Milton Friedman on Self-Interest and Profit

This is a great exchange between Milton Friedman and a young man. Some of the commenters beat up on the young man, so I was expecting him to be a complete buffoon. But, honestly, I thought he was being very respectful and passionate in his questioning, and attempting to be reasonable. He's very rehearsed, and I actually thought he handled himself very well. It's basically a losing battle to try to battle wits with Milton Friedman. In the first part, at around 2:00-2:40, there's a great exchange about whether Friedman supported subsidized flood insurance and subsidized nuclear power insurance, and he says, "Look, don't attribute to me your conventional views of what `conservative' believes because I am not a conservative. I'm a believer in freedom!" Straight out of Braveheart baby. Enough to make me return to my libertarian roots (maybe).

Part One (05:25)



Part Two (06:55)

In this second part, the young man uses the Ford Pinto as a point to illustrate the inherent inhumanity of capitalism, wherein manufacturers use cost-benefit analysis to create products that have risks of death for consumer. These risks, when multiplied over the damages, can lead to a firm to choose not to correct a design flaw, since the cost of dealing with individual lawsuits may in fact be cheaper in the event that such problems occur. Thus, it is alleged (or rather, taken as fact by most) that Ford disregarded the problems of the Pinto, involving the lack of reinforcement on the rear bumper which made the fuel tank vulnerable to a rear-end collision and an explosion possible, and continued to manufacture the car without installing an $11-13 dollar device that would've protected the fuel tank and lowered the probabilities of an explosion significantly. Looking around online, I found an interesting article on wikipedia about the Pinto problems, and upon reading it, it appears a law review article came out in the late 1990s finding that the number of deaths from the Ford Pinto were not statistically different from any other automobile at the time. That it actually had a lower fatality rate for cars of that size. Here's the quote.

However, a 1991 law review paper by Gary Schwartz [2], argued that the case against the Pinto was less clear-cut than commonly supposed. Only 27 people ever died in Pinto fires. Given the Pinto's production figures (over 2 million built), this was no worse than typical for the time. Schwartz argued that the car was no more fire-prone than other cars of the time, that its fatality rates were lower than comparably sized imported automobiles, and that the supposed "smoking gun" document that plaintiffs claimed showed Ford's callousness in designing the Pinto was a document based on National Highway Traffic Safety Administration regulations about the value of a human life rather than a document used to design the Pinto.