Mercy Pehrson

ECON 1740
Free or Equal Portfolio Assignment

Free or Equal Question

1. If the government gives everybody the same freedom to work and reap
the rewards, some will do better than others. The result will be equality
of opportunity, but not equality of outcome.

2. Immigrants who arrived in the late 1800s/early-1900s found that

America was truly a land of opportunity. Describe the factors that
these immigrants encountered which helped them thrive.
When immigrants arrived to America in the late 1800s/early 1900s they found
that this country was truly a land of opportunity because you were rewarded for
your hard work, enterprise and ability. At the time, there were few government
programs that people could access therefore people had to work to meet their
necessities rather than expecting the government to take care of them and their
families. At the time, there were few rules and regulations. They found a free
market that allowed them to thrive as there were no licenses, no permits and no
red tape to restrict them.

3. Describe how Hong Kong transformed from a refugee camp with

millions of extreme poor people to an economic power house.
Hong Kong became a refugee camp for millions of extremely poor people after
the second war and the communist revolution in China. Because of its lack of
prospect, lack of natural resources, and the fact that their governor favored free
markets, Friedman thought this would be the perfect place to test his theories.
As stated in the video Hong Kong became an economic power house because of
their ability to implement true free markets. As Friedman states The free
market enables people to go into any industry they want; to trade with
whomever they want; to buy in the cheapest market around world; to selling the
dearest market around the world. Because the government in Hong Kong never
introduced tariffs, regulations and there was no government intervention people
were able to participate in a competitive and more efficient system.

4. Explain voluntary association and why it is essential in a free market.

As explained in the video voluntary association is what we do together of our
own free will. It is essential to a free market because through cooperation and
exchange businesses and consumers can trade goods without outside
intervention or persuasion. Instead there is a free agreement amongst everyone
involved.

5. Explain how the lead pencil and the smart phone are examples of
invisible hands.
 The term invisible hands was introduced by the economist Adam Smith to
explain the unobservable market force of supply and demand in a free market.
The example of the lead pencil and the smart phone are examples products that
were invented or developed to benefit society or individuals while creating a
monetary gain to an individual.
In both examples the video explains how pencils and smart phones not only
helped better our lives but also helped multiple industries grow. Both examples
explain how the items are made of different parts, in different places, therefore
multiple industries benefit from bringing together all these parts and creating
one item. That system of mutual interdependence becomes the invisible hand.

6. Which technology did more to give the average person power? Explain
how this technology was both creative and destructive.
The cell phone is the technology described in the video that gave the average
person power. This technology was creative because it forced businesses to
become adaptable and flexible in order to stay in business. They had to come up
with a similar yet better, more innovative product that is not only cost effective
but that attracts consumers to buy it over the competitors product or be faced
with the possibility of losing your current business. Having to close your
business and terminating peoples employment would be considered the
destructive part. Thought this last part is the hard aspect of a business,
economist seem to believe that this is essential for economic development.

7. Johan Norberg describes how his home country of Sweden taxes heavily
and then redistributes wealth. Describe the benefits and drawbacks
that this approach has on the Swedish population.
The benefits: The financial gap between people is closed due to the heavy tax
imposed by the government and their ability to limit earnings by one person. The
taxes are redistributed back into society; public spending on society had an
increase from 31% to 60% allowing citizens to enjoy multiple government
programs and benefits. Johan describes how Swedish enjoy high health
conditions because most the resources were allocated to health programs.
The drawback: People become too comfortable with the lifestyle decreasing their
willingness to start new ideas or innovations. Those who do, end up moving to
other countries were taxes are not as high and their ability to make money is not
hindered.
8. Explain how free markets regularly turn luxuries into consumer goods.
Free markets regularly turn luxuries into consumer good through supply and
demand. Because of the improvement in technology many businesses are able
to create similar products and lower costs over time allowing that product to
reach the masses.
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 great
measure of both.

10.Professor Friedman uses the analogy of a race to explain concepts of

Equality of Opportunity and the Equality of Outcome:
-Would you approve of using the equality of outcome method in
calculating your final grade? Why or why not?
-What are the pros and cons of using this method?
-Address the above two questions in a minimum of 2 paragraphs
No, I would not approve of using the equality of outcome method in calculating
my final grade because the final score would be a reflection of the classs efforts
or lack of rather than reflecting my individual learning level and performance
during the course of the class. I believe my grades are dependent on my
individual performance, learning, and goals I have set for myself. Utilizing the
equality of outcome would hinder my ability to reach those goals and to asses
my personal learning and performance in that class.
While I can see, there are pros to this approach, such as equality in grades for all
students in the class and the benefit of a passing grade; I feel there are more
cons in using this method. Some of the disadvantages I could expect would be
minimum effort on the completion of course work, irresponsibility in meeting
deadlines, lack of engagement from students. Additionally, a class average could
have a significant impact on someones GPA if there is only a minimum or
average grade received as a class. It would also be hard to determine if the
course objectives were understood by everyone or just a few students but
mostly it is not a reflection of your individual performance or learning. So, even if
you worked extremely hard you are not able to reap the benefits of your efforts
at the end of course.

Workplace:
Would you approve of using the equality of outcome method in
calculating your salary? Why or Why not?
What are the pros and cons in using this method?
Address the above two questions in a minimum of two paragraphs.
No. I would not approve of using the equality of outcome method in calculating
my salary for similar reasons as the classroom scenario. While I do believe there
should be a common starting wage for a given job or profession, I also believe
that those that work hard, complete a higher education, and obtain or develop
additional skills, should be compensated accordingly. As a Registered Nurse my
increase in salary is dependent on reaching personal goals, unit goals, and
hospital goals. While I have very small control in meeting my units goals, I have
much lower control in reaching the hospital goals. For me to reach a higher
increase in salary I have to put forth the effort to reach my personal goals in
addition to collaborating in any way I can to meeting the other two goals. If I
want to achieve a higher paying salary, I must seek additional education and
certifications that would allow me to move into a higher paying position.
There are definite advantages I can see to this method. For example, the
equality of pay within all members of a profession could improve morale
especially amongst newer employees, employees could benefit from a higher
base pay without having to invest thousands of dollars on furthering education
or developing new skills. On the other hand, the same advantages could create
greater disadvantages. Some cons would be people would lose interest in
education, furthering skills, developing new talents as there would not be any
monetary compensation or incentive. Rather you would have to invest money if
you sought the above for personal development. People would also become
complacent with their earnings and lazy with their performance of their job and
duties because again, there is no incentive other than personal gain and/or
personal satisfaction in performing above the minimum standard.

Reflective Writing
Think critically and creatively
As I have completed this course and this assignment I have been able to engage
in creative and reflective thinking as I had to incorporate the information that
was presented, analyzed the concepts, and evaluated the outcomes.
I was able to understand the definition and impact that free markets have in
society by watching the Free and Equal video. Because this assignment
incorporates short answer questions, understanding of the concepts was critical
to summarize the material and provide my opinion. While working on Equality of
Opportunity and Equality of outcome section of this paper I was able to apply
new ideas, discover new possibilities, and identify alternative explanations by
comparing both concepts.

Communicate Effectively
This paper helped me with effective communication as I had to sift through my
ideas and organize them so that I could assertively convey my point of view on
each topic. It helped me further my written communication skills using language
with precision, correct grammar, and punctuation. Additionally, using paragraphs
and short sentences I was able to identify key points, decide on a logical order
and develop my arguments. Mostly, I have learned a great deal about free
markets and the impact they can have in an economy. I feel that with this
knowledge I will be able to effectively provide some insight on future
conversations about this topic.