Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.1 6/24/83; site gargoyle.UChicago.UUCP Path: utzoo!watmath!clyde!burl!ulysses!mhuxr!ihnp4!crsp!gargoyle!carnes 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. ______________________ 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