Hayek 1: Liberty and liberties

November 6, 2005

Chapter 1 of Hayek's "The Constitution of Liberty" (1960, U. ofChicago Press) is entitled "LIberty and Liberties". A bit confusing title, but it's a good introductory chapterbecause Hayek immediately defined what "liberty" and "freedom" is -- absence of coercion; absence of external impediment.

Some important quotes from the chapter that I will discuss here.

(1) "We maybe free and yet miserable. To be free may mean freedom to starve, to make costly mistakes, or to run mortal risks."

(2) "While the uses of liberty are many, liberty is one. Liberties appear only when liberty is lacking. Difference between liberty and liberties -- that which exists between a condition in which all is permitted that is not prohibited by general rules and one in which all is prohibited that is not explicitly permitted."

(3) "The coercion that government uses is reduced to a minimum by restraining it through known general rules, so that the individual need never be coerced unless he has placed himself in a position where he knows he will be coerced."

On (1), this is a situation where the concept of "personal responsibility" will come in. One can be very very rich as a result of inheritance from rich parents, spend the money as he/she wishes. There is freedom in spending, but no responsibility in saving and investing, or at least maintaining the parents' enterprises which produced such inheritance.

On (2), liberty is absence of coercion of some by others; liberties refer to various uses of liberty (political liberty, inner liberty, liberty as power) that do not touch on personal or individual liberty. For instance, political freedom refers to freedom to vote, except minors, foreigners, others prohibited by law. National freedom may mean absence of foreigners' interference, but it does not mean individual freedom because local rulers or the majority can exercise coercive power over the minorities. In short, liberties can appear where there is individual oppression.

On (3), this is where the "rule of law" and not "rule of men" appears. Rule of law means that the rules are to be applicable to everyone, rulers and ruled, governors and governed, masters and slaves, so that the rulers and governors themselves will not attempt to make very restrictive and rigid laws that will also impinge on their own individual freedom. Rule of men means making laws that are supposedly applicable to everyone, but rulers and their allies are exempted.

Government's main function is to secure individual liberty. This is by being a bigger force that can control bullies among men. By setting simple and general rules that is applicable to everyone. In most cases, however, Government (of many if not all countries) becomes the single biggest source of coercion in people's lives. How?

One, government can tell the citizens how much they can keep from their income (personal income tax, corporate income tax, estate tax,...), and from their take-home pay, how much they can spend and save since there are various forms of consumption-based taxes (sales tax, value added tax, excise tax, petroleum tax,...) and various fees for various government-mandated or monopolized services like securing a driver's license.

Two, government can over-regulate business, tell entrepreneurs they should give a certain minimum wage even for the most unskilled people, that they cannot fire their employees without giving them over-generous benefits and even if said employees have committed serious mistakes.

Three, government can restrict people to whom they can buy and sell this and that commodity or service, by how much quantity, at what price, through trade protectionism and import restrictions.

These are just a few instances where government becomes one big source of coercion. When laws become too restrictive, "rule of men" prevails because the law enforcers (police, courts, other government agencies) intend to exempt themselves and their allies from such restrictions, apply the laws only to the rest of the citizens.