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Economics Anyone know what this quote by Milton Friedman means?

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I'm doing a project for Econ where I have to pick an economist and explain one of his quotes, along with the person himself, etc.

I've picked Milton Friedman and his quote is:

“If you put the federal government in charge of the Sahara Desert, in five years there'd be a shortage of sand.†

 

Anyone know what it could mean? Ive searched for ages but couldn't find any help with explanation... could you guys share some sources as well if you can?

 

It has to be the above quote, i can't change it :)

Edited by omgee

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The federal gov't uses up resources to such an extent, that were we to compare these to all the sand in the desert, it would use up (waste, with extravagant expenditure) all that sand. 

 

Hardly a vote of confidence for federal expenditure or business savvy. 

 

The exact context is not clear, but I assume he is referring to sand as taxpayer's money. The federal govt is not known for careful use of resources or taxpayers money.

 

However, context is everything. Hopefully you'll find it. If I do, will let you know....

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I believe that it would explain Friedman's feelings against fiscal policies. The quote implies that the government wrongly uses abundant resources, making them limited and shaping society negatively.

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I would guess it means that he thinks the government is wasteful and cannot manage the resources available to them. So i guess he is trying to say that the government in charge needs to learn how to manage the money and the other FOPs (Factors of Production) well.

http://dailysignal.com/2012/07/31/taxmageddon-and-obamacare-what-would-milton-friedman-say/ 

The link above is a site I found that i thought explained it, but its pretty damn brief, so I dont know how helpful it is for a project :-/

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The government is responsible for the well being of the citizens hence, in the quest for well-being, it often ends up using resources. (Sand = Money). 

 

1) Subsidies are given to increase local weapon stock for example. This is because in case of war with the weapon exporter country, there would be no chances to win. No private company would think about all these. 

2) Unemployment benefits - This increases govt. expenditure which could be used for furthering other capital expenditure. 

3) Education and Healthcare is the govt's responsibility - Free vaccines etc in poor countries all funded by govt. 

4) Trade protection - Prevents full allocative efficiency hence, there is a wastage of resources; land, labor and capital.

 

There are many other instances where federal govt. needs to put money for the well being because for the govt. it is not all about money.

 

Secondly, it is a well-established fact that government workers tend to be less efficient and thats why privatization needs to take place.

To answer why the workers are inefficient, its probably because the authorities are not so strict like in the money hungry MNCs.

That's all I can think about from this quote. However, Friedman might have said this in some context but I ain't aware of it.

 

But, no matter what context, the explanation will be along these lines!  

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