Wednesday, June 18, 2008

The Critical and Fundamental Nature of Economic Freedom

It is an increasingly flimsy secret that I am a strong Free-Market Liberal, and a civil liberties nut. I have tried to keep my opinions on these topics out of Foggofwar--I had hoped Foggofwar would tie me down to a topic I was less feverishly passionate about, such that I would not be destroyed by the apathy of my audience--but the threads on that anchoring are beginning to unravel. So I will share this thought with you today.

I was walking back from work, listening to The Protomen as I do (quite literally) every day--they have a truly epic rock opera on the individual's stand against tyranny for the sake of safety. And I realised--the greatest losses of liberty occur when the government exploits a tragedy or fear, and whittles away at one's liberties for his own safety. I then realised that, in the realm of economics, the exact same process occurs. The US government has terrified its citizens of foreign countries (Japan in the 1980's and then China more recently), of robber barons, of outsourcing, of multinational corporations, of investment banks, of oil, of pharmaceuticals. Besides the fact that most of the true pain caused by any of these alleged ills comes when each exploits poor government regulation, the government's use of such ills to remove your civil liberties is an evil equal in scope and magnitude to tis use of the ills of terror to strip you of rights to privacy, speech, and justice within the courts.

Today, I will not touch on the pragmatic superiority of economic freedom to regulation (as this argument can stand alone without it, and also, that it is a more complicated subject that I understand less, and leaves a fair number of exceptions, like Tragedies of the Common, Freerider problems, imposed externalities, etc). I intend to argue only the following:

1) Economic Freedom (freedom of property) is a fundamental freedom, like speech, privacy, justice, etc. I intend to derive this from common law and moral intuition.

2) Economic Freedom is critical to the preservation of other freedoms, those which some might call more fundamental. I intend to derive this from a "tyrant government" hypothesis, and support it with examples from real life.


Economic Freedom is a fundamental freedom
. Some would argue differently. There are some freedoms as granted to us by the constitution that we may not consider fundamental rights of the individual simply for being an individual. For example, the right to bear arms (the 2nd amendment) may well not be a fundamental right, but is a means to an end of giving the American population a threat of force in the case that the federal government stops obeying the will of the people. We might say in this sense that the right to arms is not fundamental. So we must ask: is the freedom of your property a fundamental right, or a means to an end (that end almost certainly being a functional economy--something that Deng Xiaoping realized, despite a Communist-style denial of individual liberal civil liberties)?

In some ways, it seems we treat it as a means to an end. We certainly regulate the economy, hoping to achieve a universal outcome. But I am here, of course, to argue that such an approach is a violation of a fundamental human right.

So, the moral intuition. Let us agree for a moment that your right to not be punched on the street is a fundamental one, something we can all agree on. How does the government treat someone who punches you on the street? The government jails them. This is because the government uses force to enforce that others respect your fundamental rights. Now, let's say your jaw was broken. Will the government automatically cough up money to fix it? No; you would have to sue your assailant separately.

Now let us think of theft. I don't mean armed robbery, I mean a minimally offensive form of burglary--let us say that you leave your purse on a chair, and you get up for a moment to wave down a friend. If someone comes by and steals that purse, what does the government do to punish him? It jails him, just as if he had punched you in the face. Now, of course, the police would then re-deliver your purse to you. But if he lost it in a river? The government would not pay for your purse, you would have to sue your thief in court. Just like the punch to the face, treated exactly the same way. You do not simply sue a man for stealing from you and leave it at that, you throw him in jail, because he has violated a fundamental right to freedom of property.

I believe this comparison is a (rather simple) argument that it is morally intuitive that your property is yours on the same fundamental that your privacy, your expressions, and your body are yours--and those who violate the integrity of these things you possess are thrown in jail. Therefore, I believe that your property is an order-of-magnitude equally fundamental right to speech, property, and body integrity (if I had to rank the most fundamental rights, I believe others would certainly come before property).

I believe, equally importantly, that this is outlined rather clearly in the government's founding documents. The Declaration of Independence, of course, names "Live, Liberty, and Pursuit of Happiness" as the three basic rights of the individual, derived from "Life, Liberty, and Property" (from the First Continental Congress of 1774). In the Constitution, the government has the ability to levy taxes (but a very limited number of measures on how it can spend them, which it conveniently ignores for many expenditures), and regulate interstate commerce--but the Federalist Papers make it clear that this line is not designed to allow the government to force anyone to do what said government wants with their money--I am thus not arguing that most regulation is blatantly unconstitutional, but that it violates the spirit of the founding documents of this country.

Why is regulation a violation of this right? It does not take your money (like taxes, do, but let us call them a necessary evil), it simply restricts what you can do with it. But let us apply this to other realms: "You have freedom to speak your mind, except for criticizing the central government, talking about Falun Gong, talking about the Tiananmen Square Incident, or talking about Tibetan Independence." Sound familiar? Well, it's how the Chinese deal with their right to free speech. Just a few restrictions with what you can do with it, really. Mostly, you can talk about what you want. I think this example (I could make others) should make it clear that serious "restrictions" on your freedoms--especially those designed to protect you from your own bad decisions, or keep you from undermining the state, as most economic regulations are--mostly gut out the entire point of the freedom. If one does not consider the Chinese to have freedom of speech due to these few restrictions, then I do not think one can consider Americans to have freedom of property, due to serious limitations of how one can use his own property.

I thus believe that economic freedoms are fundamental, and that the United States undermines said freedoms.

Economic Freedom is critical to the preservation of other freedoms, those which some might call more fundamental
. Ironically, it is economic liberals (I believe FDR started this craze) that argue that freedoms mean nothing without the means to exercise them. What does this mean to me? Freedoms mean nothing without property. And property means nothing when the government can take it away on a whim--that is, if the government can simply snatch your property from you, then you have no freedoms. Why? Let us consider the case in which you criticize the wrong member of government. That member can use current regulatory laws to strip you of property--perhaps not as harsh a punishment as jailing, but certainly a tool to keep you in line, to keep you from mustering the courage to criticize. Hypothetically, the federal government could easily use its rather broad interpretation of eminent domain to force you to sell that house you like so much for sub-market if you forget to give a donation to your senator's campaign fund this year. Decent argument, you say, but where are the examples?

In 2002, a Mr. Cory Booker ran against Sharpe James for the position of Mayor of Newark (an excellent film, Street Fight, outlines the corruption of Mr. James in the battle). He was doing surprisingly well in the polls against a man who held the position for 16 years. But Mr. Booker started seeing a pattern--most companies that supported him openly were getting visits from the City Health Inspector, and being shut down. You see, it turns out that in Newark, as well as most cities, Health Codes are so thorough and superfluous that approximately every single company in the city is violating them in some way. Most of the time, inspectors say "you violated this, fix it," or ignore the trivial stuff. But when it is cast into the lawbooks, inspectors have the power to crush companies they do not like. In this 2002 election, that is exactly what happened. Mayor Sharpe James sent the City Health Inspector, over and over, to companies that held rallies for Booker, or even put his campaign poster in their window. Mr. James used the power of regulation to deny these companies their very right to speech, their right to dissent--but he did it in a completely legal way. In 2007, he was convicted of corruption, but it was for spending public funds on property for his mistress--nothing of his use of health inspections to take down those that dissented came up in the courts, because what he did was completely legal.

Other examples flourish. Richard Nixon, who started the EPA, reportedly used his very hard-line appointee for the position to coerce companies to give money to his campaign--campaign managers would mention that "Tricky Dick is putting a tough guy in charge of the EPA--you're going to want a friend in the Oval Office." Such extortion used the threat of economic punishment to violate the freedom of speech of the owners and operators of these companies--but despite Nixon's resignation for Watergate, such extortion was never brought upon him, because it was completely legal.

These are just a few examples of how the government can use--and uses--regulation to corrupt other freedoms of American citizens. Such behavior is unacceptable, and can only truly be stopped if the power of regulation is removed from the hands of these politicians. Thus, economic freedom is critical to the preservation of (arguably) more fundamental freedoms, like freedom of speech and dissent.

I thus ultimately argue that the excessive regulations imposed on the market of the United States not only violate a fundamental freedom of property for the American people, but also give the government, local and federal, the power to use economic pressure to tyrannize their opposition and coerce neutral parties into support, undermining not only free speech but the entire political process. Restrictions of economic freedom (which we gently call "regulation") create violations both in the freedom of property and in other freedoms more explicitly granted by the constitution.

Most of you reading this probably do not believe that, in general, security is more important than liberty. You do not believe in wiretapping to keep us safe from the terrorists, you do not believe in torture to learn more about terror operations, and you do not believe in a suspension of Habeas Corpus to "more rapidly" deal with terrorist threats. And these restrictions of your freedom address a much more serious threat than economic woes--terror threatens your life. Even if you do not agree with me that the free market is a pragmatically more optimal economic solution, it is inconsistent to believe that the government should not restrict your freedoms to protect your life from terrorists, and yet that the government has a mandate to restrict your freedoms to protect your job security from robber barons, multinational corporations, oil companies, and pharmaceutical companies. Such a stance (typically liberal) is at least as inconsistent as the opposite conservative one (I know you guys are out there, too). Even if you argue that the working class is in danger from the free hand of companies, it is not an excuse to restrict the freedom of Americans to use their property as they wish, just as threats from terror are not an excuse to restrict the freedom of Americans to use their speech as they wish.

And therefore, I believe it is intuitive and logical that economic freedom is a critical and fundamental freedom to the American people--fundamental in that it is something that should not be violated for its own sake, critical in that its violation leads to greater powers that the government can use to restrict your other freedoms.
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