Why should they also be accepted by private persons in private transactions in exchange for goods and services? The short answer—and the right answer… - Milton Friedman

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Why should they also be accepted by private persons in private transactions in exchange for goods and services?
The short answer—and the right answer—is that private persons accept these pieces of paper because they are confident that others will. The pieces of green paper have value because everybody thinks they have value. Everybody thinks they have value because in everybody's experience they have had value...

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About Milton Friedman

Milton Friedman (31 July 1912 – 16 November 2006) was an American economist noted for his support for free markets and a reduction in the size of government. In 1976 he was awarded a Nobel Prize in Economics.

Biography information from Wikiquote

Also Known As

Alternative Names: Milton Galbraith Friedman

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Additional quotes by Milton Friedman

The reality is that if you look at every program that the government has adopted in the direction of extending its scope, it took an enormous propaganda campaign by special propaganda groups to get those measures passed. There was no underlining public demand for those measures. On the contrary, the demand had to be created, it had to be developed, it had to be produced. And it was created, it was developed, it was produced, by people… who sincerely wanted to see an expansion in the scope of government.

Because we live in a largely free society, we tend to forget how limited is the span of time and the part of the globe for which there has ever been anything like : the typical state of mankind is tyranny, servitude, and misery. The nineteenth century and early twentieth century in the Western world stand out as striking exceptions to the general trend of historical development. Political freedom in this instance clearly came along with the free market and the development of capitalist institutions. So also did political freedom in the golden age of Greece and in the early days of the Roman era. History suggests only that capitalism is a necessary condition for political freedom. Clearly it is not a sufficient condition.

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The two chief enemies of the free society or free enterprise are intellectuals on the one hand and businessmen on the other, for opposite reasons. Every intellectual believes in freedom for himself, but he's opposed to freedom for others. He thinks that the business world is different, that because of a chaos of competition and waste, there ought to be a central planning board that will establish social priorities. But he's horrified at the thought of having a central planning board to establish social priorities for writers and researchers. So the intellectuals favor freedom for themselves and oppose it for everybody else.

The businessmen are just the opposite — every businessman is in favor of freedom for everybody else, but when it comes to himself that's a different question. He's always the special case. He ought to get special privileges from the government, a tariff, this, that and the other thing. And it's this coalition that's really difficult for us so I think we ought to be careful of according businessmen too much power, or of believing that they are the major source of support for a free society.

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