carnes@gargoyle.UChicago.UUCP (Richard Carnes) (02/01/85)
<> This is a continuation of Charles E. Lindblom's discussion of liberty and market systems in *Politics and Markets*. Comments are most welcome. __________________ AUTHORITY IN EXCHANGE. In developed market systems, most gainfully employed people in fact spend their working hours in an authority system -- typically an organized business enterprise. The consequent threat to freedom is all the more obvious in large corporations: an organization in which a few men command thousands of others in the standardized patterns of bureaucracy does not nourish freedom. Libertarians reply that employees accepting managerial authority are still free because they voluntarily accept that authority and are free to terminate it. Then whether authority permits men to be free depends on whether people choose to enter the authority system? If so, the liberal argument that men are free in exchange and unfree in authority systems is destroyed; it all depends. It might be argued that the authority of the state, unlike employer authority, is invariably imposed by threat rather than voluntarily accepted. Although some citizens see all governmental authority in that light, we have seen that others do not. They voluntarily authorize officials to issue commands and voluntarily establish a rule of obedience (even if they sometimes also wish to evade the authority once established). IMPERSONAL COERCION. The classical liberal argument also forgets a point from the history of thought. In the eyes of the classical economists one of the great virtues of the market was that it forced people to work. Naturally indolent, people have to be coerced to work either by the force of law or, through the market system, by the "silent, unremitted pressure" of hunger. Those who identify market with freedom introduce a distinction at this point: Freedom is abridged only when one person can compel another to do his bidding. In a market system, no particular person compels anyone else to work. People are compelled to work only by the impersonal requirements of the system. For that matter, most people would probably argue that any social system must require that able-bodied adults work. That they must do so in market systems is hardly distinctive. LIVELIHOOD. Yet when livelihood is at stake in exchange, as it has been in all market systems so far in history, personal coercion adds to impersonal. If jobs are scarce, anyone who has a job to offer can coerce job applicants: can compel a kickback of wages or personal services, a contribution to a political party, or a coercive relation on the job itself, among other possibilities. If coercion is rampant in labor markets with severe unemployment, even in years of "full" employment jobs in the right place and of the right kind are not so plentiful as to eliminate some of its forms. Only in a market system in which all persons are provided, through money income, with a generous basic livelihood whether they work or not would these coercive possibilities in exchange vanish. COERCION THROUGH TERMINATION OF EXCHANGE. The classical liberal argument postulates a population not yet engaged in economic cooperation and asks how they might be organized. By being drawn into mutually advantageous voluntary exchanges. Does such a method of organization impair their liberties? Not at all, for each enters into exchange for his own advantage, hence voluntarily. Societies, however, are in fact already organized through markets. How, then, today and tomorrow as needs change over time, are people drawn out of old assignments or tasks and into new ones? How does economic organization continuously adapt to changing circumstances? In two ways. First, by the opening up of new mutually advantageous exchange possibilities into which people move voluntarily. Second, by the termination by one party or another of existing exchange relations (for example, termination of jobs by a corporation). The second method, terminations, is coercive. People must move, leave their homes, change their occupations -- any of a number of possible major changes, none of their choosing. In addition the mere threat of termination can be as constraining, as coercive, as menacing as an authoritative governmental command. A person whose style of life and family livelihood have for years been built around a particular job, occupation or location finds a command backed by a threat to fire him indistinguishable in many consequences for his liberty from a command backed by the police and the courts. In most societies the law broadly prohibits one person from inflicting injury on another: prohibits, for example, physical assault, theft, libel, and conspiracy to injure. Even threats are illegal. But it leaves one great exception: injury through termination of an exchange relation. It is easy to see why it must allow that exception if a market system is to persist. But it is an exception, one to which classical liberal theory on liberty seems blind. [Charles Lindblom] Richard Carnes, ihnp4!gargoyle!carnes