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Milton Friedman Puts A Young Michael Moore In His Place

a guest May 7th, 2011 162 Never
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  1. http://www.youtube.com/watch?v=cD0dmRJ0oWg
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  3. M — This has to do with the Ford Pinto. I'm not sure if you're aware of the recent revelations that have come out about the production of that car. Ford produced it knowing full well that in any rear-end collision the gas tank would blow up, because they had failed to install a $13 plastic block in front of the gas tank, and Ford estimated in an internal memo that that would cost about 200 lives a year. They estimated further that the cost of each life would be $200,000. They multiplied and they found that the cost of installing those blocks in each of those cars would be more than the cost of saving these 200 lives, and over the past 7 years the car has been produced and over a thousand lives have been lost. Seems to me that Ford did what would be the right thing according to your policy, and yet that seems to me to be very wrong.
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  5. F — Well, let me ask you. Suppose it cost a billion dollars per person, should Ford have put them in nonetheless?
  6.  
  7. M — ...
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  9. F — You're only arguing about price, you're not arguing about principle. You're (commotion among listeners) no-no-no! Nobody can take the the principle, nobody can accept the principle that an infinite value should be put on an individual life, because in order to get the money involved, in order to get the resources involved — it's not money — in order to get the resources, they have to come from somewhere, and you want a policy which maximises the situation overall. You cannot accept the situation that a million people should starve in order to provide one person with a car that's completely safe.
  10.  
  11. M — That's absolutely right. ...
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  13. F — You're not arguing anything about principle. You're just asking, you're just arguing whether Ford used $200,000 was a right number or not.
  14.  
  15. M — No I'm not arguing that.
  16.  
  17. F — Suppose it was $200,000,000.
  18.  
  19. M — No-no-no-no
  20.  
  21. F — Suppose it was $200,000,000, what should Ford have done?
  22.  
  23. M — $200,000,000 for what?
  24.  
  25. F — Suppose it would have cost $200,000,000 for a life saved. Should Ford still have spent the $200,000,000?
  26.  
  27. M — You mean per... that's not really the question.
  28.  
  29. F — Yes it is the question! (commotion) That's the principle of the question (?)
  30.  
  31. M — Yes. They should have.
  32.  
  33. F — That's the only principle involved. I don't know whether Ford did the right thing or not. That's the question whether these numbers are valid numbers for the relevant cost of different things. You're not arguing about the principle if you once agree with me, that if it had been $200,000,000, that if the cost per life saved would have been $200,000,000, you would not argue. Look, let me go back for a moment.
  34.  
  35. M — Can I say something in response to that? If Ford had not been able to market those cars in the same kind of economic bracket because of the price of installing this one plastic block, that would be a different question. Maybe Ford could have considered redesigning the whole car to make it cheaper. But what we're talking about is balancing advantages and balancing the principles.
  36.  
  37. F — Of course, and that's why you —
  38.  
  39. M — Just a minute. I am a supporter of abortion, therefore I don't believe that every human life is sacred, I believe the principles have to be balanced. And yet I don't see Ford spending $13 less on each car at a cost of 200 lives a year as being a principled position to take, and yet I've —
  40.  
  41. F — Suppose it would have been one life per year. So that's $13 per car so that one life, instead of being 200 times — what's 200 times $200,000, it's $40,000,000 — suppose it would have been one life a year ... to cost $40,000,000, would it then have been OK for Ford not to put in that block?
  42.  
  43. M — You can't predict that one life would be lost because of a physical defect in the car, this was a clear —
  44.  
  45. F — I know-I know! but this is evading the question of principle.
  46.  
  47. M — No I'm not! I'm saying that they knew before they put the car out that there was a mechanical defect in —
  48.  
  49. F — Excuse me! You know when you buy a car, you know that your chance of being killed in a Pinto is greater than being killed in a light truck.
  50.  
  51. M — No I didn't, I didn't know that the gas tank would rupture! (commotion)
  52.  
  53. F — Of course it is the question! Everyone of us in this room could, at a cost, reduce the risk of us dying tomorrow. You don't have to walk across a street. The question is what you're willing to pay for it and the question he should be raising, if he wants to raise a question of principle —
  54.  
  55. M — I have—
  56.  
  57. F — The question he should've raised is whether Ford wasn't required to attach to this car the statement "We have made this car $13 cheaper and therefore it is 1 — 1% riskier for you to buy it".
  58.  
  59. M — Why sh—
  60.  
  61. F — Now that, then he would be arguing a real question of principle.
  62.  
  63. M — Why should they do that? Does it not interfere with the free enterprise system that you're touting?
  64.  
  65. F — No!
  66.  
  67. M — Why not?
  68.  
  69. F — Because the consumer should be free to decide what risks he wants to bear. If you want to pay $13 extra for that, you should be free to do it. If you don't want to pay $13— Excuse me, we have to keep it to the ...
  70.  
  71. M — So then the government does have the right to require information of corporations, is that right?
  72.  
  73. F — No, the government has the right to provide courts of law where corporations that deliberately conceal material that is relevant can be sued for fraud and made to pay very heavy expenses. And that is a desirable part of the market. Of course. What I'm trying to say to you is that these things are a little bit more subtle and sophisticated than you are at first led to believe. You can't get easy answers along this line, because your way of putting it doesn't really get at the fundamental principles involved. The real fundamental principle is that people individually should be free to decide how much they are willing to pay to reduce the chances of their death. People mostly aren't willing to pay very much. I personally regard this as very-very illogical. I see people on all sides of me smoking. There's no doubt, nobody denies that that increases their chance of death. I'm not saying they shouldn't be free to smoke, don't misunderstand me. I just think they're fools to do it. (laughter) And I know they're fools because I quit on the basis of evidence 18 years ago. (laughs) But that's the real issue! And if you want to berate Ford, you ought to berate it on those terms, not on the ground that you don't think they use the right numbers. Now look,
  74. I don't think we can keep on going for, I'm afraid we're going to run out of tape and I'm afraid I'm going to run out of voice, so I think I'll call it a— (applause)
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