Liberalism and the Free Market

If we take free market to be the position that the State (i.e. the political authority) should not act in the market, is this a liberal position and if not is it still coherent?

It seems that the free market differs from the liberalism in that free-market-ism (FM) does not propose that authority actually act to ensure freedom, equality, etc. FM in fact seems to argue that the State ought not to act in the market or should limit its action as much as possible.

It seems then that FM might be coherent or at least not incoherent in the way that liberalism as a political philosophy is, since FM proposes that the State actually no act and thus produces freedom and liberty. It is actually a political philosophy of markets that in taking liberty as the object of authority actually has the State not acting. It does not propose that the authority ensure liberty, but that it ensure liberty by not acting.

That all being said, every exchange or contract in the market implicitly assumes the authority of the State. All are ultimately enforced and ensured by the authority and force of the State. This implies that the State has an authority to determine what contracts to enforce. This then runs against the position of the FM for it is within the scope of the State’s authority to determine the validity of certain contracts.

The Roman Empire enforced contracts of slavery whereas the US generally does not (excluding usurious contracts). Certain Catholic princes of yesteryear did not enforce usurious contracts, whereas the US does. Each may have reasons for or against enforcing such contracts, but the point is that the State determines which contracts to enforce which provides the ultimate ground for the market to function in the first place.

It seems then that FM may be a cousin to Liberalism, but it does not seem to be a part of Liberalism or necessarily liberal in itself with respect to its commitments to authoritative action. However, it does have the same temperament of contempt for authority and the illusion that it can be overcome or removed.

*This all under the presumption of my definition of FM.

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4 Responses to Liberalism and the Free Market

  1. Zippy says:

    One way to think about it (at least tentatively) is that ownership and sovereignty used to be a unity. Modernity severed them in two, and now they simultaneously compete with each other and depend upon each other under the labels “free market” and “liberalism” respectively. Thus right liberalism tends toward the sovereignty of those who are labeled owners as the ruling class, whereas left liberalism rejects this as merely feudalism 2.0.

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  2. That seems plausible. A father is able to provide for the common good grounding his authority in virtue of his wealth. A destitute man having children may have a virtual authority in virtue of his fatherhood, but it is ineffective in his incapacity to actually act. So too a feudal lord, though I don’t know much about real historical feudalism to say or think much.
    What sort of unity do you suppose? It seems to me to be at least partially that ownership provides a basis and means for political authority.

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  3. Zippy says:

    I was just thinking of ownership as authority over objects and sovereignty as authority over persons. The two aren’t separable, but liberalism – aiming toward invalidating authority for which it substitutes “rights”, as if the latter were not merely a different word for authority – liberalism first attempts to separate them (right liberalism) and then rejects its own attempt as sophistry (left liberalism).

    Sovereignty involves an authority to which both persons and objects are subject.

    Interesting point about the destitute man. Lacking power doesn’t invalidate authority as such but it certainly does make its exercise more difficult in the face of rebellious or even just needy subjects, since the very foundation of authority is the needs (good) in common.

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  4. Thanks. That makes some good sense and I’m going to chew on it some more.

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