It is absolutely amazing the things we can learn from history. Even more amazing is how, very often, history appears to repeat itself. No, not in the deja-vu type fashion; but more of a, “Hmm, I think I’ve been here before”. Today’s show comes from the minds of two great thinkers and theorists, Milton Friedman and Adam Smith.
I recently returned from a trip to Disney World where, in my free time (which there wasn’t a ton of), I was fortunate enough to begin reading a book I have been wanting to read for quite some time. That book is Milton Friedman’s Free to Choose. Even though I am only currently through the 4th chapter, I can definitively say that this book is amazing! It is an in depth look at Mr. Friedman (and his wife’s) view on capitalism and the free market system.
What I find especially amazing about this book is that the things that were going on when Mr. Friedman was writing this have a striking resemblance to the nature of our economy at present. While the players and the circumstances have changed, it appears as though the issues are still the same.
As you listen to the show, I will explain my thoughts on American Exceptionalism. American Exceptionalism is defined as:
“The worldview that the United States occupies a special role among the nations of the world in terms of its national ethos, political and religious institutions, and its being built by immigrants.”
The way this country was formed and the unique set of circumstances that existed at the time were truly miraculous. In the show I try to bridge the gap between the visions of our founding fathers and the fundamentals of Adam Smith’s Wealth of Nations and the amazing success this country has seen over the last 234 years.
I go on in the show to attempt to explain where we as a country have missed that picture that the founding fathers were attempting to paint and how our view of the role of government has become skewed. I even cite specific examples such as the agricultural revolution that followed the abolishment of slavery as well other economic systems such as that of Soviet Russia. What I feel is truly profound is how, over the years, too much government has pulled us away from the very roots that made this country great. I am NOT anti-government, however.
As I close out the show, I attempt to explain the three duties of government as described by Adam Smith in his Wealth of Nations:
- The duty of protecting the society from the violence and invasion of other independent societies.
- The duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice.
- The duty of erecting and maintaining certain public works and certain public institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit could never repay the expense to any individual or small number of individuals, though it may frequently do much more than repay it to a great society.
I challenge each and every one of you to go out and purchase Milton Friedman’s Free to Choose. If you have already read this book, please feel free to leave your thoughts or comments below. It is this sort of thinking that I truly feel will keep America exceptional!
Josh Scott says
September 25, 2010 at 4:33 pmBrian,
Great podcast and thanks so much for the book referral! I can’t wait to get my hands on a copy, it sounds fascinating. It’s nice knowing there are other “squares” out there who are tired of being punished and pushed around for doing the right thing. It’s frustrating. We live in a society that establishes rules and social programs with good intentions but the reality is they encourage laziness and destroy incentive. We should be rewarded for saving, planning for retirement, paying our mortgages on time, not cheating on our taxes,…… but instead we suffer while those who did not reap the benefits and rewards. Spent too much on a credit card and got $100,000 in debt? No problem, just file bankruptcy and we’ll wipe the slate clean. Keep all the stuff as our gift. Bought a house you shouldn’t have and now it’s getting ready to be foreclosed on? No problem, here are all these government programs to help you out at others’ expense. Oh, and those of you that DID pay your mortgage on time, sorry, there’s no help for you. Can’t refinance because the value of your home has declined? Sorry, just keep up the payments, thanks. We only help those who are behind and in foreclosure refinance.
*sigh* The grasshopper and the ant story always come to mind. Be square, save well, plan ahead, don’t cheat, and adhere to the terms of contracts you sign and you’ll be punished. Cheat, cut corners, steal, lie on tax forms, spend money you don’t have, don’t pay your bills, spend now and save nothing and you’ll be rewarded. After all, you’re just a poor victim…..
Justin says
September 28, 2010 at 3:06 amBrian,
I’m a big fan of the show, but I took issue with this episode (evident from the fact that I just finished writing and posting my criticisms on my blog at 3am). If you’re interested, I rambled about it for some time at http://www.nokillfinance.com/?p=177
Anyway, in spite of my criticisms, I’d like to say thanks for all the information you’ve offered me over the last year or so. Hope all is well with you, and look forward to the next show!
-Justin
Josh Scott says
October 20, 2010 at 10:39 pmJustin,
As a fellow Brian Preston follower and the only other one to comment on the American Exceptionalism podcast I found your blog entry very interesting although I couldn’t disagree with you more. I’ll preface by stating I am an ultra conservative, Dave Ramsey zealot, free market loving, capitalist. And while I knew I was going to disagree with the majority of your statements after reading just the first few paragraphs, I found myself drawn into your blog further. You are well spoken, articulate your words quite nicely, sound fairly well educated, and have a unique writing style that captivates and sustains your audiences’ attention…..which is why I was sorely disappointed to find the bulk of your argument hinged upon what I like to call the “poor victim” argument. You state:
“What Friedman deliberately ignores, and what Preston likely just fails to consider is that the system is stacked against a lot of people. The vast majority of them aren’t rule-breakers at all; they’re people who were never given the chance to do better for themselves, and worse yet were never even told how they might try to do better for themselves. By providing his services as a free podcast, Preston crusades against financial illiteracy. But there are millions of Americans who don’t even realize that they lack financial literacy; they assume that being tens of thousands of dollars in debt is just part of being an American, or worse, they’re resigned to the notion that there’s no way to come back from such difficulties in today’s America.”
Then pick up a book or two at your local library instead of the Playstation or Xbox and educate yourself for Pete’s sake. I mean seriously? People need to be TOLD that borrowing money you don’t have and going into debt up to your eyeballs is probably not the best idea? That saving some money and setting it back for retirement someday might be prudent rather than relying on mommy and daddy government to do it for you? That buying a $500,000 home when you make $40,000 a year might not be wise? Common sense needs to enter here at some point. This is not rocket science. The general notions are there and the nitty, gritty details can be researched and studied by reading or taking classes/seminars or consulting professionals or…..listening to podcasts. I’m sorry, I just don’t buy the “I was never taught that so therefore I can’t be held accountable” excuses. They’re lame and the lazy way out. And yes, Justin, the rule-breakers are out there too. I can’t tell you how many times I’ve seen food stamps used while talking on an iPhone that was pulled from a Coach purse. Do not be fooled, if there are ever ways to “abuse the system”…..it will be abused.
“In that context, doesn’t it seem fair for the government to ask those who have succeeded to help out those who have been dealt an unfair hand? Perhaps we, the lucky members of the waning middle class, have benefited from their hardships in some way, and could stand to let them have a small percentage of the healthy income that we earn while they struggle to get by? (Side note: I refer to myself as a member of the middle class here because I’m still new to my near-poverty, having moved less than a decade ago from my parents’ reasonably well-to-do household. Anyway, on with the rambling…)”
No, that’s what charities are for…..for the needy. Lucky you say? Nay, I say blood, sweat, and hard work that’s paid off. Going to school for 8 years to be a doctor in order to make a generous income is not “lucky”. And exactly how have “we” benefited from those “dealt an unfair hand”? You fail to provide any specific examples. I’m so tired of the jealousy and envy that plague this country. Rather than work hard to make yourself better and put yourself into a better situation, you want to take from those that have and call it fair and just by means of government. Drag others down instead of lifting yourself up. It’s legalized stealing. I want what you have and I know I’ll never have what you have therefore I don’t want you to have what you have and I’m going to take it from you. It’s not a fruit of the spirit.
To conclude Justin, I think you need to take a closer look at reality. Try to see past the smoke screens that have been placed before you and perhaps be a little more cynical when judging the character of others. While we all wish to see the best in people and want to believe the best of intentions are always present, often times in actuality what you find inside might be a little darker and ominous than expected. The human heart is easily corruptible and while these social programs might have been created initially with honorable and worthy intentions, they quickly circum to the will of those that wish to defraud it.
Regards,
Josh