You join me here and this fine old library on the campus of the university, chicago. Were about to see the first of ten films by Milton Friedman, an economist of international repute, winner of the nobel prize, one of the most controversial and stimulating of our time in the weeks that lie ahead is friedmans first Major Television series unfolds. The famous and influential men and women who will occupy those seats are going to a lot to say about friedmans view. The society in which we live today and his solutions for the ills of our time for thats what the series is about. Milton friedmans view the way we live now and where were headed now. Like some people here, you may be appalled by his ideas or like others, extremely enthusiastic about them, whichever way it goes. I think youll be fascinated by what Milton Friedman has to say. Its a gorgeous morning around the new york metropolitan area. Skies are sunny now that a volcano over the eastern end of long island, a toxic out there. But weve got some lovely weather to talk about. And i promise you this, back at the beginning of the month, all this was a swamp covered with fires. And thats what the canarsie indians who lived here traded the 22 square miles of soggy Manhattan Island to the dutch for 24 worth of cloth and trinkets. The newcomers founded a New Amsterdam at the edge of an continent. In the years that followed it proved a magnet for millions of people from across the atlantic, people were driven by fear and poverty who were attracted by the promise of freedom and plenty. They out over the continent and built a new nation with their sweat, their enterprise and their vision of a Better Future for first time in their lives, many were truly free to pursue their own objectives. That freedom released the human energies which created the United States. For the immigrants who were welcomed by this statue. America was truly a land of opportunity and. They poured ashore in their best clothes, eager and expectant, carrying what little they owned. They were poor, but they all had a great deal of hope. Once they arrived. They found, as my parents did, not an easy life, but a very hard life. But for many, there were friends and relatives to help them get started, to help them make a home, get job, settle down in the new country. There were many rewards for hard work, enterprise and ability life was hard, but opportunity was real. There were few Government Programs turn to and nobody expected them. But also there were few rules and regulations. There were no licenses, no permits, no red tape to restrict them. They, in fact, a free market and most of them thrived on it. Many people still come to the United States, driven by the pressures and attracted by the same promise. You can find them in places. This its chinatown in new york, one of the centers of the garment industry, a place where hundreds of thousands of newcomers have had their first taste of life in the new country. The people live and work here are like the early settlers. They want to better their lot and theyre prepared to work hard to do so. Although i havent often been in factories like this, all very familiar to me because this is exactly the same kind of a factory that my mother worked. And when she came to this country for the first time at the age of 14, almost 90 years ago, and if there had not been factories like this here, en at which she could have started to work and earn a little money, she wouldnt have been able come. And if i existed at all, id a russian or a hungarian today instead of american. Of course, she didnt stay here a long time. She stayed here while she learned the language well. She developed feeling for the country, and gradually she was able to make a better life for herself similarly, the people who are here now, they are like my mother. Most of the immigrants from a distant. They came here because they liked it here better and had more opportunities. A place ke this gives them a chance to get started. Theyre not going to stay here very long or forever. On the contrary, they and their children will make a better life for themselves as they take advantage of the opportunity that a free market provides to. The irony is that this place violates many of the standards that we now regard as every workers right its poorly ventilated its overcrowded. The workers accept less than the rate it breaks. Every rule in the book. But if it were closed down, who would benefit . Certainly not the people here. Their life may pretty tough compared to our own, but thats only because our parents grandparents went through that stage for us, weve been able to start at a higher point. Frank says. And his father was 12 years old when he arrived. All alone in the United States. Hed come from sicily. That was 53 years ago. So he filled in least the crystal. Frank is a successful dentist with a wife and family. They in lexington, massachusetts. All one bottle fills the whole decanter. Theres no doubt in franks mind what freedom combined with opportunity meant to his father and then to him, or what his italian grandparents would think if they could see how he lives now, they would not believe they would see that a person could immigrate from a small and make such a success of their life because to them they were closely related to the the fields working in the field as a peasant. My father came over it was he made something for himself. Then he tried to build a family structure, whatever he did was for his family. It was for a better life, for his family. And i can always remember him telling me that, you know, number one thing in life is you should get an education to become a professional person based on that word, a plasterer from the vicinity family, like all of us who live in United States today. Oh, much to the climate of freedom we inherited from the founders of our country, a climate that gave full scope to the poor from other lands who came here and were able to make better lives for themselves and their children. You girls going to have this . You i know dont want that. But in the past 50 years, weve squandering that inheritance by allowing government to control more and more of our lives instead of relying ourselves, we need to rediscover the old truths that the immigrants knew in their bones. What Economic Freedom is and the role it plays in preserving personal freedom. The. Thats why i came here to the south china. Its a place where theres an almost Laboratory Experiment in what happens when government is limited to its proper function and leaves people free to pursue their own objectives. If you want to see how the free market really works, this is the place to come. Hong kong, a place with hardly any Natural Resources. About the only one you can name is a great harbor. Yet the absence Natural Resources hasnt prevented rapid economic development. Ships from all nations come here to trade because there are no duties, no tariffs on imports or exports. The power of the free market has enabled the industrial people of hong kong to transform was once barren rock into one of the most thriving and successful places. Asia aside from its harbor, the only other important resource of hong kong is people. Over four and a half million of them. Dont like america. A century ago, hong kong in the past few decades has been a haven. People who sought the freedom to make the of their own abilities. They, many of them are refugees from countries that dont allow the economic and Political Freedom thats taken for granted in hong. Despite rapid population growth, despite the lack of Natural Resources, the standard living is one of the highest in all of asia. People work hard, but hong kong success is not based on exploitation of workers wages in hong kong have gone up four fold since the war and thats after allowing for inflation. The workers are free, free to work long hours. They choose free to move to other jobs if they wish the market gives them that choice. It also determined what they make. You can be sure that somebody somewhere is willing pay for these cheap plastic toys. Otherwise they simply wouldnt be made. Competition from places like south korea and taiwan has made cheap products less profitable profitable. So hong businessmen have been adapting. Theyve been developing more sophisticated products and new technology that can match anything in the west or east. And their employees have been developing new skills. Hong kong never stops. Theres always some business to be done some opportunity to be seized. Its long been a Tourist Center and a shoppers paradise, and its now one of the Business Centers of the east. Its the ordinary people of hong who benefit from all this effort and enterprise. This thriving, bustling, dynamic city has been made possible by the free market. Indeed freest market in the world. The free market enables people to into any industry. They want to trade with whomever they want to buy in the cheapest market, the world to sell in the direst market and around the world. But most important of all, if they fail, they bear the costs. If they succeed, they get the benefits. And its that atmosphere of incentive that has induced them to work, to adjust, to save, to produce a miracle. This miracle hasnt been achieved by government action, by someone sitting in one of those tall buildings. People what to do. Its been achieved by allowing the market to work work. Walk down any street in hong kong and youll see the forces of the market in operation. Mr. Chung metal containers. Nobodys ordered him to. He does it because hes found that he can do better for himself. That than by making anything else. But if demand for metal containers went down or somebody found a way of making them cheaper, mr. Chung would soon get that message. A few doors away. Mr. Used has been making traditional cantonese gowns for 42 years, but the for these elaborate garments is falling the firm has already gotten that message and is now looking for another product. The market tells not only what to produce but how best to produce it through another of prices. The cost of materials, the wages of labor and so on made, for example if these workers could earn more doing something else, mr. Ho would find a way to mechanize picture frame production. Inside this chinese medicine shop, a market is going on the customers confidence that this painful looking ordeal will help him doesnt rest on any official of the bone doctors qualification. It comes from experience, his own or his friends. In his turn, the doctor him not because hes been ordered to, but because he gets paid. The transaction is voluntary, so both parties must expect to benefit or it will not take place. Believe it or not, this backyard is the entrance to a factory. The workers here are, some of the best paid in hong kong kong. Its hot, sticky, extremely noisy. The workers are highly skilled, so they can command high wages. They couldnt to their employer to improve working conditions by offering to work for less. But they would rather accept the conditions and take the high wages and, spend them as they wish. Thats their choice. The best known statement the principles of a free market. The kind of free market that operates in hong was written on the other side of the world. Okay. 200 years ago in scotland, adam smith taught at the university of glasgow. His brilliant book, the wealth of nations was, based on the lectures he gave here. The basic principles underlying the free market as smith taught them to his students in. This university are really very simple. Lets look at this led pencil. Theres not a single in the world who could this pencil remarkable statement . Not at all. The one from which its made for all i know, comes from a tree that was cut down in the state of washington to cut down that tree. It took a saw to make the saw. It took to make the steel. It took iron ore. This black center we call it led. But its really compressed graphite. Im not sure where it comes from, but i think it comes from some mines in south america. This red top up here, the eraser that a rubber probably comes from where the rubber tree isnt native. It was imported from south america by some businessmen with the help of the british government, this brass, i havent the slightest idea where it came from or the yellow paint or the paint and made the black lines or the glue that holds it together. Literally thousands of people cooperated to make this pencil. People who dont speak the same language, who practice different religions, who might one another ify met. When you go down the store and buy this pencil, you are in effect trading few minutes of your time for a few seconds of the time of all those thousands of people, what brought them together, induced them to cooperate, to make this pencil. There was no commissar sending offices from sending out orders from some central office. It was a magic of the price system, the impersonal operation of prices that brought them together and got them to cooperate to make this pencil so that you could have it for a sum. That is why the operation of the free market is so essential, not only to promote productive efficiency, but even more to foster harmony and among the peoples of the these people are crossing between two very different societies. This has will the official Border Crossing points. China and hong kong. Nowadays theres a considerable amount of traffic at this border. People cross a little more freely than they used to. Many people from hong kong trade in china and the market has helped bring the two countries closer together. But the barriers between them are still very real on this side of the border, people are free not only in the marketplace but in all their lives. They are afraid of say what they want to write, what they want to do pretty much as they please not. So over there. That is why people in china who cannot get permission to leave go to desperate lengths to escape. They risk their lives in the process. Many lose their lives, but that doesnt keep others from following. Some are attracted by higher material standard of life in hong china, but more by the natural human desire to be free. The people who get official permission to leave china are fortunate. Theyre to be able to enjoy the benefits of the freedom theyll find in hong kong. But more important, that will give them a much wider freedom freedom, human and political has never existed and cannot exist without a large measure of Economic Freedom. Those of us who have been so fortunate to have been born in a free society tend to take freedom for granted to regard it as a natural state of. Mankind, it is not. It is rare and precious thing. Most people throughout history, most people today have lived in conditions of tyranny and misery, not freedom and prosperity. The clearest demonstration of how much people value freedom is the way they vote with their feet when they have no other way to vote. Of course, many of the people pour into hong kong will end up in conditions and most of us in the west would find appalling. Hong kong is very far from utopia. It has its slums, its crime, its desperately poor people. But the people are free. Thats, after all why so many of them have come here, despite having to live in leaky houseboat in one of hong kongs many small harbors here, they have freedom and the opportunity to better themselves, to improve their lot, and many succeed. There is appalling poverty in hong kong. Its true, but the conditions of the people have been Getting Better over time. They are far better off now than they were when they first came across the border from. China and that poverty appalling us because were accustomed to much Higher Standards of life is not poverty is viewed by most of the people in the world its poverty to which they would aspire a state of affairs that they would like to. There is an enormous of poverty in the world, everywhere there is no system thats perfect. Theres no system thats going to eliminate completely poverty in whatever sense. The question is which system has the greatest chance, which is the best arrangement for enabling poor people to improve their lot . And on that, the evidence History Speaks with a single voice. I do not know any exception to the proposition that if you compare like with like freer the system, the better off the ordinary poor people have been. Ask yourself what it is that assures these garment workers in hong kong a good way, not high by western standards, but high enough to enable them to live far better than most people in the world. Its not government or trade unions, us. These workers do well because competition for their labor skills. When a business man faces trouble, a market threatens to disappear, or a new competitor arises. There are two things he can do. He can to the government for a tariff or a quota or some other restriction on competition. Or he can adjust and adapt. In hong kong. The first option is closed. Hong kong is too dependent on foreign trade, so the government has simply had to adopt a policy of complete noninterference. Thats tough on some, but its extremely for the society as a whole. Only the businessmen who can adapt, who are and adjustable survive and they create good Employment Opportunities for the rest the complete absence tariffs or any other restrictions. Trade is one of the main reasons why hong kong has been able to provide such a rapidly rising of people even communist recognizes hong kong success. It set up shop here and now accepts the universal symbol of capitalism. The bank of china the official bank of communist china is the largest bank in hong kong. Theres no doubt that china recognizes the power of the market in all this. The government of hong kong has played an important not only by what it has done, but as much by what it has refrained from doing. It has made sure that laws are enforced and, contracts are honored. It has provided the conditions in which a free market can work. Most importantly. It has not tried to direct. The Economic Activities of the colony colony. No Government Official is telling these people what to do. They are free to buy from whom they want to sell, to whom they want to work for whom they want. Sometimes it looks like chaos. And so it is. But underneath its highly organized by the forces of a fre