problems, you can listen to Friedman’s explanation.

You must separate out being pro free enterprise from being pro business. The two greatest enemies of the free enterprise system, in my opinion, have been, on the one hand, my fellow intellectuals and, on the other, the big businessmen.

“Pro-business” and “pro-enterprise” (also known as pro-market) are often mistaken for synonyms, but they represent vastly different ideas. While both believe that government should support businesses, someone who is pro-business would define “support” as selecting favored businesses for special benefits like subsidies and tax breaks, while someone who is pro-market would define “support” as staying out of the way by minimizing regulations and other obstacles to growth. Unfortunately, today, governments’ pro-business actions and simultaneous lack of pro-market principles are stifling economic growth and well-being in the United States.

One example of this is the sugar industry. Even though the U.S. sugar crop makes up less than 2 percent of the total crops produced in our country, money spent by the sugar industry represents a third of the total amount spent trying to influence legislators on agricultural issues.

Why such a high amount? Because the sugar crop industry gets significant benefits that make the investment well worth it: Tariffs and loan guarantee programs artificially increase the price of sugar, costing U.S. consumers twice as much while ensuring the sugar industry a sweet deal. Despite Friedman’s warnings, cronyism is still alive and well and will continue to undermine a healthy, growing economy in the United States. It is only through educating ourselves about what economic freedom really entails that we can confront such injustices.

There is no better way to appreciate Milton Friedman’s words and ideas than to engage with them directly. To that end, we’ve compiled some highlights:

A version of this blog originally appeared on EconomicFreedom.org, a former project of the Charles Koch Institute. The Institute republished it here on July 31, 2015 and updated it on July 29, 2016.

More Blog Posts

02-10-2020 05:11pm

Warrior for the First Amendment

Ashley Messenger didn’t plan on being a First Amendment lawyer. “It was an accident,” says Messenger, who is a senior associate general counsel with National Public Radio in Washington. But 20 years into her career, she’s worked with some of the most high-profile organizations in media and has watched how the industry and its environment has evolved along with shifts in technology and society.

Read more

04-16-2019 11:37am

New Survey Reveals American Consumers Support Businesses Hiring Those with Criminal Records

New research from SHRM and the Charles Koch Institute found that the vast majority of American consumers support purchasing goods and services from businesses that employ people with non-violent criminal records.

Read more

04-04-2019 03:05pm

On 70th Anniversary of NATO, Key Member States Question Its Relevancy and Efficacy

The North Atlantic Treaty Organization (NATO) celebrates its 70th anniversary, and in advance of this historical commemoration, a new survey asked respondents in key NATO member states about NATO’s effectiveness and relevance in today’s world.

Read more

Sign up for updates