Amartya Sen, the Economics Nobel Prize winner in 1998, said this in defense of free-market economics:
"To be generically against markets would be as odd as being generically against conversations between people (even though some conversations are clearly foul and cause problems for others—or even for the conversationalists themselves.) The freedom to exchange words, goods or gifts doesn’t need defensive justification in terms of their favorable but distant effects; they are a part of the way human beings in society live and interact with each other (unless stopped by regulation or fiat)"
A year ago, your correspondent was struggling with questions posed by his American Studies class: why haven't the mechanisms of the free-market narrowed the gap between many people's perceived efficacy and their actual efficacy. Asked, in two separate and lengthy thesis, to chart this discrepancy in efficacy from 1865 to 1920 and 1945 to 2008, respectively, among the top quintile earners, the middle class, the industrial working class, blacks, and women, I was disturbed to discover that each group believed that it had absolute socioeconomic mobility despite statistical evidence to the contrary.
A strong proponent of Milton Friedman's ideas, Free to Choose sat on my desk as Nichomachean Ethics adorns the desks of others. Friedman sat next to John Milton's Paradise Lost and Smith's Wealth of Nations. One day, I came across a warning in Milton:
“Unjustly though deprav’st [Liberty] with the name of servitude, to serve whom God ordains, or Nature; God and Nature bid the same when he who rules worthiest, and excels them whom he governs. This is servitude to serve th’ unwise, or him who hath rebell’d against his worthier, as thine now serve thee, thyself not free, but to thyself enthralled”
Milton, Book V of Paradise Lost, calls attention to how Satan has twisted the meaning of Liberty for his own ends. Have those who preach laissez-faire capitalism in the name of Liberty done the same? Milton Friedman argued for Liberty, saying that government intervention would, more likely than not, obstruct liberty.
Sen calls that "negative liberty" or freedom from obstructed action. What Sen calls for is "positive liberty" or freedom to reach one's potential. Joe Stiglitz, another Nobel winner, once described the macroeconomic situation of many African countries as existing in a poverty trap; perhaps in a micro examination, many of the members of the lowest or two lowest quintiles are also in a trap. Without good education, the lowest members may have the right to participate in the economy (negative freedom), but they do not have the ability to do so (positive freedom).
Until yesterday, I did not know of Sen and did not know of his Social Choice school of economics, a rather obscure branch of the study. But keeping both Miltons in mind, we ought to be rigorous with our definition of Liberty, distinguishing between the potential efficacy of all members of society and their actual efficacy.
Your correspondent is currently formulating his thoughts on education, as promised in the Darwinian Institutionalism post some days ago. I will approach that subject with Sen implicitly in mind. Perfect competition is a Platonic ideal that free markets are supposed to aspire to; in PC, the more actors (implicitly well-informed and educated enough to form nuanced analysis) the better. Sen's micro argument, taken to the macro level, would argue that a society is not at its most competitive and therefore productive if many of its members do not have positive freedom.
"To be generically against markets would be as odd as being generically against conversations between people (even though some conversations are clearly foul and cause problems for others—or even for the conversationalists themselves.) The freedom to exchange words, goods or gifts doesn’t need defensive justification in terms of their favorable but distant effects; they are a part of the way human beings in society live and interact with each other (unless stopped by regulation or fiat)"
A year ago, your correspondent was struggling with questions posed by his American Studies class: why haven't the mechanisms of the free-market narrowed the gap between many people's perceived efficacy and their actual efficacy. Asked, in two separate and lengthy thesis, to chart this discrepancy in efficacy from 1865 to 1920 and 1945 to 2008, respectively, among the top quintile earners, the middle class, the industrial working class, blacks, and women, I was disturbed to discover that each group believed that it had absolute socioeconomic mobility despite statistical evidence to the contrary.
A strong proponent of Milton Friedman's ideas, Free to Choose sat on my desk as Nichomachean Ethics adorns the desks of others. Friedman sat next to John Milton's Paradise Lost and Smith's Wealth of Nations. One day, I came across a warning in Milton:
“Unjustly though deprav’st [Liberty] with the name of servitude, to serve whom God ordains, or Nature; God and Nature bid the same when he who rules worthiest, and excels them whom he governs. This is servitude to serve th’ unwise, or him who hath rebell’d against his worthier, as thine now serve thee, thyself not free, but to thyself enthralled”
Milton, Book V of Paradise Lost, calls attention to how Satan has twisted the meaning of Liberty for his own ends. Have those who preach laissez-faire capitalism in the name of Liberty done the same? Milton Friedman argued for Liberty, saying that government intervention would, more likely than not, obstruct liberty.
Sen calls that "negative liberty" or freedom from obstructed action. What Sen calls for is "positive liberty" or freedom to reach one's potential. Joe Stiglitz, another Nobel winner, once described the macroeconomic situation of many African countries as existing in a poverty trap; perhaps in a micro examination, many of the members of the lowest or two lowest quintiles are also in a trap. Without good education, the lowest members may have the right to participate in the economy (negative freedom), but they do not have the ability to do so (positive freedom).
Until yesterday, I did not know of Sen and did not know of his Social Choice school of economics, a rather obscure branch of the study. But keeping both Miltons in mind, we ought to be rigorous with our definition of Liberty, distinguishing between the potential efficacy of all members of society and their actual efficacy.
Your correspondent is currently formulating his thoughts on education, as promised in the Darwinian Institutionalism post some days ago. I will approach that subject with Sen implicitly in mind. Perfect competition is a Platonic ideal that free markets are supposed to aspire to; in PC, the more actors (implicitly well-informed and educated enough to form nuanced analysis) the better. Sen's micro argument, taken to the macro level, would argue that a society is not at its most competitive and therefore productive if many of its members do not have positive freedom.
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skewz
Chris MacDonald
Kerry Lauerman
Joan Walsh
Salon.com
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