Free or Equal
If the government gives everybody the same freedom to work and reap the rewards, some will do better than others. The result will be equality of opportunity but not equality of outcome.
Immigrants who arrived at the end of the 1800's and the beginning of the 1900's encountered a US economy that had minimal to no regulation. There was no need for licensing or permits which allowed for a free market and more opportunity.
Hong Kong was still under British rule well after World War II, but had minimal economic supervision. Because of this, there was no regulation or tariffs on trade which meant economic freedom. This freedom allowed Hong Kong to prosper and it now has one of the most successful economies.
Free Markets allow for Voluntary Association. This means that every consenting adult has the ability to trade and do business with whoever they choose. This, in turn, boosts a free market economy.
The "Invisible Hand" is a metaphor for the driving force behind demand and production. The examples of a lead pencil or smartphone demonstrate this. Although a lead pencil might seem like an unimportant, everyday item, it actually requires multiple industries and involvement to produce. Smartphones too might seem simple, but actually requite manufacturing from all over the word to make a single phone.
When Friedman arrived to Hong Kong in 1980, Mr. Cheung did well by supporting himself through the production of metal bins however, as time moved on, the demand for those bins subsided so he adapted and supported himself through the sale of tourist merchandise instead. This is what is referred to as creative destruction in economics. Demand is an ever changing factor in economics, so while an item might be popular at some point in time, it will not always be and newer, trending items must be produced.
Sweden taxes its citizens heavily in order to provide them with excellent benefits. While this is great in theory, it gives Swedes no incentive to pursue better careers or be innovative. It is actually very regressive and some might say that Sweden is economically stagnant because of their redistribution of wealth.
The drawbacks outweigh the benefits because at some point Sweden will fall behind in terms of growth. Sweden produced a modified, more affordable version of the American telephone which laid the foundation for Ericsson- a multinational telecommunications and networking company. This boosted Swedens economy however, economic history has shown us that demand changes.
If Sweden does not advance with this change, it will fall behind which is why Sweden's government should regulate less.
Free markets turn luxuries into consumer goods by the "invisible hand". The rich will always be able to afford an item, and their purchases reflect the demand of the general public. The more demand and the increased production of a luxury good will lower the cost and make the good available to other consumers.
As Milton Friedman said, “The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both.”
Equality of Outcome
I would not approve of the use of Equal Outcome in class. My efforts would be wasted so I would have no motivation to excel. I know my classmates would feel the same, so we would all end up with a poor class average if were to all rely on each other. This would stunt our education and our motivation.
The only pro's I could see in utilizing the Equality of Outcome method would be (if we were ALL motivated individuals) the camaraderie and team work that would come out of implementing it. The cons, which would outweigh the pro's, would be lethargy. As I wrote earlier, Students would rely on each other and those who work the hardest would get no reward for the efforts. In fact, those who work hard would be dragged down by the minimal work of other students.
In terms of applying Equality of Outcome to my salary, I still have to disagree with it. Although it is quite a bit more than I make now, there is still no opportunity for growth and I could never make more. I feel my work would suffer because I would have no ambition to push me forward. I believe this would apply to most people, actually.
The pro's to Equality in salary in the workplace are still smaller than the cons. Those who might never be able to make that much on their own would definitely feel rewarded however, work ethic would dwindle.
Learning Outcomes:
This class was awesome, I wish I had invested more time to learn more.
The Economic history of the U.S. is such an important aspect to understanding so much of general American history. Issues like Slavery never made sense to me (apart from how unethical it is!), I never understood why a war was waged and almost split my country until I learned of its economic significance during the antebellum period. I also never understood the impact of trade, homesteading, railroads, and entrepreneurial influence on our country. As a teenager, I learned that these industries existed, but I had no idea how much tension and influence they had fiscally and how they lead to an economic boom. The Great Depression was also a topic that I was aware of, but had no real understanding of the severity it had and how, to this day, it taught us that economics cycles through with many ups and downs.
The main point I learned through all of these topics is the importance of Economic Freedom. Freedom from regulation is so important to an economy otherwise it does not grow and people do not create. The big business men of the 19th century exemplified how important it is to have a free market, otherwise they would not have been as successful. They created so many industries and provided so many jobs, and it was clear that the introduction of government regulation really stunted the US Economy's growth.