Politics & Power Quote by Milton Friedman

Milton Friedman captures a recurring cycle in modern governance: policies create unintended harms, and political energy then shifts to repairing those harms rather than achieving the original goals. The central claim is not simply that officials make mistakes, but that the institutional incentives of government make mismanagement likely. Politicians face short election cycles, agencies protect their budgets and turf, and information is dispersed in ways that make centralized decisions blunt and error-prone. The result is a permanent firefight where new interventions paper over the damage of earlier ones.

The logic echoes public choice economics and Hayek’s knowledge problem. When prices and profit-loss signals are muted by regulation or subsidy, feedback arrives late or is distorted. Consider rent control or price ceilings: a well-meant attempt to help consumers often produces shortages, queues, and reduced investment. That scarcity then invites rationing schemes, subsidies, or enforcement campaigns, each consuming more resources while failing to fix the root cause. Or take monetary policy in the 1970s, when politically driven expansions contributed to inflation; the response included wage and price controls that in turn created distortions and black markets.

Friedman’s own career sharpened this view. Writing amid postwar expansion, Great Society programs, and later stagflation, he saw how sprawling aims and discretionary management yield complex patches that harden into permanent fixtures. He favored rules that constrain discretion and harness market feedback: predictable monetary policy, school choice, and mechanisms like a negative income tax that simplify welfare while reducing perverse incentives.

The deeper point is about opportunity cost. Energy spent correcting policy-induced effects is energy not spent on innovation, productivity, and addressing problems at their sources. The remedy is less technocratic heroism and more institutional humility: set clear, simple rules, measure outcomes rather than intentions, and narrow the scope of activities where government’s structural disadvantages are most acute. By reducing the need for corrections in the first place, political work can shift from triage to stewardship.