Milton Friedman on Other People’s Money

Milton Friedman always had a way with words. His brilliance in the following video not only explains the moral problem with using other people’s money, but he also explains why it leads to poor results. In order to use other people’s money, one must first take it from them. Then, once that money is taken, it is rarely spent as carefully as the person who earned it would spend it.

This explains the inherent problem with the government spending for the “public good.”

Individuals can work and spend their money for their own good, which becomes in the “public good” in the aggregate. But, third parties, by definition, cannot spend money for the public good because there is no way that any third party is capable of spending other people’s money to meet all individual interests. The video below explains this well: