Spending somebody else&#x27;s money on somebody else describes a large fraction of what many employees of a business do. It looks to me as if those employees generally do a decent enough job of buying useful things at a reasonable price.<p>How can that be, given what Milton Friedman says? Two reasons. First: there are incentives in place to encourage them to do it. If they buy useless things or spend too much money, someone may notice and they may lose their job. If they find a particularly good bargain, they may be rewarded. Second: most people are not perfectly selfish utility-maximizing <i>homo economicus</i>, and even when spending &quot;somebody else&#x27;s money on somebody else&quot; they do in fact prefer to do so in a way that benefits the second somebody-else at not too much cost to the first one.<p>Guess what? Much the same applies in government. Suppose you&#x27;re a doctor in a nationally-run health system like the UK&#x27;s. You examine a patient and prescribe a drug. Does the fact that you&#x27;re spending &quot;somebody else&#x27;s money on somebody else&quot; really mean that you won&#x27;t prefer to prescribe a drug that actually helps the patient&#x27;s problem? Does it mean you won&#x27;t prefer a cheaper drug over a more expensive one that performs no better? Of course not. And if in fact you are the way Milton Friedman professes to be -- if you prescribe with blithe indifference to whether your patients live or die and to whether your national health service goes bankrupt -- then there&#x27;s a real risk that someone will notice and you&#x27;ll be out of a job, or pilloried in the newspapers, or something similarly undesirable.