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Capitalism and Freedom, Fortieth Anniversary Edition

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Reflection Paper

Judith Robinson

 

Milton Friedman

 

Role of Government in Education Chapter 6

 

In Chapter 9 of Capitalism and Freedom, Friedman expresses that education and schooling are only run by the government. He believes that there is a difference between education and schooling because — not all schooling is education and not all education is schooling. Friedman argues that it is an economic aspect for government to support the education for the youth, however, it does not mean that the government itself should be involved in the business of controlling schools. His solution to this is the government should issue vouchers that permit a family’s school of choice. A more effective, efficient and freer system of education will be the result if government management is excluded. This will help families have a greater control of how their children are raised. According to Friedman, Government intervention in education is rationalized in 2 ways; substantial neighborhood effects and paternalistic concern for children. These two ways have different implications for general education for citizenship and specialized vocational education. Friedman believes that literacy and holding common values are imperative for a stable democratic society. Education contributes to both literacy and holding common values. The education of one individual has an effect on those around him. I think that Friedman has a flaw in chapter 6 and chapter 9 of the book. In Chapter 6, Friedman promotes educational vouchers. In Chapter 9, ‘Occupational Licensure’, the author Friedman denies the efficiency and the necessity of occupational licensing. He introduced the economic concept of “neighborhood effect” in which a neighborhood is eligible to have direct and indirect effect on the behaviors of a society or individual. Friedman also elaborated that the “neighborhood effect” aids each child to receive a minimum amount of schooling to help them function in a stable and democratic society. He differed education and schooling while stating that each schooling needs to educate every student at a minimum degree of literacy. Friedman also believed in widespread acceptance of knowledge and values to keep society together. Vocational Training or training that is related to skill variety for a job function was not related with the “neighborhood effect”. Friedman also believed that the school administration should be deregulated to widen the range of choice available to parents.

 

 

 

Chapter 8— Monopoly and the Social Responsibility of Business and Labor

 

In Chapter 8 Monopoly and the Social Responsibility of Business and Labor, Friedman believes that monopolies raise 2 problems; they are able to set the limits on voluntary exchange and they raise the issue of “social responsibility”. In this chapter, there are 3 types of monopolies, monopoly in the industry, monopoly in labor and monopoly in government. Monopoly in the industry has a relative unimportance in the economy as a whole. In the industry, there is general bias and tendency to exaggerate the importance of big and small. Friedman also believes that we overestimate the importance of a monopoly in labor. Unions are the big factor in making wages different than what the market would establish and have made incomes of workers unequal by reducing opportunities to disadvantaged workers. Furthermore, it is labor unions have enforced monopoly by the sale of a product and have harmed the workers by misconstruing the use of labor. After reading this chapter I learnt that monopolies reduce people’s choice and freedom. Friedman emphasized that if we tell monopolies to behave responsibly it that can destroy freedom all together. What Friedman claims to be technical monopoly is what economists today view as natural monopoly. In the last paragraph of the chapter, the author is able to summarize the disadvantages of regulating monopoly. It is impossible to reverse government ownership and the government regulation is usually captured by the industry. The disadvantages of government regulation is that it is difficult to change, fails to keep up with new innovations and technology which can demoralize the industry. On page 120, Friedman states that “monopoly exists when a specific individual or enterprise has sufficient control over a particular product or service to determine control over a particular product or service to determine significantly the terms on which other individuals shall have access to it. In some ways, monopoly comes closer to the ordinary concept of completion since it does not involve personal rivalry” Monopoly is more transparent and noticeable than competition. Friedman also expresses that there are indirect and direct measure of government assistance. The indirect measures are taken for other purposes in which the imposition of limitations on competitors in existing firms is unintendedly effected. In Chapter 8, we are also introduced to what Friedman calls “social responsibility”. The concept states that is the duty of business to contribute to the well being of an economy. Social responsibility pays attention and concern to the protection of an environment, race and gender in workplace, disabled and older workers, and a safe working environment.

 

Chapter 12 – Alleviation of Poverty

 

The West has experienced great economic prosperity in the last couple of centuries but many people still live in poverty. Friedman has a strong belief in helping the poor. He is adamant about creating a program in which it is directed to help the poor and help the economy as much as it can. I did not agree with Friedman where he claimed that there is no system that is going to eliminate poverty. I would like to know how he is so sure about that belief. I imagine that it can happen with ease in a system an economic based moneyless resource. Especially when we are able to replace workers with technology which is freeing people from a lot of prior monotonous work. In Chapter 12, Friedman accepts that government should alleviate poverty but he is skeptical about how and how much.

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