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The Economic Gains Of Risk-Taking


Published: May 26, 2020

The economic system that has advanced society most in the past century is one that enables individuals to make decisions and also to bear the consequences of those decisions. Innovation that benefits us all results from the incentives of being accountable for one’s choices. No matter if any individual choice ends in failure or success, society benefits from our openness to taking chances.

Discussion Questions

  1. How can protecting individual rights encourage citizens to take risks?
  2. Have government programs protected individuals from the consequences of their decisions?

Additional Resources

  • Watch “Created Equal” on Free to Choose with Milton Friedman. Available here.
  • Read “Rugged Individualism” by David Davenport. Available here.
  • Read “The Future of American Individualism” by Herbert Hoover. Available here.
View Transcript

Every day, all of us are making decisions that involve gambles.

Sometimes there are big gambles, as when we decide what occupation to pursue or whom to marry.

More often, they are small gambles, as when we decide to cross the street against the traffic.

But each time, the question is who shall make the decision – we or somebody else?

We can make the decision only if we bear the consequences.

That’s the economic system that has transformed society in the past century and more.

That is what gave the Henry Fords, the Thomas Alva Edisons, the incentives to produce the miracles that have benefited us all.

It’s what gave other people the incentive to provide them with the finance for their ventures.

Of course, there were lots of losers along the way.

They went in with their eyes open; they knew what they were doing; and win or lose, we, society, benefited from their willingness to take a chance.