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September 23, 2009
Neo-classical economics is premised on a specific conception of freedom: namely, the extent to which economic agents (investors, entrepreneurs, workers, and consumers) are free from interference or constraint from government regulations, taxes, collective bargaining, or other intrusions. This conception is a nominally neutral conception of “negative liberty”: that is, it measures the extent to which individual agents are not interfered with.
This conception reaches back to Hobbes and Locke, who both agree that a line must be drawn and a space sharply delineated where each individual can act unhindered according to their tastes, desires, and inclinations. This zone defines the sacrosanct space of personal liberty. But, they believe no society is possible without some authority, where the intended purpose of authority is to prevent collisions among the different ends and, thereby, to demarcate the boundaries where each person's zone of liberty begins and ends. Where Hobbes and Locke differ is the extent of the zone.
One problem with negative liberty is that it captures no positive rights which individuals may claim in the economic sphere – such as the right to employment, the right to a basic standard of living, or the right to organize a union and bargain collectively. Poverty, for instance, is not a violation of negative freedom but rather of positive freedom because a person in extreme poverty is not free to do many things.
The libertarian tendency within neoclassical economics place a high priority on freedoms, insofar as they advocate that a person has the right to pursue anything he likes provided he does not violate the constraints that restrain him from interfering in the legitimate activities of another. Such libertarian arguments place too much stress on processes and not enough stress on actual results or consequences in that giving such a priority to liberty may still lead to “the violation of substantive freedoms of individuals to achieve those things to which they have reason to attach great importance” such as avoidable mortality, being well nourished, healthy and educated. No one´s rights may be violated in a famine, for example, but people still suffer severe deprivations.
In emphasising the freedom to be able to do stipulated things, as against freedom from external restraint, libertarian theory is indifferent to the “substantive freedoms” people may or may not be able to exercise.Hence it has no real interest in happiness since individual freedom (to do whatsoever) is the chief desideratum.
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The Enlightenment concept of liberal democracy, in contrast to the classical Greek and others, is summarized in the slogan, Liberty, Equality, and Fraternity. Subsequent political thought and debate has revolved about balancing them. Equality is the axis. Equality implies that all persons have equal rights as persons. From the point of view of liberty, individual rights are emphasized. From the point of view of fraternity, society as a collective of equal persons is emphasized. This dichotomy is often encapsulated in the dictum that (individual) freedom entails (social) responsibility.
Determining the theoretical and practical boundary conditions of these concepts is the history of the political dialectic in liberal democracies. For example, to what degree is society a necessary condition for individual liberty? While this is a philosophical endeavor on one hand, it is an economic question on the other, in that theoretical economics feeds into political economy and political economy in to policy. Since there is no overarching economic theory with empirical standing, the issues are ultimately ideological. From the philosophical perspective, the question chiefly involves investigating criteria, contrasting competing ideologies and proposing alternative ideologies, and clarifying key concepts. The significant contribution that philosophy can make is clearing up confusion, identifying hidden assumptions, developing criteria, and distinguishing ideology from empirical truth-claims.