The Intellectual Defense of Liberty

All too often defenders of free market capitalism base their defense on the demonstration that free markets are more efficient in terms of resource allocation and hence leads to greater wealth than socialism and other forms of statism. While that is true, but as Professor Milton Friedman frequently pointed out, economic efficiency and greater wealth should be seen and praised as simply a side-benefit of free markets. The intellectual defense of free markets should focus on its moral superiority. Even if free markets were not more efficient and not an engine for growth, it is morally superior to other forms of human organization because it is rooted in voluntary peaceable relationships rather than force and coercion. It respects the sanctity of the individual.

The preservation of free market capitalism requires what philosopher David Kelley has called the entrepreneurial outlook on life that he in part describes as "a sense of self-ownership, a conviction that one's life is one's own, not something for which one must answer to some higher power." If we accept as first principle we each own ourselves, what constitutes just and unjust conduct is readily discovered and it does not require rocket science. Unjust conduct is simply any conduct that violates an individual's ownership rights in himself when he has not violated those same rights of others. The latter phrase - when he has not violated those same rights of others - allows for fines, imprisonment and execution when a person has infringed upon the ownership rights of others.

Therefore, acts such as murder, rape, and theft, whether done privately or collectively, are unjust because they violate private property. There is broad consensus that collective or government-sponsored murder and rape is unjust; however, government-sponsored theft is another matter. Theft, being defined as forcibly taking the rightful property of one for the benefit of another, has wide support in many societies that make the pretense of valuing personal liberty. That theft, euphemistically called income redistribution or transfers, is often defended by lofty phrases such as: assisting the poor, the elderly, distressed business, college students and other deserving segments of the society. But as Friedrich Hayek often admonished, "That freedom can be preserved only if it is treated as a supreme principle which must not be sacrificed for any particular advantage . . . ." Ultimately, the struggle to achieve and preserve freedom must take place in the habits, hearts and minds of men. Or, as admonished in the Constitution of the State of North Carolina: "The frequent reference to fundamental principles is absolutely necessary to preserve the blessings of liberty." It is moral principles that deliver economic efficiency and wealth, not the other way around. These moral principles or values are determined in the arena of civil society.

Not broadly appreciated is the fact that free markets produce greater wealth itself contributes to a more civilized society and civilized relationships. For most of mankind's existence, he has had to spend most of his time simply eking out a living. In pre-industrial society, and in many places today, the most optimistic scenario for the ordinary citizen was to be able eke out enough to meet his physical needs for another day. With the rise of capitalism and the concomitant rise in human productivity that yielded seemingly ceaseless economic progress, it was no longer necessary for mankind to spend his entire day simply providing for minimum physical needs. People were able to satisfy their physical needs with less and less time. This made it possible for people to have the time and other resources to develop spiritually and culturally. In other words, the rise of capitalism enabled the gradual extension of civilization to greater and greater numbers of people. More of them had more time available to read and become educated in the liberal arts and gain more knowledge about the world around them. The greater wealth enabled them the opportunity to attend the arts, afford recreation, and contemplate more fulfilling and interesting life activities and do other culturally enriching activities that were formerly within the purview of only the rich.

Prior to the rise of capitalism a primary means to great wealth was through looting, plundering and enslaving one’s fellow man With the rise of capitalism it became possible for people to become wealthy by serving their fellow man. Men like Henry Ford, John D. Rockefeller of yesteryear, and men like Bill Gates and Steve Jobs of today accumulated their great wealth by serving their fellow man. While these men accumulated huge fortunes, those fortunes pale in comparison to the sum of the benefits gained by the common man.

For individual freedom to be viable, it must be a part of the shared values of a society and there must be an institutional framework to preserve it against encroachments by majoratarian or government will. Constitutions and laws alone cannot guarantee the survival of personal freedom as is apparent where Western-type constitutions and laws were exported to countries not having a tradition of the values of individual freedom. U.S. articulation of the values of freedom are enunciated in our Declaration of Independence: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by the Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of happiness.” This value statement, serving such an important role in the rebellion against England and later the establishment of the Constitution of United States, was the outgrowth of libertarian ideas of thinkers like John Locke, Adam Smith, Wilhelm von Humboldt, Blackstone and others.

Even in societies with a tradition of the values of freedom, such as the United States, those values and tradition have proven an insufficient safeguard against encroachment by the state. Why? Compelling evidence suggests that a general atmosphere of personal freedom does not meet what might be considered as its stability conditions. As is often the case, political liberty is used to stifle economic liberty which in turn reduces political liberty.

The benefits of liberty and protected private property rights are often lost in discussions of how our blessings can be extended to the world’s poor nations. We often hear suggestions that it is natural resources, right population size, or geographic location that explains human betterment. The United States and Canada are population scarce and have a rich endowment of natural resources and are wealthy. However, if natural resources and population scarcity were adequate explanations of wealth, then one would expect that the resource rich and some of the population scarce countries on the continents of Africa and South America to be wealthy. Instead, Africa and South America are home to the world's poorest and most miserable people. A far better explanation of wealth has to do with cultural values that support liberty.

If we were to rank countries according to: (1) whether they are more or less free market (2) per capita income (3) ranking in International Amnesty's human rights protection index, we would find that those with a larger free market sector would tend also to be those with the higher per capita income and greater human rights protections. People in countries with larger amounts of economic freedom, such as the United States, Canada, Australia, Hong Kong, Japan and Taiwan are far richer and have greater human rights protections than people in countries with limited free markets such as Russia, Albania, China and most countries in Africa and South America.

Ideas on Liberty
FEE.35
For October 2007