Friday, June 15, 2012

Economic Freedom vs. Self-Determination

Proponents of classical liberal free-markets base their vision broadly on the concept of economic freedom.  From Wikipedia:
The free market viewpoint defines economic liberty as the freedom to produce, trade and consume any goods and services acquired without the use of force, fraud or theft. This is embodied in the rule of law, property rights and freedom of contract, and characterized by external and internal openness of the markets, the protection of property rights and freedom of economic initiative.
This view is seen as incompatible with the modern welfare state, which requires levels of progressive taxation that are argued to be at odds with the rule of law (unequal treatment before the law), property rights (government "takings"), and freedom of contract (worker rights, regulations, minimum wage, etc.). 

Yet an underlying assumption of this view is that within this system of economic "liberty" men are free from privilege.  It takes a sort of tabula rasa view of social and economic interaction in which, free from all government constraint but the enforcement of private contract, men interact on a level playing field.  Yet this is clearly not so.  Let us imagine a story of how democratic capitalism has historically played out. 

Ninety percent of the land of a small village is owned by an elite aristocracy who raise their children in private schools and colleges, and control the employment of the villagers.  The villagers are free to borrow money from a bank operated by the aristocracy, and free to run their own businesses.  A few of the villagers have been able to be quite successful this way, even able to send their children to the private schools of the aristocracy.  However, the private schools, important as they are in the development of human capital, largely function to perpetuate the exclusivity and privilege of the aristocratic grip on positions of economic and political power in the village.

Is this a picture of economic liberty, or a picture of injustice and inequality, in which one's birth determines one's lot in life?  Sure, it is possible for a child to be born to a poor villager, and yet rise up to find success and entry into the aristocracy.  But this is by far the exception, not the norm.  And because of the structure of compensation and economic freedom in the village, positions of employment are defined by stark skill and wage differences.  Geographic areas of the village have developed, distinctly segregated by the occupation and education level of the residents.  There is clearly an inequality of agency to the degree that those well born have much more of it.

Proponents of economic freedom will notice that there is a marked inequity of human agency in this village; it does indeed matter to whom one is born.  And yet, they will argue, the system is quite productive.  The wages of even the lowliest worker allow them to afford basic food and shelter and, in principle, to take advantage of opportunities for advancement.  Over the years their living conditions have improved, their amenities having become more affordable and plentiful.

Yet what about individual freedom to choose one's life path?  The traditional critique of class is that, to the degree that it is defined by an inequality of agency, it is immoral.  We implicitly recognize the right to self-determination as a fundamental, inalienable right.  Even if we are better off materially than generations previous might have been, without equality of self-determination, we cannot be said to be sufficiently free.  One is reminded of the benevolent monarch, who promises his people peace and prosperity - as long as they accept his benevolent rule.

Even though some, by hook or crook, manage to find self-determination, they are the exception.  A defining feature of this system is that self-determination arises out of what one is born into, in other words one's societal capital.  This privilege allows one better access to a stable home, a quality education, and all that which better facilitates their arrival into the aristocracy, petty or otherwise.  One's development as a man is determined in no small way by their place of birth in the class system, and it arrives unto him as a piece with consciousness itself.  It colors his expectation of what life owes him, of what he understands of the world, and how to best advantage himself and his family.

So, athwart economic freedom, I propose what you might call developmental freedom.  To the extent that economic freedom displaces developmental freedom, it need be hindered.  This hindrance is not arbitrary, but rather explicitly designed to promote developmental freedom, the freedom of self-determination.

Many will say that developmental freedom is something that cannot be imposed from outside, but that must arise naturally within oneself.  Yet from what we know about human development, it is highly determined by societal interaction.  If every man's development and self-determination were to arise naturally, it would not be constrained by class, and you would see equal levels of development across economic strata. 

But this isn't the case.  Different classes of people, when defined by income, education level and family background, have very different outlooks on life.  They have different cognitive styles, different interests, different areas of knowledge, and - most importantly - different parenting styles.  Among the very poorest, there are incredibly high levels of dysfunction.  Nearly half the American prison population are high school dropouts, and majorities were raised in homes with multiple risk-factors.  Levels of self-determination are highly correlated with socio-economic class.

If we truly value self-determination as an inalieable right of man, then we must seek to maximize it whenever possible.  To the extent that economic freedom limits self-determination, then we must seek to constrain it.

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