Milton Friedman 's Article On Market Mechanisms And Central Economic Planning

736 Words Oct 23rd, 2014 3 Pages
There are series of Milton Friedman 's videos—"Free to Choose", talking about that how the United States authorities to develop excessive regulations, implement excessive regulation, establish excessive administrative agencies and spent more money and resources, in the end to reduce the social wealth of the people of the United States. When the U.S. government to intervene in every socio-economic, the consequences are often tragedy although their starting point is good. Friedman also tells us how to extend some of our freedoms, increase our wealth. What give me a deep impression are market mechanism, welfare system and equality.
In the article "Market Mechanisms and Central Economic Planning" written by Milton Friedman, he uses an example of pencil to illustrate the function of market mechanism, as known as the function of prices. There are three functions; transmit information, provide an incentive, and determine the distribution of income, All of these three have effect on another, their interrelation is that, when the price transmit information, it also gives an inventive for people, and then people make response to the information and determine who gets what and how much. Friedman thinks that it is impossible to separate these three functions, for example, when the influence of price to the distribution of income disappears, the function of transmitting information and providing an incentive will be both gone. In the video of "Power of the Market—The Pencil", Friedman…

Related Documents