The Importance of the Freedom of the Economy

全文主要通过对经济学家米尔顿•弗里德曼一段视频的分析来表达出市场经济的重要性

Milton Friedman uses the story of the pencil to introduce his view, which dramatizes vividly how voluntary exchange enables millions of people to cooperate with one another. Of course, it is wise and farsighted. Meanwhile, the story makes it easy for us to understand “the power of the market” raised by Adam Smith. The video puts the Soviet Union as a negative example which complete abolished the market. Even in the Soviet Union, the effect of the underground market cannot be ignored. We can draw the point that the market is the base of the economy. The price system is another interesting part. We use money every day, so it is easy to understand. Prices perform three functions in organizing economic activity: First, they transmit information; Second, they provide an incentive to adopt those methods of production that are least costly and thereby use available resources for the most highly valued purposes; Third, they determine who gets how much of the product— the distribution of income. These three functions are closely interrelated.
The role of government in organizing economic activity is a Sensitive problem. Milton Friedman does not ignore it. The author holds the view that the government should behave appropriately and not too liberally.

Through analyzing various examples, several major popular views are refuted from the international trade perspective, which illustrates that the increasing in the economic freedom of international trade is more beneficial to all parties, and explains both in economy and politics the reasons for free trade.
Take East and West Germany, Japan and India’s contradistinction and other countries as an example, both planned economy achievements and a more liberal economic policies achievements are compared to convince people the importance of economic freedom. From the comparisons, it is easy to find that free development of the market economy is of importance to the country. What is more, it also implies that the freedom given to the economy can stimulate the liveness of the market. And meanwhile, the freedom of the economy can give more chances to the individual enterprises. Besides, then in the video, the definitions of economic freedom and human freedom are explained. Finally, a conclusion of the video is given.
To sum up, the video mainly analyzes the importance of the freedom of the economy and it supports the idea that more freedom is given to the market to let it develop freely.