Friedman, 85 years old is probably the most important economist in life. Teacher
in the Chicago University from the 1948 to the 1983, Nobel prize - winner in
1976, Friedman is the founder of the
American neo laissez-faire school. Nowadays he works at the Hoover Institution
of the Stanford University , in California.
The European Union and the Euro ? They are false problems. Because the
economy in Europe is used to resolve the struggle, for the politic predominance,
between France and Germany.
Friedman, founder of the neo laissez-faire , rejects Maastricht. And he says to
the European people : “Let the market govern by itself. And refuse this
Nazi-planned economy that is stopping development and employment”.
about Europe ? What about SME ? What about Euro ? They are false
questions. They’re expedients to transfer to the economic plane matters which
are otherwise considered political, and in a way which recall sinisterly the
must apologise for what I’m declaring : I see a government control that
seems the direct descendent of the
Nazi’s concept of Reich. It is not usual for Berlin to rule USA. The Common
Market has created Bruxelles as a ghost capital”. These are very hard words.
are worrying too because they are
spoken by the founder of the neo laissez-faire school of thought. An old and
smiling man who spends his time between the Hoover Institution of the Stanford
University and a quiet house in Vermont. Milton
Friedman has never used half-measures , and once again he does not hesitate to
express directly his radical opinion about monetary and economic policy.
“Europe has known the development
under authoritarian regimes. At the
end of the last century it was being orientated toward a free market, but the
First World War had stopped this attempt.
Kohl and, before him, President Mitterrand of France stood for the Euro as a
deterrent of future conflict: to the contrary it was the worst way to do the
right thing, because a bad economic agreement cannot give political results.
is not only against Europe; but also against countries dominated by old –
style statalism (Italy and France among the formers) or feedback statalism (
like the one promoted by Bill Clinton in his last speech about “The State of
talks about the crisis in the Far East as a further disaster resulting from interference
in the economy by the governments of the “Asiatic Tigers”. He says :“I’m
not asserting that the market is perfect, the perfection is not of this world.
But in Korea, for example, the functioning of the market was compromised by the
intervention of the State. Not to speak about the Japan, that has arrived at its
fourth year of no-growth, of stagnation, and which must take care of its
misfortunes as soon as possible, as
not to compromise its balance with Europe and the United States”.
has always been a uncomfortable witness and today, at 85 years old, he can boast
of a professional outlook from the years of the American depression.
tested himself the laissez-faire idea about the “meritocracy” with
success, financing himself studies with grants and summer jobs; working
as a waiter in restaurants, or as an administrative clerk in a shop, until he
had some enterprising opportunities by
which he obtained the success.
1932, having just graduated from the Rutgers University, he started his
researches, transferring to Chicago, where he became the founder of the school
that produced the most economy
Nobel prize-winner and that
disseminated Chicago students that became the heads of larger
international organisations and governments
all around the world.
the most important thing that happened to me that year was the meeting with a
bashful, shifting and lovely colleague, Rose Director” who became his wife six
years later, once dissipated the doubts about the future waiting for them during
those hard times.
then on Rose is also the irreplaceable partner of his brilliant career. The
co-authors of the two sacred texts
of “ neo laissez-faire”: ‘Capitalism and Freedom’, and ‘Free to
Choose’, have just finished telling
their professional and human experience in ‘Two Lucky People -
Memory of Milton and Rose D. Friedman’, that will be published in March by the
University of Chicago Press. "It starts as a love story and it finishes as
a social policy treaty", says Friedman
jokingly, when he was persuaded by Capital, to give one of his rare interviews.
You assert that introducing the Euro would aggravate the political tensions
among the countries members. That the U.S.A. are a good example of a situation
favourable to a single currency and that Europe is instead a completely
That’s right. But I’ve never said that Europe won’t arrive at the
conditions which would make a common system feasible, that may sometimes be a
good idea, some other times less good, but isn’t a bad
thing on principle. The U.S.A., for example, was built in order that each
state would maintain its culture and its essential peculiarities, but still
having the opportunity to cooperate with the others. The free market is a
substitute for the free movement of people; trade a substitute for policy,
exchange rates and interest rates a substitute for subsidies assigned from a
sector of society to another. The historical background of the U.S.A. is clear:
Great Britain is the country that has developed the idea of
an open market. While on the Continent this is an imported idea…
which conditions will be the Euro practicable?
are two diametrically opposite conceptions of common market. The first is known
as laissez faire, and its objective is to make a big economic area in which the
market forces can minimise the strength of national legislation :
practically it is the same idea of Margaret Thatcher.
other one is to build a collectively planned State, controlled and managed from
Bruxelles ; a centralised
two conditions are the basis of creating a United
States of Europe, the structure
of which must either be based on a shared control or free trade.
creation of a single currency will be possible if European economies reduce
costs ; if the salaries are made more flexible ,and if people can move simply from a country to another. At the
moment , I think that these conditions don’t exist in Europe, but my opinion
will not be valid forever.
is your opinion about the greatest danger due to the introduction of the Euro?
The so called chock extra – market things, are events that have
influence only on some economies and that in a flexible regime could be easily
compensated by fluctuations in the exchange rates. The problem of the sole
currency is very different , for
example, from the one of the
exchange rate protections, which are not a positive solution. The free exchange
however is a very good thing,
almost independently from the circumstances.
About the flexibility of price and wages, Franco Modigliani says that this is
not the main matter, but that
unemployment may be caused by few investments...
Once again, it is the “run
for the Euro” that causes unemployment. Great Britain, that seems to be out
from the value system, has not got this problem. Italy and France suffers from
the need of meeting Maastricht’s parameters and from the impositions of the
Bundesbank. Work-crisis is the result of this useless and desperate effort. If
we lived in a free market condition we would
have anyway unemployment, but not of the today’s size! This however would
depend upon the strictness of the relationship with trade unions and laws
that make employment and firing difficult and expensive. Italy has developed
quickly, thanks to its “submerged economy”, that has risen in the last few
years. It is, actually, the breaking of European laws.
you think that the shadow economy will increase with the birth of the monetary
think, it would be better to have a good institutional economy instead of
a shadow economy
, but we need to wonder which alternatives we have : if a system of laws
and rules make difficult to use efficiently the resources, companies and people
will be brought to the evasion. The only way out will be the introduction of
incentives, but these will be charged on the effort to get the parameters needed
for the monetary union. This is the reason by which with the Euro , probably the
propagation of the shadow economy will get to increase.
picture is that of an Europe made up of different countries, subjected at
different conditions, which wants deliberately
to eliminate, from its own economic system, an important element of
flexibility : the fluctuation in the rate of exchanges.
speak about Maastricht parameters : do you really think they are able to define
the real conditions of an economy?
No, they’re completely irrelevant. Let’s see, for example, the relation
between debt and PIL: a nation can be prospering even if this value exceeds the
60% stated by the treaty. In the United States, after the Second World War the
federal debt was 105% of income
and, gradually, in the seventies it leaded
35%. Now it is approximately 50 or
60%. But it is difficult to establish any relation between these values and the
solidity of a State. At the same time, despite of the widespread convictions, the deficit isn’t an important
factor to define the wealth of a society, it is simply another form of taxation,
a taxation that it can be described as occulted.
which is a significant parameter ?
quote of income , in percent terms, of the grimy home product that is spend by
, and how much and how rules and controls established by the administration
interfere with the liberty of operate of the forces of the market. But,
strangely, the agreements of Maastricht tell nothing about this.
have just said that a common value works if it exists flexibility in the prices
and in the salaries, and this nether appears in the Agreement. Do you think
this condition can be obtained?
must not expect that Bruxelles is able to exercise a right control, as it always
introduce strictness . Every Nation will have to do everything by itself.
is always more fashionable to declare themselves liberalist, and today we have the paradox that also parties
ex communist induced the market for the privatisation of the banks and of the firms of the state, or
to arise joint-venture between public and private. Do you think they are
convinced or, maybe, that
this is only a way to confuse everything ?
speeches are one thing, another are events. Today we heard only about the
supporter of the market, in Italy as, in USA, where the economy is the most socialist of the last 30 years .
Clinton says that the age of the ”Big government” it’s finished but, in
his recent speech about the Union
State, he proposed
30-40 news laws and government operation in the economy. The reality must
be distinguished from the simply words. I think that this is good for Italy too.
A last question about Two Lucky-People, the Friedmans history of 59 years of live and work together. “We liked to remember the familiar life ; the period after the war when I had the luck to direct the National Bureau of Economic Research and, at the same time to teach economy theory at the University of Chicago; the unlucky support of the presidential election of Barry Goldwater in the sixties or the experience of administer with Nixon and Reagan. The our three travels to China....” There is an episode in which you thought to do a mistake? “ Of course but I prefer not to answer. You will decide when you will read the book.