What's Genuine "Freedom"?

(c) by Mark Dempsey

A Washington Post article about eroding freedom cites various measurements of press and speech freedom and may be useful in spotting trends. However, while it cites a current billionaire's admiration for markets free of regulation, it overlooks what the freedom of "free markets" initially meant for the classical economists like Adam Smith who sang their praises. By "free markets," Smith and his successors meant markets free from "economic rent," a concept scrupulously avoided by orthodox economics nowadays.

Economic rent is money paid for unproductive things. A rentier collects rent even as he sleeps. The current economy's crop of billionaires would be impossible without economic rent.

 

One of the primary goals of the classical economists was to "euthanize the rentiers"--a phrase from John Maynard Keynes. During the eighteenth century, economic rent was primarily land rent, so the landed gentry was, in effect, a millstone around the neck of the economy, making it less productive than it could be. 

Journalist/economist Henry George began a popular movement to discourage this unproductive burden by taxing rentable land. That movement was one inspiration for Elizabeth Magie's "The Landlord Game"--the original of what we now call "Monopoly." The Landlord Game has two sets of rules: "Monopoly," and "Prosperity." In Monopoly, the object is to bankrupt everyone but the winner. In Prosperity, everyone wins. You can still get the Prosperity game's rules from the internet, too. Monopoly rent is a subset of economic rent, and Magie's game was designed to show how society prospered when avoiding it. 

One of the desired outcomes of current, neoliberal thinking is to privatize everything, making the economy into a series of economic rent-collecting toll booths. In a more recent example, Margaret Thatcher privatized UK rail, and sold (public) council housing to its occupants. As a consequence, rail service deteriorated and was more expensive and UK real estate prices went through the roof, increasing homelessness, and tripling childhood poverty during Thatcher's term.

 

The Washington Post's emphasis on freedom of speech and press, etc. are all very well and good, but if a society run by rentiers exists--and now is their heyday--those freedoms are far too abstract to matter to most people. That is why, as important as they are, they're so casually discarded.

And the rentier-driven economic inequality we're experiencing now constrains what kind of speech and thinking is even conceivable.  

 

"In … Domination and the Arts of Resistance (1990), James Scott makes the point that whenever one group has overwhelming power over another, as when a community is divided between lords and serfs, masters and slaves, high-caste and untouchable, both sides tend to end up acting as if they were conspiring to falsify the historical record. That is: there will always be an 'official version' of reality--say, that plantation owners are benevolent paternal figures who only have the best interest of their slaves at heart--which no one, neither masters nor slaves, actually believes, and which they are likely to treat as self-evidently ridiculous when 'offstage' and speaking only to each other, but which the dominant group insists subordinates play along with, particularly at anything that might be considered a public event. In a way, this is the purest expression of power: the ability to force the dominated to pretend, effectively, that two plus two is five. Or that the pharaoh is a god. As a result, the version of reality that tends to be preserved for history and posterity is precisely that 'official transcript.' – From (footnotes) The Dawn of Everything: A New History of Humanity by Graeber and Wengrow

Michael Sandel's Justice reveals libertarianism--a "freedom" philosophy that omits mentioning freedom from rentiers--is a philosophy for amateurs. For example, it asserts all economic decisions are conducted by rational actors--yet one has to look no further than Madison Avenue's products to see that ads appeal primarilly to the irrational and emotional. 

Perhaps one of the most eloquent and concrete refutations of the pursuit of privatization and rentiers is Sacramento's electric utility, SMUD. It's publicly owned and roughly 35% cheaper than nearby, privately-owned PG&E. Meanwhile PG&E's leaders are paid much more than SMUD executives, and have recently been consulting with criminal attorneys because they might face charges of negligent homicide for the poorly-maintained gas pipeline that exploded in San Bruno and the poorly-maintained electrical lines that started the fire that burned down the ironically named town of "Paradise."

 

The freedom to profit from even unproductive activity, at society's expense, is something even Adam Smith decried. Profit, no matter how large, or privately controlled, doesn't excuse all bad behavior, no matter what conventional "wisdom" says.