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If he had the chance, Nobel laureate Milton Friedman would eliminate Medicaid, Medicare, and Social Security. “In the 1950s, we talked socialism and practiced free markets. Today, we talk in free markets and practice socialism,” he said.
Friedman, Paul Snowden Russell Distinguished Service Professor Emeritus of Economics at the University of Chicago, shared his economic theories over lunch October 15 at a California restaurant with nearly two dozen alumni and students who are members of the Milton Friedman Group, the student-led organization that promotes Friedman’s free-market approach.
The event gave participants a chance to pose questions that Friedman had fielded for years from critics. “If you’d abolish Social Security for everyone, what would you do with people who are indigent and incapable of taking care of themselves if they didn’t save during their younger days?” asked second-year student Andrew Van Fossen.
“Social Security isn’t a program for them, it’s for everyone,” Friedman replied. “There’s a much stronger case for government having a program for them than for everybody. But if you look at the record, private charity is a much more effective way of helping people.”
“If you’re going to go from where you are to where you want to go, in the process you’re going to have to have programs of that kind to do it,” Friedman continued. “That’s why, in order to get rid of Social Security, you’re going to have to have private accounts.
“What you should do, in my opinion, is to give every person who now has a claim on Social Security bonds equal to the value of his claim, and set him free. Let him save. Let him do what he wants with it. That would not add a dollar to the debt we now have; it would just convert an unfunded debt into a funded debt,” Friedman said.
Van Fossan asked, “If you did that, how would you protect people from making really stupid decisions?”
“I don’t!” Friedman replied. “Why should I?” a response that drew laughter from the group. “You mean freedom does not include the freedom to make a stupid decision?”
When Erik Chavez, ’05, asked who, among politicians Friedman had advised, had acted admirably, Friedman said he admired President Ronald Reagan the most. “He was a person of principle,” he said. Friedman also pointed to the high inflation that had plagued the 1970s and credited Reagan with letting Federal Reserve Chairman Paul Volker take the country into a recession to bring inflation down. “No other president would have allowed Volker to get away with it,” he said.
Chavez organized the event with second-year student Stefanos Athanasiadis, co-chair of the Milton Friedman Group. Among the participants were students from University of California at Berkeley Haas School of Business and The Wharton School of the University of Pennsylvania, who agreed to start their own student groups based upon Friedman’s teachings.
Chavez said after the event, “This man is responsible for maintaining and promoting some of these world-changing ideas. It was an amazing experience.”
—Patty Houlihan