On Sun, 01 Apr 2007 16:45:39 +0000 "Carl Remick" <carlremick at hotmail.com>
writes:
>
> The book fails to ask
> why
> people who claim to love freedom have so often had a soft spot for
> those who
> would deny it to others.
That's an important point. In the case of Milton Friedman, he attempted to get around this by arguing, as he did in his 1962 book, *Capitalism and Freedom*, that a free market capitalist economy was a necessary requirement if political freedom and democracy were to flourish. He admitted that not all capitalist societies were democratic and that not all them safeguarded political freedom but he argued that as an empirical matter, there were no "free" societies around that not also capitalist. He also made the argument that a free market economy was necessary to provide checks against the ambitions of the state, and so in that way acted as a necessary basis for the preservation of political freedom and democracy. That's also how, year later, he would justify his giving economic advice to the Pinochet government, which clearly was hostile to both democracy and political freedom.
There are, however, several problems with Friedman's arguments. First of all the claimed correlation between economic freedom and political freedom is not as simple as Friedman made out. Friedman claimed that "democratic socialism" was an oxymoron. A "democratic socialist" society, in his view, would either in time become undemocratic or it would revert back to capitalism. However, his argument does not take into account that though most of the West, the expansion of political freedom coincided with the spread of social democracy. The Scandinavian countries, for instance, back in the 1960s and 1970s managed to develop quite extensive welfare states at the very same time that these societies were also exapnding the range of personal and political freedoms that they were willing to protect,
Back in 1968 the Canadian political philosopher C.B. Macpherson wrote, what I believe to be one of the most effective demolition of Friedman's arguments in his essay, "Elegant Tombstones: A Note on Friedman's Freedom," which first appeared in the journal, Canadian Journal of Political Science in March of that year. The following paragraphs should give the reader some of the flavor of Machpherson's critique of Friedman.
Here, Macpherson takes on Friedman's contention that free market capitalism is noncoercive in nature. That contention is one of the basic premises that underly Friedman's argument that capitalism is a necessary presupposition for the existence of political freedom. --------------------------------------- "Professor Friedman's demonstration [in _Capitalism and Freedom] that the capitalist market economy can coordinate economic activities without coercion rests on an elementary conceptual error. His argument runs as follows. He shows first that in a simple market model, where each individual or household controls resources enabling it to produce goods and services either directly for itself or for exchange, there will be production for exchange because of the increased product made possible by specialization. But since the household always has the alternative of producing directly for itself, it need not enter into any exchange unless it benefits from it. Hence no exchange will take place unless both parties do benefit from it. Cooperation is thereby achieved without coercion'...So far, so good. It is indeed clear that in this simple exchange model, assuming rational maximizing behavior by all hands, every exchange will benefit both parties, and that no act of coercion is involved in the decision to produce for exchange or in any act of exchange.
Professor Friedman then moves on to our actual complex economy, or rather to his own curious model of it:
As in [the] simple exchange model, so in the complex enterprise and money-exchange economy, cooperation is strictly individual and voluntary *provided*: (a) that enterprises are private, so that the ultimate contracting parties are individuals and (b) that individuals are effectively free to enter or not to enter into any particular exchange so that every exchange is strictly voluntary...
...Proviso (b) is 'that individuals are effectively free to enter or not to enter into any particular exchange', and it is held that with this proviso 'every exchange is strictly voluntary'. A moment's thought will show that this is not so. The proviso that is required to make every transaction strictly volunatry is not freedom not to enter into any *particular* exchange, but freedom not to enter into any exchange *at all*. This, and only this, was the proviso that proved the simple model to be voluntary and noncoercive; and nothing less than this would prove the complex model to voluntary and noncoercive. But Professor Friedman is clearly claiming that freedom not to enter into any *particular* exchange is enough: 'The consumer is protected from coercion by the seller because of the presence of other sellers with whom he can deal...The employee is protected from coercion by the employer because of other employers for whom he can work...'
One almost despairs of logic, and of the use of models. It is easy to see what Professor Friedman has done, but it is less easy to excuse it. He has moved from the simple economy of exchange between independent producers, to the capitalist economy,without mentioning the most important thing that distinguishes them. He mentions money instead of barter, and 'enterprises which are intermediaries between individuals in their capacities as suppliers of services and as purchasers of goods'...as if money and merchants were what distinguished a capitalist economy from an economy of independent producers. What distinguishes the capitalist economy from the simple exchange economy is the separation of labor and capital, that is, the existence of a labor force without its own sufficient capital and therefore without a choice as to whether to put its labor in the market or not. Professor Friedman would agree that where there is no choice there is coercion. His attempted demonstration that capitalism coordinates without coercion therefore fails." ------------------------------------------------------------------------- -----------------------