Social democracy and freedom

In 1962, Milton Friedman famously argued that liberal capitalism and political freedom go together, they are mutually reinforcing. Nowadays, for a lot of us Milton Friedman has become a kind of bogeyman, the false prophet of a catastrophic social experiment that has, after decades, left us immiserated and divided. But I have some sympathy. The basic structure of the argument is that however democratic a powerful central government might purport to be, it is a danger to freedom. Decentralized power plus change enacted via mutually beneficial exchange are more likely to produce positive progress and — perhaps more importantly — are less likely to feature some powerful class that, through error or malevolence, harms or abridges the rights and liberties of disfavored groups. Friedman writes:

Viewed as a means to the end of political freedom, economic arrangements are important because of their effect on the concentration or dispersion of power. The kind of economic organization that provides economic freedom directly, namely, competitive capitalism, also promotes political freedom because it separates economic power from political power and in this way enables the one to offset the other.

Capitalism and Freedom was written in the heyday of the Kuznets curve, which posited that extreme inequality was self-correcting and had largely already self-corrected in modern economies. Friedman celebrated moderate inequality, on the theory that a world with many captains of industry would have many and diverse philanthropists to whom partisans of unpopular causes could make their case and find sponsorship. The logic of the argument rests on the notion that capitalism preserves political diversity that cuts across the structure of wealth and power, so that any partisan, regardless of her politics, could find communities willing and able to celebrate or at least tolerate her, within which she could secure some livelihood and position.

There is an obvious critique of this from the left. Political diversity won’t cut across structures of wealth and power evenly. Humans, including fabulously wealthy humans, are quirky, so sure, there’ll be some Friedrich Engelses and Nick Hanauers. But the winners of an economic game by and large will promote views that celebrate and entrench the game they continually win. Quantities (of money) matter, and there’s lots more scope to make a living at Mercatus than at People’s Policy Project, for partisans willing to adjust their politics accordingly. Capitalism, then, buys the appearance of political diversity (every voice is in the room!), but puts a fat thumb on the scale for the interests of the wealthy and powerful.

Interestingly, though, despite (really because of) decades of Friedman-justified nonintervention into the operation of capitalist markets, the most strident complaints of nonfreedom now come from not from the economic left but the social right. Is “cancel culture” tyranny or itself free speech? Bret Stephens is a fun figure in this debate, because he has a history both of trying to get people disciplined for their speech and of complaining that conformism to the doctrines of “woke” social liberalism are grave threats to freedom of expression. Here’s Stephens today:

The more serious problem today comes from the left: from liberal elites who, when tested, lack the courage of their liberal convictions; from so-called progressives whose core convictions were never liberal to begin with; from administrative types at nonprofits and corporations who, with only vague convictions of their own, don’t want to be on the wrong side of a P.R. headache.

This has been the great cultural story of the last few years. It is typified by incidents such as The New Yorker’s David Remnick thinking it would be a good idea to interview Steve Bannon for the magazine’s annual festival — until a Twitter mob and some members of his own staff decided otherwise. Or by The Washington Post devoting 3,000 words to destroying the life of a private person of no particular note because in 2018 she wore blackface, with ironic intent, at a Halloween party. Or by big corporations pulling ads from Facebook while demanding the company do more to censor forms of speech they deem impermissible.

These stories matter because an idea is at risk. That’s the idea that people who cannot speak freely will not be able to think clearly, and that no society can long flourish when contrarians are treated as heretics.

That idea, old as Socrates, formerly had powerful institutional defenders, especially in the form of universities, news media, book publishers, free-speech groups and major philanthropies.

But those defenders are, on account of one excuse or another, capitulating to people who claim free speech for themselves (but not for others), who believe all the old patriarchal hierarchies must go (so that new “intersectional” hierarchies may arise), who are in a perpetual fervor to rewrite the past (all the better to control the future), and who demand cringing public apologies from those who have sinned against an ever-more radical ideological standard (while those apologies won’t save them from being fired).

David Karpf (whom Stephens tried to have disciplined for a mean joke) responds on Twitter:

This is a vision of free speech that collapses under minimal Socratic scrutiny. It’s a Freedom of speech that demands a safe space from all counterspeech — free speech for me but not for thee.

FedEx telling Dan Snyder to change the damn name [of the Washington Redskins] IS speech.

People pressuring FedEx to tell Snyder this are engaging in speech as well.

Protest actions are acts of speech, even if those protest actions are aimed at people who Bret Stephens identifies with.

That’s the rotten core of every “campus cancel culture” controversy.

You have the right to speak. You don’t have a right to a (paid) platform. And if people think your speech is bad, offensive, harmful, or dangerous, then THEY have just as much right to say speak as well.

This is an insight so mundane that it barely deserves mentioning. Free speech applies to everyone, even people who criticize Bret.

So who is right here? I say Milton Friedman is. “Free speech” stops being real, stops being a practicable ideal, once the consequences of unpopular expression are so great you’ll be banished from the communities you value and unable to earn a decent living. Both the woke and their discontents should be able to speak their piece, both a controversial talk and the angry protest it accumulates are important components of free speech. We want a society where — in practice, not just as a formal, legalistic matter — the public sphere can accommodate a wide range of expression, some of which each of us will find abhorrent.

But Friedman’s conjecture that capitalism plus a light-touch state would be an effective way to ensure this state of affairs was wrong. Because it was never really “capitalism”, in his argument, that protected political freedom. It was decentralization, a broad distribution of wealth and power largely uncorrelated with political commitments. And what we’ve discovered (as any Marxist would have predicted) is that laissez-faire-ish capitalism doesn’t deliver that at all. Instead it delivers accumulation and scarcity, both at individual and institutional levels. At an individual level, the Kuznet’s curve that was fashionable when Friedman wrote, that suggested inequality was a problem of the past under industrial capitalism, has completely broken down. We are back in the Gilded Age, or worse, in terms of inequality. If the consequence of unpopular speech is that a person falls from the upper-middle to something below the middle of the income distribution, that would have been tolerable in 1962 in a way it is not tolerable now. At an institutional level, the economy has consolidated since 1962. The elites who manage the winners of that consolidation and who benefit from entrenched monopoly have of necessity developed a strategies to defend the winner-take-all economy from democratic contestation. One strategy contemporary robber barrons have converged upon is to rebrand themselves as “progressive”, as forces of social good. They cynically and collectively choose what qualifies as virtuous in social affairs, and they garb themselves and give philanthropically to immunize themselves from attacks on their dominant and entrenched economic positions. Today it is Black Lives Matter. A decade ago it was “transformation of the world economy lift[ing] four people in China and India out of poverty and into the middle class” for every American it kicks out, which doesn’t play well anymore in Western democracies. It changes with the wind, Davos is like a fashion magazine. But at any given moment, there must be great and virtuous causes whose pursuit is not antithetical to continued domination by the already dominant. Dominant firms will brook no public dissent from the moment’s religion, as preaching that religion is essential to bewildering and misdirecting an immiserated public whose democratic power could, in theory, undo them.

It’s a bit, um, rich that Bret Stephens would complain about this from his perch at The New York Times, whose dominance of print news is unprecedented and growing. But perhaps it is understandable that he feels the chill. Elite positions like his are an ever-shrinking a game of musical chairs, lots of us would love his life and he wouldn’t love ours. If he (like his editor) were kicked out in a great public scandal, it’s not at all clear that he would land so well. Among elites, the stakes of this game of dangerous speech and righteous counterspeech have become enormously high. (Just ask Steve Salaita, Bret.) You can lose the sort of incomes most of us will never enjoy, and the sort of social place most of us will never experience, if your friends decide they have to sacrifice you in the name of the corporate virtue upon which you collectively depend.

So for those of us who really favor free expression, what is to be done? It’s not enough to adopt a legalistic, First Amendment version that shrugs when private actors censor, ban, and risk people’s livelihoods. It’s pure surrender to defer to Popper’s “paradox of tolerance” and say that it’s cool there’s an ever-shifting set of boundaries beyond which expression and therefore eventually thought can legitimately be punished, because some ideas are too dangerous, free society is too weak to tolerate them.

We should return to the wisdom of Milton Friedman, that political freedom is a structural matter, inextricable from economic arrangements. Friedman was wrong that light-touch capitalism would durably enshrine and protect the kind of structure conducive to political freedom (ht Chris Mealy). He probably was not wrong that versions of socialism that repose economic power in a unified economic hierarchy would be hostile to political freedom. Instead what is required is some system in which the economic stakes of unpopular speech are unlikely to be so horrible, because the distance between lives of the conformist elite and unwashed others is not so great. What is required is a system under which economic power is not consolidated among a few firms with a shared interest in sheltering their dominance, but where instead a diversity of thriving actors ensures that any weirdo can find prosperous communities that will at least tolerate, if not agree with, her views. Such a system might look a lot like capitalism with limited government, but the limits of government would expand somewhat from protecting property and enforcing contracts to providing generous universal (therefore nondiscriminatory) social benefits, raising the floor onto which one might fear to fall for speaking your mind. Such a system might design its corporate and tax law explicitly to promote competition and limit scale (rather than narrowly proscribing a few illegitimate tactics or effects for clever lawyers to work around) so that economic power is affirmatively widely distributed.

If there’s a name for this system, almost uniquely consistent with durable political freedom, I think it would be “social democracy”.

Update History:

  • 5-July-2020, 11:35 p.m. EDT: “…middle class’ for every American it kicks out, which…”; “…some ideas are too dangerous, and free society is too weak to tolerate them.”; “He probably is was not wrong that versions…”
  • 7-July-2020, 2:30 p.m. EDT: “banished from the communities you value and be unable to earn a decent living”
  • 13-July-2020, 2:30 p.m. EDT: “…lots of us would love a his life and he wouldn’t love ours…” (thanks Christian Peel)

10 Responses to “Social democracy and freedom”

  1. Detroit Dan writes:

    Constructive, as usual. There’s lots that we can all agree on here with regard to freedom of speech and tolerance of opposing viewpoints.

    I’m not a big fan of labels, but I like “Democratic Socialist” better than “Social Democrat”. That is because I believe greater control is needed to prevent the destruction of the planet. The risk that socialist centralization infringes on human rights is dwarfed by the risk that we will destroy the planet. Nobody wants that, but it seems to be where we’re headed unless we get tough on technology and pollution.

  2. Kien writes:

    I would like to defend “reasoned speech”, and would argue that unreasoned free speech (eg, abuse, prejudice, hate speech) is detrimental to reasoned speech.

    Speech is unreasonable if we cannot or are unwilling to give reasons for our claims, and are unwilling to subject our claims to reasoned scrutiny.

  3. Kimbo Mundy writes:

    Do you remember the “equal time for opposing viewpoints” law (the FCC Fairmess Doctrine)? It should be reinstated and applied to all commercial platforms that have legal protection for free speech. This would be the modern equivalent of equal access to the public square.

  4. albatross writes:

    I think a huge amount of this is about culture, rather than formal rules. Imagine two countries, Astan and Bstan, with identical laws w.r.t free speech and at-will employment.

    In Astan, it is widely believed that reasonable people may differ about religion, and that it would be wrong to punish people for heresy by shunning or firing them. In Bstan, it is widely believed that reasonable people all agree on the state religion, and that it would be wrong to tolerate people openly questioning the state religion.

    Astan will have far more practical freedom of speech, and richer and more interesting public discussions on religion, than Bstan. In Astan, you’ll mostly be able to find out what someone believes about religion by asking them; in Bstan, only very close friends will know that you secretly have doubts about exactly what happens to the bread and wine during communion.

    Indeed, in Bstan, you may well have people looking for hidden or secret signs of heresy. Joe doesn’t go to Church every Sunday–maybe he’s a secret atheist. Jane was recorded making an off-color joke about some religious topic–this proves she’s a secret heretic and must be shunned. Frank spends a little too much time talking about fossils and dinosaurs, and we all know what *that* means. In Astan, hunting witches or seeking dogwhistles just won’t be as entertaining a passtime, because you can’t really stir up much trouble.

    Also, in Astan, claiming that a rival employee is a secret heretic won’t help you get that promotion over him, so you won’t do it. In Bstan, on the other hand, a claim of secret heresy or Protestant sympathies or atheism or guilty secret doubts will be a useful tool to pry a rival out of his job. And it will be used thus.

    Increasing precariousness and inequality make it even less pleasant to live in Bstan, but they’re not the main problem, they just make the problem nastier.

  5. Detroit Dan writes:

    Very well said, albatross. This explains the ongoing witch hunts in the U.S.

  6. Bolt writes:

    Bret Stephens is a bedbug. Facebook is the new Leviathan. When are we going to starve that beast so we can drown it in a bathtub?

  7. Unanimous writes:

    Albatross has some good points. I don’t know which problem is worse, but they are both significant issues in their own right. Social standing is something that people value for itself, and to a large extent the social standing that comes from wealth is one of the reasons wealth is valued as much as it is.

    It is probably easier and more effective to argue separately against each issue.

    Mobs of people searching for the most negative interpretations of prominent people’s statements so they can activate their outrage and feel like they are good people is a ludicrous form of public discourse that destroys effective and productive forms of public discourse. This is true regardless of the economic environment.

    Much of the media profits from confecting outrage, and consistently intentionally gives a false impressions of things to do that.

    Intentionally or neglegently giving a false impression needs to be a crime in all cases. It is a crime when the false impression is given directly to the person being profitted from (i.e. fraud, false advertising and similar), but otherwise it’s open slather.

    The reason behind free speech being good is that accurate and useful speech will win out in the end because people generally want to believe accurate and useful things. Everyone having the right to put forward their genuinely held views of the accurate and useful is valuable in that process.

    If you can prove beyond reasonable doubt that someone is giving a false impression by ignoring relevant facts (taking things out of context), then that act is an abuse of free speech (as is fraud,false advertising,incitement to violence and libel). It needs to be illegal.

  8. albatross writes:


    If you can prove beyond reasonable doubt that someone is giving a false impression by ignoring relevant facts (taking things out of context), then that act is an abuse of free speech (as is fraud,false advertising,incitement to violence and libel). It needs to be illegal.

    I think it would be very hard to enforce this, because there’s always another study or datapoint that *could* be added.

    Alice writes an article showing that minimum wage laws help the poor. Bob complains that while she cited a couple economics papers supporting her thesis, here are a couple others that oppose it that she didn’t cite. Has Alice committed a crime?

    The result of that seems to be that nobody wants to publicly express an opinion on a contentious subject unless it’s a meticulously researched academic paper. I don’t think that makes the world a better place. There’s a lot of value in having informal discussions and arguments that don’t aspire to the level of a doctoral dissertation or an academic paper or even a news article that’s been carefully fact checked.

  9. seohitszone writes:

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  10. I like your words that we should return to the wisdom of Milton Friedman, that political freedom is a structural matter, inextricable from economic arrangements.