Milton Friedman - Imports, Exports & Exchange Rates

Sounds like Greeko-German realationships :D

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.

a tuberculosis-stricken audience

lol this video wasn't about free trade.

its anti tariff

He's merely reciting Hazlitt, and the lessons learned in "Economics in One Lesson".

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.

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.

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.

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.

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.

What exactly don't you understand?

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.

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

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.

And once again, all you are doing is name-calling. Nearly everything you are saying is backed up by emotion and are not real arguments backed by evidence. The only two facts you have said are that foreign workers are paid cheaply and US workers lose jobs. But here's another fact: First, our goods are cheaper and allow us workers to specialize outside of labor. Secondly, China has raised more people out of poverty than any other country in the world as result. It's basic economics baby.

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.

You still are not addressing any arguments, but thanks for the psychoanalysis.

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.

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.

yup. I was thinking if we could improve job mobility, then that might reduce the protectionist argument significantly. More perfect competition.

Key term "free exchange rate." China is not free, it's manipulated. We need Milton. We need him more than ever.

We export fords and import toyotas case closed

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.

Milton would be freaking out about Trump. Trump doesn't get it.

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.

The way he explains this concept is priceless and helped me understand currency rates more!

salute to this man

We need this man right now...

sounds great unless there is a bubble from investment in bonds

Holy cow, did someone release tear gas into the audience..? 😷

Nine Nazi

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

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.

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

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 .

Money gone out is money gone for good... corporatist spin.

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.

Great man, so much insight.

has this aged well?

I wonder what would happen if there was just one global currency? I’m thinking something like a cryptocurrency...

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

Mercantilism was a terrible economic era and should be left in the past to rot as a failed economic system.

These Milton Friedman Forums usually delete any credible opposition to Friedman and keep only friendly comments.

Friedman is one of the major contributors to the global takeover we are experiencing today.

Friedman has brought us Joe Biden.

We all know by now that Friedman was wrong. Imports kills the working class, and makes the investment class richer. Especially the investment class of the third world. ( Thus it is the poor of the rich countries who will subsidize the rich of the poor countries.) a quote from Sir James Goldsmith's book ( THE TRAP )

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