Book Review on Free to Choose: A Personal Statement, by Milton and Rose Friedman - Essay Example

The book begins by stating the market has power, and this is the power that needs to usurp government. They believe that regulations are tantamount to giving orders to the corporations, and that these orders should only be given by individual corporations, not by the centralized government. In their view, the simple principle that exchanges between parties are made because both parties benefit from the exchange should be the guiding principle for the markets, and this is the backbone of the free market.

Governmental price controls therefore have no place in this system, because the free market will correct prices that get too out of wack, such as when supplies diminish. This principle also extends to trade, as tariffs and other restrictions are offset by losses to producers and consumers in general. Further, the Friedmans take issue with licensing requirements, such as for doctors, dentists, barbers and the like. The welfare state is another institution with which the Friedmans take issue, including social security, housing subsidies, subsidized medical care and the like.

The authors argue that, if not for the welfare system, that most individuals would be self-sustaining and self-reliant, instead of being wards of the state. That being said, they believe that the individuals who are currently on welfare or reliant upon social security cannot just be thrown off the rolls, but, rather, must be transitioned off the roles. The authors also argue for vouchers and school choice, stating the obvious, that schools are failing our children throughout the nation. The Friedmans also trace the growth of regulation, which began in the 1960s with the publication of Silent Spring by Rachel Carson and Unsafe at Any Speed by Ralph Nader, to the slowing of economic growth.

These two books spurred movements to protect consumers, and the environment, but coincided with the slowing of economic growth in the United States. The Friedmans point to industries that have not been as regulated as other industries, such as the television, appliance and technology industries, and state that these are the industries that have had high growth, while industries, such as the Post Office and railway transportation, have had unsatisfactory growth. The labor unions get the next examination.

According to the Friedmans, these labor unions do not protect the worker at all, but, rather, are in collusion with the employers, as they collude to fix prices and share markets, thus getting around antitrust laws. The minimum wage is wrong, because it does not allow the market to pay individuals what they are worth. Thus, a teenager who is low-skilled should be paid at a lower rate than the minimum wage, because this would enable the company to hire others at a higher rate and would presumably enable the company to hire more people as well.

Moreover, it prevents people from entering the job market because, if they could get paid at a lower rate, they could get job experience that would help them earn a higher rate later on. But, since there is a minimum wage in place, the employer cannot hire them at a low rate to give them job experience, which means that these individuals are shut out from the job market altogether. In looking at the argument of the Friedman’s critically, the main hole in their argument is that they presume a rationality of humans that do not exist.

Basically, if a human is rational, then he or she will act according to his or her best interest.