Milton Friedman - The Four Ways to Spend Money
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- เผยแพร่เมื่อ 30 ก.ค. 2012
- Milton Friedman discusses the only four ways to spend money.
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Was an amazing man. I noticed that most of the time he was smiling and was very friendly, even in heated debates.
MarcusAurelius, Walter Williams related that he received a phone call from Friedman after appearing on TV, telling Williams to smile more.
@Bobby Brady When your intellectual prowess is so overwhelming that you can detach your emotion from the argument to such an extent that your limbic system goes off dilly dallying in happy land.
Marcus, your right, he treated people with great respect, while he instructed them and taught them, he handled with care!
Although it was often a dry wit -- he had a very keen sense of humor, too.
1) YOUR money on YOU.
2) YOUR money on ANOTHER PERSON.
3) ANOTHER PERSON'S money on YOU.
4) ANOTHER PERSON'S money on ANOTHER PERSON.
With decreasing care and decreasing incentive to spend carefully.
Perfect example as to why all government procurement offices should be audited annually.
Thanks for posting.
And whos money are you going to use to pay for annual auditors?
Thank you Milton. Happy 100th Birthday.
Thank you Milton, FreetoChoose and TH-cam, You all have done more to free my mind in the last 2 years than my previous 17 in state-ran schools.
This is such a brilliant thought and so simply put
The truth is usually simple. Complexity hides lots of faults. The more steps in a process the more opportunity for errors and faults.
"When you spend your money on yourself, you're very careful"
My Steam backlog of hundred of games says otherwise.
This is one of my favorite videos of all time
Thank you
So simple, so brilliant! There's NO WAY the government is interested in this.
This video seems truncated compared to the original quote I saw. Is there a way to get the full-length summary restored?
This fact is the basis for most of my economic thinking
Thank you for the video.I studied banking and finance for 3 years but I get a lot of lesson from this video.Thank you Mr Milton Friedman
Totally agree
great
I was pretty much brainwashed at school and by the media to believe in collectivism. Now I'm starting to see the light. Thank God for youtube!! I actually began by watching Noam Chomsky!! Lol What a load of bull now that I've got to hear the other side and judge based on the FACTS rather than feelings and slogans.
The wonder of the marketplace of ideas.
Same story man, i used to be quite a leftist, now I'm like "what the hell was i thinking". And yes, Chomsky sucks so bad. And to think that I used to love the guy... I have like 4 of his books.
I admire Noam Chomsky. He's one of the great linguists of the 20th century. I gloss over his economic views ;)
Chomsky is not an economist, he is a linguist. His views suck. I too actually started out believing in socialism and welfare states. Milton showed me how flawed my thinking was.
Simple yet still very clever
Milton is so kool !!! I wish I could meet him :)
Wow
I think many people have a misconception of Mr. Friedman. His Four Ways to Spend Money is a simple yet brilliant! As a fellow libertarian, the problem has always been governments and the political economy. The main emphasis on this idea is synonyms with the taxation system. As a Canadian, I would sure love to an elimination of the federal tax code. Minimize government roles, put more money into people pockets. Average Salary in Canada is 48,250.. under the current system I would owe $8,149. Surely this money can be used much more efficiently then its current distribution. If people would actually take their time and do some schooling in economy, they would figure things out much more clearly.
but that would lead to LESS GOVERNMENT CONTROL and we cannot have that nosiree!!!!
Is there a name for this economic principle?
Spending your own money on yourself. For example, buying groceries or lunch. ... Carefully and you get the most for your dollar
Spending your own money on someone else. ... Onse again you earned this money so you don't waste it.
Spending someone else's money on yourself. ... You can be careless, and wasteful there is no incentive to be frugal.
Spending someone else's money on someone else. This is done to make you look good and to take credit but you have no skin in the game so you waste it.
Brilliant
Man he is greatly missed
Nope
"दानं भोगं नशस्तिस्त्रो गतयो भावनाति विथस्य" has already been quoted by the Indian ancient texts, meaning there are only 3 ways the money can be spent, you either give or spend or see the wealth perish in due course..
Still waiting on the second coming of Milton Friedman.
4th way its the way politicians spend our money, they don't care how much they spend or what quality we get for it.
He actually mentioned two ways gov spends your money, the last two, cause the gov still has military/judicial/law and order/infastructure spending that still affects the taxpayer for what they get, even though they get the money from the people to do it, which is reflective of his third option of how money can be spent.
I see lots of people disagree. The most important part of this is that, when you spend OPM on OP, you don't have to care how it gets distributed, because it won't hurt you one bit. You can be as free with it as you like, especially if there is no accounting.
That's the problem with government spending is that it's not traded for the same kind of potential value as any other money.
I believe that he or another economist fromChicago was awarded a Nobel Prize for economics for the proposition that spending other people's money. like the government, on other people does not rewire the same amount of prudence as spending your own money one yourself.
The 3rd party payer problem
This is an argument for UBI.
Government does't spend money but currency, fiduciary debt based currency to be exact. He didn't know that?
These comments seem to say more about him than any universal truth.
One of the smartest men I have ever heard speak.
Wild of Milton to assume that I have any money to spend
This says a lot about how he feels and what he is thinking when he spends money in those four ways, but it does not say anything about the truth... necessarily.
Glad to see someone say that! I'm sure what he says speaks to some people, but I just can't relate to it at all on a personal level. that's just not how people I know behave. He's presumably talking about his own personal attitude, he's talking about a specific cultural attitude that I have seen more prevalent in some countries than others, but there is no objective universal truth here. Still, his is a useful frame of reference to be able to see the world through.
Public funds is number 2. Not sure why hes creating a 4th category. In fact its 1 and 2 simultaneously. We use our money for ourselves and others.
Actually there’s millions of ways to spend money,even more ways that I’m unaware of still.
Bro if I'm spending somebody else's money on somebody else, my first priority is going to be getting the need met, and making very sure that the need is met. If the priority was going to be conserving the resource at the expense of getting the need met, then the owner of that money should have not put someone else in charge of getting it done. If we're talking finding better ways of getting the need met, or improving efficiency, though, I'm here for it.
In government distribution, getting the need met should always be the first priority. That's the reason that instance of government distribution was deemed necessary in the first place. There should be no budget surplus in the government if the citizens' needs are not getting met.
If I buy something as a gift, I approach it the same way if I were buying it for myself
Do you have any idea what you're talking about? His policies? Are you on something?
If only this were to taught to every person entering govt. service....
I do purchasing at my work.
I treat it like it was my own.
Same with Casinos you will start with your money on averages you will raise upwards into their money. Now you think ohhh boy awesome ill spend their money now you lose and start the process again until you lose it all
Maybe we should let ai spend it on us like we would spend it on ourselves
My favorite Uncle Miltie bit is that part where his Chicago Boys birthed Pinochet. So endearing.
Edit: For the lazy: en.wikipedia.org/wiki/Chicago_Boys
The West explained in a minute thirty.
Disagree to fact that when you spend on others you are worried how much you have spent
It really seems like he was interested in convincing himself and others of an ideology, more than working out how the real world works. Kind of comical how the weak-minded flock to him without blushing.
Yep,just like most pro capitalism people. There are so many huge flaws that are never acknowledged. Some of his ideas are interesting, but the fact that most of what he says is very subjective and ideological, while most of his fans believe he just "spit facts" and is just "describing how the real world works" is annoying.
Indeed. "Libertarianism" itself is a term of marketing. It should properly be called "proprietarianism", because they're mostly concerned with upholding property rights, and not at all concerned with advancing the greatest amount of liberty for the greatest number.
Everything is based on ideology, just choose your favorite evil.
That is why a democracy is better than a dictator. The people control if the money is spent wisely.
A efficient and effective state offers services to the public where one dollar is more worth than one dollar spend by a single person.
This applies to spending in military, infrastructure, education, social security like healthcare, pension system and unemployment benefits.
Okay. So what should we make of this short clip? To eliminate welfare? What costs would that incur? Financial costs are but one category of cost. What are the economic costs? The social costs? Let’s say eliminating welfare would improve the financial costs for those who control capital, but it would come at high social cost. Would it be worth it? Is it worth letting the wealthy keep more of their money if the consequences include a decreased standard of living and lower quality of life for everyone else? What if high income inequality costs us the democratic society in which we derive our freedoms?
I’ve always found Friedman to be a glib pseudo-intellectual. His theories make perfect sense in a fantasy world where money is the only thing that matters and people don’t need food to survive.
I love your ending statement. These thinkers are obsessed with money, and have very little (if at all) consideration for culture, talent, pleasure, love, family,....
False; it would not come with a high social cost. It would in fact come with a high social benefit.
Hell has a new angel
Well, that argument fell flat on its face real fast. Like, who would actually be more strict, when spending their own money on someone else than themselves? If you're buying a watch for yourself, any old watch that performs the function will do, but if you're buying a watch for your friend, obviously you're going to spend more money and make sure that it's a really good watch, that your friend will treasure for a long time.
Right from the get-go, what Mr. Friedman is saying just doesn't make a lick of sense. What matters in government spending, to make sure that the money is spent well, is to ensure the independence of the government from private interests. Now, this is something that doesn't really happen in the US, like, at all. And it shows. You folks managed to separate the different branches of government from each other just fine, but completely failed to separate the public from the private.
I'm not saying it's easy, but you can't even bring your ideas of reduced government intervention to the government, when the government officials have one foot in their current public office and one in their future private office and vice versa. The revolving door simply has to be closed. Fixing corruption is simply the first step that needs to be taken, before any other steps can even be considered.
100% agree. All the libertarian anti government rant is basically just addressing critics to the corruption happening in government. They pretend to ignore corruption happens in private fields as well. As you say it's hard but far from impossible.
One of the most comprehensive and complete comments on TH-cam. Was thinking similarly.
um. No on number one. Just no. Very few of us are like George Costanza unfortunately.
As we get older sure. But rarely until then. lol.
Economists are the shaman of today.
This comment is not a slight on Milton Friedman. I really respect him amd his intelligence, but the fact that he took time to summarize something so basic underscores lack of financial intelligence in the general population. How sad.
Duh. That’s the problem. What’s the solution? 🤨
The other side to the coin is all the detrimental effects that come about from loss aversion. There is much less likelihood of taking risks/being creative/generous and/or spending on necessary tasks that won't make a return for you.
We actually rely the *benefits* of spending money that isn't ours to get the best results for society as a whole, which indirectly come back to you as well as everyone else.
There's all these implicit assumptions built into Milton's grossly simplistic model here, all for the sake of promoting an unhealthy, alienating economic ideology that is quietly doing so much harm to the vast majority on the wrong side of it, mostly through no fault of their own.
Read Murray Rothbard if you want to read an honest man.
He looks like Danny Devito.
This guy is really brilliant at assuming and thinking that only the worst sides of human beings are the driving traits of society. What a narrow minded view…
Wait a second, is he saying that distributors of welfare funds are actually going out and buying groceries and stuff for the people on welfare?
Do you have developmental problems?
"Somebody elses money". Interesting. If we acknowledge REALITY,, the conniving corporate-freeloader class, extract "somebody elses money" daily, when they receive and enjoy the fruits of other peoples labor, talents, and innovatuons. In reality that is
People love symmetrical arguments, no matter how meaningless they are 😅
The commie bitch comes out of the woodworks
All he's saying is very much common sense any 25 year old should have.
Thr best decision i made was to get arrested and have all my medical paid for. Now that I'm better they let me free
first you should have money and healthy free products market and workers market you do not have that in America anymore majority of Americans wealth owned by stock holder and BlackRock ....your only hope to destroy them and that almost impossible so other option to create new small markets communities with open cryptocurrency or paper money backed with gold silver bonds any mineral with real value
Wrong on its face, even with the examples he uses. Say I am a salesman with an expense account, and as one of the tools in my toolbox, I can take clients out to lunch. I'm going to be very careful about which clients receive those perks, and I'm going to be even more careful making sure said client benefits from it. A profitable customer will stay with you longer, sure. But a customer that influences other actual and/or potential customers is going to pay you massive returns when you spend money keeping them happy. Likewise, a customer that isn't placing orders and is out there bad-mouthing your brand is not a customer you would continue courting with your expense account.
There are four ways you can do stuff, you can do stuff, you can do stuff with another person or a person can do stuff and tell you about it blah blah blah
just a bunch of nonsense.
Dead right!
Hardly profound.
Not true on point 2. I pay more attention to buy stuff for family and friends than myself. Ridiculous take. Clown
Yawn, folksy answer dealing with a psychological question when he is an economist....
That's why communism is bad. Spending someone ekse money on someone else 😂😂😂
Ugh. Nonsense. His theories have long been debunked.
This out-of-context short just serves an agenda and disrespects Milton Friedmans work. It's stupid.
This is an evil man.
This is the only somewhat intelligent talk I have ever heard Friedman give.
Perhaps it is the only one you have been able to grasp
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