Friday, 9 March 2007

My Economic Philosophy - 1 (The Definition of Freedom)

(This is the first of n pieces on my emerging economic philosophy called Liquidism.)

I won't lay claim to the following piece of wisdom - I remember reading someone's article (dashed if I can remember who it was!) where he asked a most profound question:

"Which is the greater freedom? A freedom without restrictions, or a freedom that cannot be taken away?"

He was asking this in the context of a big argument among advocates of Free Software and Open Source. Though Free Software/Open Source software is "free" (and I mean freedom, not price), there are actually two very different kinds of freedom implied by the term, and the two major categories of software licences tend to reflect this dichotomy. One set of licenses grants users full rights to do anything at all that they want with the software. The other set allows them to do anything except make proprietary enhancements to it. That's because such a right will give a one-way benefit to those making the proprietary enhancements and always place the users and developers of the original, free version at a disadvantage.

[I won't discuss the software issue in greater detail because this is not a technical blog, but I can't help citing another brilliant document at this point. This one is a highly technical software critique, by the way, which may go over the heads of even techies (I had to read it a few times to understand it), but the best thing it did for me was introduce me to the phrase "usefully contrary trade-offs" (See the section titled "The API Fallacy").]

The two definitions of freedom we talked about make usefully contrary trade-offs in what they offer to recipients of such freedom, but my eyes didn't open until I read the question posed in this way.

A freedom without restrictions is a laissez-faire system. Anything goes, as long as fundamental rights are not violated. One side-effect of giving freedom to all players is that, through entirely legal means, some players will ultimately end up with much more power than others. Then those others will find that they have very little freedom, after all. They are left with only their fundamental rights, but without much economic freedom, they must pretty much agree to any conditions imposed on them, "of their own free will".

Contrast this with a situation where basic economic freedom is guaranteed to all, so that no one can be forced to do anything against their will. This goes beyond fundamental rights, by the way. Obviously, to protect such freedom, restrictions must be placed on all players to prevent an aggrandisement of power such as what would happen under a purely laissez-faire system. So some freedom is being denied to all, in order to preserve a minimum of freedom for all. By way of example, most countries have a Restrictive Trade Practices Act or the equivalent, which limits what market players can do, in a bid to protect the freedom of others.

That's the crux of the issue. Both systems claim to value freedom, but they are talking about subtly different concepts. One is a freedom without restrictions (with the risk of that freedom being taken away by other players through entirely legal means). The other is a freedom that cannot be taken away under any circumstances (with some consequent restrictions being placed at all times on what players can do).

We will return to this dichotomy again and again, because understanding the philosophy of Liquidism requires an understanding of these two usefully contrary trade-offs. Before you read further, think for a moment about the difference. Which do you think is the greater freedom?
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