To continue a barroom conversation ... a complete essay.
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Capitalist Freedom Is a Farce, by Rob Larson (Jacobin)
Milton Friedman was wrong. Capitalism doesn't foster freedom — it produces autocratic workplaces and tyrannical billionaires.
For all the changes of the last fifty years, the conservative classics have held their place surprisingly well. Milton Friedman’s Capitalism and Freedom and Friedrich Hayek’s The Road to Serfdom are still featured on Breitbart’s
But what then are the liberty and freedom that conservatives celebrate? And does capitalism advance or restrain them?
Freedom is regarded so highly because in a way it contains all the pleasures of life — it’s the ability to do what you want, within the limits of material conditions and a human lifespan. However you like to spend your time, whoever you love, whatever you like to work on or laugh at, all represent the tremendous value of social freedom.
According to John Stuart Mill, the basic principle of freedom was that “the only purpose for which power can be rightly exercised over any member of a civilized community, against his will, is to prevent harm to others.” The philosopher Isaiah Berlin later described this idea as “negative freedom,” or freedom from coercion by others. Berlin also suggested a “positive freedom” — the freedom to do different things, rather than freedom from the choices of others. Instead of asking, “What power centers control me,” positive freedom asks, “What am I free to do with the world’s opportunities and resources?”
The traditional philosophical view of capitalism is that while it does not provide a “positive freedom” to a fair share of the world’s production of goods, it provides a “negative freedom” from economic tyranny by leaving consumers and workers free to choose among different options. This is the view of Friedman and Hayek, and they insist it’s just the right kind of liberty. Many generations of capitalism’s defenders have agreed.
But any realistic review of the market economy reveals a different picture: capitalism limits both positive and negative freedom. It fosters a huge buildup of private power by concentrating individual wealth and entrenching corporate control over markets (along with mercilessly destroying environmental systems and thus the freedom of future generations). Capitalism not only fails to provide a “positive freedom” to a fair share of the economy — it fails to preserve “negative freedom” from the power plays of the 1 percent’s corporate property.
When GM and Ford decided to desert cities like Detroit and Flint for poorer towns and countries, they denied their former workforce any positive freedom to enjoy the industry’s enormous revenues — revenues the workers themselves had created. When Martin Shkreli’s pharmaceutical company hiked the price of a life-saving patented drug from $13.50 to $750, effectively snatching it away from disease sufferers, it drove dependent users into poverty or bankruptcy — a frightening restriction of negative freedom. When Amazon held a sweepstakes to see which North American city would be blessed with its new headquarters, and mayors across the continent threw billions in tax concessions at the company’s feet, Amazon wielded enormous power over the destiny of millions of people — laying bare how capitalist investment decisions can dramatically limit human liberty.
Capitalism’s defenders insist that, as Friedman and his wife Rose wrote in their book Free To Choose, “When you enter a store, no one forces you to buy. You are free to do so or go elsewhere. . . . You are free to choose.” They applied the same argument to workers: if you don’t like your job or career, find another one.
But other figures have seen the market’s alleged negative freedom quite differently. Consider Frederick Douglass, the escaped slave and self-taught intellectual. He concluded:
Experience demonstrates that there may be a slavery of wages only a little less galling and crushing in its effects than chattel slavery, and that this slavery of wages must go down with the other. . . . The man who has it in his power to say to a man, you must work the land for me for such wages as I choose to give, has a power of slavery over him as real, if not as complete, as he who compels toil under the lash. All that a man hath he will give for his life.
Here Douglass was suggesting that markets allow the exercise of unaccountable power — the enemy of freedom. But how could a free person be “enslaved” to wages, with so many different options for purchasing goods and finding different careers?
One answer, as critics of capitalism have pointed out for centuries, is that markets concentrate and often tend toward monopoly. From the well-known Gilded Age monopolies in oil and steel to the Silicon Valley tech giants of today, the dynamics of capitalism generate unbelievable concentrations of private power. And while antitrust law is intended to constrain such monopolies, as the eminent economist Alfred Chandler pointed out long ago, commenting on the 1890 Sherman Act, at best such statutes tend to “create oligopoly where monopoly existed and to prevent oligopoly from becoming monopoly.” Large agglomerations of unaccountable power — not the freedom-enhancing markets of Friedmanite fantasies — are the stuff of mature capitalism.
Douglass’s larger point, however, was that market economies treat basic necessities as commodities to be bought and sold, including food and shelter. Capitalism compels people to find work in labor markets, on such terms as they can find and subject to the tyrannical rule of jumped-up capitalist bullies, from Rockefeller to Bezos.
This is a radical infringement on positive and negative liberty. In order to get the rudiments of life, most people must submit to the utter dictatorship of the modern workplace — the day-to-day schedule changes, the dressings-down, the restrictions on freedom of speech. No wonder Douglass added: “As the laborer becomes more intelligent he will develop what capital he already possess — that is the power to organize and combine for its own protection.” Collective organization by workers — that bugaboo of capitalist partisans like Friedman — was the true guarantor of freedom.
But wait — Friedman and company say they have a trump card: “Since the household always has the alternative of producing directly for itself,” Friedman wrote in Capitalism and Freedom, “it need not enter into any exchange unless it benefits from it.” The power of “exit” restricts the potentially coercive power of the labor market.
Yet Friedman’s picture of the average family is so rosy it borders on the oblivious. What he refuses to recognize is that producing goods typically requires capital, the tools and equipment used to make products.
And capital is enormously concentrated. Inequality scholar Thomas Piketty has found that the richest 10 percent of US households own 70 percent of total national wealth, and the top 1 percent alone owns 35 percent. Crucially, corporate stock, which represents ownership of the productive capital that’s required to make goods and thus enable people to “produce for themselves,” is just as concentrated, with the richest 5 percent of households holding 67 percent of US equities, according to the Economic Policy Institute.
Somehow the Chicago School Nobelist fails to realize that the average individual — the individual around which his entire philosophy is allegedly based — is held hostage to the whims of those who own the productive economy, who can decide how wretched our work lives will be and which cities will get to have an economic future. From break times to ergonomics to maternity leave to acceptable workplace speech, the upper crust calls the shots and makes a mockery of “capitalist freedom.”
Liberals, for their part, are often prepared to push for more “positive freedom” in the form of entitlements to health care, education, and a safe environment. But democratic control over investment and production would represent a far more promising model for liberty, since achieving worker control would replace capitalism’s profit motive with solidarity — the drive to support and collaborate with our fellow men and women.
Doing so would end giant firms’ power to sweep the legs out from under a major city by relocating overseas, or to ruin their employees’ work lives by speeding up production or surveilling them. Decisions made by cooperatives of workers, elected and subject to recall by their colleagues, could be made in a matrix of social solidarity and thus significantly limit the power-mongering we’re used to from today’s corporate world.
We on the Left cannot surrender the language of freedom to the Right. Having a critical analysis of capitalist corporations is great, but socialists must also promote the transformative potential of socialist freedom — both to inspire the hard work needed to change the world and to give our struggles a north star.
In The Road to Serfdom, Hayek grudgingly laments that “the promise of greater freedom has become one of the most effective weapons of socialist propaganda.” Hear, hear!
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