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In Search of a Basis for Freedom

Mises Daily: Wednesday, September 29, 2004 by

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Jeffrey Friedman is wrapping up the first day of his seminar in the summer of 2003. "We have gotten off the table the idea that freedom is inherently valuable, or that capitalism is inherently valuable," he says. "What we have left is that capitalism may be more valuable than the alternative, given the consequences."

We eleven are mostly students, conservatives or libertarians. Several are from Yale and Harvard, one from Oxford. Three are members of the press.  We have come to Princeton, our way paid by donors who want us to hear what Friedman has to say.

Friedman is 44, the son of an atheist rabbi. He is dark-haired, intense, exacting, and with a quick smile. He is a teacher of political science at Barnard College, New York. He says he started adult life as "an annoying Rothbardian anarcho-capitalist." Among libertarians he is famous, and also a bit infamous, for his seminars that deconstruct their creed.

Years ago, Friedman became dismayed with the showing of libertarians in academia. Even Robert Nozick, author of the acclaimed Anarchy, State and Utopia, was emerging from academic warfare severely damaged. "Professors teach Nozick because he is so easy to dismiss," Friedman says.

He started an academic journal, Critical Review, to strengthen libertarian ideas by testing them against opponents. To his chagrin, he says, the opponents were winning.

By the early 1990s Friedman says, he had abandoned libertarianism, though "not for an alternative." He developed a completely empirical view, he says, and began poking through studies in political science. "I began finding nuggets of research that the usual people didn’t see," he says. "They were things it takes a libertarian to see." And these, he says, now form the basis of "a case that doesn’t walk the traditional path."

It is to consider this case that he has invited us for three days at Princeton.

Deconstructing liberty       

First the way must be cleared. Our old ideas must be deconstructed, starting with our idea of liberty. The attack comes in an essay by a Marxist, one G.A. Cohen of Oxford University.

Now, I work in the press. We deal with lots of left-liberals. We don’t have Marxists. The idea of seriously arguing with a Marxist seems, well, preposterous. We don’t argue with Nazis. After the 20th century, why do we even talk to Marxists? I mention to a fellow seminar participant that it seems strange to be having a dispute with a communist. The fellow from Oxford looks pained and says, "Cohen’s not a communist. He’s a market socialist."

Oh. Progress, then.

Cohen’s "Capitalism, Freedom and the Proletariat" (1979), starts by quoting philosopher Jan Narveson’s definition of liberty as "doing what we wish without the interference of others." This is a bad definition, and Cohen makes the most of it.

Cohen says, "Let us suppose that I wish to take Mr. Morgan’s yacht, and go for a spin. If I try to, then it is probable that its owner, aided by law-enforcing others, will stop me. I cannot do this thing that I wish to do, because others will interfere. But liberty, Narveson reasonably said, is ‘doing what we wish without the interference of others.’ It follows that I lack a liberty here.

"Patently, the point is generalizable. Private property always limits liberty."

Notice that Cohen posits a yacht, a rich person’s property. He could just as well have posited a bicycle, and suggested that he had the right to take a student’s bike for a spin. Not even a People’s Republic would allow Cohen to do that.

But I have to admit that private property does limit liberty. It defines liberty. Liberty is really the permission to do what we wish with what we own, including ourselves. Cohen calls this a moralized liberty, and, Friedman adds, "The ‘moralized’ part of ‘moralized liberty’ is doing all the work."

I suppose it is. I can live with that. Jonathan Wolff argues in "Freedom, Liberty and Property" (Critical Review, Summer 1997) that we ought to use "freedom" in the sense of possibility ("My leg iron is off; I am free to walk") and "liberty" in the sense of permissibility ("I could walk if I wanted, but I am not at liberty to leave the house").

I agree with Cohen that libertarian liberty is about the permissions you have in a world of private property. I mention to Friedman that I have long thought that the technically correct name for libertarianism is "propertarianism."

He smiles. "Exactly."

But does that mean the liberty in libertarianism is bogus? Cohen thinks so, and Friedman seems to agree. In "What’s Wrong With Libertarianism" (Critical Review, Summer 1997), Friedman says: "Inasmuch as there is just as much of the world to be parceled out under each system’s set of property rules, and the rights governing all of this property are just as coercively enforced in all systems, there is no difference in the ‘amount’ of coercion. . ."

I was stunned by this statement. Only in a very restricted sense is it true. In a capitalist society and a socialist society, there are places you are allowed to go and places you aren’t. In both societies, everything is owned by some individual, company, co-op, collective, or state agency. Further, all the properties that capitalism creates—patents, copyrights, bonds, stock options, futures, fishing rights, grocery coupons—are protected by force.

Friedman believes capitalism is preferable to socialism. But the reason, he says, is not that capitalism uses less force to set up and run. It’s that capitalism allows people more choices that they will actually make use of. He and I have several back-and-forths about this. I begin to think that our disagreement is more one of labels than of essences. The amount of decision-making permitted me under capitalism, particularly my right to say "no" to people who would use my time and my property, is what I call "liberty." Friedman has a different name for it, as we shall see. But he’s for it.

Deconstructing property

What most of us call liberty derives from what we own. But why do we own what we own?

Because of the nature of man? Not quite. The Bushmen in the film, "The Gods Must Be Crazy" are human, and their hunter-gatherer society does not have property. However, all agricultural societies have it. It says something that there is no society in which you can walk up to another person’s field and start planting your crops in it.

But our job is to justify capitalist  property. In that regard, our first inclination is to say, "Look at capitalist property and socialist property. Private owners care for their properties and improve them; socialist citizens don’t."

That is an excellent reason, but Friedman wants a more philosophical one.

The libertarian offers an argument from self-ownership. If your life is an end in itself, and you own your life, meaning you have the right to direct and control it, you should be allowed to obtain rights to direct and control things.

Why? Friedman asks, "How is self-ownership translated into world ownership?"

If you own yourself, you own your talents; if you own your talents, you must own the product of your talents.

The most obvious problem with that is land, because land is not a product of our talents. How did land become property? It was divided up by farmers, which was necessary if people were to grow food. But Friedman wants a philosophical reason . . . 

Let’s take an easier case: a painting. In "Freedom, Self-Ownership and Libertarian Philosophical Diaspora," in the summer 1997 Critical Review, Justin Weinberg of Georgetown University supposes he paints a painting.

"If that painting is taken away from me—suppose it is appropriated by the state . . . then I no longer own the painting," Weinberg writes. "But I still fully own and possess my talents. . . . If the state confiscates my earnings, it is not materially different from the state confiscating my painting; I still fully own my talents. So I still fully own myself." He can still paint another picture (and the state can take that one away, too).

I don’t buy this. If the state has confiscated my painting, it has confiscated the product of my time and effort. To say, "Don’t worry, you still own your talents," is an apology for a thief.

I want to own the painting. But I am alerted by Friedman’s approach: I am not willing to make my ownership of the painting so fundamental that I don’t care about any imaginable consequence. At one of the breaks, I go to Friedman and say, "That I own my painting is valuable to me. I’d rather live in a society that let me own the painting even if it meant living in a poorer society. But I’m not going to insist on owning the painting if the price is mass misery."

"You are a reasonable man," he says.

What of the would-be painter who owns no paints, brushes, canvases or free time? Is self-ownership meaningful to him? Cohen, the Marxist, argues that it is not.

Cohen posits a world with two self-owning persons, Able and Infirm. Able can produce enough goods to sustain them both. Infirm cannot produce anything. Cohen stipulates that the two own the world jointly in a partnership that is undissolvable and self-enforcing, so that each must agree before either can touch anything. This means Able needs Infirm’s permission before Able can do any work. Infirm would need Able’s permission, too, but he can’t work.

Cohen does not say this, but from Able’s point of view, this is no different from Infirm owning everything.

Does Able have self-ownership? Cohen stipulated that he did. But will the libertarian be satisfied with his position? No. He is self-owned in theory, but he has no liberty.

Now consider the capital-less worker in a capitalist society. He cannot work without the agreement of an employer, Cohen says. Is his self-ownership any more meaningful than Able’s?

Cohen wants to say it is not, but he is wrong. He has put Able into a world where there is no market or possibility of one, because there can be no rival buyers or sellers. There is only Infirm, who has a 100% monopoly. Able is at his mercy.

This is not the position of a worker under capitalism. The worker is at liberty to negotiate with any employer. He is at liberty to sell goods or services directly, and have no employer at all. He may sponge off his relatives or marry into cash. On Cohen’s world, Able can do none of these things because there is no one to do them with. Able is like the worker in a communist world, who may be employed only by the state.

And Cohen compares him to the workers in capitalism. I think, "This Marxist does some fine card tricks, but he wins by stacking the deck."

Deconstructing responsibility

The hard sell for the libertarian is neither liberty nor property. It is responsibility.

I ask Friedman twice about the argument against the welfare state in Charles Murray’s In Pursuit of Happiness and Good Government (1994). Murray argues that what people want is a satisfying life, and that a good society should allow ordinary people to have satisfying lives.

Deep satisfaction, Murray says, comes from effort to achieve a meaningful goal. And what, for the ordinary person, could fit that bill better than working hard, supporting a family and raising capable and moral children? Before the welfare state, even the poor American who did this was respectable. As Garet Garrett wrote in 1947, recalling a maxim of his youth: "To be poor is no disgrace. In the whole civilized world that was only true here, and it was true here because no stigma, no hint of caste, no sense of status attached itself to the condition of being poor."

The welfare state takes this away—not because it taxes the strong, but because it pauperizes the weak.

Friedman has asked us what we think of the suggestion from liberal theorist Bruce Ackerman that the government provide each new adult with a capital grant—say, $20,000. This could be for tuition or tools or a down payment on a house or a binge on cocaine and hookers.

Murray’s answer would be to earn the money. It is not just that the person will "appreciate" it more, though he will. Also the person will have learned how to earn and save $20,000. Others will benefit because he will have become a producer of wealth rather than a waster of it.

I think of the $20,000 and remember what it was like to be 21 years old. God help them, academics can be as stupid as fire plugs.

Friedman dismisses Murray’s argument as "bourgeois complacency." In "What’s Wrong With Libertarianism," he explains what he means. People experience more than one kind of happiness. One might think of the happiness of watching one’s child graduate from college, of reading poetry, of watching TV, of feeling a full belly, or of a debauch in a whorehouse. Why, Friedman asks, does Murray favor the achiever’s happiness?

I suppose it is because, through introspection, Murray decided the achiever’s happiness is deeper and more lasting, and is the sort that should matter most. Perhaps also because it is more socially useful.

Friedman asks whether all humans at all times have felt this achiever’s happiness. Our warm feeling, elicited by Murray, could be the result of "bourgeois society, and thus our own bourgeois sensibilities." In other words, a husband providing for a wife and children may feel satisfied not because any man naturally would, but because his capitalist culture taught him to feel that way. People in some other culture might not feel that way, which would mean that libertarianism was culture-specific.

Yes, it might mean that.

Friedman offers another argument. In a market economy, he says, "people are not, in fact, solely or even largely responsible for their good ill or fortune," so that the ability to make a good living "depends overwhelmingly on good luck."

John Rawls argues this, too, in A Theory of Justice. If it were true, it would be deadly to capitalism. It is true of the economic position of children—it depends on their luck in having successful parents—and it is the principal reason why capitalist societies have socialized their schools. But the "you’re not responsible" thesis is generally not true of adults. One’s starting place in life is determined by luck, but one’s ending place is not.

What I see among the adults is that they are overwhelmingly self-made. 

Friedman calls this "Victorian psychology." I don’t know what I would call it, but I defend it.

‘Voice’ and ‘Exit’

The first day at Princeton has been a hosing-down. The fellow from the trade paper cannot stand it.  He leans back with his arms crossed over his belly, scowling. The next morning he checks out, telling one of the participants, "My vacation is too valuable to waste."

I am having too good a time to leave. Friedman is a smart guy, and I like following his line of thought.

Up to now, Friedman has been arguing that libertarian philosophy amounts to chasing our tails. But he does accept free-market economics. Thanks to Ludwig von Mises, Friedman says, we can rule out central planning. The problem is that central planning has been vanquished. Nobody believes in it anymore (not even Marxists). Our enemy today is the administrative state.

To reach a libertarian position, "you need a theory of politics," Friedman says—not just a theory of how the market works, but a theory of how the government works.

The economists’ candidate is public choice theory. This is an extension of economics to government. It treats people in government as profit maximizers, all trying to puff up their power and the size of their agencies. The problem is, Friedman argues, it’s too often not true.

Our readings have some examples. One is a story on the McCain-Feingold law, which banned certain political contributions. The Democrats relied most on those contributions. Public choice theory would predict that the Democrats would fight McCain-Feingold and the Republicans support it. Reality was the opposite. The two sides followed their ideologies, not their wallets.

This happens often enough to be more than an exception to the rule. "It is a grotesque falsification to assume that our opponents are driven by economic concerns," Friedman says. I have covered enough of politics to know he’s right about this.

The popular alternative to public choice theory is the theory of democracy offered by Democrats and Republicans. And that, Friedman argues, is not realistic either.

He refers us to Public Opinion, written in 1922 by journalist Walter Lippmann. Lippmann asks how the people in a democracy are supposed to know what is going on. They rely on the press. But the press is a wandering spotlight. Journalists have to make quick decisions, using preconceived notions of what is news. Every day, they are enticed by press agents who say, "Shine the spotlight here," because it is in somebody’s interest that it be shined there. Often they do. The mass-market press also will be drawn to what is entertaining rather than what is dull.

I am a member of the press, and recognize all these criticisms as true.

Then comes the news consumer. His attention is limited. Like the journalist, he has preconceived notions, and a liking for entertainment. The actual work of government bores him. Therefore he will be largely ignorant of what his government does.

Lippmann reached this conclusion before TV news and talk radio. It was true then and is true today.

Next comes one of Friedman’s nuggets of research: "The Nature of Belief Systems in Mass Publics," a 1964 article by Philip Converse. Converse finds that less than 4 percent of American voters can give a coherent account of what liberals and conservatives believe. These people he calls "ideologues." They understand the political division in society well, and their voting reflects it. A slightly larger group of voters partly understands and partly votes that way. A large group in the middle votes mainly by race, class, or other group affiliation. Below them is a fourth group, quite large, that votes on a politician’s looks, or whether he "cares about people like me."

What Converse finds is that liberal and conservative parties win elections because of changes in the votes of the two groups at the bottom—the people who don’t know ideology from acorns. This picture of the ignorant voter, says Friedman, has been verified again and again.  "But very few political scientists have the imagination to think what it means."

What it means is that a smart society cannot be run mainly by the puny political resources of voters.

Voting is based on the idea that every adult citizen should have a voice. Capitalize that: Voice. The first problem with the power of Voice, already discussed, is that it requires the voter to have more information than he will undertake to get, and to do more thinking that he will undertake to do.

The second problem is that one vote is worthless. In order to make Voice heard, you have to convince many others to add their votes to yours, which means making a public campaign. Unless your side wins, you get nothing.

What Voice gives the individual voter is the appearance of power without actually having any. Those who influence electoral majorities, those who operate the state, and those who influence them hold the real power.

Compare this with the market. It gives you a different power, called Exit. That is, you have the right not to make a purchase, not to renew a lease, not to continue working in a job. You can keep your money, move out, and quit your job. You can Exit.

Voice and Exit are not original to Friedman. He got them from another "nugget" of political science, Alfred Hirschman’s academic paper, "Exit, Voice and Loyalty" (1970). Hirschman does not champion Exit. Friedman does.

The first reason to prefer Exit is that even in the singular it gets us something valuable: to get out of a bad deal.

The other virtue of Exit, Friedman says, is that it "does not require us to think." To say "no" to a market transaction requires no knowledge of public questions, only of what is in front of our noses. The market handles the public question, which is, say, how many one-bedroom apartments to build and what price to set on the ones available for rent. The market makes this decision without any single participant having to think for the whole.

Says Friedman: "Exit is compatible with the complexity of the world."

I like Exit. It is an intriguing label, but I peel back the label and I see an older name underneath it: Liberty. It may not be exactly the same, but it is close.

An offensive idea

The sum of Friedman’s theory is that capitalist rights allow people to get what they want from the market much more reliably than democratic rights allow them to get what they want from the state. Therefore, maximize the market and minimize the state.

His view of politics is frankly elitist. Even when it looks as if voters are sending a clear message, they’re probably not. When voters elected a Republican House of Representatives in 1994 it did not mean Americans swung from left to right, because most Americans cannot articulate what "left" and "right" mean. If the elites believed it meant that, their belief was more important than the event.

This reminds me of a friend who works in state politics. He says the value of newspaper editorials is not that they influence the public. They influence decision-makers—not to change their beliefs, but to affect their propensity to act. An editorial saying, "Do this," validates the decision-maker who wants to do it. Says my friend, "It provides cover."

If you want to influence government, influence elites.

This view is not only realistic but also offensive, in several senses of the word. Rather than building up a libertarian citadel and defending it, it goes on the offensive against the modern democratic state. Those who are true believers in the state will find this argument offensive in the second sense. When I wrote a newspaper column explaining and endorsing Friedman’s argument against democracy, one reader set up a booth on the sidewalk in front of where I work with a banner that read:

Election 2003.
Is Bruce Ramsey an Ignorant Ass?
Vote Here

I asked him what he was about, and he said he was doing it to show his disgust with my point of view.

It’s not a point of view anyone is used to hearing. It’s fresh, it’s provocative, and it pisses off the progressives.

While such a view is dismissive of the public wisdom, it is not dismissive of one’s opponents, nor need it necessarily demonize them. I demonize the Marxists but Friedman is scrupulously polite, even to academic Reds. He says it is a mistake for libertarians to label leftists as evil. Leftists don’t understand the market. "We have a theory that highlights certain facts, which causes those facts to jump out at us," he says. "They don’t have that theory."

Friedman believes he can impart that theory much more effectively explained his way—an empirical, look-at-the-real-world way. Friedman has done this himself, because he also gives seminars to liberals.

I didn’t attend one of those. But I have the reading list, and can compare it to the one for the right-wingers. Many of the selections are the same, starting with Friedman’s two favorite thinkers, Max Weber and Walter Lippmann. But the lefties are given more readings about the market and fewer about politics.

Here are some comments from a seminar for left-liberals. "It was an excellent experience that I can unwaveringly say changed the way I look at the world," writes one student who said she came "from a socialist background." Another says, "This was an amazing experience. I have certainly never been exposed to strong libertarian arguments." Another writes, "I am more open and, yes, Jeff, more libertarian than I would have guessed possible after a three-day seminar."

These evaluations are responding not only to Friedman’s ideas, but also to Friedman’s way of teaching. He is an engaging man, even when sawing off your political limb.

Consequences, for those who care

At the end, I joke to the student next to me: "We came here believing in liberty, and we leave here believing that voters are ignoramuses."

"Something like that." he says.

I have added to my stock of ideas, but haven’t erased the old ones. I am older than Friedman and two decades older than any of the other attendees, and probably not subject to total conversions.

With that caveat, a few concluding thoughts.

First, on a priori versus consequentialist arguments: Each side paints a caricature of the other. The consequentialists think of the a priori side as being for principle of X, even if everyone starves because of X. The a priorifolks see the consequentialists as principle-free, deciding each question on the spur of the moment.

The reality is, everybody in this debate uses principles. And principles, even natural rights, are established with a mind to consequences. The difference is in the level of abstraction of the argument, and of the principle. One party wants an exclusive rule for a broad category; another wants separate rules for smaller categories, and to balance one rule against another.

If you incline to radicalism, you will go for few rules that apply broadly. But the ultimate end has got to be consequences: the good society, the fulfilling life, lots of smiling faces—something like that—and anyone who severs all connection between his political theory and worldly consequences may be dismissed as a fool.

I agree with Friedman about that.

My second thought is that in American political culture, "liberty" is a good and heroic word. It appears on the coins back to the 19th century. I am not going to share it with communists. There are cultural reasons not to. There are tactical reasons, and reasons of substance. The classical liberal conception of liberty, moralized though it is, does give the individual more control of his destiny than any socialist conception. In our political journals we may rename this "Exit," but I don’t ever expect to see Lady Liberty replaced by Ms. Exit.

My third thought is that Friedman is wrong about Charles Murray’s argument for individual responsibility. Libertarians need that argument. It is a convincing argument to many ordinary people. At the Liberty Fest convention in 2004 I buttonholed Murray and asked him about that argument, and he said, "That’s the one most people intuitively agree with. People who are not libertarians—that’s the one that moves them, especially those of us who had parents who were poor. They snap to that argument."

If libertarians do not assert that self-reliance is good for the individual and good for the society, why do they favor it?  Friedman’s argument about Voice and Exit will get us, for example, to publicly financed school vouchers (as Hirschman noted in 1970), but it is not clear he can take it beyond that.

My fourth thought is that one of the weakest links in capitalism is corporate governance, the relationship between shareholders, directors and managers. Here we find insider trading, self-dealing and golden parachutes, which, despite the hot denials of some libertarians, are obvious forms of corruption. This corruption arises from the weakness of Voice, not Exit. Score one for Friedman here.

My fifth thought, which is at the heart of all political arguments, is something subjective. It’s consequences, but the consequences you care about. "My axiom is happiness," Friedman says, and "happiness is whatever puts a smile on your face." (The happiness of contemplating a life’s achievement? The happiness of watching Cartoon Network?) Libertarians should be for capitalism, Friedman says, because the market can make more people smile than the government can.

Friedman’s argument for Exit rather than Voice is ingenious, and I like it. But it is not why I’m on the side I’m on. I am the man with the painting. That the political system allows me to keep what’s mine is a consequence that interests me. That most people would have higher disposable income under a system of property rights is nice. It means I don’t have to feel guilty about keeping my painting. But keeping what’s mine is the first thing.

Finally to Friedman.

Critics have assailed him for attacking their arguments for libertarianism, and because he publishes leftists who attack the entire position. In a letter to me, he writes:

"Thus far, every single libertarian who has commented in print on the project I’m engaged in has gotten so caught up in defending the familiar forms of libertarianism that they have left completely unexamined, and unremarked, the fact that I’m presenting a new and arguably defensible form of libertarianism.

"If the people in the free-market world keep getting the message that Critical Review’s project is ‘anti-libertarian,’ their lack of support will spell the end of that project, and of the incredible success it is having in persuading talented young people who would otherwise become leftist journalists, politicians and scholars."

I don’t agree with him on everything, but I never expected to. I agree on enough to wish him good fortune.

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Bruce Ramsey [mail] is a journalist in Seattle and editor of Defend America First and Salvos Against the New Deal. Post comments on the blog.