Milton Friedman - Imports, Exports & Exchange Rates
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- เผยแพร่เมื่อ 21 ก.ย. 2024
- Professor Friedman explains the principles that govern imports, exports and exchange rates. www.LibertyPen.com
Source: Milton Friedman Speaks
Buy it: www.freetochoos...
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The way he explains this concept is priceless and helped me understand currency rates more!
And other than that, you can look at places like the Four Asian Tigers (Hong Kong, South Korea, Taiwan, and Singapore) that were manufacturing power houses when they were going thru industrialization. But after a while, pretty much all of those jobs had gone to other developing countries. But even though tons of people lost their manufacturing jobs, the Four Asian Tigers had business friendly environments, that allowed for other businesses to be started, which lead to new jobs.
The Asian Tigers are all grossley protectionist. Especially S. Korea, and Taiwan.
“When goods do not cross borders, soldiers will.”
Frédéric Bastiat
before the first world war germany and UK had very high trade among them. weakness invites war , not poverty.
@@interestingvideos6978 the First World War didn't happen because the UK and Germany had any problems with each other, they only fought because of a system of alliances and hegemony
We need this man right now...
The whole protectionism nonsense can be refuted so easily. You don't even have to talk about companies from other countries competing with companies in the USA. You can could just talk about how ridiculous it would be just in terms of states. Lets say one state has a company that makes steel at a cheaper rate and higher quality than a steel company in another state. So should the state that has a worse steel company set higher taxes on people importing steel from the other company? Its silly.
well the argument is that its good for sunset industries to temporarily protect joba during a phase out
I see valid arguments in that with crushing regulations of the state, a business cannot just spring up in an attempt to find out if they are viable to compete with imports. The start up costs and time delay simply add to the total cost to produce the product and increase the risk to try it.
yup. I was thinking if we could improve job mobility, then that might reduce the protectionist argument significantly.
More perfect competition.
Great man, so much insight.
Milton would be freaking out about Trump. Trump doesn't get it.
Aanthanur DC well first we should allow ourselves to view the economy in the 70s vs 2017
Quite different, perhaps Miltons diagnosis would change today, but also, put 2 economists in a room theyll have 3 opinions about the economy.
It's not free trade when Japan or China have tariffs... why is this so hard for people to understand?
thugix this will never end, sooner or later one or another country will try to find a way to out stiff the other or others , that’s called politics.
@@thugix You obviously missed the whole point of the video.
@@italianmiltyfriedman6264 No, the laws of economics haven't changed. It doesn't matter what trade policies other countries adopt. It is still best economically to allow 100% free trade on our side.
Key term "free exchange rate." China is not free, it's manipulated. We need Milton. We need him more than ever.
It does not matter. Yuan is now more expensive than 10 year back. Even China's government cannot stop economic laws. Milton was always right
www.xe.com/currencycharts/?from=USD&to=CNY&view=10Y
It doesn’t matter, watch the video where he explains why the Japanese government subsidising computer parts at a loss was in fact beneficial to the us.
BABATUNDE where they parts of the bonds pieces of paper ?
I think it's workd only for USA as it can trade with its local currency while the rest of the world specially emerging economies such as india have to earn dollars through exports to be able to import by paying them in dollars
the us enjoys and has enjoyed the currency privilage for long. I think soon US dollar will no longer be the reserve currency. central banks from other countries have deflated their currency or pegged their currency to the US far too much and too long
Yeah, some domestic industries will go out of business. That is unfortunate in the short term, but what does it mean? It means that some domestic industries are not as efficient in the global market or that there is simply too much of a single industry for the demands of a global population. This is allocative efficiency 101. It really does suck for the people that lose their jobs. But they will find new jobs that better suite what is demanded, and goods are more efficiently distributed.
I will export to you some worthless paper fiat currency in exchange for your valuable products/resources/food/etc. In my mind that's a win for me.
salute to this man
The biggest problem with some economists today is they speculate and translate the economy based on analyzes of old outdated data.
Example: countries that provided subsidies through oil when it was $5 per barrel in the 1970’s with a population of 5 million costed the government $5 billion.
While today that same country with a population growth has risen to 50 million as well as oil prices at to $100 would cost the government tens of $ billions, therefore policies that seemed smart in 70S would be disastrous if applied today.
Adapt & reform or face the storm.
*cost the tax payer $5 billion
Specifically the whole concept of the "seen and unseen"... but the whole allegory of trade, monetary exchange rates, etc... that was all in that book as well.
Not so sure about that one. Trade and commerce between nations is always desirable but stating that it will prevent wars contradicts historical data. The chief belligerents in the two greatest wars of the last century were active trading partners - Germany and England in WW1, Germany and Russia in WW2, America and Japan in WW2. Wars are about political calculations since geopolitical power, unlike economic power, is always a zero sum game.
If we didn't have the government regulation and intervention we do here in America it would be no problem to sprout up multiple competitors for those in China which Ironically can be called more capitalist as far as lack of restrictions on starting a business. Unfortunately too many people focus on the wrong problem. If China is doing the same but subsidizing it's companies or lowering the value of it's money, it would eventually run out, just like a business.
I remember as a kid I would be fascinated with this type of humor because my grandpa was a economist junkie... now I know what he was really hinting at. Milton is woke
Honestly what do you think those people did before the jobs came? Do you think the Chinese people are upset about the jobs because they are paid cheaply? They are making more money than they had ever before. I'm sure they are a lot happier working for higher wages with more consumer goods than in some nationalized factory. Then in the U.S. liberals say "THAR TAKEN OUR JERBS!" However, people love it. I guarantee that most of the stuff in your house is foreign made because it is cheaper or better
sounds great unless there is a bubble from investment in bonds
Michael n. Yeah no one explained that one.
There's no such thing as an asset price bubble.
Friedman would be 💯 correct, if it were not for the petrodollar. The current monetary system artificially promotes imports over exports. An artificial monetary system created by government intervention. Something Friedman strongly opposes. Protections do shelter workers in certain sectors but only at the expense of workers in other sectors. But the current monetary system undermines all workers- domestic and foreign- through inflation. US inflation tends to be less because our government exports US dollars, but inflation in other counties only increases because they debase their currencies off the US dollar. Under a capitalist free market system with sound money, people would trade freely and would produce what they were good at and would import what they could not produce. All based on the price mechanism. The fiat petrodollar distorts the price mechanism
I love Milton, but his basis for favoring importing to exporting seems hard for me to swallow. He seems to discount the monetary side of the transaction and substitutes the goods exported as a substitute for the currency. It doesn't make sense(cents!) to me as of now.
What do you need the currency for?
Yes he is substituting good and services for the currency. He is saying that the currency is going there where it buys the greatest value of goods and services. A currency should do just that. The monetary side is this: the goods and services were produced by japan and the currency flowed to them.
The quantity of dollars would increase if the US production increases.
5:34 "Is this... SAY'S LAW???" *points at butterfly*
Kind of because at the end he says that it's much more complicated, implying that money can also not be spent immediately, but even if that happened there would still be a conversion between dollars and yen to maximize the value of the currency
Holy cow, did someone release tear gas into the audience..? 😷
coronavirus 80's style
I wonder what would happen if there was just one global currency? I’m thinking something like a cryptocurrency...
If we follow the notion that both parties mutually benefit from any transaction they agree to be a part of, wouldn't there be no superiority to either imports or exports. I find the rationale that exports pay for our imports loosely supported.
The Bitterman Of course both parties mutually benefit. You didn’t buy that banana at the grocery store and ‘lose’ on that trade, you bought that banana because that banana is more valuable to you than your dollar. And to the person selling you the banana, they don’t ‘lose’ by selling you the banana, because they value that dollar more than they did the banana. Both parties mutually benefit.
These Milton Friedman Forums usually delete any credible opposition to Friedman and keep only friendly comments.
its anti tariff
We export fords and import toyotas case closed
Hey dude you won't find Fords in Japan, they protect their automobile markets. You won't find Ford, GM or any other American auto plants in Japan.
louiethegreater1 I don't even know what this video was about anymore tbh
WRONG. Ever here of Mazda? It is wholly owned by Ford. Your ignorance is stunning
You are full if it, ignorant.
Mazda is Japanese company based in Hiroshima, Japan.
The US sold one car in Japan for every 400 Toyota's they sold in the US. Throw in the factories they have here and the ratio goes to 1,300 to 1.
Japan sold the US 1.5 million vehicles last year, we sold them 8,000.
Why? it is simple we practice free trade, they are protectionist. Think of the revenues the US loses annually just in cars alone. How many high paying jobs does that represent?
Thomas Capital when u reply to someone's comment tap them and hit reply
btw ... i didn't get one thing straight ... who is selling the japanese ther yen ? the americans .. i'm new to economy .. can someone explain . Thank you .
No one did sells Yen to Japan. Japan produces the Yen.
Japanese printing those Yen to purchase goods from overseas, same with USA printing their own Dollars and China printing their own Yuan to purchade goods from overseas
I wonder what he would have thought about Trump tariffs. Based on this video he would not have been in favor of it, but the economy must have been quite different in 45 years time
No, I just don't believe that's true. Under the current circumstances yes, of course, it takes a year to start a business in some of the best states to start businesses. Minimum wage and the backbreaking weight of Obamacare make it even more certain. If they did not exist as I said, you would have competitors popping up daily. Much wider selection. And the skills would carry on. You might not have mega conglomerates, but I don't think they're what we need. More small and mid size less big.
a tuberculosis-stricken audience
What exactly don't you understand?
He's merely reciting Hazlitt, and the lessons learned in "Economics in One Lesson".
Ofcourse...he is 'merely reciting'. That's the only book he has ever read...isn't it?
Mercantilism was a terrible economic era and should be left in the past to rot as a failed economic system.
there needs to be a tariff to offset not just cheaper labor but also
the advantages they have through lack of environmental regulations and
worker rights (safety, work obligations , vacations) it needs to be
perfectly balanced to meet the environment we have in our own countries
so its a truly level playing field that continues to benefit the average
citizen. we cant allow china to manpulate its currency.
No. And yes we can.
Yes I think that’s fair enough to , this is something I didn’t think about and I’m betting many others never ether. That’s politics and there country’s around the world hassling for there own benefits in the system.
If you are going to make everything even on both sides, thus taking away the comparative advantage the under developed country has, then why the fuq are you trading? Just make everything yourselves then.
Friedman has brought us Joe Biden.
Look I am a free market person, and I have watched every lecture by Prof Friedman. However, I don't agree with him on this one.
The assumption was the central bank of a foreign country enjoying trade surplus would let their currency go up.
What if yen doesn't get more expensive because Japan devalues their currency. The American goods are not getting cheaper in comparison to the Japanese goods, and meanwhile, the American industries are falling apart due to decades of unfair competition?
Then, this economic theory falls apart. This is what the Chinese are doing.
China is not a country that plays by the rule, they keep pumping the economy with cheap money. They don't need to forge consensus with the people. They use this predatory practice to destroy the manufacturing business of other nations.
To see the analogy to your example re-watch the part where Friedman discusses "burning the money up". He addresses this point directly. They are effectively subsidizing us as Americans, by continuing to finance our imports and simply sit on U.S. paper while not allowing their own currency to re-value. This is great for us. It keeps our standards of living artificially high, while sacrificing their own. It would be wonderful if we could enter into a deal with the Chinese where they would agree to produce everything very cheap in exchange for our debt forever.
And yes you're quite right, various parts of our different sectors of industry are priced out of the market because of disadvantages, but to the overall theme of this clip - that is perfectly ok. We shouldn't be focused on small special interests, but rather the whole of general interests - that is what raises all boats. If instead favor is given to special interests through government, those deemed special benefit and importantly, at the expense of the rest of us.
devaluing the currency doesent make a country richer. Japan dont buy Ford and GM but they buy fish from Norway and here in Norway we use that money to buy tesla. If you want the US to do the same as japan you can expect to get alot poorer.
In other words, instead of actually rebutting my argument. You call me names and spout doom and gloom. My favorite part was when you complained about my "derogatory hillbilly comment" and then proceeded to swear at me in the same sentence. If you actually want your statements to hold any water, then make an educated argument.
What are you talking about
has this aged well?
Sounds like Greeko-German realationships :D
I agree with Friedman, but i think the american citizen needs to be helped if we r going to last the transitions into a global economy. Trump should create Jubilee laws for americans citizens by Eliminating their primary mortgages, n cancel out all credit card debt for american citizens every 7 years automatically. This will at least bail out the American citizen, give them some reprieve for the global adjustments taking place, and by limiting this bail out to citizens only cushion the hate growing toward foreigners. To avoid unfairness, what is paid out to debtors should also on average be given to citizens with no debt as direct payments, this could help stimulate consumer spending on a local level, instead of starting at top and waiting for it to trickle down, something politically could be very dangerous to wait for given the current atmosphere.
wtf
Wkkaboom7 mate Americans should adopt Australian politics, our politicians stab each other in the back then get rid of the prime minister by a further stabbing in the back so we then get another prime minister which we never voted for, they stay in term for a while then get stabbed in the back and so the cycle continues lol and the funny things is we didn’t even vote for these clowns. Talk about a fucked up goverment..talk about a fucked up world as per your statement . Fucked up . Lol
@@ElTheJono I tried to formulate a more robust response but 'wtf' really does cover everything.
lol this video wasn't about free trade.
You still are not addressing any arguments, but thanks for the psychoanalysis.
Money gone out is money gone for good... corporatist spin.