Friday, November 17, 2006
Is Capitalism Humane?
You bet it is.
The proof is here - in the positive changes I observe daily in China. Things are consistently improving: economic development has paved the way for a more efficient and just political system (where people are even beginning to acknowledge corruption and do something about it). The wealth gap is narrowing every year - a VERY positive economic indicator. And in the last 10 years, the percent of the Chinese population under the poverty line has dropped by over 30%.

Even more proof comes in the form of increased political and social freedoms in Vietnam, resulting from both their future entry into the WTO and attempts by the U.S. government to lift Cold War restrictions on trade with the small southeast Asian nation. Major technology and software firms - including Intel, Microsoft, and IBM - are making major investments in Vietnam. And the APEC summit in Hanoi, which will be attended by President Bush, will be pushing a free-market agenda, as the focus of the summit will be not political, but economic exchange.

The very wise man who posed this question regarding the humanity of capitalism - and himself answered with a resounding "Yes!" when many leftists pushed to say "no" to the economic ideal of free-market capitalism - has passed away. Milton Friedman was one of a select few economists whose ideas I could truly agree with and who preached the principles of economic theory in a way that was both scholarly and practical. His theory's governing principles, and the way in which they were presented, made my personal study of economics both fruitful and interesting and increased my passion for its analysis. May he be enshrined in the annals of history, may he inspire new generations of free-market economists, and may his ideas continue to contribute to the betterment of society. Amen.

In his memory, an ode based on lecture by Professor Tom Woodruff -
"A Day In The Stomach Of A Free-Market Economist": A Lesson In The Economic Principles Of Milton Friedman

  • Depreciation leads to an increase in appreciation: First, scoop a bowl of chocolate ice cream. If you like the richness of hard ice cream but the texture of soft serve, get the ice cream first and let it soften - the best of both worlds.

  • Save GNP (gross national product): Once the ice cream is nicely melting, create a salad big enough to revitalize the agricultural industry of a small South American nation. I've read that spinach is really healthy for you, so get lots of it.

  • Have a capital consumption: Get hot food and soup last. That way, they'll still be hot when you eat them.

  • Treasure economy: When you're ready to dig in, assemble your food all at once so that when you sit down you don't have to get up again. It's just more efficient that way.

  • Know your absolute capacity: There's no need to go for seconds when you have a finely honed sense of how much you can eat. The result: always being able to finish everything on your plate.

  • It's a consumer's market out there: Normally, one eats at home, school, or work five plus days a week. On those occasions when that's not an option, you can catch a ride to the family restaurant around the corner, bike to a cafe, or walk to a neighborhood bistro. My personal philosophy: if there's pizza, I'm there.

  • Keep your propensity to consume: When the choice is available, go for the all-you-can-eat model. As an economist, one must practice what he preaches. When you pay a fixed price, the marginal cost of each item is zero. Basic economic models say eat up until your marginal utility is zero. In other words, eat cheaply until you're full.

Now, who couldn't love advice like that?

posted by Rachel @ 10:06 AM  
THE WILD WILD EAST: Everything you never knew you didn't know about life on the other side.
In China, the people are represented by two separate, yet equally important groups. The Chinese, who call this land "home," and the expats who migrate here. My name is Rachel. I am an expat. These are my stories.
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