Image credit. Following up from Competing for Liberty (4/6) - Two Functions of Law, and Liberty as Method vs Liberty as Blueprint, read more below on why liberty can never be the preserve of one school, faction, or an outstanding personality.
Crusoe-Freedom vs. Sociogenic Freedom
Freedom as Property Rights
Let us start off by
conceiving of the freedom of the INDIVIDUAL quite simply as the absence of personal or social restraints on his behaviour. Crusoe ... is a free man according to this definition ... [which] sees all limitations on a person's freedom as emanating from individual or collective actions by others.
(Demsetz, H., The Meaning of Freedom, p.286, emphasis added)
Now, let us try to extend the definition of
- freedom for a single person ("hermitage-liberty")
- a multi-person environment ("sociogenic liberty," i.e. liberty engendered by the interaction of more than one person).
To this purpose, Harold Demsetz argues:
[W]e may begin by basing the freedom of a society of persons on two conditions: (1) all rights to act are private, which means not to be interfered with by the state, and (2) all persons enjoy the same rights ... [F]or brevity, denote a society satisfying them as privatized. (p.286)
In order to arrive at a reasonably unambiguous model of freedom, we must also grant the assumption that freedom-via-privatization can be achieved without incurring any costs. Why this assumption is required to ensure non-ambiguity, we shall see in a moment.
In this model, all rights are simply assumed to be private, symmetric, known, and respected. No problems of defining and enforcing private rights arise. Each person ... is a Crusoe whose interactions with others are guided by impersonally set prices and whose domain of action is determined by his (acknowledged by others) wealth. The trade-offs available to him are determined by the non-collusive aggregate of wants and preferences, the given state of technology, and the relative abundance of resources. (p. 287)
The above is a neat summary of the mostly unacknowledged assumptions inherent in the politics-and-democracy-averse libertarian vision of markets-as-social-order, i.e. the idea that all human affairs can be settled in the market place, rather than requiring additional forms of reconciliation and enforcement other than those attainable by way of bilateral transactions.
In this model,
coercion in Hayek's sense [see Competing for Liberty (3/6) ... ] is absent ... since no one controls price or any other parameter of choice. Perfect decentralization also satisfies Stigler's real-wealth maximization criterion [people (i) have consistent tastes, (ii) make correct cost calculations, and (iii) take decisions that maximise utility]. (p. 287)
Assumed to prevail are
diseconomies of scale (and hence, dispersed ownership of substitutable resources), full information, zero transaction cost, and implicitly, costless privatization. The implied dispersal of these rights deprives any one of the ability to impose costs on others. Zero information and transaction costs imply real-wealth maximization ... Coercion is absent, real wealth is maximized, and rights are private. Perfect decentralization seems very much like a leading candidate for modelling the state of liberty. (p. 287)
But then Demsetz warns:
Extending the definition of freedom to a society of individuals is not straightforward. Individuals necessarily impinge on each other because resources are scarce ... Our [above] definition of individual freedom is inadequate to describe the freedom of a society of persons. (p. 286) [...]
Weaken the assumption that private rights are freely known and respected, and ambiguities immediately cloud the relationship between privatization and freedom. How private is a private rights system that is less than completely enforceable ... How secure must private rights be for us to conclude that we are dealing with a society of free persons? (p. 287)
Now it becomes more difficult to define a society of free persons unambiguously,
because of the potential trade-offs [that these questions] imply, trade-offs that would be unnecessary if privatization could be defined and secured costlessly. (p. 287) [...]
The connection between privatization and freedom, which can be given fairly clear meaning in the context of perfect decentralization, becomes opaque in the face of positive costs of privatization. Full privatization is not attainable in the face of positive implementation costs, and the degree of privatization that is attainable by persons free to choose is that which privatizes only to the degree that they judge efficient. (p. 289)
No matter whether you subscribe to the small government approach to liberty (with a night-watchman state) or whether you support the idea of a society of free persons
conceived of as relying strictly on private means to define and enforce rights [p. 288]
an important problem that both alternatives fail to resolve: that of defining a state of liberty in a regime of scare resources.
Given that there are costs of improving the reliability of private rights, what degree of certainty in the exercise of private rights characterizes this state? ... [E]ach person will consider what other goals must be sacrificed to improve the reliability of his private rights.
Suppose that persons who populate a society place a very low value on improving the reliability of private rights and a very high value on other goals. Is the state of liberty appropriately characterized by the level of privatization chosen in this society?
What values must a people attach to freedom before their chosen degree of privatization meets the requirements of a state of liberty? Defining the state of liberty in terms of private rights (defended privately or by the state) offers no answer to this question. (p. 288) - emphasis added.
Free choice, the very precondition of free markets, engenders political scarcity, i.e. different strategies that people apply to form an attitude toward freedom that appears to them morally, religiously, or otherwise ideologically desirable and economically and otherwise practically feasible.
This is the root cause of the natural contestability and faction-transcending competitiveness of liberty. See in particular the first post in the present series: Competing for Liberty (1/6) - Libertarian Paternalism and the Contestability of Freedom.