Karl Popper on economic power and freedom

[ribozyme]

I read this from The Open Society and Its Enemies chapter 17m and I thought it would be relevant here.

I believe that the injustice and inhumanity of the unrestrained “capital system” described by Marx cannot be questioned; but it can be interpreted in terms of what we call… the *paradox of freedom. *Freedom, we have seen, defeats itself if it is unlimited. Unlimited freedom means that a strong man is free to bully one who is weak and rob him of his freedom. … Nobody should be at the mercy of others, but all should have a *right *to be protected by the state.

Now I believe that these considerations, originally meant to apply to the realm of brute-force, of physical intimidation, must be applied to the economic realm also. Even if the state protects its citizens from being bullied by physical violence (as it does, in principle, under the system of unrestrained capitalism), it may defeat our ends by its failure to protect them from the misuse of economic power. In such a state, the economically strong is still free to bully one who is economically weak, and to rob him of his freedom. Under these circumstances, unlimited economic freedom can be just as self-defeating as unlimited physical freedom, and economic power may be nearly as dangerous as physical violence; for those who possess a surplus of food can force those who are starving into “freely” accepted servitude, without using violence. And assuming that the state limits its activates to the suppression of violence (and to the protection of property), a minority which is economically strong may in this way exploit the majority of those who are economically weak.

If this analysis is correct, then the nature of the remedy is clear. It must be a political remedy - a remedy similar to the one which we use against physical violence. We must construct social institutions, enforced by the power of the state, for the protection of the economically weak from the economically strong. The state must see to it that nobody need enter into an inequitable arrangement out of fear of starvation or economic ruin.

This, of course, means that the principle of non-intervention of an unrestrained economic system has to be given up; if we wish freedom to be safeguarded, then we must demand that the policy of unlimited economic freedom be replaced by economic intervention of the state.

…

In this way, the Marxian view is analogous to the liberal belief that all we need is “equality of opportunity”. We certainly need this. But it is not enough. It does not protect those who are less gifted, or less ruthless, or less lucky, from becoming objects of exploitation for those who are more gifted, ruthless, or lucky.

Regarding intervention, Popper warns that it too is extremely dangerous, but he does not argue against it. Of course, Popper disagrees with Marx that unlimited economic power is the root of all evil; instead, he believe that uncontrolled power in any form is dangerous, and a democracy provide a means to control such power since people are freely able to change their rulers in a bloodless fashion. However, I am somewhat surprised that Karl Popper explicitly promoted economic intervention in The Open Society and Its Enemies since he admired Hayek’s work (he is considered to be a major apologist of laissez-faire economics and was generally opposed to state intervention). I do agree with Hayek’s assertion about how a totally planned economy is not feasible because it is impossible for the central planners to have access to the necessary information to perform such a task. They cannot possible have information about everyone’s preferences and desires, nor do the have adequate information about supply and demand of goods to effectively conduct economic policy. Regardless, I do agree with Karl Popper that the role of the state should protect the economically weak which, of course, is an aberration of John Locke’s assertion that the government’s function is to simply protect private property. Contrary to Locke’s original view, limited government is not enough to ensure the liberty of the disadvantaged. I am a liberal because I believe that libertarians are generally myopic about the economic coercion (although they are passionately against physical coercion) of the economically unfortunate and such an approach is not conducive to bettering the lot of the economically disadvantaged.

Although taxing the economically privileged is a limitation of their liberty, John Rawls, in A Theory of Justice argues that this is acceptable from the perceptive of the original position. For example, if you do not know who you would become before you were born (a position of imperfect knowledge called “the original position”), you would rationally support a system of moderate redistribution to provide a safety net if you were born in an unfortunate position (such as not having enough wealth or skills to earn a descent wage). From the perspect of the original position, one would agree with Popper that equality of opportunity is not enough. Because of this, redistribution is ethically justified even if it does involve coercion. I do not think private charity alone is capable of doing this.

 

[The_Barbarian]

This libertarian sees economic coercion as no different than government coercion.

It is the function of government to keep people from abusing each other, and to protect the weak from the strong.

Whether that’s protecting you from someone who steals your property at gunpoint, by monopoly or other economic power, or by abusive law, is beside the point.

If government abdicates any of these roles, someone will step in and form their own, informal government to take charge.

This is the anarchist’s paradox.

 

[Swan]

I read this from The Open Society and Its Enemies chapter 17m and I thought it would be relevant here.

Regarding intervention, Popper warns that it too is extremely dangerous, but he does not argue against it. Of course, Popper disagrees with Marx that unlimited economic power is the root of all evil; instead, he believe that uncontrolled power in any form is dangerous, and a democracy provide a means to control such power since people are freely able to change their rulers in a bloodless fashion. However, I am somewhat surprised that Karl Popper explicitly promoted economic intervention in The Open Society and Its Enemies since he admired Hayek’s work (he is considered to be a major apologist of laissez-faire economics and was generally opposed to state intervention). I do agree with Hayek’s assertion about how a totally planned economy is not feasible because it is impossible for the central planners to have access to the necessary information to perform such a task. They cannot possible have information about everyone’s preferences and desires, nor do the have adequate information about supply and demand of goods to effectively conduct economic policy. Regardless, I do agree with Karl Popper that the role of the state should protect the economically weak which, of course, is an aberration of John Locke’s assertion that the government’s function is to simply protect private property. Contrary to Locke’s original view, limited government is not enough to ensure the liberty of the disadvantaged. I am a liberal because I believe that libertarians are generally myopic about the economic coercion (although they are passionately against physical coercion) of the economically unfortunate and such an approach is not conducive to bettering the lot of the economically disadvantaged.

Although taxing the economically privileged is a limitation of their liberty, John Rawls, in A Theory of Justice argues that this is acceptable from the perceptive of the original position. For example, if you do not know who you would become before you were born (a position of imperfect knowledge called “the original position”), you would rationally support a system of moderate redistribution to provide a safety net if you were born in an unfortunate position (such as not having enough wealth or skills to earn a descent wage). From the perspect of the original position, one would agree with Popper that equality of opportunity is not enough. Because of this, redistribution is ethically justified even if it does involve coercion. I do not think private charity alone is capable of doing this.

I, too, agree, and will make a note to read more from Popper later. He makes excellent points.