Question

ummary on Ch. 2 "Free to Choose" book by Milton Friedman based on International Trade

Answer 1

‘Free to Choose’ is a legendary book written by Milton Friedman in the late 1970’s. The book was published and made available to the public in 1980. The main content of this famous book centered around the advocation of free trade, may it be between nations, between economies or between individuals.

Friedman was of the view that an economy can be best established, and it can attain the justifiable equilibrium only when all the sectors of the economy are free to decide their own sphere of actions or policies. The sectors like Public sector governed the administration, the social sector, the financial sector, etc. should all be free to choose. The term ‘free to choose’ refers to the respect of an individuals or a sectors decision. Friedman advocated that an individual can attain the highest level of equilibrium, i.e. the maximum utility and satisfaction only when his consumption is as per his own wishes and desires. When all individuals are free to choose according to their desires m an economy will always have satisfied and highly efficient resources for labor and input generation.

                                         Similarly, is the case with the firms operating in a market economy. The firms should be made free to choose their resources or product lines or their business decisions at their own wishes and desires. The firms can be the best judge of their benefit or loss and must not be under any pressure from any authority to act against their own wishes. Similarly, free trade among the nations is also the most important requirement to attain balance of trade and at the highest level to attain trade equilibrium. Friedman advocated that the individuals, firms or nations are mature enough to come in to market and operate at their own choice and the finally find the equilibrium where they need to settle down and operate a free market economy. Only such an economy is the most desirable and the most sustainable in the long-run.