Friedman - Why government is the problem

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Hoover Institution Press Publication

Essays in Public Policy No. 39

Copyright 1993 by the Board of Trustees of the Leland Stanford Junior University

Material contained in this essay may be quoted with appropriate citation.

First printing, 1993

Manufactured in the United States of America

Library of Congress Cataloging-in-Publication Data

Friedman, Milton, 1912-2006.

Why government is the problem / by Milton Friedman.

p. cm. (Essays in public policy; no. 39)

ISBN-10: 0-8179-5442-2 (pbk.: alk. paper)

ISBN-13: 978-0-8179-5442-0 (pbk.: alk. paper)

1. United StatesEconomic policy1981- .

2. United StatesPolitics and government1981-1989.

3. United StatesPolitics and government1989-1993.

4. Free enterpriseUnited States

I. Title. II. Series.

HB106.8.F743 1993

338dc20 93-6673

The major social problems of the United Statesdeteriorating education, lawlessness and crime, homelessness, the collapse of family values, the crisis in medical carehave been produced by well-intended actions of government. That is easy to document. The difficult task is understanding why government is the problem. The power of special interests arising from the concentrated benefits of most government actions and their dispersed costs is only part of the answer. A more fundamental part is the difference between the self-interest of individuals when they are engaged in the private sector and the self-interest of the same individuals when they are engaged in the government sector. The result is a government system that is no longer controlled by "we, the people." Instead of Lincoln's government "of the people, by the people, and for the people," we now have a government "of the people, by the bureaucrats, for the bureaucrats," including the elected representatives who have become bureaucrats. At the moment, term limits appear to be the reform that promises to be most effective in curbing Leviathan.

When a preacher gives a sermon, he usually has a text. Generally, the text expresses a thought that he agrees with and is going to expound. I have been trying to find the word for an antitext because I have a text for this essay that I am persuaded is wholly wrong. The text comes from the SeptemberOctober 1991 issue of Freedom Review, about as inappropriate a place as possible. It is the statement, "Reagan's fatuous doctrine that government is the problem." That's my textor my antitextfor this essay.

The text leaves me two tasks: one easy, one difficult. The first task is to demonstrate that government is the problem; that's the easy task. The hard task is to understand why government is the problem. Why is it that able, public-spirited people produce such different results according to whether they operate in the political or the economic market? Why is it that if a random sample of the people who read this essay and are not at present in Washington were to replace those who are in Washington, our policies would very likely not be improved? That is the real puzzle for me.

As to the easy task, let me just first count the waysto plagiarize words from a love poemin which government is the problem. Let's list our major social problems and ask where they come from.

Adapted from the 1991 Wriston Lecture, presented in New York City on November 19, 1991, under the auspices of the Manhattan Institute. Richard Stern, and Stephen Stigler.

One major social problem is clearly the deterioration of our educational system. Next to the military, education is the largest socialist industry in the United States. Total government spending on schoolingI call it schooling rather than education because not all schooling is education and vice versacomes close to total government spending on defense, if, with the so-called peace dividend, it is not already greater. The amount spent per pupil in the past thirty years has tripled in real terms after allowing for inflation. Although input has tripled, output has been going down. Schools have been deteriorating. That problem is unquestionably produced by government.

If there is any function of government that all but the most extreme anarchist libertarians will agree is appropriate, it is to protect individuals in society from being coerced by other individuals, to keep you from being hit over the head by a random or nonrandom stranger. Is there anybody who will say we are performing that function well? Far from it. Why not? In part because there are so many laws to break; and the more laws there are to break, the harder it is to prevent them from being broken, not only because law enforcement means are inadequate but, even more, because a larger and larger fraction of the laws fail to command the allegiance of the people. You can rigidly enforce only those laws that most people believe to be good laws, that is, laws that proscribe actions that they would avoid even in the absence of laws. When laws render illegal actions that many or most people regard as moral and proper, they can be enforced only by brute force. Speed laws are an obvious example; alcohol prohibition, a more dramatic one.

I believe a major source of our current lawlessness, in particular the destruction of the inner cities, is the attempt to prohibit so-called drugs. I say so-called because the most harmful drugs in the United States are legal: cigarettes and alcohol. We once tried to prohibit the consumption of alcohol at tremendous cost. We are now trying to prohibit the use of narcotics at tremendous cost. The particular consequence that I find most indefensible is the havoc wreaked on residents of Colombia, Peru, and other countries because we cannot enforce our own laws. I have yet to hear an acceptable justification of that consequence. Coming back home, whether or not you believe that it is an appropriate function of government to prevent people from voluntarily ingesting items that you regard as harmful to themand whether you believe that it is an appropriate function of government because of the harm to them or to third partiesthe attempt to do so has been a failure. It has caused vastly more harm to innocent victims, including the public at large and especially the residents of the inner cities, than any good it has done for those who would choose to use the prohibited narcotics if they were legal. There would be some innocent victims (e.g., crack babies) even if drugs were legalized. But they would be far fewer, and much more could be done to reduce their number and help the remainder.

What produced the current wave of homelessness around the country, which is a disgrace and a scandal? Much of it was produced by government action. Rent control has contributed, though it has been even more damaging in other ways, as has the governmental decision to empty mental facilities and turn people out on the streets and urban renewal and public housing programs, which together have destroyed far more housing units than they have built and let many public housing units become breeding grounds for crime and viciousness.