There are severe limits to the good that the government can do for the economy, but there are almost no limits to the harm it can do.
Interpretation
Government has restrictions on how much it can positively influence the economy, but it can easily cause significant harm.
This quote by Milton Friedman highlights the idea that while government intervention can facilitate economic growth and stability, its capacity to cause damage through excessive regulation, mismanagement, or poor policy decisions is virtually limitless. Friedman emphasizes the importance of being cautious about governmental roles in economic matters, suggesting that its negative impacts can often outweigh the potential benefits.
In practice
This quote could be used in a lecture on economic policy to emphasize caution in government intervention.
The economic miracle that has been the United States was not produced by socialized enterprises, by government-unon-industry cartels or by centralized economic planning. It was produced by private enterprises in a profit-and-loss system. And losses were at least as important in weeding out failures, as profits in fostering successes. Let government succor failures, and we shall be headed for stagnation and decline.
Universities exist to transmit knowledge and understanding of ideas and values to students not to provide entertainment for spectators or employment for athletes.
There is no place for government to prohibit consumers from buying products the effect of which will be to harm themselves.
There is one and only one social responsibility of business - to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.
The great danger to the consumer is the monopoly -whether private or governmental. His most effective protection is free competition at home and free trade throughout the world. The consumer is protected from being exploited by one seller by the existence of another seller from whom he can buy and who is eager to sell to him. Alternative sources of supply protect the consumer far more effectively than all the Ralph Naders of the world.
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.
What brought mass innovation to a nation was not scientific advances - its own or others' - but 'economic dynamism': the desire and the space to innovate.
If farming were to be organised like the stock market, a farmer would sell his farm in the morning when it was raining, only to buy it back in the afternoon when the sun came out.
It is an extreme perversion of capitalism if you can trade in something before you have even paid for it.
Fair treatment in the work force is no longer exclusively a labor issue, nor is it a women's issue - it is a fundamental economic issue.
Money is different from all other commodities: other things being equal, more shoes, or more discoveries of oil or copper benefit society, since they help alleviate natural scarcity. But once a commodity is established as a money on the market, no more money at all is needed. Since the only use of money is for exchange and reckoning, more dollars or pounds or marks in circulation cannot confer a social benefit: they will simply dilute the exchange value of every existing dollar or pound or mark.
Yes, over the centuries economic progress has reduced some gross disparities - modern Americans are relatively unlikely to simply starve to death (though it can happen), so in that sense the gap between rich and poor has narrowed. But the question isn't whether society is, in some sense, more equal than it was in 1900. It's whether it is radically more unequal than it was in 1970. And of course it is.
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