economist, statistician, university teacher, essayist
🔗 Read on Wikipedia1912 – 2006
The organization of economic activity through voluntary exchange presumes that we have provided, through government, for the maintenance of law and order to prevent coercion of one individual by another, the enforcement of contracts voluntarily entered into, the definition of the meaning of property rights, the interpretation and enforcement of such rights, and the provision of a monetary framework.
Freedom is a tenable objective only for responsible individuals. We do not believe in freedom for madmen or children. The necessity of drawing a line between responsible individuals and others is inescapable, yet it means that there is an essential ambiguity in our ultimate objective of freedom. Paternalism is inescapable for those whom we designate as not responsible.
I am favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible.
The Great Depression in the United States, far from being a sign of the inherent instability of the private enterprise system, is a testament to how much harm can be done by mistakes on the part of a few men when they wield vast power over the monetary system of a country.
To paraphrase Clemenceau, money is much too serious a matter to be left to the Central Bankers.
Nothing is so permanent as a temporary government program.
With respect to teachers' salaries .... Poor teachers are grossly overpaid and good teachers grossly underpaid. Salary schedules tend to be uniform and determined far more by seniority.
The world runs on individuals pursuing their self interests. The great achievements of civilization have not come from government bureaus. Einstein didn't construct his theory under order from a, from a bureaucrat. Henry Ford didn't revolutionize the automobile industry that way.
The major disadvantage of the proposed negative income tax is its political implications. It establishes a system under which taxes are imposed on some to pay subsidies to others. And presumably, these others have a vote.
The heart of the liberal philosophy is a belief in the dignity of the individual, in his freedom to make the most of his capacities and opportunities according to his own lights, subject only to the proviso that he not interfere with the freedom of other individuals to do the same. This implies a belief in the equality of man in one sense; in their inequality in another.
An income tax intended to reduce inequality and promote the diffusion of wealth has in practice fostered reinvestment of corporate earnings, thereby favoring the growth of large corporations, inhibiting the operation of the capital market, and discouraging the establishment of new enterprises.
The contraction from 1929 to 1933 was by far the most severe business-cycle contraction during the near-century of U.S. history we cover and it may well have been the most severe in the whole of U.S. history.
I am convinced that the minimum-wage law is the most anti-Negro law on our statute books—in its effect, not its intent.
How much attention is paid to agreement between Galbraith and myself in opposing a draft and favoring an all-volunteer armed force, or in opposing tariffs and favoring free trade, or on a host of other issues? What is newsworthy is that Galbraith endorses wage and price controls, while I oppose them.
The key insight of Adam Smith's Wealth of Nations is misleadingly simple: if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.
The price system works so well, so efficiently, that we are not aware of it most of the time. We never realize how well it functions until it is prevented from functioning, and even then we seldom recognize the source of the trouble.
The government solution to a problem is usually as bad as the problem.
Prices perform three functions in organizing economic activity: first, they transmit information; second, they provide an incentive to adopt those methods of production that are least costly and thereby use available resources for the most highly valued pur poses; third, they determine who gets how much of the product—the distribution of income. These three functions are closely in terrelated.
The price system transmits only the important information and only to the people who need to know.
If you look at the drug war from a purely economic point of view, the role of the government is to protect the . That's literally true.
One reason why money is a mystery to so many is the role of myth or fiction or convention.
Why should they also be accepted by private persons in private transactions in exchange for goods and services?The short answer—and the right answer—is that private persons accept these pieces of paper because they are confident that others will. The pieces of green paper have value because everybody thinks they have value. Everybody thinks they have value because in everybody's experience they have had value...
Analysis of the supply of money, and in particular of changes in the supply of money, is simple in principle but extremely complex in practice, both in our hypothetical world and in the current real world. Simple in principle, because the supply of money is whatever the monetary authorities make if, complex in practice, because the decisions of the monetary authorities depend on numerous factors.
For both long and short periods there is a consistent though not precise relation between the rate of growth of the quantity of money and the rate of growth of nominal income. If the quantity of money grows rapidly, so will nominal income, and conversely. The relation is much closer for long than for short periods
The greatest advances of civilization, whether in architecture or painting, in science and literature, in industry or agriculture, have never come from centralized government.
Governments never learn. Only people learn.
The world runs on individuals pursuing their self interests. The great achievements of civilization have not come from government bureaus. Einstein didn't construct his theory under order from a, from a bureaucrat. Henry Ford didn't revolutionize the automobile industry that way.
Most of the energy of political work is devoted to correcting the effects of mismanagement of government.
Government has three primary functions. It should provide for military defense of the nation. It should enforce contracts between individuals. It should protect citizens from crimes against themselves or their property.
The black market was a way of getting around government controls. It was a way of enabling the free market to work. It was a way of opening up, enabling people.
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.
If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand.
When government - in pursuit of good intentions - tries to rearrange the economy, legislate morality, or help special interests, the cost come in inefficiency, lack of motivation, and loss of freedom. Government should be a referee, not an active player.
I think that the Internet is going to be one of the major forces for reducing the role of government. The one thing that's missing, but that will soon be developed, is a reliable e-cash - a method whereby on the Internet you can transfer funds from A to B without A knowing B or B knowing A.
Many people want the government to protect the consumer. A much more urgent problem is to protect the consumer from the government.
Universities exist to transmit knowledge and understanding of ideas and values to students not to provide entertainment for spectators or employment for athletes.
When government - in pursuit of good intentions - tries to rearrange the economy, legislate morality, or help special interests, the cost come in inefficiency, lack of motivation, and loss of freedom. Government should be a referee, not an active player.
There's no such thing as a free lunch.
The greatest advances of civilization, whether in architecture or painting, in science and literature, in industry or agriculture, have never come from centralized government.
The only relevant test of the validity of a hypothesis is comparison of prediction with experience.
Only government can take perfectly good paper, cover it with perfectly good ink and make the combination worthless.
If we are to use effectively these abstract models and this descriptive material, we must have a comparable exploration of the criteria for determining what abstract model it is best to use for particular kinds of problems, what entities in the abstract model are to be identified with what observable entities, and what features of the problem or of the circumstances have the greatest effect on the accuracy of the predictions yielded by a particular model or theory.
The construction of hypotheses is a creative act of inspiration, intuition, invention; its essence is the vision of something new in familiar material. The process must be discussed in psychological, not logical, categories; studied in autobiographies and biographies, not treatises on scientific method; and promoted by maxim and example, not syllogism or theorem.
I have no right to coerce someone else, because I cannot be sure that I'm right and he is wrong.
Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output. … A steady rate of monetary growth at a moderate level can provide a framework under which a country can have little inflation and much growth. It will not produce perfect stability; it will not produce heaven on earth; but it can make an important contribution to a stable economic society.
Make politics an avocation, not a vocation.
There was nothing in these views to repel a student; or to make Keynes attractive. Keynes had nothing to offer those of us who had sat at the feet of Simons, Mints, Knight, and Viner.
So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no they do not.
The problem in this world is to avoid concentration of power - we must have a dispersion of power.
I think the government solution to a problem is usually as bad as the problem and very often makes the problem worse.
I want people to take thought about their condition and to recognize that the maintenance of a free society is a very difficult and complicated thing and it requires a self-denying ordinance of the most extreme kind. It requires a willingness to put up with temporary evils on the basis of the subtle and sophisticated understanding that if you step in to do something about them you not only may make them worse, you will spread your tentacles and get bad results elsewhere.
I say thank God for government waste. If government is doing bad things, it's only the waste that prevents the harm from being greater.
Every friend of freedom must be as revolted as I am by the prospect of turning the United States into an armed camp, by the vision of jails filled with casual drug users and of an army of enforcers empowered to invade the liberty of citizens on slight evidence.
If we have system in which government is in a position to give large favor - it's human nature to try to get this favor - whether those people are large enterprises, or whether they're small businesses like farmers, or whether they're representatives of any other special group. The only way to prevent that is to force them to engage in competition one with the other.
One of the great mistakes is to judge policies and programs by their intentions rather than their results.
In this day and age, we need to revise the old saying to read, "Hell hath no fury like a bureaucrat scorned."
It's nice to elect the right people, but that isn't the way you solve things. The way you solve things is by making it politically profitable for the wrong people to do the right things.
They think that the cure to big government is to have bigger government... the only effective cure is to reduce the scope of government - get government out of the business.
The strongest argument for free enterprise is that it prevents anybody from having too much power. Whether that person is a government official, a trade union official, or a business executive. If forces them to put up or shut up. They either have to deliver the goods, produce something that people are willing to pay for, are willing to buy, or else they have to go into a different business.
Society doesn't have values. People have values.
The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both.
There is no place for government to prohibit consumers from buying products the effect of which will be to harm themselves.
Governments never learn. Only people learn.
With some notable exceptions, businessmen favor free enterprise in general but are opposed to it when it comes to themselves.
When government - in pursuit of good intentions - tries to rearrange the economy, legislate morality, or help special interests, the cost come in inefficiency, lack of motivation, and loss of freedom. Government should be a referee, not an active player.
The broader and more influential organisations of businessmen have acted to undermine the basic foundation of the free market system they purport to represent and defend.
Every friend of freedom... must be as revolted as I am by the prospect of turning the United States into an armed camp, by the vision of jails filled with casual drug users and of an army of enforcers empowered to invade the liberty of citizens on slight evidence.
Spending by government currently amounts to about 45 percent of national income. By that test, government owns 45 percent of the means of production that produce the national income. The U.S. is now 45 percent socialist.
The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.
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.
I know of no severe depression, in any country or any time, that was not accompanied by a sharp decline in the stock of money and equally of no sharp decline in the stock of money that was not accompanied by a severe depression.
Joan Robinson, a leading Keynesian and radical, produced a specimen for me to analyze. I said something like, "This is obviously the writing of a foreigner, so it's difficult for me to analyze. But I would say it is written by someone who had considerable artistic but not much intellectual talent." It turned out to be the handwriting of Lydia Lopokova, the world-famous Russian ballerina whom Keynes had married. That was surely my greatest triumph of the year at Cambridge!
There's a smokestack on the back of every government program.
The unions might be good for the people who are in the unions but it doesn't do a thing for the people who are unemployed. Because the union keeps down the number of jobs, it doesn't do a thing for them.
The use of quantity of money as a target has not been a success. I'm not sure that I would as of today push it as hard as I once did.
I am a libertarian with a small "l" and a Republican with a capital "R". And I am a Republican with a capital "R" on grounds of expediency, not on principle.
You must distinguish sharply between being pro free enterprise and being pro business.
Keynes was a great economist. In every discipline, progress comes from people who make hypotheses, most of which turn out to be wrong, but all of which ultimately point to the right answer. Now Keynes, in The General Theory of Employment, Interest and Money, set forth a hypothesis which was a beautiful one, and it really altered the shape of economics. But it turned out that it was a wrong hypothesis. That doesn't mean that he wasn't a great man!
Thanks to economists, all of us, from the days of Adam Smith and before right down to the present, tariffs are perhaps one tenth of one percent lower than they otherwise would have been. … And because of our efforts, we have earned our salaries ten-thousand fold.
If a tax cut increases government revenues, you haven't cut taxes enough.
The true test of any scholar's work is not what his contemporaries say, but what happens to his work in the next 25 or 50 years. And the thing that I will really be proud of is if some of the work I have done is still cited in the text books long after I am gone.
I’m in favor of legalizing drugs. According to my values system, if people want to kill themselves, they have every right to do so. Most of the harm that comes from drugs is because they are illegal.
There is enormous inertia—a tyranny of the status quo—in private and especially governmental arrangements. Only a crisis—actual or perceived—produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.
To the free man, the country is the collection of individuals who compose it, not something over and above them. He is proud of a common heritage and loyal to common traditions. But he regards government as a means, an instrumentality, neither a grantor of favors and gifts, nor a master or god to be blindly worshipped and served.
Inflation is taxation without legislation.
As liberals, we take freedom of the individual, or perhaps the family, as our ultimate goal in judging social arrangements. Freedom as a value in this sense has to do with the interrelations among people
The liberal conceives of men as imperfect beings. He regards the problem of social organization to be as much a negative problem of preventing 'bad' people from doing harm as of enabling 'good' people to do good; and, of course, 'bad' and 'good' people may be the same people, depending on who is judging them.
The basic problem of social organization is how to co-ordinate the economic activities of large numbers of people.
Fundamentally, there are only two ways of coordinating the economic activities of millions. One is central direction involving the use of coercion—the technique of the army and of the modern totalitarian state. The other is voluntary co-operation of individuals—the technique of the market place.
Political freedom means the absence of coercion of a man by his fellow men. The fundamental threat to freedom is power to coerce, be it in the hands of a monarch, a dictator, an oligarchy, or a momentary majority. The preservation of freedom requires the elimination of such concentration of power to the fullest possible extent and the dispersal and distribution of whatever power cannot be eliminated — a system of checks and balances.
Underlying most arguments against the free market is a lack of belief in freedom itself.
The existence of a free market does not of course eliminate the need for government. On the contrary, government is essential both as a forum for determining the 'rule of the game' and as an umpire to interpret and enforce the rules decided on.
A major source of objection to a free economy is precisely that it … gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.
The widespread use of the market reduces the strain on the social fabric by rendering conformity unnecessary with respect to any activities it encompasses. The wider the range of activities covered by the market, the fewer are the issues on which explicitly political decisions are required and hence on which it is necessary to achieve agreement. In turn, the fewer the issues on which agreement is necessary, the greater is the likelihood of getting agreement while maintaining a free society.
The need for government in these respects arises because absolute freedom is impossible. However attractive anarchy may be as a philosophy, it is not feasible in a world of imperfect men.