1. According to the authors, Adam Smith wrote of the three (3) essential roles of government. What are these three (3) roles?
1.) Achieve security or equality to help promote education (Provision of certain public goods) 2.) Protect the consumer or the worker (National Defense) 3.) Avoid inflation and promote employment (Administration of Justice) 4.) What is the fourth role of government that the authors added to Adam Smith’s list? The government’s role, according to the author is that it should serve as an umpire to prevent individuals from coercing one another. Besides that, as little government intervention as possible is ideal.
2. What are the four (4) arguments in favor of tariffs? 1.) A tariff is necessary in order to promote national security. 2.) A temporary tariff is said to be justified in order to shelter an infant industry and help it grow to maturity. 3.) The third argument is the “beggar thy neighbor” argument, in which a major producer can create a monopoly position by not raising the price of a product, but by raising the export tariff. The same can be said of an importer, who is able to use the tariff to create a lower price. 4.) The final argument is that free trade would be fine if all countries practiced free trade, but this is not the case. It is a situation where countries that impose trade restrictions end up hurting us, but also hurting themselves- this creates a somewhat ‘even playing field.’
To solve the problems of welfare programs, the authors proposed two (2) essential components of reform. What are they? 1.) First, reform the present welfare system by replacing the ‘ragbag’ of specific programs with a single comprehensive program of income supplements in cash. 2.) Second, unwind social security while meeting present commitments and gradually requiring people to make their own arrangements for their retirement.
The Friedman’s discuss countries/governments that experienced hyperinflation at various times in history? List the countries/governments that were affected during the historical periods below:
1860’s - Confederate currencies experienced hyperinflation. After World War 1 - Hyperinflation in Russia and Germany After World War 2- Hyperinflation in China which eased chairman Mao’s defeat of Chiang-Kai-Shek. Inflation in Brazil which brought military government. 1970’s -Hyperinflation in 1973 contributed to the overthrow of Allende in Chile, and Isabel Peron in Argentina in 1974, followed in both countries by the assumption of power by a military Junta.
The authors wrote that liberty is enhanced when government promotes personal equality or equality of opportunity. Alternatively, when the government promotes “fair shares for all,” liberty is reduced. Using the “fair shares for all” concept to calculate class grades, all students would receive an average grade (C+). This would be accomplished by taking points away from students earning A’s & B’s to give to students earning D’s & E’s. Distributing points equally would result in “fair grades for all.” 4.) Would you approve of this method in calculating your final grade? Why or why not? I would absolutely NOT approve of this method in calculating final grades. The grades one has worked hard to achieve is not “fair share for all,” when someone else has not put in the work, time, or effort to achieve a higher grade.
4 .) How would this differ from “fair shares for all” economically? This differs from fair shares for all economical speaking because we are essentially swapping out grades for income. In the U.S., politicians typically preach to the middle class the redistribution of wealth through taxation, the higher the income, higher the tax. This obviously interests those in the middle-income level, but angers those at a higher income In your own words, explain your thoughts in a minimum of 3 paragraphs.
In all honesty, I do not believe there is a huge difference between a successful student being required to give up his/her hard-earned grades and a successful businessperson being expected to give more of his hard-earned income. If you support redistribution of income and wealth, redistribution of academic grades is not too far a shot from-that speaking figuratively. This exercise of ‘fair grades for all’ reminds me a lot of the ideal of Communism and the idea that “people of any and every place in the world should all own the tools, factories, and farms that are used to produce goods and food.” There is no motivation for personal growth, no entrepreneurship, no going for that good grade. Although grades are not ‘personal tangible property’, they are tools for higher education, which in turn lead to better jobs, higher income, etc. If we held the idea that ‘fair grades were for all’ we would essentially eliminate any personal initiative to take the time and study to reach a higher grade. This would in turn drop grade average for everyone. The same can be said for redistributing wealth. If the wealthy only have to pay more for those that are not successful, this creates a lack of motivation and makes the living situation worse for everyone. Overall, I do not approve of redistribution in any sense- whether speaking about salaries or grades- it creates a lack of motivation. It may work for a short period of time, but after a while the average of grades, or salaries, would end up sinking and have a hard chance of rising again.
Compose 2-3 paragraphs explaining how reading Free To Choose helped you achieve at least 2 of the following SLCC Learning Outcomes:
“Free to Choose” by Milton and Rose Friedman was a thorough, opinionated, analysis of what has gone wrong in America, and what changes needed to be made to help it not make the same mistake and flourish. Reading this book helped me acquire substantive knowledge and think critically. The part of the book that I found most interesting in developing my critical thinking and knowledge was Chapter: 3 “Anatomy of a Crisis.” This chapter prefaced the events leading up to the depression, and an in depth look at what ultimately lead to this event. I thought this was especially great because the Econ history book we’re reading in class does not lay it out as clearly as the author in this book did. I also thought that his analysis of how the depression could - and should have been avoided, or have been lessened, was very helpful in understanding the role of government- or lack thereof. Overall, this book was a straight forward read which exposed me to different ideas of Economics on a global level. I enjoyed the tone and the way the authors delved into what they would consider clear reforms for systems that are lacking currently.