“Freedom” means the human capacity to choose among options, based on one’s own preferences and reasoning. It also stands for the political status to exercise such freedom on matters of conscience and to express opinions without interference from the state. Enlightenment thinkers also included the right to buy and sell property in an open market with minimal government interference. So is the justification for our free-enterprise system a practical matter – an effective way of organizing resources and the distribution of goods – or does it rest on deeper principles? John and Ken test their entrepreneurial spirit with Shannon Stimson from UC Berkeley, co-author of After Adam Smith: A Century of Transformation in Politics and Political Economy.
John opens the show by stating that freedom and free markets go hand in hand. Not only would free markets not be possible without individual freedom, says John, but to regulate the market is to reduce liberty. Ken asks John whether it isn’t actually better to regulate markets in the name of freedom, but John insists that when markets are restricted, so is choice, and when choice is restricted, so is freedom. Ken provides the example of health insurance, explaining that were insurance to be distributed by the free market alone, with no governmental input, a great number of individuals would not be able to ensure their security in this sense due to extraneous circumstances, including financial concerns. This, says Ken, is no freedom. John and Ken speak of the see-saw balance between the particular freedoms of various parties in an exchange. John proposes that Ken is thinking of fairness rather than freedom, and that regulation always leads to less freedom for at least one party. Fairness is a good thing, says John, as is equality, but freedom trumps these other values. Ken tells John to think of this issue in terms of positive freedom. This kind of freedom, says Ken, requires autonomy, and to be autonomous, basic regulations and services provided by the government are needed.
Ken and John are joined by guest Shannon Stimson, Professor of Political Science and Chair of the program in Political Economy at UC Berkeley and co-author of After Adam Smith: A Century of Transformation in Politics and Political Economy. John first asks Shannon what political economy is exactly and why she finds the subject so fascinating. Shannon says that when she speaks of political economy in her work, which mainly focuses on the 18th and 19th centuries, political economy is thought of as an imaginative construct or a systematic understanding of production, distribution, and law, custom, and regulations set by governments. Shannon adds that she thinks of political economy not so much as it is viewed contemporarily but rather as the basis of civil life and also as the basis of actually maintaining civil life. John asks Shannon which side she takes from the viewpoints of the opening segment - Ken or John’s - to which Shannon replies that the concept of a market, excluding a command economy, in itself presupposes that there is greater freedom, specifically more freedom from arbitrary regulation because more people are able to participate in the market.
Ken asks Shannon what it means to say that a market is “free” and whether free markets necessarily engage completely free choice. Shannon says that no market is entirely free if what is meant by free is an entirely unrestricted system. There are laws, and markets still take place within constitutional parameters. Shannon poses the question of whether these regulations are restrictions of freedom or things that make the market work more freely. John wonders whether in some areas, such as in medicine, markets cannot be as free as they are in other areas. Shannon provides the example of the sale of organs as one such restriction. She adds that not all things are equivalent commodities. Some kind of minimal regulation is necessary. Ken, however, wonders how and where the line should be drawn between minimally necessary regulation and freedom-constricting restrictions.
Ken and John then invite audience participation, where questions such as the why Americans seem to embrace capitalism much more than other countries or the notion of free markets without democracy are discussed. The show concludes with Shannon reflecting on the constant adjustment needed to regulate free markets.
