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From: carnes@gargoyle.UChicago.UUCP (Richard Carnes)
Newsgroups: net.politics.theory
Subject: Freedom, coercion, and free markets (III)
Message-ID: <328@gargoyle.UChicago.UUCP>
Date: Sun, 10-Feb-85 18:49:02 EST
Article-I.D.: gargoyle.328
Posted: Sun Feb 10 18:49:02 1985
Date-Received: Mon, 11-Feb-85 07:19:50 EST
Organization: U. Chicago - Computer Science
Lines: 64

This is a continuation of Lindblom's discussion of the extent to which
market systems support freedom.  The following should be of particular
interest to libertarians.  
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DISPARITY IN ATTRACTIVENESS OF ALTERNATIVES.  Many of the coercive
potentials in exchange can be subsumed under one generalization.  Suppose A
offers something of overwhelming value to B -- say, a lifetime income -- in
return for which B must do something he abhors.  Is he really free to
refuse?  Suppose A offers something that B must have -- water when he is
stranded in the desert -- but at an exorbitant price.  Is he not then
coerced?  Clearly freedom depends on the character of alternatives.  The
generalization, then, is that exchange best supports freedom when every
party can choose among offers that do not greatly differ in value from each
other or from no exchange at all.  

The requirement can be met in either of two circumstances.  One is that
exchange is limited to small values (hence livelihood must not be at stake).
The other is that, although important values are exchanged, no single act of
exchange is greatly more advantageous to either party than other available
exchange opportunities.  In neither circumstance can anyone be coerced,
since he can, without great loss to himself, easily refuse any offer.

COMPETITION AND LIBERTY.  The second circumstance -- no exchange opportunity
is greatly more advantageous than any other -- makes liberty depend on
competition.  On this the liberal argument is correct:  liberty in market
systems exists only if everyone is able to escape coercion at the hands of
any one buyer or seller by turning to another.  If that proposition holds
out hope for enlarging man's freedom, it also tells us that poor labor
markets stand as a worldwide enemy of freedom.  Landless rural laborers in
much of the world remain dependent for livelihood on land-owning employers
too few to compete.  That helps explain why, for example, during twenty-five
years of democratic national government, millions of India's agricultural
laborers often surrendered control of local government to the landlords,
submitted to beatings and other indignities at their hands, and accepted
exploitative work contracts.

LIMITED CAPACITY TO OFFER.  Precisely why do inadequate labor markets count
so heavily against freedom?  For two interconnected reasons.  One is, again
that livelihood is at stake in market systems.  The other is that hundreds
of millions of people have nothing to offer in their pursuit of livelihood
than their labor, an obvious truth the significance of which has long been
obscured.  Landless laborers, laborers without assets of any kind, must
count on jobs alone to protect their freedoms in the market.  So also
millions of industrial workers.  In a wealthy society like the United
States, as of the early 1960s only about 3 percent of families had assets of
as much as $50,000, and 75 percent had assets less than $5,000.

Marx saw the staggering importance of that simple fact; classical liberal
thought has been embarrassed by it.  Income-earning property is a bulwark of
liberty only for those who have it!  [Footnote:  The conventional liberal
argument alleges, however, that because a system of private property
disperses control over production, it guarantees the political liberties of
the propertyless as well as the propertied (Hayek, *Road to Serfdom*).  The
allegation is silent on the effect of property on the market liberties of
those who have very little of it or whose share of it they never voluntarily
chose.]  Those who do not [have income-earning property] are vulnerable to
coercion when jobs are scarce and insecure to the degree that jobs may
become scarce.  Unemployment compensation and other welfare programs are --
by such a line of analysis -- necessary to freedom in market societies.
[Charles E. Lindblom, *Politics and Markets*]
_______________________

Richard Carnes, ihnp4!gargoyle!carnes