Capitalism and freedom – Econlib

In Capitalism and freedomMilton Friedman warned that major government intervention in the economy would limit our freedom. Friedrich Hayek made a similar argument The road to serfdom.

I have always found this argument plausible, but sometimes I have wondered whether it is really convincing. Throughout my life, European governments as a percentage of GDP have been quite large, and yet Europe still seems relatively free, at least compared to some of the more authoritarian parts of the world. However, recent events have made me more receptive to the Friedman/Hayek position, especially the regulation of social media platforms. Here is David Rose:

If the government were to directly punish freedom of expression, it would provoke an immediate backlash among voters. Instead, the government works quietly behind the scenes like a mafia boss, essentially saying: “Nice social media platform you have there. It would be a shame if something happened to it.”

All the government has to do to undermine our right to free speech is to make it more expensive than otherwise. The more we have allowed the government to entangle itself in our lives, the greater the risk for us to speak out against the government through actions and inactions that we are unlikely to be able to prove are motivated by an attempt to shape or suppress our opinions. . . .

The root of the problem is not the ability of any particular court to deal sensibly with a particular crime, but the ability of the government to impose costs without accountability.

People often cite China as an exception to the hypothesis that capitalism promotes freedom. But is that so? Over the past 40 years:

1. China has regressed on freedom of speech (and speech was far from free in 1984).

2. Chinese people are freer to have more than one child.

3. Chinese people are freer to live where they want. (“Hukou” restrictions remain, but are weakening every year.)

4. Chinese people have more freedom to date whoever they want. (Gays are no longer arrested.)

5. There is much more economic freedom to start businesses, travel and pursue different professions.

I’m certainly not claiming that China is a good example of capitalism that promotes freedom. It’s not. But notice that even the worst case of Friedman’s hypothesis has one quoted by almost every opponent of neoliberalismcapitalism’s effect on freedom is ambiguous: gains in some areas and losses in others.