Assignment for International Economic Relations lecture
Topic:Milton Friedman as the criticised economic agitator which has chances to succeed
In my opinion, things which are fascinating in the economy for people without more than average knowledge about this science are not elaborate models, taxation or tariff systems. Really captivating issue for ordinary man is a picture of economy as a metaphysical force which rules our lives. In this context it is a reasonable tool for explaining global processes. Somehow, we should be a little skeptical, because it is quite dangerous to think that one and only impact on world society is supply and demand rule. In my essay I would like to focus on the understanding and the idea of world which Milton Friedman offered in the book „Free to Choose”. In the reality as he presented it there are two categories of action- according to “real economics” and against it. That real and good economics is a set of actions, but also lack of any action, which are undertaken for purely economical reasons. One should emphasize that Friedman sees economics as overwhelming power which, in terms of the effectiveness and the profit, is the best solution. As an example he is points to ZSSR- an opposite of the model to free economics. In his view commonwealth with the planned economy would be in even worse condition if it weren't for the elements of drawing aside from the Marxist ideology in the direction of the capitalism. American economist illustrates the way in which the system works by describing the situation of the Soviet citizen who is decides to break the principles of soviet economy. He is handing the washing machine over to the national point of repair illegally. He is paying more, but repair is done without the queue and he has his working washing machine in the short time. What is more a mechanic from the national point of repair gets some additional earnings. Both benefit from that transaction, which is a pure example of capitalistic way of handling business , all that happening in the center of gravity of a planned economy. Friedman is also assigning a very important role to the price as the notifying, stimulating and regulating factor. One should add typical Smith's attitude to the role of the government presented in the epitaph for Hong Kong of the end of years 80', written in the same spirit. My point is not to report Friedman's ideas, as I think that what he presents to his readers is not only the image of economics. I can see it more as the program, desired state of affairs. In my mind a Nobel Prize winner in field of economics from the year 1976 is in a way reminding of Karol Marx. Despite the fact that the Communist Manifesto is from other times and presents the opposite ides, I could say it uses similar rhetoric. As a matter of fact the American economist is scoring the program of the co-founder of the International Workingmen's Association, as if he wanted to show that the capitalism won already as the best economic system, now is the time for it to become the leading ideology. Finding support in such attributes as the freedom, the equality in the access to goods explicitly in the context of the economic system is making the text of Friedman agitational. In the following part of the essay I will be trying to confront utilitarian (or even Utopian) vision of Friedman with views of other economic minds. It is probably the best to argue against Milton Friedman's theory by using the achievements of the school of John Maynard Keynes. It is obvious that the British scholar sees the role of the government and the state rather differently. Keynes wants administration to take care of citizens in the full-time manner, rather than only as a night watchman. However he agrees with the global scope of economics. According to him the domestic production depends on the world demand, and unemployment is an effect of the insufficient demand. When comparing the two points of view I shall...
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