Freedom and Free Markets

Thursday, February 4, 2016 -- 4:00 PM
Ken Taylor

This week our topic is freedom and free markets.   We want to explore the extent to which these two things are or perhaps are not mutually dependent on each other.  You might think that the answer is obvious, that freedom and free markets necessarily go together hand in glove.   Clearly,  free markets would not be possible without a great deal individual freedom – particularly the freedom to make contracts.  Similarly, to regulate the market, it might seem, is ipso facto to shackle liberty.   When you restrict markets you restrict choice.  When you restrict choice you necessarily restrict freedom.

But might it not be that it is sometimes necessary to regulate markets in the name of freedom.   and in order to enhance freedom.   Think about health insurance, for example.  If the distribution of health insurance was left entirely to the whims of the free market, lots of people  -- old people, people with pre-existing conditions, people with bad habits – probably couldn’t afford health insurance at all.    What kind of freedom is it if you have to live in constant fear that the next illness will lead to financial ruin?

Now I admit that when the government steps in and forces insurance companies to provide health insurance to certain people, it is restricting the freedom of insurers.  No doubt about it.  But it seems right to say that the government would also thereby be enhancing – at least in the sense of rendering more useful – the freedom of people who otherwise couldn’t get healthcare.  They would be freed from constant worry.  They would be freed to change jobs without fear of losing their healthcare.

Sceptics about government intervention in the market will no doubt dismiss talk of this sort as taking liberty with the  notion of “freedom.”   They will quite rightly distinguish between making markets more free and making markets more fair or more equitable. Regulating markets may or may not them more “fair” or more equitable,   but regulation always makes markets and people less free, they will say.  It’s not that they deny that freedom and equity are potentially good things.   But given a choice between  more freedom, on the one hand, or more fairness or equity, on the other,  they will choose freedom every time.   You know the kind of people I’m talking about, I am sure.

But the problem with this kind of fetish from freedom above all else, is that it’s based on much too narrow a notion of freedom.    Freedom as understood by those who resist regulation at every turn is usually taken in a purely negative sense – as amounting to nothing but  the absence of compulsion or coercion.  Suppose I were to get up out of my chair right now in order to go out for a run. What would it mean to say I acted freely in doing so?  -- That I made an unforced choice to do so, that nobody coerced me into doing so.     In the same vein, the market might be thought to be free when it is governed by nothing but the unforced choices  of consumers and producers.

That’s fine as a definition of what  is often called negative freedom.   But there’s also such a thing as positive freedom.  Positive freedom involves more than absence of external constraint or coercion.   It requires autonomy  -- the positive power to shape your own life in ways of your own choosing.   It was Isaiah Berlin who first made it this distinction explicitly, I think.  But the distinction has roots in the work of thinkers like Kant, Rousseau, Marx and Hegel.  

Unlike those thinkers, who were big fans of positive freedom,  Berlin, it should be noted, thought that a government dedicated to promoting positive freedom would eventually turn into an oppressive overbearing busybody.   He thought that such a government would be constantly seek to protect us from the bad choices and baser impulses that supposedly undermine our autonomy.  Such a government would to know better than us how to best live our lives.   So he thought that it was best for the government to to just keep out of the way to the maximum extent possible.

But I think Berlin missed something deeply important.   If I’ve got no money, no education, no health insurance, what good does it do me to be left alone?  It’s not that I want a government to care for me cradle to grave.  I really do want to be free and autonomous so that I can take care of myself.   But in order to do that, it’s not enough to be left on my own.  I need access to what might be called the necessary conditions of full autonomy.   What do those include?   Not exactly sure, but on the list would be such things as good schools, safe streets, and guaranteed access to basic goods like food, shelter, or health care.   Without those things, it’s hard to see how I can be master of my own fate, shaper of my own destiny in the way that autonomy – that is,  positive freedom, requires.  

But why not t trust the market to provide those things?  And  my answer is that markets have their limits.   I pretty seriously doubt that if we were to let the free market be the sole determiner of who should receive what education at what price, that rich and poor would have equal access to education.    But I do admit that that is an empirical question.   And I fully admit that we’ve never actually let the free market work its magic on primary and secondary education.  Instead we’ve put our trust in in the hands of politicians and bureaucrats.  And I can’t say that that has worked out all that well.

Obviously, there is lots and lots to think and talk about here.  So please add a thought or two of your own. 

 

 

Comments (14)


Harold G. Neuman's picture

Harold G. Neuman

Tuesday, July 23, 2013 -- 5:00 PM

I do not know who generated

I do not know who generated this post-JP; KT; or LM. Not that this matters, but, it kind of sounds like John. There have been quite a few arguments and discussions recently regarding the role of government in the lives of citizens, here and far. Free markets may be justifiably called a manifestation of freedom. Profit and loss is a matter of calculated risk, not governmental domination. Even China appears to realize it cannot be a world economic power without fostering some form of capitalist initiative (although we may not know exactly what that form may be.) Some pundits have been criticizing other economic systems, notably those of Canada and Great Britain (or is that England, now?) I cannot comment on the Brits means and methods---never been there. But, let's look at Canada (I have been there---lived there, in fact.) The punditry says their healthcare system is inferior. Socialized medicine is inherently inferior. I'd say: it depends. On numbers, firstly and priorities, secondly.
On the numbers: Canada does not have 300 million citizens to take care of. Socialized medicine works better with small populations. On the priorities: Canada does not have a huge public assistance bureaucracy to administer, because her disadvantaged population is proportionally much smaller than that of the USA. There are many more factors involved in this equation. I have given you the fundamentals.

Guest's picture

Guest

Wednesday, July 24, 2013 -- 5:00 PM

It's not that we can't trust

It's not that we can't trust a well designed and well enforced market place to provide safe streets and guaranteed access to basic goods. It's that we can't realize an uncorrupted market place or any ideal without first charging government with the primary purpose of shaping children into agents of moral reasoning. As long as it is respectable to believe that property rights are god given or to not think about them, markets will serve "god's chosen" rather than optimize human potential.
One way for a state to ensure that it's market provides for every citizen's basic needs (beyond their formative education) is to divide the tax burden of flesh and blood employers by the number of their dedicated employees, and to offset this meritorious tax cut with a fully progressive individual income tax* without further exemptions. Competent leaders would then compete for employees as fiercely as for profit. They would do so by offering their employees benefits of community, rather than the excessive salaries and cold shoulders offered by exceptionally affluent Americans today, who are not obligated to demonstrate leadership competency or justify to the public in any way their exceptional affluence and influence. Simply taxing the rich is like asking for a bribe in exchange for overlooking their undeserving, likely detrimental influence in society and on the state.
* income x .000001 x income divided by dedicated employees = debt to state

Guest's picture

Guest

Sunday, July 28, 2013 -- 5:00 PM

Canada is such a peculiar

Canada is such a peculiar country, so under-appreciated by its inhabitants as by others, that it is hardly possible to use it for general illustration. I hope a little history is apropos since it leads to a point.
In the year 577, Brendan the Navigator crossed the Atlantic with his crew of Irish monks and came upon an inhabitant of what is believed to have been Canada. The native, "all hairy and hideous, begrimmed with fire and smoke," so unnerved the group that Brendan was compelled to calm them with a speech: "Soldiers of Christ, be strong in faith unfeigned and in the armour of the Spirit, for we are now in the confines of hell." As the group sailed further south, they acquired a more pleasant view but by the time an account of the voyage was published (in Dutch) it had become filled with such fabulous elements that it was easily dismissed as a seafaring yarn and reality is still difficult to decipher.
The name "Canada" derives from Portuguese privateers who charted parts of the coast of North America seeking easy treasure -- gold, silver, spices. On a particularly bleak stretch of coastline, they noted on their chart "Ca nada," signifying "There's nothing here." Later these charts fell into the hands of North European mapmakers who made "Canada" the name of a region and eventually of a country.
The French took the lead in exploring and colonizing the new country. When Jacques Cartier, who set sail from France in 1534, recorded his first impression of the new country: "I am rather inclined to believe that this is the land God gave to Cain." His view improved as he explored further.
From 1756 to 1763, the British and French fought a brutal war for supremacy. In the war, the British captured Canada and the Caribbean island of Guadeloupe, an important supplier of sugar. In the peace treaty, France was offered the return of either at its choice. To the dismay of many British parliamentarians, France chose Guadeloupe.
I could of course go on, but you can see where its going. No one underestimates, or has ever underestimated Canada's potential than its politicians (in recent years, at least). The present government of Canada will sell anything that can be dug up or pried off, and at rock-bottom prices, and continues to run up historic deficits year after year. If you want an example of intelligent government, Canada is not your choice.

MJA's picture

MJA

Monday, July 29, 2013 -- 5:00 PM

To insure our freedoms,

To insure our freedoms, governments should be restricted to simply delivering the mail.
And as for the governed health insurance for all, the solution is the other Way. If insurance companies and their profits were removed from the cost of healthcare entirely, the cost of healthcare would come down to what everyone could afford, free market supply and demand would make it so.
As for the choice between freedom and equality, they are truly One or the same. Fairness by and by, is sadly the grey area of today's justice; something like science and religion, probability and faith, that will evolve into the light of absolute One day very soon.
And lastly, if One ever finds One or equally another in need beyond the strength of one's own power of self-reliance, surely it is not up to the government to come to One's aid, but the good or right of simply us All.
Be One too,
=

Harold G. Neuman's picture

Harold G. Neuman

Monday, August 12, 2013 -- 5:00 PM

History is history, or course

History is history, or course. And, it is meaningful--even instructive, although Santayana strongly implied that we refuse to learn from history, and, history appears to support his notion. In any case, freedom and free-marketry probably did not occur simultaneously. Therefore, I conclude they are cousins, not siblings. What this may mean exactly, I am not sure---except to say we ought not marry either.

Gary M Washburn's picture

Gary M Washburn

Thursday, February 4, 2016 -- 4:00 PM

What Canada does have is a

What Canada does have is a population that never relied on slavery or fanatic religious views, and so never developed the conservative extremism we have here. I have it on good authority that most Democrats would be considered too radically conservative for the Conservative party there. There is no free market where we are suppose to believe in a symmetrical negotiation to establish an a-symmetrical relationship. If governments are established to secure rights, whose rights are they? If only for some, and otherwise to enforce a-symmetrical relations (i.e. the denial of rights to others), then is the authority of such a government legitimate? Why is it so easy to forget that Europe pays a great deal less than we do for the same products, and has less need because people do not get as sick, or wait so long to get help when they do.

Harold G. Neuman's picture

Harold G. Neuman

Friday, February 5, 2016 -- 4:00 PM

Just what is it that drives

Just what is it that drives free marketing? Well, there are several factors that have been alluded to since this post was initiated in 2013, and now, upon its resurgence, I think it time to connect some dots more directly than as has been done heretofore. Freedom and free markets are, as I stated before, close cousins without which prosperous economies cannot evolve and endure. Profit and the creation of wealth are the lifeblood of progress an most all of its forms. Business, science, technology, infrastructure, education and a whole host of societal necessities rely upon money in order to grow, develop, expand and improve the condition of human life and protect the freedoms we have come to expect from the privilege of living in a free society. Much of where we are today, like it or not, came out of the time of FDR. Social Security spawned the notion of government stewardship and provided the impetus for an acceleration of the industrial revolution which propelled us toward the ubiquitous military-industrial complex that married creation of wealth with defense (and/or offense, depending upon who we were defending or offending against and why).
And, as we know, when powers are conferred, the entities administering them are loathe to relinquish those controls. Government does what we have either tacitly or explicitly authorized it to do. Don't like government being involved in the healthcare business? Look in the mirror. Uncomfortable with government stewardship over education? Either you or one of your ancestors likely had something to do with that too. We are where we are for many reasons, a good many of those being at the behest of consenting adults. It is interesting that one of the new crop of presidential candidates has been pounding the drum of revolution and that he seems to have touched a nerve. Revolution is a strong word and stirs emotions, but, most of us doubt that he will get the nomination. Yes, we pretty much get what we deserve and no, I'm not talking about catastrophic illness, terrorist violence, automobile accidents, or murder. Not as direct causation anyway.
But, it is all connected in one respect or another. Because we are a wealthy people who are steeped in the traditions of privilege. And not everyone in the world likes us now. I doubt seriously that everyone ever did.
Neuman.

Gary M Washburn's picture

Gary M Washburn

Saturday, February 6, 2016 -- 4:00 PM

Actually, the Department of

Actually, the Department of Defense was called the Department of War until the "military industrial Congressional complex" emerged as foil and spoiler to the New Deal (well documented in Change They Can't Believe In, by Christopher Parker and Matt Barreto). The inclusion of Congress in the conspiracy was dropped by Eisenhower from his famous speech at the behest of advisors concerned about the power of that bloc. The reason we have such a badly designed health care system is that employers promised to keep this issue out the public domain by taking it upon themselves. This made health care contingent upon holding a job, and gave the employer one more tool to intimidate disgruntled workers into falling and keeping in line. It also represents a latter-day version of shrinking expectations and rights echoing the Acts of Enclosure by which earlier modes of Feudal domination took root. Prerogative is not a right, it's not even a privilege, it's a power, a social phenomenon Berlin never accounts for. Prerogative, let alone privilege, is not a positive freedom, it is a power which holds civil authorities liable to enforce. It is called liberty only to disguise its real character. The only answer to it is by a civil authority that thwarts rather than enforces it.
Imagine a casino in which bets are taken, not on cards or wheels or dice, but on the ups and downs of stocks. Would government have a responsibility there to support the property claims of the winners? I never could understand how we get this notion that gambling gains should be enforced by law. Surely the law is only mandated to enforce those gains gotten in a fair and equal exchange? Should government cooperate in using its power to back up a property claim that surrendered nothing in exchange? Should the principle of getting something for nothing have public support? The winners in this game vociferously deny it should in the case of supports to the poor. But actually, that support has a positive effect on the general prosperity, by giving working people a modicum of confidence in standing up to a parsimonious employer, an effect absolutely vital to the concept of negative freedom. All exchanges are inherently asymetrical (by the way, Marx never quite was able to explain this, because he did not think individually) and so the notion of a free market is conceptually and irresolvably vexed. At best, we can mitigate the worst effects, keep the gamblers out of it, and limit the social disparities that entrench feudal domination into the fabric of society.
Liberty to swing one's fist, it is said, ends at the other's nose. But just swinging the fist threateningly is as much an assault on liberty as the implicit impact. Simple minded slogans usually have pernicious consequences, and this is a prima facie case they are intended. Berlin's notion cannot be assumed to be honest. But read Adam Smith, where there is a sharp distinction made between financial investment and work. Money investors might realize a profit or not, but there is no limit on how much, and potential gains often far exceed possible losses, whereas the best the worker can expect out of investing his or her working life is "subsistence". This is consistent throughout the text of The Wealth of Nations, but it is not explained why. The reason, of course, is that the prosperity of working people is always accompanied by efforts to relieve them of their "disposable income", and defense against this assault requires resources far in excess of those just emerging into the middle class. And so, they get pushed back down, unless government intervenes as their champion, instead of shill to prerogative.

MJA's picture

MJA

Sunday, February 7, 2016 -- 4:00 PM

Regarding free markets, I

Regarding free markets, I would suggest reading The Shock Doctrine by Naomi Klein if you have the stomach for it.
Gandhi said: ...the root of all evil -- human greed. 
=

Gary M Washburn's picture

Gary M Washburn

Sunday, February 7, 2016 -- 4:00 PM

A bit of a meal there,

A bit of a meal there, Michael. Krugman's Conscience of a Liberal, or the Case for Big Government might be easier reads, but there are many resources that support the proposition that conservative economics is toxic. Perhaps Mr. Taylor is suggesting, by re-posting this thread, that Bernie is the solution. But in view of all the economic scandals, inverted moral themes, and incoherent explanations of events of the past fifty odd years, there is little chance anyone who still supports the standard economic theories is being honest. Economists present the stock market graph urging us to smooth out the bumps to see the trend they want us to, but the same analyst magnifies the ups and downs to microscopic scale and shows the private investor how to cheat at it. That is, they invert the story. Parsimony for the worker, extravagance for upper management. Inversion. Financial advice used to have incumbent upon it fiduciary responsibilities, today banks place fast and loose with your money but cagey and cautious with their own. The plight of today's renters echoes the plight of the serf in feudal time, and isn't feudalism nothing more than taking advantage of the place of the tenant in the context of a legal and economic system that offers them no recourse but homelessness or "outlawry"? Imagine a homeowner with a mortgage in which the bank lets anyone pay up the balance and take over the property even if the originator of the mortgage had almost paid it all up? That's what corporate raiders do, and that's what banks are trending to happen even to home ownership. And just because you can sell something doesn't mean you are giving people what they want. At every turn economics chooses terms that corrupt our perception of the phenomena.

Gary M Washburn's picture

Gary M Washburn

Thursday, February 11, 2016 -- 4:00 PM

"Look'n for my 'Lo, and

"Looking for my 'Lo, and Behold!'"? Problem is, whose 'Lo!' and whose 'Behold!'? If they're not the same, it's preaching, not philosophy.
A great teacher is simply one who gets the point across, not one that gets to the point. Confusion on this point engenders tirades. But even if a bit of effluvium can be satisfying, it doesn't satisfy its basic mission if it doesn't get the point across, however brusquely it gets to the point.
The only reason posts on these pages ever get deleted, as far as I can see, is for hucksterism. Inanity and rudeness, alas, remains here for all to see, though judging by the lack of action here it seems there are few enough that do. The author, of course, can alter, but not wholly delete, a message.
The most serious point that needs to be made on the specified topic is the current danger "global markets" are to the sovereignty of free peoples. Public control of markets, and therefore of work-life too, is being ceded to what Chomsky, rightly, calls "private tyrannies", let alone to totalitarian states. Once the global market has become a full-fledged neo-feudalism it is hard to see how any of the peoples of the world can ever be free again.

Gary M Washburn's picture

Gary M Washburn

Sunday, February 14, 2016 -- 4:00 PM

Wittgenstein says the world

Wittgenstein says the world is the totality of facts. He is dead wrong. The world is the facile term of our knowing it. They used to call psychiatrists "alienists". The marketplace of social equanimity is anathema to what would reveal its insanity. But nothing is so rigorous as portraying the strangeness of a world taken as so comfortably familiar there seems something hermetically domestic to it. The fact is, it is the strangest thing of all. but if all you can do is act strange, that rigor is in limbo.

Gary M Washburn's picture

Gary M Washburn

Monday, February 15, 2016 -- 4:00 PM

"By moving its tax address

"By moving its tax address (but not its headquarters and employees) to a tax haven, Pfizer will likely avoid paying the U.S. taxes it owes on about $140 billion in profits it has stashed offshore. That will cost us tens of billions of dollars in lost revenue ? money that is needed to maintain critical services here at home."
From a petition to stop tax havens.

Guest's picture

Guest

Sunday, February 21, 2016 -- 4:00 PM

Great topic.nice discussion.I

Great topic.nice discussion.I admit that when the government steps in and forces insurance companies to provide health insurance to certain people, it is restricting the freedom of insurers.  No doubt about it.
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