Freedom and CivilizationTags Free Markets
If men were like ants, there would be no interest in human freedom. If individual men, like ants, were uniform, interchangeable, devoid of specific personality traits of their own, then who would care whether they were free or not? Who, indeed, would care if they lived or died? The glory of the human race is the uniqueness of each individual, the fact that every person, though similar in many ways to others, possesses a completely individuated personality of his own. It is the fact of each person's uniqueness — the fact that no two people can be wholly interchangeable — that makes each and every man irreplaceable and that makes us care whether he lives or dies, whether he is happy or oppressed. And, finally, it is the fact that these unique personalities need freedom for their full development that constitutes one of the major arguments for a free society.
Perhaps a world exists somewhere where intelligent beings are fully formed in some sort of externally determined cages, with no need for internal learning or choices by the individual beings themselves. But man is necessarily in a different situation. Individual human beings are not born or fashioned with fully formed knowledge, values, goals, or personalities; they must each form their own values and goals, develop their personalities, and learn about themselves and the world around them. Every man must have freedom, must have the scope to form, test, and act upon his own choices, for any sort of development of his own personality to take place. He must, in short, be free in order that he may be fully human. In a sense, even the most frozen and totalitarian civilizations and societies have allowed at least a modicum of scope for individual choice and development. Even the most monolithic of despotisms have had to allow at least a bit of "space" for freedom of choice, if only within the interstices of societal rules. The freer the society, of course, the less has been the interference with individual actions, and the greater the scope for the development of each individual. The freer the society, then, the greater will be the variety and the diversity among men, for the more fully developed will be every man's uniquely individual personality. On the other hand, the more despotic the society, the more restrictions on the freedom of the individual, the more uniformity there will be among men and the less the diversity, and the less developed will be the unique personality of each and every man. In a profound sense, then, a despotic society prevents its members from being fully human.1
If freedom is a necessary condition for the full development of the individual, it is by no means the only requirement. Society itself must be sufficiently developed. No one, for example, can become a creative physicist on a desert island or in a primitive society. For, as an economy grows, the range of choice open to the producer and to the consumer proceeds to multiply greatly.2 Furthermore, only a society with a standard of living considerably higher than subsistence can afford to devote much of its resources to improving knowledge and to developing a myriad of goods and services above the level of brute subsistence. But there is another reason that full development of the creative powers of each individual cannot occur in a primitive or undeveloped society, and that is the necessity for a wide-ranging division of labor.
No one can fully develop his powers in any direction without engaging in specialization. The primitive tribesman or peasant, bound to an endless round of different tasks in order to maintain himself, could have no time or resources available to pursue any particular interest to the full. He had no room to specialize, to develop whatever field he was best at or in which he was most interested. Two hundred years ago, Adam Smith pointed out that the developing division of labor is a key to the advance of any economy above the most primitive level. A necessary condition for any sort of developed economy, the division of labor is also requisite to the development of any sort of civilized society. The philosopher, the scientist, the builder, the merchant — none could develop these skills or functions if he had had no scope for specialization. Furthermore, no individual who does not live in a society enjoying a wide range of division of labor can possibly employ his powers to the fullest. He cannot concentrate his powers in a field or discipline and advance that discipline and his own mental faculties. Without the opportunity to specialize in whatever he can do best, no person can develop his powers to the full; no man, then, could be fully human.
While a continuing and advancing division of labor is needed for a developed economy and society, the extent of such development at any given time limits the degree of specialization that any given economy can have. There is, therefore, no room for a physicist or a computer engineer on a primitive island; these skills would be premature within the context of that existing economy. As Adam Smith put it, "the division of labor is limited by the extent of the market." Economic and social development is therefore a mutually reinforcing process: the development of the market permits a wider division of labor, which in turn enables of further extension of the market.3
If the scope of the market and the extent of the division of labor are mutually reinforcing, so too are the division of labor and the diversity of individual interests and abilities among men. For just as an ever-greater division of labor is needed to give full scope to the abilities and powers of each individual, so does the existence of that very division depend upon the innate diversity of men. For there would be no scope at all for a division of labor if every person were uniform and interchangeable. (A further condition of the emergence of a division of labor is the variety of natural resources; specific land areas on the earth are also not interchangeable.) Furthermore, it soon became evident in the history of man that the market economy based on a division of labor was profoundly cooperative, and that such division enormously multiplied the productivity and hence the wealth of every person participating in the society. The economist Ludwig von Mises put the matter very clearly:
Historically division of labor originates in two facts of nature: the inequality of human abilities and the variety of the external conditions of human life on the earth. These two facts are really one: the diversity of Nature, which does not repeat itself but creates the universe in infinite, inexhaustible variety. ...
These two conditions … are indeed such as almost to force the division of labor on mankind. Old and young, men and women cooperate by making appropriate use of their various abilities. Here also is the germ of the geographical division of labor; man goes to the hunt and woman to the spring to fetch water. Had the strength and abilities of all individuals and the external conditions of production been everywhere equal the idea of division of labor could never have arisen. … No social life could have arisen among men of equal natural capacity in a world which was geographically uniform. ...
Once labor has been divided, the division itself exercises a differentiating influence. The fact that labor is divided makes possible further cultivation of individual talent and thus cooperation becomes more and more productive. Through cooperation men are able to achieve what would have been beyond them as individuals. ...
The greater productivity of work under the division of labor is a unifying influence. It leads men to regard each other as comrades in a joint struggle for welfare, rather than as competitors in a struggle for existence.4
Freedom, then, is needed for the development of the individual, and such development also depends upon the extent of the division of labor and the height of the standard of living. The developed economy makes room for, and encourages, an enormously greater specialization and flowering of the powers of the individual than can a primitive economy, and the greater the degree of such development, the greater the scope for each individual.
If freedom and the growth of the market are each important for the development of each individual and, therefore, to the flowering of diversity and individual differences, then so is there a casual connection between freedom and economic growth. For it is precisely freedom, the absence or limitation of interpersonal restrictions or interference, that sets the stage for economic growth and hence of the market economy and the developed division of labor. The Industrial Revolution and the corollary and consequent economic growth of the West were a product of its relative freedom for enterprise, for invention and innovation, for mobility and the advancement of labor. Compared to societies in other times and places, 18th and 19th-century Western Europe and the United States were marked by a far greater social and economic freedom — a freedom to move, invest, work, and produce — secure from much harassment and interference by government. Compared to the role of government elsewhere, its role in these centuries in the West was remarkably minimal.5
By allowing full scope for investment, mobility, the division of labor, creativity, and entrepreneurship, the free economy thereby creates the conditions for rapid economic development. It is freedom and the free market, as Adam Smith well pointed out, that develop the "wealth of nations." Thus, freedom leads to economic development, and both of these conditions in turn multiply individual development and the unfolding of the powers of the individual man. In two crucial ways, then, freedom is the root; only the free man can be fully individuated and, therefore, can be fully human.
If freedom leads to a widening division of labor, and the full scope of individual development, it leads also to a growing population. For just as the division of labor is limited by the extent of the market, so is total population limited by total production. One of the striking facts about the Industrial Revolution has been not only a great rise in the standard of living for everyone, but also the viability of such ample living standards for an enormously larger population. The land area of North America was able to support only a million or so Indians 500 years ago, and that at a barely subsistence level. Even if we wished to eliminate the division of labor, we could not do so without literally wiping out the vast majority of the current world population.
Excerpted from Freedom, Inequality, Primitivism, and the Division of Labor
- 1. On the interrelations between freedom, diversity, and the development of each individual, see the classic work of Wilhelm von Humboldt, The Limits of State Action (Cambridge University Press, 1969). On freedom as necessary for the development of individuality, see also Josiah Warren, Equitable Commerce (New York: Burt Franklin, 1965) and Stephen Pearl Andrews, The Science of Society (London: C. W. Daniel, 1913).
- 2. The economists Bauer and Yamey cogently define economic development as "the widening of the range of alternatives open to people as consumers and as producers." Peter T. Bauer and Basil S. Yamey, The Economics of Underdeveloped Countries (Cambridge: Cambridge University Press, 1957), p. 151.
- 3. See George J. Stigler, "The Division of Labor is Limited by the Extent of the Market," Journal of Political Economy (June, 1951), p. 193.
- 4. Ludwig von Mises, Socialism: An Economic and Sociological Analysis (New Haven: Yale University Press, 1951), pp. 292–95, p. 303.
- 5. Historians have been reminding us in recent decades that neither in England nor in the United States did government confine itself strictly to the ideal of laissez faire. True enough; but we must compare this era to the role of government in earlier — and later — days to see the significance of the difference. Thus, cf. Karl Wittfogel, Oriental Despotism (New Haven: Yale University Press, 1957).