The Centrality of Liberty

There are two good reasons that liberty should be central in any discussion of public policy. First, freedom is the best candidate available to be the central goal of social policy. Second, any sensible policy discussion recognizes that emphasizing liberty provides a needed safeguard against the excesses of government power. While a philosophical discussion of natural rights gives us little clear guidance on what to do about regulations, like the minimum wage, these two central reasons for valuing freedom point to a pretty clear policy conclusion against such regulations.

Why should freedom by the primary goal of government? There are really two alternatives for the proper objective of government: liberty and everything else. The advocates of liberty argue that individuals, not the state, should be the primary arbiter of how to live their lives. They argue that private individuals make better decisions than governments and that individual decision-making is inherently good. This view does not give any clear answers about tradeoffs between the freedoms of two people, but it does put liberty first. The alternative view is that the state should select objectives, like psychological well-being, longevity, or racial purity, and push the population towards those objectives. The case for liberty is as much a case against these alternatives. The case for liberty is best made by emphasizing the imperfections of governmental decision making, and a historical track record where liberal democracies have far out-performed the alternatives.

Accepting that the goal of government is to maximize the range of choices available to private individuals tells us little about cases where there is a tradeoff between two peoples’ choices. But regulations like the minimum wage are not problematic because they increase one individual’s choices at the expense of another, but because they redistribute choices badly. If the goal is to take money from some people and give it to others, then standard tax-based redistribution accomplishes this more effectively, without restricting the ability to freely contract and to employ less skilled workers. The minimum wage is bad not because it redistributes choices across people, but because it reduces freedom for everyone, at least relative to a better redistribution system.

The second reason to treasure liberty is the need to be vigilant against the abuse of power. Every expanded regulation provides yet another opportunity for the state to put special interests ahead of the public. Every increase in redistribution will be accompanied by inefficiency and inequity. Without a clear and compelling reason to increase the coercive

acts of government, our bias should be against more intervention. It is hard to see why the need for the minimum wage is so vital that it leaps over this threshold, especially when other forms of redistribution exist.

Whether or not one can spin philosophical justifications for this type of regulation, it is hard to see how this is a sensible way to redistribute income that puts the burden fairly on all taxpayers, instead of on the employers of less skilled labor and the consumers who buy their products.

Also from This Issue

Lead Essay

  • Economics and the Distinction between Voluntary and Coercive Action by Daniel B. Klein

    George Mason University’s Daniel Klein begins this month’s lead essay by presenting evidence from a poll of economists showing that more than half of those who are in favor of a minimum wage generally don’t think it is coercive, suggesting that judgments about what is coercive or voluntary underpin professional opinion about economic policy. If so, Klein asks, shouldn’t economists address the question of coercion more directly? Klein argues that we should treat non-coercion as a maxim to be followed “ninety-something percent of the time,” which allows for the legitimacy of coercion under certain conditions. Economists may then ask: “When should we endorse the liberty maxim and when not?” in a principled way. Klein draws on ideas from F.A. Hayek and Adam Smith to argue for the centrality of the distinction between voluntary and coercive action in the ordinary practice of economic inquiry, and to urge a renewed emphasis on the role of liberty in economic theory.

Response Essays

  • Coercion as a Political Concept by Liam Murphy

    NYU philosopher and legal theorist Liam Murphy responds to Daniel Klein’s lead essay by questioning the relevance of the general concept of coercion to the defense of market institutions and disputing Klein’s particular characterization of coercion. Murphy observes that arguments in defense of markets generally appeal to pre-institutional rights or a conception of good consequences. In neither case does the idea of coercion play a key role. Further, Murphy suggests that Klein’s particular account of coercion is loaded with contestable moral baggage. But, Murphy writes, “The concept of coercion … is deeply indeterminate, with disagreement about correct usage tracking exactly the fault lines that have political significance; so there is simply no right answer to such questions as whether a labor contract for below a minimum wage, or its prohibition, is coercive.”

  • Coercive Regulation and the Balance of Freedom by Edward Glaeser

    Harvard economist Edward Glaeser agrees with Dan Klein that economic regulations, such as minimum wage laws, are coercive, and that this ought to give us pause. “For millenia, governments have abused their control over the tools of violence,” Glaeser writes. “The historical track record insists that we treat any governmental intervention warily.” However, that does not rule out coercion. “The ultimate job of the state is to increase the range of options available to its citizens,” Glaeser maintains, and well-targeted coercion can increase total freedom in this sense. “Certainly, redistribution reduces the freedom of the taxpayer but it increases the options of the recipient of governmental largesse,” Glaeser says. He goes on to argue that laws that restrict the liberty to contract, such as the minimum wage, generally are not freedom-enhancing overall and tempt government abuse.

  • Voluntary and Coercive Action: A Key Distinction in the Overall System of Liberty by Richard A. Epstein

    In his reply, University of Chicago law and economics guru Richard A. Epstein attempts to lay out an account of “justified coercion.” Taking the minimum wage as an example, Epstein sets forth and then rejects several grounds on which the minimum wage may be seen as non-coercive. He then sets forth and rejects several arguments that might justify the coercion in economic regulations such as the minimum wage. According to Espstein, state coercion in support of market institutions “is justified because it expands the envelope for gains from trade through voluntary exchange.” In general, coercion may be justified when “it is to the long-term advantage of all,” but detailed and systematic analysis of particular institutions – such as the one Epstein provides for the minimum wage – is required to establish when this is, and is not, the case.

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