Common Sense Video — “It Will Destroy A Society”

Milton Friedman deals with a young idealist over incentives and equity. Unfortunately, it is the same naivety exhibited by this idealist that drives current political economic policy (at least drives the part of it that is not motivated by political advantage).  Incentives matter more than good intentions. Attempts to make society more fair necessarily destroy incentives and harm all of society.

Once you destroy incentives, there is no more wealth to fight over. It is only rich societies that have the luxury to speculate about and argue about what is a “fair” allocation of wealth. Societies that engage in redistribution learn that wealth creation rather than redistribution displaces their initial concern. Wealth is not guaranteed. It is an outcome, an outcome that is only achieved when incentives to acquire it are matched with incentives to control it. When existing wealth is attacked, future wealth is diminished.

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