This one sentence explains why government spending is rarely efficient.
“Nobody spends somebody else’s money as carefully as he spends his own.” – Milton Friedman
What it means: People protect their own resources because they bear the direct cost of waste. When individuals spend other people’s money, such as government funds, accountability drops. There is no personal penalty for poor choices. This dynamic creates systemic waste. Bureaucracies lack the personal incentive structure found in private ownership.
About the author: Milton Friedman was an American economist and Nobel laureate. He taught at the University of Chicago for three decades. His work on permanent income, monetary history, and free market capitalism shifted modern economic thought. He advocated strongly for deregulation, free floating exchange rates, and school vouchers.
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Originally posted as a note on St. Clair Exchange: “Nobody spends somebody else’s money as carefully as he spends his own.” – Milton Friedman
