In Capitalism and Freedom, Milton Friedman warned that too much government involvement in the economy would limit our freedom. Friedrich Hayek made a similar argument The Road to Serfdom.
I’ve always found this argument sound, but sometimes I wonder if it’s really convincing. Throughout my life, European governments have been larger as a share of GDP, and yet Europe still seems liberal, at least compared to some of the more authoritarian parts of the world. Recent events, however, have led me to accept the Friedman/Hayek position, particularly the regulation of social media. Here it is David Rose:
If the government directly punishes free speech, that can provoke an immediate reaction from the electorate. Instead, the government works quietly behind the scenes as a mob boss, effectively saying “Good social media got you there. It would be a shame if anything happened to it.”
What the government should do is undermine our right to free speech and make it more expensive than that. The more we allow the government to intrude into our lives, the greater the risk for us to speak ill of the government through actions and inactions that we may have no way of proving to have encouraged an effort to shape or suppress our speech. . . .
The root of the problem is not any ability of the court to deal intelligently with any particular error, it is the ability of the government to impose costs without accountability.
People often cite China as an alternative to capitalism promoting the liberal hypothesis. But is it so? 40 years ago:
1. China has regressed in terms of freedom of speech (and speech was not free back in 1984.)
2. Chinese people are free to have more than one child.
3. Chinese people are more free to live where they choose. (“Hukou” restrictions still exist, but are getting weaker every year.)
4. Chinese people have more freedom to date whomever they choose. (Gays are no longer imprisoned.)
5. There is greater economic freedom to start businesses, travel and engage in various activities.
I certainly do not dispute that China is a good example of liberal capitalism. It is not. But note that even in the worst case of Friedman’s hypothesis, that is cited by almost all opponents of neoliberalismThe effect of capitalism on freedom is ambiguous—gain in some areas and loss in others.
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