Free or Equal Questions

1. If the government gives everybody the same freedom to work and reap the rewards,
some will do better than others. The result will be ____________________, but not
____________________.
Answer #1: equality of opportunity
Answer #2: equality of outcome

2. Immigrants who arrived in the late-1800s/early-1900’s found that America was “truly
a land of opportunity.” Describe the factors these immigrants encountered which helped
them “thrive.”
One of the factors was opportunity. There was so much going on in the 1800’s and the
1900’s in the US. There were a lot of jobs being created, industries and commodities
were booming across the countries. The outsiders looking in saw an increased
opportunity from what they currently had.

3. What are the factors which led to the rapidly rising “standard of life” in Hong Kong?
(Be specific.)
This thriving, bustling, dynamic city has been made possible by the free market that is
indeed the freest market in the world. Hong Kong had no prospects, no natural
resources, and little land that could be cultivated. But almost by accident, it was given
economic freedom. The British government could not be bothered with local Hong
Kong affairs, and the governor here happened to favor free markets. So Hong Kong
never introduced all those polices that other governments did: no tariff, no regulations
or government intervention in the economy. So the economy could evolve in a natural
way. As a result, Hong Kong became an economic powerhouse. When Friedman came
to Hong Kong in 1980, it could boast statistics on life expectancy and infant mortality
that equaled western countries. Incredibly, it was on its way to become richer than its
colonial ruler, Britain. Hong Kong has been made possible by the free market. The free
market enables people to go into any industry they want; to trade with whomever they
want; to buy in the cheapest market around the world; to sell in the dearest market
around the world. The complete absence of tariffs, or any other restrictions on trade, is
one of the main reasons why Hong Kong has been able to provide such a rapidly rising
standard of life for its people.

4. Explain “voluntary association” & why it is essential in a free market.
Voluntary Association is what we do together of our own free will. When these people
buy and sell to each other, and none is subject to force or fraud, that is voluntary
association. It is anything that is going on between consenting adults.

5. Explain how the lead pencil & the smart phone are examples of “invisible hands.”
“Invisible hand” that makes your life better, you have to better the lives of others.
Invisible hands are all around us. There is not a single person in the world who could
make lead pencil. To cut down that tree, it took a saw. To make the saw, it took steel. To
make the steel it took iron ore. For example, you can imagine one smartphone. That
display is made in Japan, and the camera in Vietnam. The microphones come from
Austria and the chip set from France. The memory is produced in Korea, and the battery
in China. And the software and design centers are all over the world, in countries like
India, Finland, Britain and the U.S. Thousands of people, in several continents,
cooperated to make these phones so that we could have them. People from different
countries, different cultures; people who had never even met.

6. In 1980, Milton Friedman visited Hong Kong & met Mr. Cheung who made & sold
metal containers. Decades later, Johan Norberg visited Mr. Cheung & found that he still
makes metal containers however, he now produces more things for the tourist trade.
This is an example of what economic concept? Explain its significance.
Economic Concept & Significance
Economists call this constant renewal of the economy, “creative destruction.” If we
want to increase our wealth and opportunities; we have to stop doing old things in old
ways, and start doing innovative things in better ways. In other words, we have to be,
“creative.” But we consumers move on to new goods, it can be difficult and painful,
because old factories and old shops close, and people lose their jobs. That is the,
“destructive” part. And yet, most economists think that creative destruction is necessary
for economic development.

7. Johan Norberg describes how his home country of Sweden taxes heavily & then
redistributes wealth. Describe the benefits & drawbacks that this approach has on the
Swedish population.
When people are allowed to compete freely, some win, and make a lot of money, some
lose, and they lag behind. That is when the Swedish government steps in; to reduce
differences of outcome they tax heavily, and redistribute wealth among their citizens. To
many, this is the best of both worlds, since we do not really have equal chances in life.
Some people have parents who give them an interest in learning, ambition and
opportunities, some do not, some are lucky in the genetic lottery, and some are not,
some have good health, and some do not. To reduce the gaps that such differences might
lead to, our government steps in. Sweden chose to make equality a priority in the 1970s,
when they were already one of the richest countries in the world.
Taxes were raised and benefit systems were made more generous. There are some
benefits that are public spending almost doubled between 1960 and 1980: from thirty-
one percent to sixty percent of GDP. Some would say that this has made their country
better. But there is also drawbacks that reduced the rewards for working hard and taking
risks. And it laid the groundwork for one of Sweden’s most successful companies:
Ericsson. And today, it still employ more than eighty-thousand people in one-hundred-
and-fifty countries. This should make me proud as a Swede, but in fact, it makes some
people a bit worried, because almost all big Swedish businesses share Ericsson’s
heritage. They have apparently not had the policies that encourage people to start the
new businesses that might become tomorrow’s Ericsson. Today, Swedish entrepreneurs
are the oldest in the world. This is the other side of the coin. The young people and the
immigrants, who should be our future, are not staring the new Ericsson’s. In fact, we
have many examples of young Swedes and entrepreneurial immigrants who moved
from Sweden to Britain, or the United States, because the rewards are much greater
there, where taxes are lower.

8. Explain how “Free markets regularly turn luxuries into consumer goods.”
Free markets could make some consumer goods such as computers, smart phones, and
so on. The free markets encourage people to be creative because consumers like new
goods. So some countries that have free markets will make their country better.

9. As Milton Friedman said, “The society that puts equality before freedom will
_______________________. The society that puts freedom before equality will end up
with a __________________________________.”
Answer #1 end up with neither.
Answer #2 great measure of both
10. Professor Friedman uses the analogy of a race to explain the concepts of Equality of
Opportunity and the Equality of Outcome:
Equality of Opportunity Equality of Outcome
All race participants are given the All race participants are guaranteed to
opportunity to begin the race at the finish at the same time.
same starting line at the same time.
Also known as Free Market Capitalism. Also known as Equal Shares for All.

In this class, we apply the Equality of Opportunity concept. All students begin on the
same day, receive the same course information & have the same amount of time to
complete the coursework. While there is no guarantee that students will earn a
respectable grade, all students are given the opportunity to earn a respectable grade.

Classroom
Hypothetically, if we applied the Equality of Outcome concept in this class, all
students would be guaranteed to receive the class average grade.

The grade would be determined by combining all points earned (by the class as a
whole) & dividing them equally among each student. All students would earn the same
grade regardless of their performance.

Unless the class average were unusually high or unusually low, the most likely
result would be all students would earn a grade in the “C” range (C+, C or C-). Grades
in the “C” range are generally considered to be average grades.

1. Would you approve of using the Equality of Outcome method in calculating your
final grade? Why or why not?
I would not approve of using the Equality of Outcome method in calculating my final
grade. There are some reasons for this. If we used the Equality of Outcome method in
calculating our final grade, it would not be my grade. It would be our grade. We are not
group, and we do assignments by individual; therefore, it would be unequal if we use
the Equality of Outcome method in calculating our final grade. Also, we do not have
same goals, so some people may think that they want to pass with any grade, and some
people may think that they want to pass with the highest grade. For me, I would like to
get A, so I would not approve of using the Equality of Outcome method in calculating
my final grade.

2. What are the pros & cons in using this method?
Pros: If some people who think just want to pass the class may pass with high grade if
others did hard work. Also, if some people who do not do any assignments may pass if
others did hard work. They may be happy.

Cons: I think there is no motivation of hard work because I am not sure that I will get
high grade if I do hard work. The most important thing is learning about the economic
history of the U.S., but the grade is also important. I think that achieving good grade
encourage me to learn and understand about the class; however, if we use the Equality
of Outcome method in calculating your final grade, it might discourage me to study.

Workplace
If the Equality of Outcome concept were applied at your workplace, all employees
would be paid the same wage, regardless of their job duties, education, performance or
skill.

Consider the example of Gravity Payments, a Seattle-based credit card processing
company. In April 2015, CEO Dan Price set a $70k minimum salary for all 120
employees. He also announced that he was taking a pay cut from $1 million to $70k.

1. Would you approve of using the Equality of Outcome method in calculating your
salary? Why or why not?
I would not approve of using the Equality of Outcome method in calculating my salary.
I think some people who have higher position have responsibility that may have risks of
losing their jobs. If I were general manager, and some people who I need to take care
did some bad things, I need to take responsibility for them. If they did too bad things, I
might lose my job. Also, everyone have different jobs and level of jobs. Therefore, I
think I would not approve of using the Equality of Outcome method in calculating my
salary.

2. What are the pros & cons in using this method?
Pros: It is equal salary for everyone, so some people who work not very well may be
happy.
It is not important how you work and where you work, and we do not need to worry
about our skills and education.
Cons: Some people may think that they do not need to improve their skills, so it is not
good for the company. Also, some people may think that they do not want be an
important person such as manager or head of department because of same salary.
Manager usually have responsibility than other employees, so he or she has a risk of
losing jobs for taking of responsibility; however, if the salary is same, most people do
not want to be a manager. It may make company is getting worse.

Reflective Writing
Think Critically & Creatively
I learned about American Economic History. I am from Japan, and I had not studied
about American Economic History before. Before this class, I had no idea about
American Economic History, free market, and Sweden economy. This class helped me
to understand how the free markets works for economy. Milton Friedman gave me a lot
of knowledge.

Develop Knowledge & Skills to be Civically Engaged
This class gave me some knowledge that freedom can create our economy. There are a
lot of different own economy all over the world such as the U.S., Hong Kong, Sweden,
and so on. We need to be creativity if we would like to do business because people’s
mind is changing every time. Also, we need to be fit the economy and each country if
we want to do business.

Master your semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master your semester with Scribd & The New York Times

Cancel anytime.