Between you and me Quote by Milton Friedman
“"Free markets" is a very general term. There are all sorts of problems that will emerge. Free markets work best when the transaction between two individuals affects only those individuals. Most often, a transaction between you and me affects a third party. That is the source of all problems for government. That is the source of all pollution problems, of the inequality problem. This reality ensures that the end of history will never come.”
About This Quote
Source Speech: Public Lecture on Free Markets, 1970s
Free markets are ideal when transactions affect only the parties involved; externalities cause problems that government must address, preventing a perfect end of history.
In simple terms: Markets work best without side effects; government steps in when they arise.
Key Takeaway
Address externalities to improve market outcomes.
Themes
economics
government
externalities
market failure
history
policy
Mood
analytical
critical
Type
economic
political
When to use this quote
- regulating pollution
- tax policy
- social welfare programs
- international trade agreements
Key Concepts
liberalism
public choice
environmental economics
Questions to Reflect On
- How can we internalize external costs?
- What role should government play in market regulation?
A Different Perspective
Government intervention can be inefficient or capture interest.
![“Just between you and me, shouldn’t the World Bank be encouraging MORE migration of the dirty industries to the LDCs [Less Developed Countries]?... I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that... I’ve always…” quote by Lawrence Summers](https://sms4smile.com/quotes/img-quotes/ac4/lawrence-summers-16940_air_just-between-you-and-me-shouldn-t-the-wo_4703.jpg)
