SMITH AND FRIEDMAN

Smith and Friedman



Smith and Friedman

According to Friedman, economic system plays a dual role in promoting freedom. He strongly believes the government should stay out of anything to do with the economy. Friedman is under the impression that any government that is not the most basic government is bad. He thinks that it is important to let the invisible hand do its job and that by interfering with the natural process the system will get messed up. He introduces some radical ideas such as non-licensed doctors and school vouchers.

Friedman was under the impression that if doctors were not required to obtain licenses, a better breed of doctors would come along. He thinks that by allowing the modern doctors to dictate whom the future doctors will be the competition for better doctors is impaired. By putting guidelines on who can practice medicine the system is creating the same level of doctor consistency. Friedman disagrees with this process because he sees competition a driving force that makes people to be the best they can be. Therefore, by making want-to-be doctors conform to a certain mold, the cycle of survival of the fittest is ruined. No better doctors or forms of practicing medicine will come along if this process is stunted.

Friedman proves this theory of government interference as damaging, by showing the Federal Reserve Act of 1913 in a negative light. Friedman suggests that if the Federal Reserve Act would have created a rule that would have required companies to increase the monetary flow by 3-5% every year, the act would have stabilized the economy. Friedman's stance on international finance and trade agreements is that monetary flow should not be managed especially among the world's major industrial states. He is against the Bretton Woods system because this system is for government regulation of money in commercial and financial relations. Friedman strongly advocates that government interference is nothing but harmful. He gives examples of past government interventions that failed to be productive and actually harmed the economy.

Friedman strongly disagrees with any continual government spending. He believes that nothing even the “balance the wheel” theory justifies government intervention of any kind. Government spending makes the economy less stable and hurts the natural flow of the economy. Friedman even disagrees with government enforcing fair employment laws. He believes that the more qualified people are sometimes ignored because the employers are looking or trying to diversities their staff. Friedman also believes that Right to Work Laws should be abolished. He wanted them abolished because the Right to Work Laws required agreements between trade unions and employers making union fees a condition of employments. Friedman believed that monopolies should not be built with any help of government. He had three alternatives for a monopoly: public monopoly, private monopoly or public regulation. Friedman often found what he believed to be flaws in many government systems; he also came up with alternatives to the government's laws.

Friedman attacked the ...