Arnold Kling  

Friedman Interview

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College Tuition... Comment of the Week, 2003-09-1...

John Hawkins' interview of Milton Friedman touches on many subjects. Friedman is not terribly worried about Social Security.


we're a very strong country, lots of able people, lots of active entrepreneurs, and so the Social Security system will be a burden, but it won't destroy the country.

I think it will be changed of course. I think there is a great and growing pressure towards privatizing Social Security, converting it into individual accounts. We've been moving that way indirectly through 401ks and the equivalent retirement accounts. I think Mr. Bush will go back to his emphasis on privatizing Social Security. I think there's a good chance it can be done.


For Discussion. Of the following policies that Friedman advocates, which do you think will be tried first: school vouchers, drug decriminalization, or Social Security privatization?



COMMENTS (21 to date)
Frank Young writes:

Looks like Social Security privatization is picking up some steam. If this simply gets back into the spotlight we can see how much traction it gets.

See the link to Robert Novak's recent Townhall.com article.

Jim Glass writes:

Interesting comments in there about the way to control government spending being to have one party in the White House and the other running Congress so they keep blocking each others' spending wishes.

There's a fair match with history there. During Bush I whne the Dems had Congress spending was highly constrained. Then during the first two Clinton years when the Dems controlled everything there was the massive spending proposal of nationalized health care. But after that crashed and burned and gave Congress to the Repubs so power was split, spending was constrained again. Then with Bush II in the WH and the Repubs controlling Congress as well spending exploded again.

Of course spending clearly started surging the year the surplus unexpectedly arrived, with Clinton and Gingrich happily cooperating on that like on nothing else. So that was a factor too.

Whoo writes:

School vouchers are on the Republican radar screen in a lot of R-leaning states. African American Democratic leaders are beginning to break the Democratic-orthodoxy The voucher plan in D.C. is gaining enough momentum to ride through the next congress if R's win a few more Senate seats (which is very likely with NC,SC,GA,FL,SD,ND,LA likely pickups against only IL for D's).

So vouchers first.

Next is Social secutiry privatization. It has some possibility of happening. The Bushies were sympathetic and many R congressmen favor it. It still is a minority position and is really a dumb solution to a non-problem so it could be stopped. Especially as 401k's and IRA's take the supposed place of privatization and the astronomical costs of real privatiztion become evident.

Even if privatization is tried the present Social Security system will be restored soon because it serve necessary purposes and we will simply have two expensive SS programs on the books -- one private and one public.

So I'd call that a distant second place.

But SS privatization wins out handily over drug decriminalization. You can't find one single governor or senator or even five congressmen anywhere in the U.S.A. who will even hit about drug decriminalization. DD is electoral poison and will always be so. The U.S.A. is a million times more likely to unilaterally and unconditionally surrender to the Taliban than to seriously consider drug decriminalization.

Bob Dobalina writes:

"You can't find one single governor... anywhere in the U.S.A. who will even hit about drug
decriminalization"

I present to you, Gary Johnson.

Whoo writes:

Bob, the governor of New Mexico is Bill Richardson. Gary Johnson knew he would never win office again after endorsing drug decriminalization and he never will. The legislature inveighed against his position and the Republican party could not elect a successor even by repudiating his position in the heavily Republican year of 2002.

More and more evidence that DD is the fringiest of fringe positions and mainstream americans will vote against in droves with great reliability.

vinod writes:

I'd say social security priv first b/c of Friedman's obseration - there will be semi-public/private retirement accounts w/ some level of government backing but they might not necessarily be called Social Security accounts. Super 401K's or the like will achieve the same ends via different means.

the problem with school vouchers is that too many rich / white parents see vouchers as destroying the "education edge" they secured for their children when they paid the premium to move to a high quality school district. Ideological initiatives are hard to foist when you're talking about either property values OR child-rearing; vouchers encounters BOTH.

Jim Glass writes:

"I'd say social security priv first ..."

Being that vouchers have existed in practice for more than ten years and are steadily expanding (if from a small base) I fail to see how anyone would say any of the others would come first.

"the problem with school vouchers is that too many rich / white parents see vouchers as destroying the "education edge" they secured for their children when they paid the premium to move to a high quality school district..."

How did that stop voucher programs from being enacted in inner-city Milwaukee, Cleveland, etc.? How is that an obstacle in Washington DC?

Matt Young writes:

I'm going to go with vouchers.

But, SS privatization might win out if we see a rebellion by the urban poor. These folks never see a 401k, and after payroll taxes, they have little left for private savings. If Harold Ford's interest in the subject leads to organized support by the urban poor, I can easily see a Chile type option for mandatory savings with payroll tax cuts, for the working poor, at least.

Bob Dobalina writes:

Considering how racist Social Security is, it surprises me that we don't hear more about it from the African-Americans in Congress. Maybe it will indeed pick up some steam.

Boonton writes:

The reason that you don't see a rebellion against SSI by urban poor and blacks is because it is not racist. Yes some blacks lose out on SSI because they have a shorter lifespan than whites but many blacks are helped by SSI because it provides benefits to widows (and widowers) as well as to children who have lost their parent(s). SSI also has rather generous disability benefits which make the 'SSI is racist' proposition very dubious.

Alberto Mingardi writes:

The State is not likely to get rid of the monopoly of education, which is essential to its own self-perpetuating. I think social security reform will soon be a necessity everywhere, even though governments will be very reluctant to follow the right path of privatizing it all. So, I think soft drug legalization may come first.

David Thomson writes:

“Of the following policies that Friedman advocates, which do you think will be tried first: school vouchers, drug decriminalization, or Social Security privatization?”

The question always boils down to this harsh political reality: are there sufficient number of voters who refuse to take no for an answer? Is this an issue that transcends normal party lines? Thus, social security privatization will likely become the law of the land in the relatively near future. The younger voters simply do not trust the present system and are inclined to consider this of major importance. They will therefore vote for even the devil himself if this is what might increase the odds in their favor.

School vouchers are among the no compromise issues of the Democrat Party. A candidate endorsing school vouchers often is treated with contempt by its hard core fund raisers. The opponents of this laudable concept are far more numerous and wealthier. I’m afraid that victories will be few and far between. I don’t see a tipping point being reached anytime in the next five years.

Lastly, the drug issue is the most intractable. Both the hard core religious Right and the liberal soccer mothers believe that Armageddon is inevitable if we decriminalize mind altering drugs. I strongly suspect, though, it will be a Republican administration that will eventually bite the bullet and resolve this issue. Let us not forget that Nixon opened the door to China.

“Of the following policies that Friedman advocates, which do you think will be tried first: school vouchers, drug decriminalization, or Social Security privatization?”

Haven't school vouchers already been tried in some places? Or am I missing the point..

Drug decriminalization is a long way off, given the power of the religious right/ social conservatives in America.

Thorley Winston writes:


“Drug decriminalization is a long way off, given the power of the religious right/ social conservatives in America.”
I agree that it is probably a long way off but disagree that it is due to the “power of the religious right/ social conservative.” As I see, most people are opposed to drug decriminalization/relegalization (rightly or wrongly) including most political “moderates.” Whether it is a good or bad position, you don’t see too many politicians (including Democrats) who support it publicly. Which is why the issue is promoted either by libertarians opposed to having the government tell them what to do or hippies who just want cheaper drugs for their next fix. The notable exception being center-right publications like National Review who have consistently opposed it as bad public policy.

I agree with David that if it does happen, drug decriminalization/relegalization will occur under a Republican administration and probably a conservative one at that. The reason being that any Democrat who advocates it will be tarred as trying to normalize their own bad behavior (see any commentator during the impeachment trial of Bill Clinton who tried to argue that “high crimes and misdemeanors” did not apply to perjury when it was for “personal reasons”). Republicans are generally seen as people who take a more socially mainstream, which is to say conservative, position on social issues and will have greater political cover to say something to the effect of “drug use is bad but prohibition is worse and we no longer wish to repeat the failed experiment of the Volstead Act.”

Drug decriminilization would make so much money it'd make the other too moot. Not that it actually will happen first; terror of inner city blacks and hippies is still too strong.

Lawrance George Lux writes:

School vouchers basically fail the test of democracy, as they advocate a sustained level of inequality in Education. I personally favor a special tax on Private Education, Funds to go to the Public Education system to equalize per-Student expenditures.

Drug decriminalization will fail in a Society which tries to eradicate Alcohol and Tobacco use. The only reason these have not been criminalized consists in knowledge of immense Tax revenue loss, which would have to be made up elsewhere.

Privatization of Social Security will never happen for two reasons. The first being no Recipient of Government benefit, whether Individual or Corporation, will ever willingly surrender any of those benefits. Privatization insists on Benefits reduction. The second reason being the practice of tying Social Security protection to the performance of Wall Street and Economy. This is fine in peak economic performance, but would Anyone desire their current Benefits to be dependent upon current Stock dividends?

Freidman is a great Economist, but somewhat Utopian. lgl

Eric Krieg writes:

>>School vouchers basically fail the test of democracy, as they advocate a sustained level of inequality in Education. I personally favor a special tax on Private Education, Funds to go to the Public Education system to equalize per-Student expenditures.

Lawrance George Lux writes:

Eric,
The acceptance of unequal educational provision is a failure of democracy, when One studies the relationship between effective Education and political participation. The only true separation of Educational quality and opportunity and Housing Costs lies in equal provision of educational skill levels. School vouchers are only effective, if there are concerned Parents willing to gain such Vouchers for their children; and all remedial Education will fall and fail drastically into the hands of a depleted-Fund Public Education system.

I once wrote a College paper on the differences between a Democracy and a Representative Republic. The first funded Public School system came in 1784. The Framers on down tried to promote equality of Educational provision, in order to promote a more perfect Republic.
lgl

Eric Krieg writes:

>>when One studies the relationship between effective Education and political participation.

What relationship? There is no correlation between increasing education and increased political participation. Arguably, in the past, when we were less educated as a society (as measured by, say, high school graduation rates) we had MORE participation, as measured by the voting rate.

But even if it were so, you would still have to prove that vouchers are detrimental to society in terms of education. It just ain't so. Again, competition improves widgets. Why won't it improve schools?

Or are you saying that inequality of education in and of itself is the problem, that some people being educated and some ignorant is in itself the problem? Then, forcing everyone to get an education in a government school, and thereby EVERYONE being ignorant, is a great answer!

David Thomson writes:

“But even if it were so, you would still have to prove that vouchers are detrimental to society in terms of education. It just ain't so. Again, competition improves widgets. Why won't it improve schools?”

I think that you should become a lot more cynical. Sometimes there is such a thing as an honest difference of opinion. This is definitely not one of those times!

Most of the opponents of school vouchers could care less about rational argumentation. The bottom line is simply this: these proposals weaken the teachers unions. Nothing more needs to be added. I see little evidence that their position has anything to do with what’s best for the children. It’s all about the money and the power.

Eric Krieg writes:

Me, not cynical? Come on.

David, I can't assume someone on these boards is not arguing in good faith. That's just rude.

I don't have any disagreement with your assesment of teacher unions and their motives.

However, do no discount the extent that the white, upper middle class of this country are against vouchers in order to preserve their housing prices. School quality is priced into home values, and vouchers are a huge threat to that. For some communities, it could wipe 10, 15, or maybe 20% of the homes value overnight, in my opinion. Maybe more, in some cases.

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