Milton Friedman debates a protectionist

Debate between Milton Friedman, Michael Walker and Steven Cohen on the subject of free trade and protectionism. Taken from the "Free to Choose" series. No copyright intended.
Learn about comparative advantage: • Episode 34: Comparativ...

[@SlipClipRip]

Classiest insult in the history of debate at 14:29: "I beg your pardon. You simply are demostrating the parochialism of your knowledge."

[@piotrnowacki5133]

Protectionism is great! Doesn't everyone want to be paying several times the global average for rice, sugar and fruits? I personally love it (not)!

[@gerardoespinal4071]

Y

[@BuyTheDip627]

Gerardo Espinal Loooool

[@Ro500501502]

Piotr Nowacki Do you want to be making several times the global average for wealth because of increased corporate investment in your own country. Wages of upper middle class and middle class and lower class having been falling compared to inflation in America in the past 30 years where the world economy is booming bigger than ever. And also I read somewhere that clothes made in China were only 5% cheaper than the ones made here so you aren't going to paying several times more for them.

[@Ro500501502]

What stance are you even arguing?

[@Ro500501502]

I agree with you, little or no free trade is common sense. Nations need to be independent or able to become independent easily from other nations and the UN. Rice from China has mercury and heavy metals in it sometimes.

[@xit1254]

Protectionism does do a few things well. It makes sure products are of poor quality, it makes prices are very high, and it makes the political cronies who own the "protected" industries get very rich.

[@markknight4660]

+rd f are you shitting us all the products we are getting from Asia are of poor shit quality. here in the western world before this free trade sickness we had good jobs with good quality products. those are the Facts.

[@markknight4660]

+rd f if you looked at the facts you would know from 1792 until the early 20th century the US Economy was Booming and growing. and if you knew you would know at the same time from 1792 until the early 20th century the US had large Tarrifs. so Tarrifs and protectionism do Good for growth in the economy and are good for Workers.

[@xit1254]

+Mark Knight - during the time you speak of, almost all countries had high tariffs (Although the UK unilaterally removed all tariffs, and subsequently became the most powerful nation in the world during the 19th century.) As the economist Donald Boudreaux points out in the following video, the Commerce Clause of the US Constitution turned the US into the largest free trade zone in the world during that time, and that caused the incredible growth of the US economy. If protectionism works so well, then why don't US states impose tariffs on the goods from other states? Florida should impose tariffs on Vermont maple syrup to protect the Florida maple syrup industry, and Vermont should impose tariffs on Florida oranges to protect the Vermont orange growing farmers: www.learnliberty.org/videos/free-trade-vs-protectionism/

[@markknight4660]

rd f a couple of points. 1 if the US from 1792 until the early 20th century didn't have tariffs then foreign goods would have been imported and then US manufacturing would never have been. because it needed to grow from nothing to a major power house. 2 you talk about UK unilaterally removed all tariffs, and subsequently became the most powerful nation in the world during the 19th century.) fristly where do you get that from and the reason why the UK really became the most powerful nation in the world during the 19th century was because they invaded country after country after country after country. that's the reason why they became the most powerful nation in the world in the 19th century. lets also look at the facts the biggest growing economy's china has 25% tarrif , brazil 35%, Nigeria 70%, India 125% and that's only for cars.

[@markknight4660]

rd f and you asked me ''If protectionism works so well, then why don't US states impose tariffs on the goods from other states?'' the reason for this is the same reason why detroit is done for. its because all or 99% of all american politicians support free trade so they help their Rich mates get even Richer.

[@theknightsofren358]

Honestly all of these people are incredibly intelligent and honest. I just don't see debates like this anymore.

[@makisxatzimixas2372]

This is the only debate I've seen Milton Friedman interrupting. There is something in this debate.

[@surreallife777]

@@makisxatzimixas2372 Actually there’s nothing

[@makisxatzimixas2372]

@@surreallife777 Yes, but he's the only speaker that Friedman feels uncomfortable letting him complete his sentence.

[@surreallife777]

@@makisxatzimixas2372 I think the problem is not that other people wouldn’t let him complete his sentences it is that they wouldn’t or couldn’t criticize the nonsense Milton Friedman was spewing. He’s done irreparable damage to the US, UK and the world.

[@surreallife777]

@@makisxatzimixas2372 I’m not sure I understand. You mean the speaker is challenging Friedman?

[@Ezio17a]

The protectionist gave the example of Japan. LOL. Look at what Japan's government policies have done - it's a country in decline now with an ever stagnant economy. Free trade always wins out in the end.

[@thegreatonecometh200]

What are you talking about! Look at our economy! How many times just in your lifetime has the government saved our economy?I count 4 and I'm in my late 30s so don't pretend like you free marketeers like to do don't pretend like free trade made us rich protectionism is what made almost all of the rich countries rich and Milton Friedman has had to admit more than once that every economy is mixed

[@Ezio17a]

The government has SAVED the economy? Seriously? The government causes the booms and the busts by manipulating fiat currency. It's like saying that the EU will save Greece by printing more Euros and that EU is not to blame for lending money to Greece at the same rate as Germany when clearly both countries are poles apart. Why do you use a computer, a cellphone, a TV , pretty much every manufactured good made in China? Why don't you buy American, since you like protectionism, right?

[@imalwaysbluffing]

Japan is stagnating but what is the relation to protectionism? They have High standard of living and great wages. Japanese cars are still kicking American cars asses. They have a problem their aging population not with protectionism.

[@boblarry649]

Yea unless you want to be deindustrialized like usa and whole cities looted

[@surreallife777]

You’re either misinformed or delusional.

[@AlexTaldren]

Free trade is human nature. It isn't a system designed by man, like communism or marxism. It is, by its very nature, the lack of a system, and that's why it works so well. It is devoid of force and coercion. People can freely decide what to do with their labor (money) as they choose, and it forces producers to compete for that person's labor (money).

[@sauliusmuliolis7325]

*****"Free markets and free minds are corollaries"--Ayn Rand

[@Mujangga]

+AlexTaldren I've been saying that for years!

[@85bezzer]

I would say protectionism is more human nature

[@SivoDyas]

And this what Cohen calls ideology

[@louiethegreater1]

Wow, after 7 years of skyrocketing trade deficits, and giving the Chinese Communist Party more military power, that now threatens the US. You must stand with egg on your face, concerning your ignorance on economics. You must also have come to the conclusion that Mr. Friedman - God Rest His Soul was feeding unworkable economic theory to young ignorant kids. You must also believe that Friedman taught Globalism not economics.

[@OhRaez]

This is like 4 people just getting together and sitting to camly speaking their mind. I actually love this little debate. Very rare to see a debate this civil and calm, especially nowadays.

[@cbriangilbert1978]

If you are pushed out of an industry, it means someone else did it better. Why would you want to continue in an industry that you cannot compete in? And how is it fair to force the rest of us to supplement your desire to be in a particular industry? Innovation should be the driving force of a U.S. economy. High-tech, high paying jobs should be the desire. Why in the world would you want to stay in archaic industries better suited for third world countries? Competition, not just necessity is the mother of innovation. Because competition breeds necessity. There are jobs that are unfathomable because the technology doesn't exist yet. In the 1990's as computers became more mainstream people became fearful of the loss of jobs to computers, but quit the opposite occurred. The protectionist policies do nothing but hold back innovation, much like slavery did in early America.

[@beng4151]

Well said. People have argued that stupid theory that we need to protect old industries. Should we subsidize candle makers because we have electricity? Should we subsidize DVD companies because everyone is going digital? What sense does that make? You are right on, sir!

[@parabolikadocosmos]

Que merda de visão da vida! Que vida de merda é essa que estamos projetando pra humanidade! Inovar Pra vender? Precisar de dinheiro pra morar ? Vestir? Comer?

[@superhermanosvr2754]

Si necesitamos dinero para vivir, o al menos capital. Mire le pongo un ejemplo: cuando usted quiere comer necesita comida (obviamente) pero ¿de dónde sale esa comida? ¿Del cielo? ¿Aparece mágicamente en su mano? No, la comida tiene que trabajarse, incluso si sale de un árbol uno tiene que ir, caminar y tomar la fruta, todo requiere capital. Es una visión muy poco romántica, pero es así, el capital es necesario para la existencia. Sin comida morimos, sin casa morimos, sin salud morimos. Todas esas cosas requieren esfuerzo y/o dinero, no son gratis. El mercado es la forma más eficiente que ha visto la humanidad para asignar recursos, solo observe los resultados: antes del capitalismo (antes de 1820) un 95% de la población vivía en pobreza extrema, y tan sólo en 2015 el 10% de la población vive en pobreza extrema. También están los gráficos del PIB per cápita de los países antes y después de la Revolución industrial: ourworldindata.org/grapher/maddison-data-gdp-per-capita-in-2011us?tab=chart&time=1..1790&country=CHN~BWA~TWN~KOR~CRI~THA~PAN~MUS~MYS Y repito que esto suena muy poco romántico, pero no podemos negar los hechos. Y le pido que reconsidere su visión del dinero, el dinero es un medio por el cual intercambiamos y mejoramos la calidad de vida, no es algo horrible que debería extinguirse.

[@jackstuhley1745]

All this talk of competition and innovation but what about the people out of a job?

[@superhermanosvr2754]

@@jackstuhley1745 es que con más oferta laboral, lógicamente la gente sin empleo va a tener más oportunidades

[@MomoBrandt]

Id like to hear this big government idiots comments on the current situation. The bigger the government, the worse off we are. The years to come will blatantly prove this.

[@mike-wi8wm]

Are you American?

[@Synodalian]

+mike r America is the greatest example of bigger government leading to greater chaos. The more diverse the nation, the worse off it is under governmental control.

[@Synodalian]

Juan Primos​ Because Germany is mainly capitalist like Switzerland is.

[@TheWayoftheSith]

Of course big govts are the problem, but that doesn't address the argument of free trade vs protectionism. I'm for both no regulations/taxes except a layer of protectionism against foreign competitors.

[@wikieditspam]

+Monica Jones I'd rather hear about protectionists becoming convinced that Laissez-faire can help people better than a policy left over from mercantilism primarily employed by people mortally afraid that a Chinese person might have handled the manufacturing of their cheap shit instead of an American. I guess that's just wishful thinking considering how most debate works on the internet.

[@StatelessLiberty]

He's right in that state controls ("regulations") and excessively powerful unions do create unemployment -- but the law of comparative advantage is unaffected by this, so protectionism doesn't alleviate the problem. As Walker pointed out, if foreign firms outcompete us we aren't worse off. Instead, we specialise in different goods and services, and benefit from higher foreign productivity as consumers. I also don't think the humanitarian benefits of free trade should be ignored.

[@lucasfortes7705]

Friedman is awesome, he always had that look in his face "I'm right, I know it, you know it, everybody knows it. Now please, keep you stubborn babbling".

[@kimobrien.]

Friedman is dead and so is his neoliberalism.

[@johnlasiter2562]

Weird that people think protectionism still works. Japan has been a resounding success over the last 20 years....

[@mike-wi8wm]

That is because China did exactly what Japan did, that is globalisation not protectionism's fault

[@johnlasiter2562]

China stagnated under deflation?

[@mike-wi8wm]

John Lasiter ?

[@johnlasiter2562]

+mike r how does China play into what I'm saying.

[@mike-wi8wm]

+John Lasiter come on John leave it

[@TheRoark85]

The irony is that shortly after the video was filmed the Japanese economy collapsed and they only recovered after opening up their markets.

[@shredermn]

Except that the opening of markets didn't have the result you claim it did.

[@nicolasfat]

3 economists, 2 Adam Smith ties.

[@Paul-A01]

11:05 "This is all true, but it has no concreteness, it's all ideology" Translation: This is true, but lets change the subject

[@coltonsparks8426]

interesting he mentions japan. A now lost economy...

[@saayagain65]

***** Due to financialization of the economy...

[@markknight4660]

+Colton Sparks and Look at the Free trade US. A now lost economy...

[@markknight4660]

***** where do you get that from ''U.S. manufactures and exports more today than anytime in the nation's history''. and just think about the millions and millions of more jobs would they have if they had protection. and you seriously believe the fake figures of the unemployment is at 5% its close to 20%. and if the nation is fine i would take it that you support obama.

[@louiethegreater100]

+SuperMarioandSonic Marco Wow -- How dumb could you actually be. We have a 505 billion trade deficit with China, a 58 billion with Mexico, and 350 billion with Japan. What planet do you live on.

[@louiethegreater100]

***** You should be saying that massive trade deficits do not hurt the economist that are stupid enough to believe the failed economic theory involved in their thinking. You mean you actually believe that crap? LISTEN -- The US was founded on protectionism. The tariffs at our borders produced the greatest manufacturing economy in the history of the world, and produced the greatest wage earners. You are dim witted enough to believe exporting high paying industrial jobs,with benefits, with low paying service sector jobs is beneficial to a nation state. You sir have been badly hoodwinked by the very people who benefit globalization. A 35% tariff at our borders will bring prosperity back to the US, rebuild the middle class, who is really the driving force behind the economy.

[@juliancordova5851]

Do talk shows like this still exist ?

[@krock8912]

Julian Cordova Stossel is the closest thing I know of. It comes on Fox News I believe.

[@adamprozak9409]

Yes, it's called the podcast

[@zxcv73]

"Those were stupid protectionism." "The question is is there any other kind?" My gut just busted.

[@apekatt2011]

Yeah, Japan is a great example of good government control. Not going so well there now is it. Government always fail.

[@sergioccs74]

+HaloMortal What happened with Konami? thanks for the reply

[@bighands69]

+HaloMortal Japanese manufacturing is still a world leader. It unemployment is at about 4%. I would hardly call it failing.

[@mikequigley1954]

Milton is one of my all-time favorite economists. However, back in the 90s things were different. The government was only getting started at growing to the Goliath it is today. It seems to me, a 2-pronged approach to returning America back to a Super Producer again is required. And it begins small. 1st: Set our investors free from the insane number of regulations. One of the Founders of Home Depot was asked, "If you had to do it all over again, what would you do differently?" He said, "Fail. Fail in the first year. There are simply too many rules and regulations and taxes and issues that cost huge amounts of money for new businesses to overcome." So, that would be step one. 2nd: MILD taxation of products coming into the country must be levied. Foreign nations do not have our best interests in mind. They will ride the wave as long as they can, then find other markets (or create other markets.) Foreign nations MUST pay something to operate here. America also needs to stop supporting the rest of the world financially. When you buy a friendship with money, when the money runs out, so does the friend.

[@edithbannerman4]

@Hello there, how are you doing this blessed day?

[@kimobrien.]

You end up writing all these laws and regulations and hiring government officials because you don't trust us the actual workers with any real decisions. Instead you rely on all these eggheads from the elite universities like Freidman.

[@mrlozano]

I don't think the trade deficit is a bad thing. If people want to buy foreign made goods at cheaper prices , they should be able to do that. If we want to stimulate production in our own country, we want to reduce the tax burdens and get rid of the regulations that make it hard for small and emerging business and manufacturing plants to compete with their billionaire counterparts. But right now we have a system where the multimillionaire companies lobby the politicians to regulate the market so that small and emerging middle class entrepreneurs spend all their resources just on regulations alone that they have nothing left to open up shop and take the necessary risks to make a profit. In fact the entire venture becomes unprofitable at that point, this artificially props up the large corporations as the competition that would thrive in a freer market, are regulated out entirely. It's corporatism that is the problem, not capitalism. We don't have capitalism. As far as tariffs, I understand Milton's point. Hayek also argued the pretense of knowledge problem. Government can only make political decisions, they can't manage an economy. Central planning fails everywhere, always. Only where there has been freer trade have the masses enjoyed a higher standard of living, affording products that were once reserved for the rich, but that through competition, has lowered the costs of consumer goods. Tariffs will raise the cost of consumer goods and I dont' know what it's like in other countries, but here in the US, the federal reserve is debasing our currency, which means the dollar is worth less and less and people are already suffering higher costs of living. Add to that tariffs that will increase the cost of goods? It doesn't look good for tariffs.

[@bighands69]

+Henry Lozano Japanese companies benefited in the US because they paid less taxes when entering the US. But yet if a US manufacturer tried to sell their goods in Japan they face higher taxation than Japanese made goods.

[@artemisrafti3956]

Henry Lozano Persistent trade deficits are a bad thing. When our exports do not cover our imports, we must pay the difference by selling assets, hence reducing our net worth, or assume debt. This is unsustainable. America has a finite amount of assets to sell and a finite capacity to service debt. Yes, the trade deficit is a bad thing in the long run.

[@MUSTASCH1O]

@@artemisrafti3956 Surely we would end up with an equilibrium eventually, where the cost of selling am asset to import a good is too high, necessitating home production to make the difference.

[@artemisrafti3956]

@@MUSTASCH1O That process won’t be pretty. It will precipitate asset deflation, reducing the net wealth of Americans, which will decrease consumption. Aka, we are “paying back” the years of over-consumption. But I doubt this will happen because the US has a relatively young demographic and a growing population. We are naturally in a position to play the consumer role in the world. The financing of net imports will be largely due to foreigners buying US treasuries because there’s nothing else they can do with their surplus dollars

[@StatelessLiberty]

"what we do see is jobs being sent overseas because of free trade." This is a classic case of Bastiat's the seen and the unseen. Imagine if a technology was invented where if we send an empty container ship into the ocean, for a certain price, they magically fill with cars. This price undercuts domestic car manufacturers, making them go out of business. If you say this shows how technology hurts us -- you're a Luddite. Imagine that technology is another country. Then you're a protectionist.

[@guiltreaper37]

Thank you, you really have helped me clear up some things I was unsure about.

[@nicksundin]

Hilarious how short a great man like Milton Friedman was, a genius dwarf

[@TheRev1269]

Hahahah true. You ever hear Richard Epstein tell the story of when he was driving behind Milton and thought no one was in the car because he couldn't see him? So funny

[@nicksundin]

I'll have a look. When MF drinks from the mug, it looks massive! Though it's America so it's probably like a gallon.

[@robertsacamano]

He's the economy Yoda

[@nthperson]

The best argument in favor of "free trade" was provided by the American political economist Henry George in 1886. His book "Protection or Free Trade" was read by supporters into the Congressional Record that year. What is most important from Henry George is his final chapter, in which he shows that the elimination of barriers to trade will largely benefit rentier interests in the absence of the full taxation of rents.

[@redsox1006]

3:41 "Well what are you saying, Dr. Cohen?" Thanks for the input, lady.

[@StatelessLiberty]

It's from the updated 1990 Series. It's from the 2nd episode, "The Tyranny of Control." This is the whole debate taken from the episode, so you won't be able to find the rest of the debate because it wasn't aired.

[@Semislavia]

-In the 19th century the steel industry was an infant. -It was. -It still is. I lost it here.

[@urvagrawal2358]

I like milton friedman but in this debate he is not answering the other person properly. The person on the right is doing good arguments but the other two are giving not rebuttals they are just saying the same thing in different words

[@MrBlues113]

Economists some times underestimate the power of historical arguments.

[@guiltreaper37]

...That is all I have to say. Thank you for the conversation.

[@Gtjg88]

@jmintube. Will you please explain what better economic system there is out there? Also, what nation do you live in if you don't mind me asking?

[@parlifunk1]

Such a great, civil, respectful debate.

[@delinx04]

Lets say Apple keeps their iPhone factories in America. That means MORE EXPENSIVE iPhones for American buyers. Is it worth keeping a FEW THOUSAND jobs to make it more expensive for the MILLIONS? So I don't see how protectionism benefits MOST of a country's people. Sure you're keeping the jobs in the home country. But you're making it more expensive for the customers. Why prioritize the interests of a few over the masses? This is the principle I don't get with those who support protectionism.

[@akasteve03]

delinx04 how does cheap goods help someone with no job. Japan isnt big enough to present a real issue so yes free trade in that instance was fine. but china and india at the same time has basically become a endless supply of very cheap unskilled or low skilled labor and as it has benefited america as a whole the benefits have been mostly captured by the wealthy. thats the problem.

[@chrisbeast7044]

delinx04 you would be correct but we are in a special time where you can make this work. If you cut cooperate tax rate from 35% to 15% and drop many EPA regulations you can offset the price of the iPhone over here. I'm a free trade guy but if congress does this right it can work. So you can get the jobs and keep the price the same.

[@scott91575]

steve k - So you are under the assumption no one ever gets a job after they lose one. This is part of the flawed logic of protectionism. You take those same workers and let them know "hey, it's time to find a trade that you can use to find a job. We don't need a screw turner anymore." Then society advances with more specialized work that people are forced to find. As that occurs the products made in the country advance. In the mean time goods get cheaper and quality of life improves. Using the same metric US unemployment has been typically around 5% for the last century. Obviously higher during the great depression and times of recession, but that is the number it typically returns to. That is where we are today. So employment levels are essentially the same. Yet in 1900 almost 45% of a person's wages went to food. In 1950 it was 30%. Today it's around 10%. Similar trend in clothing. The only basic need products that have increased are housing due it's finite nature (housing is also advanced a lot in size and amenities) and health care (lack of foreign competition and aging society). That has left Americans with a non essential slice of their wages at around 50%, up from 20%. The free market has made us far richer that we have ever been. Yet most people are too blind to see it. Instead they see a lost job and panic without any understanding of what is happening to society as a whole.

[@akasteve03]

Scott N - technology is the great advantage we have over 100 years ago dont be foolish and attribute it all to the free market. im all about markets but even freidman was in favor of a negative income tax

[@justwannabehappy6735]

Yes, it is. It's called be patriotic. Something your generation doesn't understand.

[@MrBlues113]

Great debate, great arguments, both sides.

[@christopheradderley6902]

And we smile with him! God bless his good manners!

[@striake209]

wow, even though I agree with Milton Friedman in every sense, I have never heard protectionist policy argued so well. Its sad that today politicians no longer argue using fact but campaign slogans and false promises

[@dumyjobby]

people that say that the japaneese economy is doing grwleat they don't know what are talking about.

[@brainwashguy]

Dumy Jobby They were in the 80's.

[@BuFFoTheArtClown]

This interview was done in the 80's, which you seem too young to understand the issue concerning Japan. Google it.

[@dumyjobby]

what have the interview to do with the comments. comments are recent

[@mattmoran2511]

4:15 This is actually a really important point I think libertarians needs to be more aware of (I am a no gov't free market person). Governments can, as tactical moves, subsidize industries in their own country, and then sell to another country to outbid their localized market. This will artificially re-route domestic labor and capital from their current occupations in response to the artificial supply created by the foreign government. The more subsidized the foreign industry is, the more the domestic industry will be unable to compete without subsidy. However, on the whole, making free trade as open as possible would cure this, and is doing so more each and every day in the eastern world. If we have many foreign nations that are willing to trade we don't need to rely on a single one, which will make the foreign countries rapidly waste resources in a bid to out-do one another with taxpayer money. Fiat currency can basically create a limitless ability to do this by borrowing against the future, so I think that makes the argument for a private digital currency in this day and age more and more necessary. And overall, my entire point of both paragraphs is that we would be better without governments completely, because they can make foreign trade destructive and win/lose.

[@yp5422]

Matt how do you counter the argument for supply chain security- Ie the rationale for chips act ?

[@alunevans2377]

Protectionism is about politics and vested interests

[@CV_CA]

Funny in our time you can substitute China every time they said Japan.

[@wrestlingmast543]

It's amazing how the decades since this video have so thoroughly disproved Friedman's ideas on free trade. Does anyone still doubt that competing with unpaid workers in the third world has gutted the average American's standard of living as his job was shipped overseas?

[@DREwestcoast]

Dude.. that hilarious first line in that comment is golden... not that it took that for me to sub =P +1 and keep the good stuff coming sir!

[@ironcito1101]

They were discussing the strategic importance of the semiconductor industry back then, around 1990. Access to semiconductors is a big part of the current tensions across the Taiwan Strait between China and the US.

[@BeMyFirst]

I am a South Korean. Our country had virtually nothing in the 1960s. My parents grew up under time of massive starvation and lack of education. Now, our country is home to many industrial giants like Samsung and Hyundai, and Seoul has become a household name that signifies wealth, infrastructure, and high education. But we didn't achieve this massive transformation through free-trade, but through highly protectionist measures that shielded corporate giants during its infancy by the Korean government. It's really common knowledge that many developing countries like Korea didn't grow through free-trade measures, a truism that escapes many western free-market ideologues who can't really understand how the rest of the world really works. In fact, it's also common knowledge that FTA with US was the provenance for the farmer's plight and unfettered capitalism that used to foreign to South Korea.

[@StatelessLiberty]

You've got the facts exactly backwards. South Korean growth was primarily _export_ driven, i.e. trade driven, it did not involve import substitution. Rather than the government restricting trade to foster the growth of domestic industries ("protectionism"), it actually stimulated it through policies such as low-interest loans to exporters. The South Korean government did not "shield corporate giants" but allowed chaebol which failed in international markets to go out of business. Studies have found that relative prices in South Korea are similar to other Asian nations suggesting the policies did not distort the market very much. Your claim that developing countries didn't grow through free trade measures is false. The fastest growing economy in the world, Botswana, has implemented free trade policies. The Japanese industrialisation occurred during Meiji restoration involved free trade policies. Britain and Hong Kong also grew rapidly under free trade policies. If you want examples of extreme protectionism, look at the countries that attempted autarky (en.wikipedia.org/wiki/Autarky#Historical_examples) - the effects are usually so disastrous the policies are quickly abandoned.

[@BeMyFirst]

StatelessLiberty Hi thanks for your swift response to my comment. But your claim that our development tended toward EOI and involved zero ISI is totally inaccurate, although I can surmise why you hold on to such an belief, since mainstream developmental discourses (and free-trade supporters) tend to reduce South Korean policy in the 1970s as export-oriented. But any South Korean political economist or sociologist (like John Lie (Berkeley) or Ha Joon Chang) will tell you that the strategy South Korea pursued was both export and import oriented, and the interdependence of the two policies was the key to our economic development. To be specific, Park Chung Hee's Third Five-Year Economic Development plan in 1971 focused on a) dramatic increase in exports, and b) establishment of heavy and chemical industries, among others, which allowed the development of industries in steel, nonferrous metals, machinery, shipbuilding, electronics, and chemical. But to develop these 6 key industries, the state first promoted export-oriented production to import raw materials and machinery needed for the development of these industries and the subsequent domestic production. And importantly, the state performed a crucial role of protecting the domestic economy from foreign capital and competition (to the point where we couldn't even have foreign goods like cigarettes or cars that weren't made in Korea until the 1980s) through trade licensing, quantitative controls, advanced deposits, ministerial approval, and many others. So yes, South Korea pursued EOI and you got that part right, but you forgot to include that we did so to expand our domestic production, which is the other half of the story. If your story is correct, we wouldn't even have Hyundai or Samsung or other corporate giants, as Ha Joon Chang observes. And this isn't to forget how the government established many public enterprises, many of them that still exist with us today. On the topic of chaebol, it's ridiculous to suggest that because the state left many inefficient conglomerates to die off, South Korea promoted free-trade. You also forgot to include that chaebols that did not align with the ideology of the state were also killed off, and those did align receive stage patronage that John Lie says "cannot be overemphasized." Samhak (삼학) is a good example where the owner bbacked Kim Dae Jung (김대정) for 1971 presidential election, which resulted in the company being convicted of tax evasion and forced into bankruptcy (of course I am not saying that this is a good thing, but only to present a counterargument). So yes, the state penalized poor corporate performers, but you should keep in mind that it also backed efficient ones that align with the state regime by gaining monopoly over certain production, debt relief, and many others. One example is Hyundai; Chung Ju Yung, the founder, cultivated a good relationship with "President" Park, which led the company to undertake several state projects, such as the construction of the Gyungbu Highway in Korea and many building in the Middle East during their construction boom in the 1970s. In short, the government was severely tied to the development of the chaebols.

[@lalem91]

BeTheFirst Wow, its incredible to hear from someone from South Korea who knows a good deal on the subject. I'm from Ethiopia, and I'm fascinated by industrial policies adopted by SK and Taiwan in the 70s and 80s. I was aware of the blend of ISI and EOI, which is clear to see played a major role in their development. I was hoping that perhaps you could help direct me towards any books or analyses you know of that discuss the Korean industrial policies and five year plans in detail. It's a bit of a challenge to find information that discusses the policies themselves without frustrating attempts to hide information in order to proselytize "free trade". As soon as I can, I'm going to look into Lie and Chang for their insights (it's late where I am haha). Personally, I've never heard of any economy that's developed under free trade policies except for the free ports of Singapore and Hong Kong. Britain didn't have free trade policies during its industrialization and actually caused massive de-industrialization in India through its policies of mercantilism in the 19th century. It's awesome to find you!

[@BeMyFirst]

lalem91 hey man! Glad I'm of help to you. John life's "political economy of South Korea" is a great, accessible text that outlines the development history and plans. It's an old book, so u won't get past year 1999 I think, but would be plenty for your own purposes. Ha joon Chang's "bad samaritans" and "23 things they don't tell you about caoutalism" are refreshingly lucid and humorous books that has many bits about south Korea and developmental histories throughout in general. Joseph Stiglitz has a book called "Making globalization work" which has parts about East Asia, and although it covers a wide range of topics and countries, I felt the criticisms to be moderate and mild compared to say Chomsky's books and lectures on international trade, like "hopes and prospects" (more Latin America and middle east based, although criticisms are nonetheless relevant). On that note, I think it's Chang's 23 things book where he talks about the 'Singaporean problem' where he highlights Singapore complicates all free trade narratives with its SOEs, and housing and development board. Stiglitz also points to the central provident fund in his book. Happy reading!

[@Enedrapvp]

BeTheFirst Then why did your North cousins not surpass you? The truth is South Korea had an incredible amount of free trade. South Korea mainly made its profit off producing vehicles and electronics, both industries started by Japanese and American businessmen working with wealthy koreans to make large industry. You clearly misunderstand what free trade means to an economist. It does not mean an Anarchist society. It means the acts of trade that doesn't require government involvement, which is almost every business in Korea. South Korea is by all means a great example of a capitalist miracle. If 99% of the market is free, and 1% is regulated, you would call it a regulated market. I would call it a 99% unregulated and 1% regulated market.

[@paulpeartsmith]

The "protectionist" wins the argument. He wasn't a protectionist of course, he was just talking common sense. Government and free trade in conjunction is the only way. Balance, gentleman, balance.

[@C_R_O_M________]

Your notion of balance is my notion of imbalance! Your balance always brings bad unpredictable results in the longrun. The other way does not. Unfortunately, free market policies do not follow through because the state usually creeps its way to domination by exploiting the abundance of efflorescence the markets have created.

[@paulpeartsmith]

+C_R_O_M__________ there's been no bad unpredictable results from uncontrolled free trade? Are you kidding?

[@nyobunknown6983]

What I find amusing is many Trump supporters idolize Friedman despite the fact Trump was a protectionist. Friedman would have despised Trump's protectionism. The title was Milton Friedman debates a protectionist when it was every bit as much Michael Walker debates a protectionist. The brilliance of these 3 men is shown in all had good arguments. Steven Cohen held his own despite it being 2 against one.

[@FletchforFreedom]

Well, gee, since Japan's "phenomenal growth" proved to be illusory based entirely on accounting gimmicks and its protectionist and interventionist policies completely collapsed their economy, stuck it in a decades long slump and shackled them with a national debt twice as large as their economy, Friedman proved completely correct. And since no competent economist would argue that Reagan's economic policies failed (or that living standards had fallen for 30 years) the rest is just stupid.

[@thegreatonecometh200]

This guy is going against 2 people and he's whipping their butts! That's why they keep interrupting him and ganging up on him every time he disproves their mythology they come up with some Millie mouthed excuse always an excuse for why it didn't work other than it just doesn't work other than in academia

[@tapptom]

Shalom

[@fudgedogbannana]

He is not whipping their butts at all, I do wish they would have let him finish his thoughts, I would rather let some one whom I don't agree with prove his own folly than to interrupt him to show my virtue.

[@tapptom]

Japan knew the future because of the people. Not the Government, The products produced years ago by Japan were superior. Friedman proposed "No Draft" army for USA....NO government intervention .....let the man be free. YOU DONT WANT SERVE he said ok......WRONG. LOOK at our Military now. Hes a Zionist Jew. Look at how Israel does it.....they have a draft army. Gotta serve.

[@fudgedogbannana]

Tom Tapp There is a big difference when it comes to Israel, they are few in numbers and are surrounded by a hundred million of an angry enemy

[@tapptom]

fudgedog Israel is the PRIME Racist country....I dont even understand your response?????

[@blooddiamond93]

30 years of Milton Friedman's Free Trade and we're more in debt, under employed, and unemployed since the Great Depression. Free Trade is garbage. You can cut taxes domestically, but internationally, you need tariffs. This great country, at one point, survived purely on international tariffs and no taxation domestically at all.

[@cha0sman]

+blooddiamond What a moronic thing to say. You do understand that we have about 12,000 tariffs right now, right? Protectionism does not work. It has been proved time and again.

[@blooddiamond93]

cha0sman Yeah, the Founders of this country were real morons who purely used tariffs on imports to fund our Govt instead of a Federal Income Tax prior to 1913.

[@libertynow8192]

We don't have free trade... What world do you live in?

[@blooddiamond93]

LibertyNow What is NAFTA and what do the letters stand for?

[@libertynow8192]

+blooddiamond The International Trade Commission lists over 12,000 specific tariffs on imports to America. Hundreds of agricultural, textile, and manufacturing items are highly protected.

[@rastaman24211]

To me it is interesting watching these intellectual battles. Even though we now know who history judged to be victorious, when this exchange was filmed nobody knew who would win and whose philosophy would become dominant.

[@BBBarua]

Love it! It shows both sides of the equation.

[@chungawoowoonga6177]

This Video should be titled "Milton Friedman was wrong"

[@TheRev1269]

Uh. No?

[@BuyTheDip627]

chunga woo woonga bullshit. Million is right

[@mjones7243]

Very interesting. I'm not sure who is right in this one, but it is a great video because it's the first one where I saw someone go toe to toe with Milton Friedman and actually land a few good shots.

[@jimba6486]

Milton Convinced me how wrong I was about protectionism. I picked up a microeconomic textbook to learn more discovered how right he is about free trade. So much so that I now question my stance on supporting unions. All I will say is that the arguments for unions are similar to those who want "America First" (i.e., protect jobs and industries in America).

[@trent3727]

China now outproducers US ship building 8 to 1. Yay, Free Trade!!

[@troll707]

You are just naive

[@Technoguy3]

All three of them are pretty smart, but I agree with Walker and Friedman the most. Even if Japan destroys American industry, it isn't a zero-sum game. There aren't set industries a country can enter/exit. The semiconductor industry didn't even exist before it was invented. Without Hollywood movies, Sony wouldn't sell any VCRs.

[@nintyjazz2557]

Friedman is much more of a libertarian than a modern conservative. His philosophy is something republicans need to embrace i believe

[@kinanradaideh5479]

Can anyone link me to more information on steve cohen? I csnt find him anywhere online.

[@TemplarDark123]

Where can I find the entire debate? I couldn't find this debate in those 10 videos from Free to Choose.

[@kev3d]

For example, in 1900, nobody needed tungsten, but today, tungsten is in demand and there isn't much of it in the U.S. so it must be imported. The same is said for many other raw materials that are not found domestically. When people needed little more than wood, iron, cotton and local foods, smaller economies work fine, but with the demands that people have today, international trade is needed and this is a good thing.

[@charlesswadlesworth4144]

Thanks mate! WIll do

[@laversabeats]

I love it how Steve Cohen is defending Japan's protectionist and government policies. A country that has been in a recession for two decades, priceless.

[@matthewrichardson828]

There's been no successful example of 'price dumping'. Besides, if Japan wanted to send us cheap semi-conductors, we'd just produce something else. A country can't dump on every product.

[@wrestlingmast543]

(Part 1) You're confusing (1) the issue of competitiveness with (2) the employment and living standards of average people, the second of which I was talking about. Even within the terms of the theory of comparative advantage, the fact that your country's economic situation will adjust along the lines of comparative advantage doesn't mean that the economic situation of the average worker will re-cover from the movement of his/her job overseas. Economic activity may equalize between countries,

[@mtb416]

Oh! A protectionist, not a "projectionist." That clears things up quite nicely.

[@scottmc2626]

The core principle of economics is "ceteris paribus," hold all other variables constant. Friedman and Walker err in using the MICRO approach to ceteris paribus in comparing trade with tariffs to trade without tariffs, because they inherently raise overall taxation in the "with tariffs" scenario. Using the MACRO approach, the "with tariff" scenario must be adjusted such that overall taxation is held constant as compared to the "without tariff" scenario. When this is done, then yes, imported goods are more expensive, but the discount in general taxation means that the consumer also has an identical amount more money to spend on the imports. The net result is that the affordability of imports is unchanged.

[@thiinkerca]

Friedman more destructive than can be expressed

[@kyledavid91]

Does anybody know what film they are referencing toward the end of the video?

[@kyledavid91]

Thanks Javier

[@grass.dihenia2590]

Wow this debate was actually productive because people listened to each other rather than interrupting. Wish people would learn from this

[@kimobrien.]

The thing to learn from this is how the industrial powers with all their wealth decided to go into two world wars destroying each other like mad men.

[@scottmc2626]

The notion asserted of "getting government out of economics" is impossible. Proof: The economics they are talking about is essentially commerce. Commerce is the exchange of property. Property is nothing but a set of rights. Rights are exclusively protected by the state. It follows directly that in any scenario where the state is the final arbiter of individual rights, economics is inseparable from the state.

[@jhonathan6430]

I have been very interested in Friedman`s free market ideology. But, I agree with the protectionist guy on "this theory does not work in practice!". Japan, South Korea, China have grown to be very competitive markets on automobiles, 4th generation industry, electronics after significant subsidies and protection from their government. Brazil has started adopting since 80`s the great Chicago boy`s free market ideology, privatizing everything. Many were good for the population, but on average, they failed the Brazilian industry, which has fallen from 30% (1970`s) to 10% (2019) of Brazil`s GDP. Brazil does not have a strong industry, no national automobile company, no national strong electronic industry, only commodities - which means not good jobs. If the government had subsidized a national industry for electronics, automobiles; I think Brazil would be a competitive player in those markets and this was not allowed by the free market. Then, in 2019, the greatest free market country in world (US) imposes tariffs on world`s steel and several other products, impedes qualcomm to be bought. What a great ideology to impose on underdevelopment countries which are not in practice applied to the ideology owner? I think protectionism is bad for the population, because makes things more expensive. However, in early stage, protectionism and subsidies (which are against free market) helps the national industry to grow stronger and are necessary, mainly when all other players do it. I you don`t, you are playing football without helmet. If someone thinks different, please share.

[@scottmc2626]

Eliminating internal tariffs is not free trade because it is not trade, it is merely commerce. Trade means commerce across sovereign political boundaries. It must never be conflated with commerce occurring within sovereign political boundaries. Therefore, Friedman's point about eliminating Germany eliminating internal tariffs is misplaced as an argument for free trade. That is merely a reduction of domestic tax.

[@sharperguy]

It's not about how any particular industry fares against other industries of other countries. Yes, by banning (or discouraging) the import of steel into the country, the Japanese government created the necessity for a steel industry to develop in Japan, which in the end turned out better than the US steel industry. However, if the import of steel was not discouraged, then this would've greatly reduced costs to other industries allowing them to develop. This is a simple case of seen vs unseen.

[@tuxorz]

Outsourcing jobs -> Same work for cheaper pay -> more savings for companies -> more product investments -> better and cheaper products -> Consumer benefits. The problem is this: Every new innovation, whether it is in terms of outsourcing labor or in developing new machines, always causes an irrational concern for "lost jobs". However, this fear always happens in the present and never for the past. Do we fear the lost jobs of milk men or construction workers who only used horses and shovels? No.

[@incognitonazo]

minute 8:32 - 8:50 totally right !! Strategic industries protected in order to compete later AKA INDUSTRIAL CLUSTERS

[@pagetvido1850]

Debates were so much more civilized back then.

[@sion1138]

Indeed. Croatia. Telecommunications network sold, layoffs in the thousands, no quality increase, no cost decrease, except the profits go to Germany. Distributed agricultural and dairy industries reduced to large farms in debt. Huge amounts of imported second class goods, largest dairy firms sold, price and quality remained the same, except the profits go to France. The last domestic bank and insurance company to be sold shortly. Highways to be given into concession. And so on...

[@MegaAstrodude]

The overwhelming historical evidence, including that of Adam Smith's own writings, suggests that tariffs are infinitely superior when it comes to generating growth. Even Adam Smith came out in favor of tariffs when writing of Wealth of Nations, saying "By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value,..."

[@daPlumber702]

I said Friedman made the argument, not that he always did what he said.. You'll also find that a lot of things were done under Reagan that Friedman had stated he was against in previous interviews etc. As for the tariffs on Japan in the '80s there are plenty points of argument that it did very little to help and indeed only served to raise the price of the cheap Japanese cars that Americans were benefiting from.

[@TheFremenChick]

One cannot be increase cost effectiveness without increasing efficiency without government intervention. period

[@MrIzzyDizzy]

i understand it well enough - i had 2 course in college but that was 25+ years ago with no particular use of such equations as those presented -if i ever learned those have been lost. i understand the concept of marginal utility and subjective value. these concepts are exactly why objective efficiency is not assured - price mechanism may be a pressure resulting in better efficiency -and better efficiency can result in monetary cost effectiveness - but it isn't the only means. cont

[@JamesTindaleArt]

It doesn't matter what you call it - it's still snow and it's still cold.

[@StatelessLiberty]

As I've pointed out to other commenters, the idea that jobs can be "lost overseas" was refuted by David Ricardo in the 19th century. Ricardo showed that there is no such thing as an "uncompetitive" country, because countries will always possess *comparative* advantage in something. Another way of looking at it is that countries that can produce at lower costs will experience more demand for their currency and the exchange rate will adjust so that international price is equal to other countries.

[@doncooper6163]

These guys muddle the discussion with generalizations, false equivalencies and a lot of unsubstantiated assumptions. Government as an economic agent making economic decisions on behalf of a society goes against all basic economic principles. Basic economics is based on individual preferences and a firm's objectives. Individuals and a firm's leadership risk their scarce resources when making decisions and bear the consequences of those decisions. They adjust their decision making processes based on those consequences. Politicians don't risk their own scarce resources, they risk society's resources and they bear none of the consequences of their decisions. It's a perversion of economic principles so if someone believes that politicians can make better economic decisions then they must conclude that either basic economic principles are wrong or government intervention of any kind is economically less efficient and beneficial than individuals and firms making their own decisions. Politicians are like stock brokers, regardless the consequences of their actions they always get paid.

[@boralapah]

No. I was saying was that if lobbysim is a tool of companies to make more profit what else will companies use as tools? if prohibitive laws are passed then the state is interfering with markets, the state is saying that this market or that market can't exist because they are immoral. in this way there will still be government intervention in markets and lobbyism will continue to exist. instead of it being focus on where subsidies go to it'll be focused on what markets are legal or not.

[@dnch]

why are there no discussions like this now?

[@phiizzurp1200]

Because nowadays this is to complicated for people

[@rodrigonoschese9981]

If you are not the most efficient in making it, buy it! And go do something else, in which you can excel!

[@shredermn]

And exactly that's the way you extinguish your own economy.

[@StatelessLiberty]

You're welcome!

[@kavonfiennes8003]

Beautiful sarcasm i was confused too! Fannie Mae (The Federal National Mortgage Association) created by the FEDERAL govt (not free markets) in 1938 as part of the NEW DEAL. Its purpose was to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities by govt; Freddie Mac was chartered by Congress in 1970 to keep money flowing to mortgage lenders in support of homeownership and rental housing. So the govt intervention in housing created a bubble.

[@sonofsin110]

What is wrong with cheap labor? If someone is will to work for less, why not let them. This is the very essence of competition. This forces people to either compete or makes them do another job based on their skill level. Minimizing opportunity costs is fundamental to creating efficiency. Let the people who do their job best do that job otherwise you create waste in the system. The Idea that people work together in societies by specialization applies to people of all nations as well as the home.

[@StatelessLiberty]

The balance of trade reflects net flows of investment. This can be shows with national accounting identities. Y=C+I+G+(X−M) S= Y−T−C S=C+I+G+(X−M)−T−C S=I+(G−T)+(X−M) (I−S)+(G−T)=M−X Or in words: Net inflow of private investment + State fiscal deficit = Trade deficit Thus, setting aside the issue of fiscal deficits, trade deficits reflect inflows of foreign investment (How horrifying!) "Market inefficiencies" are neither sufficient nor necessary to explain trade deficits.

[@logicalspartan]

The issue I have is that other nations do not have the systems to protect the citizens. So the businesses in other nations have a natural advantage in costs.

[@MrIzzyDizzy]

we can use the most advanced means of production in proximity to its use and do it sustainably - with renewable energy and eliminate waste, we can make products to last much longer and design them to be more easily updated - reused repurposed recycled and repaired, these are some of some of the ideas of the resources based economy - we have means to actually address all of basic human needs -(food.clothing,housing ,medicine education and more)irrespective of demand and use less resources

[@MegaAstrodude]

" Moreover, how little do you think an American is willing to earn to make them?" Americans would likely make between $15 and $30 an hour to make T-shirts for now. Due to automation, a 30% tariff would bring the T-shirt industry back to America largely. Wages double and triple, but prices only go up 30%. Free-trade favors the corrupt the most because it favors those who can win the affections of the North Korean, Venezuelan, Iranian, and even other Western governments.

[@captainhaire]

When Government makes a law that is outside moral and value bases then they are overreaching. Friedman was a freethinking historian and economist. Laws were put into place by interventionist politicians that forced companies to do the impossible. People- not government- get us out of recessions and depressions when they are allowed to.

[@ChitranjanBaghiofficial]

ok economics is all fine, but cudos to the quality of sound, the audio engineer did a good job.

[@travisdonaldstanley6420]

POTUS Trump was a protectionist tariff white house. I disagreed with it at first, but somehow it worked out. Amazingly, globalization has actually gone backwards post COVID. Car Chips. Oil, thanks to Russia. Wheat, thanks to Russia. Amazingly, jobs have come back from overseas, after wages went up in China, which not one thought of back then. Japan actually had a financial meltdown in the early 90s. And of course the internet disrupted loads of stuff.

[@StatelessLiberty]

The idea that jobs can be "lost" overseas is a fallacy that was refuted by David Ricardo in the 19th Century. It's the economic equivalent of geocentrism-it is a very old and very well refuted idea. Countries that trade with each other will specialise, and this means labour must be reallocated to areas of comparative advantage. Unemployment is just part of that reallocation process.

[@darwinkilledgod]

Incidentally, Eskimos do not have 100 words for snow. Steven Pinker debunks this in his book How the Mind Works. Good read.

[@guiltreaper37]

...lower quality for the lower price. It is up to the consumer to decide whether it is worth his money to buy any product or service. Globalization of business is not anti-american, if anything I think it's pro. I will rap this up because I think I have gone over my time limit. When you look at this issue just remember that there are other factors in play then just the one you can see. Also just wanted to let you know I am really enjoying this discussion.