[net.politics.theory] Freedom, coercion, & free markets - II

carnes@gargoyle.UChicago.UUCP (Richard Carnes) (02/01/85)

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This is a continuation of Charles E. Lindblom's discussion of liberty and
market systems in *Politics and Markets*.  Comments are most welcome.
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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