Hello, welcome back!

Following from last week, today we consider the question: What is coercion? Enjoy!

1.0: Recap

There’s a final question for Hayek to answer for Friedman: what is meant by ‘coercion’? Friedman defines political freedom as an absence of coercion, and economic freedom as an absence of economic interference into one’s life. Hayek defines freedom in general as an absence of coercion. But defining freedom by the absence of another term shifts the burden of definition from ‘freedom’ to the other term; ‘coercion’. So, Friedman needs a definition of ‘coercion’. Hayek provides this.

1.1: What is Coercion?

Hayek defines coercion as a situation where a person’s ‘essential data’ is intentionally manipulated by another person. The coercer does this to make the coerced act in a specific way, in line their will. The coerced individual remains autonomous, but their choices, derived from their essential data, have been manipulated so they can only do what the coercer wants (1960: 133 – 139).

For example, if I am accosted on the highway by a robber, and told ‘your money or your life’, I autonomously choose to give them my money. But my choices, determined by my ‘essential data’, have been manipulated by the robber so that I give them my money, because doing so is less painful than giving them my life (1960: 133). Coercion is therefore narrowly defined. Only the intentional manipulation of an individual’s essential data counts as coercion. So, only intentionally manipulated individuals are unfree.

Hayek further argues that the only way to guarantee the freedom of every individual – where freedom means the absence of coercion – is to ensure each individual can secure a ‘private sphere’ that protects their essential data from manipulation. Protecting one’s essential data from manipulation guarantees that their actions are done only in accordance with their own will, not someone else’s (1960: 139).

Hayek argues that guaranteeing each individual their own private sphere requires state action. It must protect each individual’s property, the transference of their property through consensual agreement, and the enforcement of freely made contracts.

Individuals are not guaranteed any specific material goods. They are only guaranteed the means to secure the things they want in their private sphere: what each individual considers to be their essential data. Hayek thus relativises each individual’s essential data to each person. The state cannot guarantee you anything because it cannot know what you want. It can only give you the means to secure and preserve what you want.

So, the only thing a state has to do is guarantee each individual that their property will not be interfered with, and that individuals have the capacity to pursue their essential data. Anything else is supererogatory.

Hayek claims that individuals have the means to secure their essential data so long as they live in an economy where no material goods are controlled by a monopoly power:

‘The essential prerequisite for the protection of the individual against coercion is not that [they] possess property but that the material means which enable [them] to pursue any plan of action should not be all in the exclusive control of one other agent’ (Hayek 1960: 140).

Once all monopolies are removed from an economy, all social organisation can be structured by the market – because they organise society on completely free terms:

‘The mechanism of mutual adjustment of individuals (i.e. the market) forms the most important part of the knowledge that ought to enter into the making of general rules limiting individual action… the actions of such individuals are said to be free, for they are not determined by any specific command’ (Hayek 1960: 159 – 160, parenthesis mine)

To summarise, Hayek defines coercion as an absence of intentional manipulation of one’s essential data by another, who aims to make the coerced act according to their will. Preventing this intentional manipulation is done by guaranteeing each individual a private sphere that cannot be manipulated by others, achieved by destroying any monopoly powers. This is the full remit of the state. All other social organisation is outsourced to the market. Consequently, individuals satisfy their goals in the market, with the outcomes of that activity protected by the state.

2.0: Overview

We can now paint a full picture of Friedman’s definition of freedom by using Hayek’s definition of coercion and linking it back to Friedman’s Logical Argument.

Friedman argues that maximising economic freedom, done by reducing government taxation and regulation, maximises total individual freedom in two ways. First, it maximises individual economic freedom which is intrinsically valuable. It does this by maximising the amount of money individuals can spend, meaning they get to perform more actions within the market – what Gray calls ‘freedom as doing what one wants’ (1991: 62). It also gives individuals more choice over what to do with their money by introducing more suppliers into markets, maximising the freedom of individuals’ ‘availability of choice’ (Gray 1991: 31).

Second, economic freedom instrumentally maximises political freedom by reducing the state’s power to coerce individuals – what Hayek defines as the intentional manipulation of one’s essential data – by privatising key industries. This diversifies the number of owners of goods within a society, meaning no owner can intentionally manipulate the essential data of a customer without that customer leaving their joint contract. This ensures each individual a basic standard of living without a social command structure as individuals can engage with the market until they have secured their essential data, then leave. This essential data is then protected by the state through the universal guarantee of property, consensual exchange, and enforceable contracts.

In this way, the market and the state form a virtuous spiral of freely organised goal satisfaction. Individuals form goals based on their state – protected essential data. These goals are imposed on the market, incentivising the individual to give items and perform actions that satisfy others’ goals in exchange for the satisfaction of their own. The total amount of satisfaction in the economy subsequently increases as each party in the transaction gains more than they lose. The satisfied goals transform into another data point in the individuals’ essential data, prompting the production of further goals to impose on the market and work to satisfy.

The full formulation of the liberal conception of freedom therefore becomes: Freedom is of the determined, rational individual (X), from the intentional manipulation of their essentials data (Y), to make rational choices in securing their self-interests, that is determined by their essential data (Z).

3.0: Conclusion

Next week we will consider some criticisms of this picture of freedom. Until then, have a fantastic week!

References:

Hayek, Friedrich A. von, The Constitution of Liberty (London: Routledge & Kegan Paul, 1960)

Gray, Tim, Freedom (Basingstoke: Macmillan Education, 1990)