October 2007 -- Free to Choose: A Personal Statement, written by Milton Friedman. Television series produced by Bob Chitester. First aired on PBS in 1980. The five-disc, ten-part series is available on DVD and distributed by The Idea Channel for $95.00. The companion book, written with Rose Friedman and first published in 1980, is available in a 1990 edition published by Harvest Books.
(This is the fifth in a series of reviews of the seven best classic documentaries of broadcast television. These have included Civilisation by Kenneth Clark, published in the April 2007 issue of TNI; The Ascent of Man by Jacob Bronowski, May 2007; Connections: An Alternative View by James Burke, June 2007; and Cosmos: A Personal Voyage by Carl Sagan, July-August 2007.)
No economist in the twentieth century was more popular and more closely identified with free markets than Milton Friedman (1912-2006). A Nobel Prize winner and one of the bright lights of the Chicago school of economics, Friedman’s fame beyond the walls of academia came from his ability to popularize the subject that nineteenth-century historian Thomas Carlyle famously called “the dismal science.”
Friedman’s supreme achievement in his television series Free to Choose was to follow in the tradition of popular writers on the subject, like Frederick Bastiat and Henry Hazlitt. He explained to the layman how the free market works, and he conveyed to the public excitement and admiration for entrepreneurs large and small who, by pursuing their self-interest, make us all prosperous.
His ten-part series, with the accompanying book written with his wife Rose, was produced by Bob Chitester, who also produced the follow-up series The Power of Choice. The series was first broadcast in 1980, the election year that saw Ronald Reagan campaigning on the premise that “government is the problem, not the solution,” and pledging to roll back taxes and economic regulations. Friedman’s series helped give the public a better understanding of “Reaganomics” and set the stage for a political as well as economic revolution. Reagan himself promoted many of Friedman’s policies.
Each one-hour episode begins with the diminutive economist walking through markets and factories, taking us to England and India, Hong Kong and Japan, making very real his explanations about how wealth is created and how individual freedom of choice is the engine of prosperity.
The second part of each episode is a question-and-answer period. Friedman was confident enough in his ideas to expose them to challenge from opponents as well as from sympathizers. These sessions are fascinating for several reasons.
First, we see Friedman vanquish the best arguments against freedom that can be thrown at him. For example, he tangles with self-styled consumer activist Joan Claybrook over whether government or the free market can best protect consumers.
Friedman vanquishes the best arguments against freedom that can be thrown at him.
Second, we hear from individuals whose ideas were considered important three decades ago but which turned out to be so wrong. Socialist Michael Harrington stands out as one who makes all the arguments about the dangers of freedom and the need for more, not fewer, government restrictions on free choice. A major thinker in his time, Harrington is forgotten today, except within small fringe circles, while Friedman’s ideas and the individuals he influenced are found far and wide.
Third, we hear many of the same faulty arguments being made in 1980 that are still raised today. But we can appreciate that today’s versions of such arguments must be more subtle—I’d say sneaky—because Friedman’s explanations and twenty-five years of history have so well refuted them.
And fourth, we’re delighted to see and hear very young versions of Thomas Sowell, Walter Williams, and even Donald Rumsfeld (then a businessman), among others, who are notables today, but who were then just starting out and interacting with Friedman at his finest.
Many conservatives today who consider themselves in the Reagan tradition might be uncomfortable viewing the first episode of Free to Choose. Friedman begins by describing how immigrants came to America from many countries having diverse languages and cultures, and how they built the richest country on earth. Manhattan, he points out, used to be a swamp, purchased from the natives by European settlers for $24 in trinkets. It became a magnet, especially in the late nineteenth and early twentieth centuries, for individuals (including Friedman’s parents) from all over the world who sought the opportunities that New York City had to offer.
He then travels to the freest market in the world, Hong Kong, where there are virtually no economic regulations: no government-mandated wages, no trade protection, just individual economic liberty. This freedom had allowed Hong Kong to grow rich. In the period between the end of World War II and 1980, wages had increased four-fold. In the decades since, wages have grown to Western levels.
Friedman contrasts the freedom in Hong Kong with the then–far-less-free People’s Republic of China. In the two-and-a-half decades since the series, China has more and more adopted the policies of Hong Kong, not only in light of the obvious success of its free neighbor, but also from explicit studies of Friedman’s ideas and teaching visits by Friedman himself.
Britain in the nineteenth century turned to free trade and became the leading industrial power in the world, with rising living standards for all. An insular and impoverished Japan learned from that example, opened up to the world later in that century, and joined the ranks of prosperous countries.
Friedman’s arguments are still relevant.
When India gained its independence from Britain in 1947, it sadly retained its dependence on the socialist ideas that were to sink the British economy. For example, India closed its markets to support and subsidize small hand looms. The number of looms increased in the decades after independence. But most Indians, whose looms were perhaps one-hundredth as productive of automated looms in Japan and elsewhere, remained in terrible poverty while living standards grew in Japan and other more open economies.
Viewing Free to Choose also shows us history repeating itself. Back then, Friedman was refuting protectionists who argued for “fair trade” in light of rising competition from Japan. Public policy battles in the United States at that time were fought over whether and how to restrict the Japanese imports. In the end, the more open American markets resulted in a stronger economy vis-à-vis Japan’s. But today we hear similar arguments about jobs supposedly lost to India. Friedman’s arguments are still relevant.
To bring “home” his lessons about free markets for the ordinary viewer, Friedman also uses a very simple yet compelling example, borrowed from the late Leonard Read: the production of a simple pencil.
“Look at this lead pencil,” he says. “There’s not a single person in the world who could make this pencil.”
The wood from which it’s made, for all I know, comes from a tree that was cut down in the state of Washington. To cut down that tree, it took a saw. To make the saw, it took steel. To make the steel, it took iron ore. This black center, we call it lead but it’s really graphite, compressed graphite. I think it comes from some mines in South America. The eraser, a bit of rubber, probably comes from Malaya where the rubber tree isn’t even native; it was imported from South America by some businessmen.
He goes on to point out that “literally thousands of people cooperated to make this pencil, people who don’t speak the same language, who practice different religions, who might hate one another if they ever met.” So, a question: “What brought them together and induced them to cooperate to make this pencil?”
There was no commissar sending out officers, sending out orders from some central office. It was the magic of the price system, the impersonal operation of prices that brought them together and got them to cooperate to make this pencil so that you could have it for a trifling sum. That is why the operation of the free market is so essential—not only to promote productive efficiency, but even more to foster harmony and peace among the peoples of the world.
I found the episode “Who Protects the Worker?” to be particularly interesting. Organized labor tries to restrict competition from non-union workers in order to drive up their wages. They sometimes use violence. When governments give unions special support, they can effectively restrict the opportunities of workers who don’t have union jobs and who can’t get them.
Union bosses push minimum-wage laws even though most union members make far more than minimum wage. Why? So that they can drive up their own wages, in response. Such government mandates do not in fact protect poorer workers; they limit their job opportunities.
“There’s not a single person in the world who could make this pencil.”
Anticipating today’s headlines, Friedman shows illegal immigrants crossing the border from Mexico into the United States. He acknowledges the problems with unrestricted immigration in a welfare state that hands out taxpayer money to all comers. But he also points out the problems of trying to restrict the immigration of those who are simply looking for work. “The poor Mexicans are driven by hunger and attracted by the prospect of jobs.”
Friedman visits Spartanburg, South Carolina, which in the 1970s suffered recession and high unemployment in its garment industry. Then local officials decided to make it into a kind of free-trade center. They instituted right-to-work laws to prevent forced unionization. They cut taxes. New industries moved in. New jobs were created. Older textile mills actually faced competition for workers, increasing wages.
Moving to the rotunda of the Library of Congress, he tells us that in 1936, the Federal Registry listing economic regulations was contained in three volumes. The camera then pans back; Friedman is surrounded by books piled around the rotunda, constituting the regulations as of 1980.
The Consumer Product Safety Commission, he points out, makes rules for every sort of consumer product. Do we really need bureaucrats testing matches to see if they light when struck from different angles, he asks?
The Interstate Commerce Commission, which regulated railroads, also regulated the emerging trucking industry in order to protect big railroads. By 1980, trucking companies could not send trucks to make pick-ups and deliveries without government permission. Friedman presents executives from an air-shipping company whose trucks sit idle waiting for permission travel certain routes. (Thanks in part to Friedman’s exposé, the ICC was abolished in 1995.)
Regulations do not simply drive up costs; they can literally be a matter of life and death. Because the Food and Drug Administration requires tests for both the safety and efficacy of drugs, many beneficial products are kept off the American market for years. Decisions about what is best for patients are no longer made by doctors and patients; bureaucrats are involved.
Sitting in the oldest bar in Chicago, Friedman explains how the prohibition of alcohol gave rise to black markets and Al Capone. He tells us we can expect the same for other products that governments restrict or ban.
Regulations do not simply drive up costs; they can literally be a matter of life and death.
The episode “What’s Wrong with Our Schools?” opens in some of the worst. Children go through metal detectors and past security guards in buildings that look more like locked-down prisons than institutions of education. Neither parents nor teachers like the situation, and the children are certainly ill-served. Yet parents have no choices. They’re not well-off and their kids must go to a government school over which they have little control. Private schools, on the other hand, must compete to attract customers and thus must serve students, so they perform far better.
Friedman follows attempts by the poor in Harlem to run private, struggling storefront schools as alternatives. One resists offers of government aid but eventually gives in. Then we hear the sad complaints of school administrators now forced to comply with government regulations and bureaucrats.
The movement for free choice in education via vouchers and tax credits grew out ideas that Friedman had as early as 1955. Today the principle task of the Milton and Rose D. Friedman Foundation is to promote the agenda of free markets in education.
At one point, Friedman displays a calculator that he bought second-hand in 1955 for $300—a lot of money. In 1980 a far better one could be purchased for $10.
What produced this tremendous improvement in technology? It was self-interest or, if you prefer, greed: the greed of producers who wanted to produce something they could make them a dollar on, the greed of consumers who wanted to buy things as cheaply as they could. Did government play a role in this? Very little. Only by keeping the road clear for human greed and self-interest to promote the welfare of the consumer.
After the series aired, Milton Friedman went on to become the most influential free-market economist in the world. His ideas have influenced reformers from Chile to China. He was a leading light in the creation of an economic freedom index developed by an international coalition of groups and published in the United States by the Cato Institute; I had the privilege of working with Friedman on that enterprise. His ideas are as strong and relevant as ever today.
Wealth is the foundation of human survival and physical comfort. There is little room or capacity in impoverished societies for advances in arts, sciences, and technology. The discovery of the source of wealth should itself be ranked as a great achievement.
Milton Friedman was one of those discoverers and a popularizer of the discoveries. Better than most introductory economics courses you’re likely to find in schools, and better than most documentaries you’re likely to see, Free to Choose demonstrates capitalism’s virtues in action and provides a wealth of things to think about and celebrate.
Edward Hudgins is research director at the Heartland Institute and former director of advocacy and senior scholar at The Atlas Society.