Libertarians Don’t Understand Liberty
I just finished reading Milton Friedman’s Capitalism and Freedom, and I was left with two impressions. The first was awe at his penetrating insight into economic questions, and the second was awe at his astounding political naivete. Obviously the world to which he was responding was quite different than the one in which we live today, and so one of his major fixations is demonstrating the way in which the market was superior to a planned economy. His basic proposition is the markets’ superiority rests on “the elementary yet frequently denied proposition that both parties to an economic transaction benefit from it provided the transaction is bilaterally voluntary and informed“. Which is all very good as well as it goes, and yet when it comes to the big issues in life those propositions so often do not hold true.
Healthcare in America should stand as the ultimate refutation to Friedman’s conception of freedom. Receiving employer-provided healthcare formally fits Friedman’s distinction fully – it is a bilaterally voluntary and informed transaction – employers are free not to offer it, employees are free not to demand it, and it is set by a voluntary and terminable contract. But of course, if you actually need health insurance than it’s not an option. If you or a family member has a pre-existing condition of any kind, you cannot affordably purchase health insurance on the open market. Your practical career freedom is very low – you must work at a stable job at a large employer. No startups or consulting for you, and if you are fired your health is suddenly in real danger. Employer-provided healthcare may formally appear like a voluntary contract, but the sole provision of healthcare through employers leads to very real restrictions on the freedom of employees.
This freedom represents what Isaiah Berlin called positive liberty, the freedom to make one’s own decisions. It appears many other places – the freedom to get a decent education, the freedom to not have to worry that the vagaries of the stock market will destroy ones’ retirement income, and the freedom to not worry that a natural disaster will leave one completely destitute. Yet this freedom appears nowhere in Milton Friedman’s analysis. It is such a cramped and oddly detached analysis of freedom that it appears more suited for a laboratory than for real life.
This is, I think, why libertarianism is so popular among the wealthy, white, rich men who populate Silicon Valley. They are so richly endowed with positive freedom that they never consider how hard it must be to lack it.