Joshua Hadfield

Economic History of the United States

E-Portfolio Assignment
Free or Equal

1. Professor Milton Friedmans research led him to believe in the power of free markets and
economic freedom.
Answers:
1. Free Markets
2. Economic Freedom
2. If the government gives everybody the same freedom to worksome will do better than
others. The result will be equality of opportunity, but not equality of outcome.
Answers:
1. Equality of opportunity
2. Equality of outcome
3. After World War II, Hong Kong became a refugee camp with millions of extremely poor
people. Hong Kong had no prospers, no natural resources and little land that could be
cultivated. But almost by accident it was given economic freedom..As a result, Hong Kong
became an economic powerhouse.
Answers:
1. Prospers
2. Natural Resources
3. Land that could be cultivated
4. Economic freedom
5. Economic powerhouse
4. In the small Baltic country of Estonia, Prime Minister Mart Laar took his inspiration from
Professor Friedmans book Free to Choose. What three things did he do to imitate the Hong
Kong model?
Answers:
1. Estonia
2. zero tariffs
3. flat tax
4. minimum of regulation
5. Adam Smiths concept of the invisible hand was illustrated in the example of buying a
tomato. The following 3 points were made:
Answers:
We vote with our pocketbooks.
Every purchase sends a message.
To make your life better, you have to better the lives of others.
6. Economists call the constant renewal of the economy creative destruction. To increase our
wealth and opportunities, we have to stop doing old things in old ways and start doing
innovative things in better ways.
Answers:
1. Creative destruction
2. old ways
3. better ways
7. Swedish entrepreneurs are the oldest in the world. Young Swedes and entrepreneurial immigrants
have moved from Sweden to Britain and the U.S. because the rewards are much greater there, where
taxes are lower.
Answers:
1. oldest
2. rewards
3. taxes
8. The Founding Fathers had learned the lesson of history. The great danger to freedom is the
concentration of power, especially in the hands of a government.
Answers:
1. concentration of power
2. hands of government
9. 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 greater measure of both.
Answers:
1. end up with neither
2. greater measure of both
10. Professor Friedman compares the concept of equality of opportunity to a race where
everyone begins at the starting line at the same time. In contrast, equality of outcome guarantees that
everyone finishes at the same time. Today, equality of outcome is referred to as fair shares for all.
If we applied the fair shares for all concept in this class, all students would receive an average
grade of C. This would be accomplished by taking points away from students earning As and Bs to
give to students earning Ds and Es. Distributing points equally would result in fair grades for all.
Would you approve of this method in calculating your final grade? Why or why not?

How would this differ from fair shares for all economically?
For example, whats the difference between a successful student being required to give up some
of his/her hard-earned grade and a successful person being expected to give more of his/her hard-
earned income? If you support redistribution of income and wealth, shouldnt you also be willing to
redistribute academic grades? After all, many of your fellow students may not have had the advantages
in education and upbringing that youve had.
Address the above questions in your own words, in a minimum of 3 paragraphs.
Answer:
My approval would be against the fair grades for all. If everyone received the same grade at
the end of the semester regardless of effort or completion it would defeat the purpose of education.
Sooner or later no effort would be given by any student to obtain knowledge and progress. This in turn
would do lasting damage to each individual personally and to everyone as a whole. Progression would
slow, invention and innovation would cease to exist. As a society our progression would slow to almost a
halt.
Competition and drive is at the heart of innovation and change. It allows us to grow and
progress. We can compare it to going to the gym, often times we dont want to exercise because it
stretches us, breaks down muscle and provides room for new growth, it hurts. Even though exercising
can be hard it provides us with growth, health and a better quality of life. These results that we receive
from taking care of our bodies are desired by all but not everyone is willing to pay the price. In the real
world the same principles exist. Competition leads to progress and a better quality of life for everyone.