The Meaning of Freedom

A review of Rob Larson’s “Capitalism vs. Freedom”…

If you are locked in a small room against your will, and an official opens the door and tells you that you are free to leave, you will probably be pleased. If, however, you pass through door, only to find yourself in an endless series of additional small rooms, with no visible path towards an exit, you will probably not think much of your new “freedom.” It may even seem like something of a joke. “Freedom” is not just about being technically allowed to do something, but being meaningfully able to do it.

For some time now—about a couple of centuries—the left has argued that popular libertarian ideas of “freedom” are unsound. The libertarian idea is that so long as people are being left alone, they are “free.” The libertarian Murray Rothbard, for example, said freedom meant “being unmolested by other persons.” In response, the left has pointed out that being “unmolested” doesn’t mean very much if you aren’t actually able to do anything. If you are free to go anywhere you like, but the whole world is fenced-in private property, you are not actually able to go anywhere you like. In political philosophy, the ideas of “negative liberty” and “positive liberty” have arisen to describe these conceptions of freedom. Negative liberty is the freedom “from” interference, positive liberty the freedom “to” act.

Leftists have argued that both kinds of liberty are necessary: The government shouldn’t restrict your ability to live your life your own way, but it should also be possible to live life in many different ways. If everyone just has to work all the time, and cannot afford to quit their job, then they aren’t fully free. The economist Amartya Sen, for example, has become well-known for emphasizing the importance of growing people’s capacity to act, which means seeing issues like healthcare, food, and shelter as questions of freedom. As Sen days, “Sometimes the lack of substantive freedoms relates directly to economic poverty, which robs people of the freedom to satisfy hunger, or to achieve sufficient nutrition, or to obtain remedies for treatable illnesses, or the opportunity to be adequately clothed or sheltered, or to enjoy clean water or sanitary facilities.”

In his new book Capitalism vs. Freedom, economist Rob Larson further develops a “left” idea of freedom. But in doing so, he departs from the usual way of framing the “positive-negative liberty” debate. Often, the left says something like “Free market economies may provide ‘negative’ liberty, but they do not provide ‘positive’ liberty.” Larson says that they do neither. In fact, he says, capitalism both restricts people’s ability to act and acts upon them against their will.

The title of Larson’s book is a rejoinder to Milton Friedman, whose “classic” Capitalism and Freedom argued that the combination of “political freedom” (civil liberties) and economic liberty” (the free market) was the foundation of true liberty. Larson believes that this is baloney. Instead, he prefers the concept of freedom formulated by Mikhail Bakunin:

We are convinced that freedom without Socialism is privilege and injustice, and that Socialism without freedom is slavery and brutality.

Larson explains that capitalism does not satisfy either the “positive” or “negative” conceptions of liberty: People are not “free from” the arbitrary power of others, and they are not “free to” live their best lives because they’re locked in a ceaseless competitive struggle for survival.

Those who believe capitalism doesn’t subject us to the whims of the powerful, Larson says, have not taken a look around them. In fact, concentrated economic power is so great that it acts as a kind of private government. It’s quite simple: Because money confers social power, where there is great wealth inequality, there is great inequality of power. And where there is inequality of power, people aren’t free, because freedom involves not being subjected to power. Larson quotes the economist Robin Hahnel, who compares wealth inequality to a situation in which some people were allowed to vote more times than others. In the marketplace, “it is not one person one vote, but one dollar one vote,” and “people have vastly different numbers of dollar ballots to cast in market elections.”

Larson demonstrates what this actually means in practice. Jeff Bezos is not just far, far richer than nearly anybody else, but far, far more powerful than anyone else. Amazon’s market dominance means that Bezos has the power to create or destroy. And the company has not hesitated to use that power. Its infamous “Gazelle Project” tried to squeeze small publishers as much as possible, and one senior Amazon executive “took an almost sadistic delight in pressuring book publishers to give Amazon more favorable financial terms.” Publishers depended on Amazon, and knew it could crush them, so they had to give in, even if it meant they could barely break even on their products. Bezos said that “Amazon should approach these small publishers the way a cheetah would pursue a sickly gazelle.”

The Amazon behemoth is infamous, but Larson says that monopoly and oligopoly are everywhere now. All of the major eyeglasses retailers (LensCrafters, Sears Optical, Sunglass Hut, Pearle Vision) are part of the same company, and 90 percent of America’s domestic beer production is controlled by two companies. Google has a virtual monopoly on searches, and Facebook, YouTube, Apple, and Twitter each dominate their respective markets. This means they have total power to dictate terms. Current Affairs itself depends heavily on Facebook and Twitter to distribute its content. If either site were to ban our magazine, our business would almost certainly collapse overnight. These two companies hold our fate in their hands, and if they tell us what to do, we would have to seriously consider doing it. We remain in their favor, for now, but as Larson points out, a benevolent dictator is still a dictator.

Friedrich von Hayek, one of the foremost intellectual defenders of capitalism, wrote that “so long as property is divided among many owners, none of them acting independently has exclusive power to determine the income position of particular people.” Larson points out that when property is not divided among many owners, many of them do have the power to determine people’s income positions. He tracks the growth in the power of employers, and the declining power of labor unions, and shows the consequences. RCA, for example, simply moved its capital elsewhere whenever workers threatened to gain the upper hand. As Jefferson Cowie documented in Capital Moves:

Each of RCA’s plant relocations represents the corporation’s response to workers’ increasing sense of entitlement and control over investment in their community. Capital flight was a means of countering that control as the company sought out new reservoirs of controllable labor.

Ironically, the concentration of capital means that one of the great fears about socialism—that decisions about what to sell would be made by small, unelected groups of bureaucrats, rather than determined by competition—is increasingly coming true under capitalism. As Larson writes, “rather than the ‘planned economy’ of socialism that haunts Hayek’s dreams, it is corporate monopoly and oligopoly, and their industrial organizations, that are the main source of today’s central planning.” Instead of the government determining which speech will be heard, and which product features will be offered, the decisions are made by Mark Zuckerberg and “Jack,” who nobody ever voted for.

Larson takes us on a tour of the contemporary neoliberal nightmare, showing the various ways in which the poor remain disempowered and unfree while the wealthy live the “freest” lives in human history. He shows us the fruits of our unequal economy, from a 21,000 square foot hotel suite with its own hair salon, movie theater, and secret passageway to the “poor doors” installed in apartment building so that, in the words of an apartment broker, “the two social strata don’t have to meet.” Luxury towers are bought up by foreign oligarchs who treat them as investments, meaning that in New York City, some of the “most expensive residential buildings stand mostly dark lonesome and empty on the inside” (“Just like their owners!” Larson quips).

Larson also shows how “political freedom” and “economic freedom” cannot easily be separated. Many libertarians like to say that economic inequality is fine, so long as people are “equal under the law.” But because money is always going to be power, economic inequality will always translate into differences in political influence. Rupert Murdoch has a far greater capacity to set the political agenda than I do. Mick Mulvaney admitted openly that when he was a Congressman, money determined who got a hearing and who didn’t: “If you were a lobbyist who never gave us money, I didn’t talk to you. If you were a lobbyist who gave us money, I might talk to you.” That’s not just because American capitalism is a uniquely corrupt form of cronyism. It’s also because money is always going to be able to influence voters, and elected officials are always going to be dependent on voters’ votes.

The most depressing portion of Capitalism vs. Freedom is its chapter on the environment. As Larson has written for Current Affairs, one of the central threats capitalism poses to freedom comes from its failure to hold companies accountable for “externalities,” the costs their actions impose on other people. The freedom of future generations is being steadily destroyed by the “economically rational” actions of this generation. Even those who challenge the idea that humans are technically causing a “mass extinction” admit that humans have done extreme damage to the natural world:

[Wildlife] has decreased in abundance by as much as 50 percent since 1970. This cull is from both direct hunting and global-scale habitat destruction: almost half of the earth’s land has been converted to farmland. The oceans have endured a similar transformation in only the past few decades as the industrial might developed during World War II has been trained on the seas. Each year fishing trawlers plow an area of seafloor twice the size of the continental United States, obliterating the benthos. Gardens of corals and sponges hosting colorful sea life are reduced to furrowed, lifeless plains. What these trawlers have to show for all this destruction is the removal of up to 90 percent of all large ocean predators since 1950, including familiar staples of the dinner plate like cod, halibut, grouper, tuna, swordfish, marlin, and sharks. As just one slice of that devastation, 270,000 sharks are killed every single day, mostly for their tasteless fins, which end up as status symbol garnishes in the bowls of Chinese corporate power lunches… Inching up to mass extinction might be a little like inching up to the event horizon of a black hole—once you go over a certain line, a line that perhaps doesn’t even appear all that remarkable, all is lost.

If we are to talk meaningfully about human freedom, then, we have to talk about the consequences of industrial capitalism for the lives of the billions of people who have yet to be born. They aren’t free to enjoy the same richly diverse living planet that we have. And they aren’t free from the catastrophic climate effects that our actions have caused. If freedom is the exercise of power in ways that harm others, environmental destruction is an obvious abrogation of freedom. We exercise our power in ways that cause our children to inhabit a boiling and lifeless planet.

Fortunately, Larson does not end on a hopeless note. His final chapter discusses the ways that a pragmatic form of libertarian socialism can restore human freedom. He shows that socialism is not inherently “authoritarian,” and sketches an economic philosophy that values true human freedom rather than the highly limited “freedom” offered by both capitalist and totalitarian “socialist” societies. 

Rob Larson is a gifted economic writer who shuns jargon and explains concepts clearly and compellingly. Capitalism vs. Freedom is a useful book for introducing people to left theories of freedom, and it uses ample doses of humor to avoid leaving readers weary and depressed. The book collects lots of fascinating quotes and sources I had never read before, and Larson engages with the written work of free market theorists, presenting their arguments fairly and compellingly before flogging them mercilessly. Capitalism vs. Freedom helps us understand not only how power works in the real world, but how we might build a fairer society in which people had more meaningful control over their lives and workplaces. In other words: how we could finally be free. 

Capitalism vs. Freedom is available from Zero Books

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Correction: this article originally stated that a quote about a senior Amazon executive was a quote about Jeff Bezos himself. 

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