Wednesday, September 29, 2010

Find the cost of freedom

As part of a fascinating debate about measuring inequality, the generally excellent Interfluidity made the following remark that simply threw me for a loop:

In my view, freedom, not consumption, is the central distinction between rich and poor. It is odd that I should argue this point with libertarian Wilkinson.

I guess that I am somehow missing his point or else fundamentally misunderstanding what the word freedom means.

In the United States at least, we are all free to vote, speak, practice (or not practice) our religion, etc. etc. We are not all free to send our kids to expensive schools, but that's consumption. We are not all free to travel to other countries, but that's consumption.

Interfluidity only gives one concrete example, which throws me for another loop:

Indebtedness also entails a cost in freedom that we miss if we focus on consumption.

I think that, if anything, this is backwards. Having little to no collateral, the poor are not "free" to borrow money. The ability to take on debt is liberating. However, I would still argue that this shows up mainly in consumption.

I guess I could agree with a statement like "the poor are not free to smooth their consumption stream", but I'd still be quite conflicted about how exactly that is freedom.

I was bothering Mrs. Angus about this (she thinks I'm at least partly wrong, which means I probably am, but I honestly can't see it), and she brought up differences in life expectancy across identifiable groups, but again to me, that is an exceedingly tenuous use of the concept of freedom. Men are not free to live as long as women? (NB: that was NOT the example that Mrs. Angus used).

In Hansonian terms, I must recognize that Interfluidity, Mrs. Angus and Sen are all smart people, so I'm probably somehow wrong, but to me, freedom is nowhere near the central difference between the rich and the poor, at least not in the USA.

I have to go with Hemingway here people: The main difference between the rich and poor is that the rich have more money!

Does anyone want to go Kristofferson here: "Freedom's just another word for nothing left to lose".


tony Caporale said...

Kevin, Your discussion reminded me of this old Stigler paper.

Shawn said...

I thought stigler on that, too. But, I really didn't buy stigler's point in this paper...

Flop said...

It seems to make sense in a Lockian context: "to be free means to have property."

I can consume without being free, but I cannot be free without being able to consume. The rich in the US are thus free (while the rich in, say, Cuba or North Korea are not free), while the poor are not free, regardless of where they live.

Thus freedom would be primary to consumption.

doclawson said...

Welcome to my life, Kevin. I have to deal with lefties all the time who don't understand the basics of the positive v. negative freedom distinction at all.

Norman said...

I could see this if by freedom we meant the volume of the feasible set, which seems to be the point in the article. Perhaps the point is not what you *actually* consume, but what you *are capable of* consuming if you so choose?

It still seems awkward to call this 'freedom' instead of 'income.'

Ray Harvey said...

Freedom is fundamentally the absence of coercion. As such, the only way to negate freedom is through the instigation of aggression or force -- be that force direct, as in assault, or indirect, as in extortion. Quoting the 19th century political philosopher Auberon Herbert, whom Ayn Rand, among others, plagiarized:

"Nobody has the moral right to seek his own advantage by force. That is the one unalterable, inviolable condition of a true society. Whether we are many, or whether we are few, we must learn only to use the weapons of reason, discussion, and persuasion.... As long as men are willing to make use of force for their own ends, or to make use of fraud, which is only force in disguise, wearing a mask, and evading our consent, just as force with violence openly disregards it – so long we must use force to restrain force. That is the one and only one right employment of force ... force in the defense of the plain simple rights of property, in a world, of all the rights of self-ownership – force used defensively against force used aggressively" (Auberon Herbert, The Principles of Voluntaryism, 1897).

Freedom by definition is inherently unequal. The reason for this is that not everyone possesses the same degree of talent, skill, and most especially, ambition. (This point was dramatized rather persuasively in the late Kurt Vonnegut’s short story “Harrison Bergeron.”)

Humans left free naturally stratify, as several famous experiments have demonstrated. Freedom, thus, does not guarantee wealth. It does not guarantee success. It does not guarantee happiness, or health. Freedom is one thing and one thing only: the absence of compulsion. It simply means that you are left alone.

Freedom means no entitlements, no minimum guarantees, no help (or hindrance), no public education, no free health care, no drinking laws, no illegalization of drugs, and so on. That is why everyone is nominally for "freedom" -- until everyone finds out what freedom actually is. Then almost no one is for it.

Yet it is freedom and freedom alone that generates wealth, as this country's early history (and 20th Century Hong Kong) incontrovertibly demonstrate.

Anonymous said...

Yet it is freedom and freedom alone that generates wealth, as this country's early history (and 20th Century Hong Kong) incontrovertibly demonstrate.

I see. So the huge gains in wealth and GDP during the 20th century didn't really happen. The increasing quality of life for all Americans wasn't the result of "creating more wealth".

As for "this country's early history", are you referring to the part where a good portion of the wealth involved the enslavement of one class of people by another?