The summary of the rationality theory and price theory & the conclusion of the book.
Careful study of Friedman's new book, Hidden Order: The Economics of Everyday Life, will make the reader a better thinker and a more skilled debater, whether the topic is economics, politics, crime, or love and happiness.
Economics is not just the study of satisfying insatiable wants with limited resources, as so many textbooks illustrate. Economic science encompasses all human behaviour: people acting rationally to reach objectives. Those objectives include such everyday dilemmas as deciding which checkout lane at the supermarket will be fastest, dating and finding the right person to marry, voting, and protecting one's property.
Friedman has very
From the start, you can tell that the author approaches economics from an unconventional point of view: in his view, economics is not about money. Instead, it turns out to be about value, and how we exchange things of value to obtain others; money need not be involved. When examined from this viewpoint, economics suddenly becomes applicable to study of how we make decisions about nearly anything. Rational decision-making involves, to a certain extent, evaluating relative value of the options.
After dropping this bombshell, Friedman goes on to demonstrate basic microeconomic principles in a variety of contexts, and shows how changing one variable while holding others constant can affect the outcome. For many situations, this produces counter-intuitive results; for instance, he shows how a homeowner is made better off by changing home prices, regardless of whether prices rise or fall
In the second half of the book, Friedman takes the principles he demonstrated in the first half and shows how they work together, then applies them to a variety of situations. The chapter on personal economics as applied to political actions is, to me, worth the cost of the book by itself; it supplies a rational explanation for why even the best-intentioned elected officials do things that go against the interests of their constituents.
While not openly advocating libertarianism, Friedman's demonstrations clearly display ample reason for a normal