Capitalism and Freedom

Is a capitalist economic and social system essential for the flourishing of human freedom?

The idea that freedom is unattainable without the flourishing of a capitalist, free-market economy and social system is the hegemonic belief in Western society today. ‘Freedom’ has been referred to time and again by governments to account for both domestic and foreign policy which involves the liberalisation and expansion of the free market. However, this essay will demonstrate that not only is this supposition incorrect, but that capitalism is in fact the antipode of human freedom, and only through a departure from this system can true liberty for humanity and freedom for the individual be attained.

What exactly are we talking about when we discuss ‘freedom’? The concept of ‘positive’ and ‘negative’ freedom is one way of framing this topic, as referenced from Isaiah Berlin’s well-known Two Concepts of Liberty. The meaning of ‘positive’ and ‘negative’ freedom can be summarised simply by the distinction between the ‘freedom to’ and ‘freedom from’, respectively. Positive liberty thus ‘derives from the wish on the part of the individual to be his own master’, whereas to be negatively free is to be free to do as one wishes without human interference. These two freedoms, according to Berlin, are fundamentally incompatible.

The American economist Milton Friedman was one of the most notable champions of this idea that ‘any deviation from the free market, apart from having the stated adverse effect on welfare, is a transgression against freedom.’ He wrote in 1982 that ‘[t]he preservation of freedom is the protective reason for limiting and decentralizing governmental power.’ Friedman argued that ‘[t]he great advances of civilization, whether in architecture or painting, in science or literature, in industry or agriculture, have never come from centralized government. … Government can never duplicate the variety and diversity of individual action.’ The ‘major function’ of government should be merely to protect these economic freedoms: ‘to preserve law and order, to enforce private contracts, to foster competitive markets.’

For Friedrich Hayek, economic freedom underpins political freedom. Not only are economic freedom and political and civil freedom inextricably linked, but the absence of economic freedom has always accompanied an absence of civil and political freedom. Attempts to realise positive freedoms by curtailing negative freedoms––no matter how well-meaning––are dangerous and end in totalitarianism. In light of the move towards increased centralisation and welfare prompted by two world wars, Hayek stressed that this was an ‘implicit threat to individualism’, fearing increased state intervention ‘would prove The Road to Serfdom.’ Inspired by the works of Friedman and Hayek, Margaret Thatcher during her 1979 election campaign announced that it was necessary to re-establish capitalism not just for economic reasons but also for ‘moral’ ones. As her philosophy was summed up by G. A. Cohen, ’private property, after all, belongs to those who own it. It is, consequently, a kind of theft to tax it on behalf of those who do not own it’.

Marx and the Critique of Capitalist Freedom

George G. Brenkert outlines what he describes as Marx’s three dimensions of freedom, which can be said to be an expression of ‘positive’ freedom. Firstly, ‘one is truly free when free from fortuity and chance in the conditions of ones life, and when able to participate in the control and direction of ones own affairs.’ This includes the ‘knowledge and rational understanding of the nature of one’s life conditions’. Freedom only exists when, man ‘develops his capabilities and talents so that he may do as he pleases. Private property, in contrast, divides one’s life activities’. As Cohen argued, ‘private property pretty well is a particular way of distributing freedom and unfreedom.’

Secondly, ‘freedom requires the objectification of man through his activities, products and relations.’ However, freedom can only been attained when that objectification is in the form of the ‘interactions between people and things which take place in terms of their own concrete qualities–not those of abstract, symbolic forms such as exchange-value and money.’ Private property, on the other hand, creates relationships based in the abstract––i.e. exchange value––rather than in concrete qualities, the use-values. 

Thirdly, freedom ‘can only be achieved in and through the community–in cooperation and association with others.’ Under a society based on private property, each individual’s interests are divided. In The German Ideology, Marx outlines his position as follows: ‘Only in community [has each] individual the means of cultivating his gifts in all directions; only in the community, therefore, is personal freedom possible. In the previous substitutes for the community, in the State, etc. personal freedom has existed only for the individuals who developed within the relationships of the ruling class, and only insofar as they were individuals of this class.’ 

Andrzej Walicki contends that Marx ‘absolutely ignored the freedom of the individual’. Yet it is quite the opposite case. Marx fully recognised only when man is free ‘in the materialist sense,’ he is ‘free not through the negative power to avoid this or that, but through the positive power to assert his true individuality’. As Thomas Sowell explains, Marx viewed that this kind of freedom would only be possible with the reorganisation of social and economic life, with a primary aim of promoting personal development of each individual––not economic growth and efficiency. ‘This did not mean society’s attempting to mold the individual to some preconceived pattern of virtues but rather society’s providing the circumstantial preconditions for the individual to realize himself’, Sowell explains. To abolish class ‘was not to be for the purpose of making all men uniform atoms in society, not to destroy variation, but to make the individual rather than the class the unit of variation.’

That the working class is forced to sell his labour power in order to live, Peter Fryer argued, ‘drains his labour of its sweetness, makes it a dreary burden instead of an essential and beneficial part of living.’ To labour under capitalism, Marx claimed, alienates man from himself; ‘[a]n immediate consequence of the fact that man is estranged from the product of his labor, from his life activity, from his species-being, is the estrangement of man from man.’ Man is forced through necessity to acquiesce in his subordination to the capitalist:

The dull compulsion of economic relations completes the subjection of the labourer to the capitalist. Direct force, outside economic conditions, is of course still used, but only exceptionally. In the ordinary run of things, the labourer can be left to the “natural laws of production,” i.e., to his dependence on capital, a dependence springing from, and guaranteed in perpetuity by, the conditions of production themselves.

Capitalism by default can only function with the existence of a large working class. Though perhaps a minority may be lucky enough to able to escape the shackles of the proletariat and exploit their ‘negative’ freedoms in the free market, ‘the proletariat is collectively unfree, an imprisoned class’, wrote Cohen. They are not free to be emancipated as a class; ‘each is free only on condition that the others do not exercise their similarly conditional freedom. Not more than one can exercise the liberty they all have. If, moreover, any one were to exercise it, then, because of the structure of the situation, all the others would lose it’; their freedom in mutually conditional.

Freedom and Coercion

Supporters of capitalism claim that choice, rather than coercion, is a fundamental feature of the system. Friedman and Berlin emphasised that ‘[t]he fundamental threat to freedom is power to coerce’; ‘to coerce a man is to deprive him of freedom’. It is insisted that all the source of coercive power can be eliminated through ‘removing the organization of economic activity from the control of political authority’ and an individual  must be free to secure ‘some private sphere where he is protected from such interference’. Yet capitalism was founded and is sustained on coercion. As Michael Perelman highlights, ‘contemporary economists such as Milton Friedman gloss over the dark side of capitalism, ignoring the requisite subordination, while celebrating the freedom to dispose of one’s property.’ 

Workers, from the very beginnings of capitalist development, have been coerced into the labour market. Modern liberal capitalism, as Karl Polanyi highlights, has only been made possible through ‘a conscious and often violent intervention on the part of governments’. To ensure that people would accept wage labour, brutal measures were endorsed across nearly all sectors of the economy ‘to deprive people of their traditional means of support …  stripping the majority of the people of the means of producing for themselves’, both in the countryside and city. This dispossession of most small-scale producers and the establishment of a laissez-faire economy are so closely connected, Perelman explains, that Marx ‘labeled this expropriation of the masses as ‘‘primitive accumulation”.’  As laissez-faire ideology was enthusiastically encouraged, policies which ‘flew in the face of their laissez-faire principles’ were championed by capitalists in order to hasten capitalist assimilation. He concludes by saying ‘no class proved itself as effective and as ruthless in separating workers from their means of production as the bourgeoisie.’

Authoritarian use of law and order was also at the heart of the establishment of laissez-faire capitalism. A ‘contrived law and order’, as Perelman calls it, was used to severely restrict the rights of workers to unionise and even to simply act politically. ‘The entire judicial edifice was erected with an eye toward making ownership of capital more profitable,’ he argues. 

A similar point can be made about the extension of capitalism around the world through the process of colonisation. A regular charge against ‘positive’ freedom is that it assumes what is the best for people, resulting in an ‘enlightened totalitarianism’ of sorts. Yet the expansion of markets across the globe through colonialism was regularly justified as the expansion of ‘freedom’ or ‘enlightenment’. The ‘scramble’ for Africa was touted as a ‘civilising mission’, ‘scientific’ and part of the ‘white man’s burden’. In the same spirit as ‘freedom’, these ideas made it easier for the capitalist powers to justify their actions in Africa by applying a moral sugar-coating. Yet, as Peter Fryer wrote, the capitalist freedom supposedly brought to new colonies denied ‘the fundamental freedoms to the colonial peoples, and hypocritically prates about “freedom in ideas and freedom of debate” though it can no more permit free discussion and exchange of ideas in the colonies, when those ideas challenge imperialism, than it can adequately feed the millions it oppresses.’

There is an abundance of contemporary cases in which capitalism has been sustained through authoritarianism and totalitarianism. Chile is a clear example where supposed ‘freedom’ has been used as a pretext for the forced expansion of free-market capitalism. When Social Democrat Salvador was overthrown and replaced by Augusto Pinochet in a U.S.-backed coup in September 1973, the military dictatorship dramatically liberalised the Chilean economy (advised by Milton Friedman himself) while overseeing an oppressive regime which resulted in the death and disappearance of thousands. Henry Kissinger, U.S. National Security Advisor at the time, infamously justified this in a particularly authoritarian fashion: ‘I don’t see why we have to let a country go Marxist just because its people are irresponsible’. Another instance of economic freedom failing to deliver political and social freedoms can be observed in the reintroduction of capitalism in former Soviet states in Eastern Europe. The so-called ‘shock therapy’ of economic liberalisation imposed on the post-Soviet states has evidently not deterred autocratic regimes and authoritarianism; Putin’s Russia being the most obvious example.


Freedom under capitalism, as described by Marx, is simply ‘the freedom to exploit one’s fellows, or the freedom to make inordinate gains without commensurable service to the community, the freedom to keep technological inventions from being used for public benefit, or the freedom to profit from public calamities secretly engineered for private advantage”. Thus, as Karl Polanyi asserted, the idea of freedom degenerates merely into  the ‘advocacy of free enterprise’, resulting in ‘the fullness of freedom for those whose income, leisure and security need no enhancing, and a mere pittance of liberty for the people, who may in vain attempt to make use of their democratic rights to gain shelter from the power of the owners of property’.

To conclude, far from being essential to human freedom, the capitalist economic and social system is fundamentally antithetical to the flourishing of human freedom. True human freedom cannot be achieved in a society in which activities which are determined by by the compulsion of economic necessity.



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