Friday, October 20, 2006
This is the third in a series of posts on theories that tie property rights to individual freedom. The first two posts discussed work by Charles Lindblom and Charles Reich, neither of whom can be described as pro-market or libertarian. Both descriptions fit the subject of today's post, Milton Friedman (though Friedman would prefer "liberal" to "libertarian"). The first chapter of Friedman's Capitalism and Freedom (1962) contains one of the classic articulations of a liberal theory of property. Like Lindblom and Reich, Friedman discussed the role of property in securing an individual's ability to act independently of the state:
In order for men to advocate anything, they must in the first place be able to earn a living. This already raises a problem in a socialist society, since all jobs are under the direct control of political authorities. (At 16).
For advocacy of capitalism to mean anything, the proponents must be able to finance their cause – to hold public meetings, publish pamphlets, buy radio time, issue newspapers and magazines, and so on. How could they raise the funds? There might and probably would be men in the socialist society with large incomes, perhaps even large capital sums in the form of government bonds and the like, but these would of necessity be high public officials. (At 17).
A key additional element of Friedman's theory was the observation that property promotes political freedom by separating economic power from political power:
Viewed as a means to the end of political freedom, economic arrangements are important because of their effect on the concentration or dispersion of power. The kind of economic organization that provides economic freedom directly, namely, competitive capitalism, also promotes political freedom because it separates economic power from political power and in this way enables the one to offset the other. (At 9).
Political freedom means the absence of coercion of a man by his fellow men. The fundamental threat to freedom is power to coerce, be it in the hands of a monarch, a dictator, an oligarchy, or a momentary majority. The preservation of freedom requires the elimination of such concentration of power to the fullest possible extent and the dispersal and distribution of whatever power cannot be eliminated – a system of checks and balances. By removing the organization of economic activity from the control of political authority, the market eliminates this source of coercive power. It enables economic strength to check the political power rather than be a reinforcement. (At 15).
Next up: Hayek.
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