Free Enterprise

What is free enterprise? What role does it play in the economy and how does it relate to economic liberty? Why do different ways of interfering with free enterprise persist? What problems can interference with free enterprise cause? Under what circumstances is limiting the space for free enterprise justified?

The Birthright of Economic Liberty

Economic liberty—the right to earn an honest living—is one of the most important rights of free people. Over time, this right has been restricted by unnecessary laws and regulations. Legislators should govern from a presumption of liberty. Applied practically, this means legislators should presume individuals have the right to practice their chosen occupations free from government regulation unless and until systematic evidence shows this right must be curtailed to protect the public.

Rawls on Economic Liberty and the Choice of Systems of Social Cooperation

Classical liberals argue Rawls fails to give sufficient weight to economic liberty. This paper argues that these classical liberals are mistaken. We know that Rawls took seriously Marx’s critique that the merely formal equality guaranteed by the basic liberties principle was de facto undermined by the material inequality permitted by the difference principle. As a response to Marx, Rawls believed that his principles could be fully specified in only one of two forms: liberal market socialism or property-owning democracy. Each fully specified system disperses capital so as to bring it under democratic control. Furthermore, within each system, economic liberties are robustly protected in a stable way. The classical liberal critique misfires as it takes only a part of his view to be the whole and neglects the full specification of these principles in one or another of Rawls’s preferred social systems.

POLITY AND ECONOMY IN PLATO’S REPUBLIC

Although the architectonic of Plato’s best city is dazzling, some critics find its detailed prescriptions inimical to human freedom and well-being. Most notably, Karl Popper in The Open Society and its Enemies sees it as a proto-totalitarian recipe, choking all initiative and variety out of the citizenry. This essay does not directly respond to Popper’s critique but instead spotlights a strand in the dialogue that positions Plato as an advocate of regulatory relaxation and economic liberty to an extent otherwise unknown in the ancient world and by no means unopposed in ours. His contribution to liberal political economy thereby merits greater attention and respect.

Reason and Political Economy in Hume

This paper examines some connections between Hume’s epistemology in his Treatise of Human Nature and his political economy. I make three claims: (1) First, I argue that it is the development of Hume’s account of the faculty of reason in Book I of the Treatise that leads him to emphasize social science—including political economy—and the humanities over more abstract modes of intellectual inquiry. (2) Second, I argue that Hume’s conception of reason has implications for his methodology in political economy. His perception of human reason leads him to deploy a method of qualified generalization that emphasizes the by-and-large nature of theoretical statements. (3) Third, when it comes to policy matters, the method of qualified generalization in theory cashes out in terms of practical maxims. I suggest that two central maxims in Hume’s political economy derive from his views of the usefulness of economic liberty and the coordinating nature of the status quo.

The Free Market

Market-based economies outperform the alternative forms of economic organization on almost every measure. Nevertheless, this leaves open what the optimal degree of government regulation, government-provided social insurance, and macroeconomic adjustment is. Most economists seem to favor mostly, but not completely, free markets. Although regulation can in principle correct certain market failures, whether it will do so in practice depends in part on how pervasive and damaging corresponding government failures will be. Philosophers, unlike economists, tend to think that questions about the value of the free market are not settled entirely by examining how well free markets function. Some philosophers even claim that markets are intrinsically unjust. In their view, markets encourage wrongful exploitation, lead to excessive economic inequality, and tend to induce people to treat each other in inhumane ways. Among those philosophers who are more sanguine about markets, one major question concerns the moral status of economic liberty. Some philosophers, such as John Rawls, hold that economic liberty is purely of instrumental value. Citizens should be granted a significant degree of economic freedom only because this turns out, empirically, to produce good consequences. However, other philosophers, such as Robert Nozick and John Tomasi, argue that economic freedom is valuable in part for the same reasons that civil and political liberties are valuable—as a necessary means to respect citizens’ autonomy.