The Volokh Conspiracy
Mostly law professors | Sometimes contrarian | Often libertarian | Always independent
Economic liberties, such as the freedom to start and run a business, to enter into market competition, and to profit from transactions, are in jeopardy in many parts of the world. For example, in May 2005 the government of Zimbabwe launched the operation Murambatsvina that has resulted in tens of thousands of vegetable sellers, food cart pushers, shoe shiners and other informal entrepreneurs detained and their businesses destroyed. In September 2011 more than 7,000 informal traders were forcibly evicted from the streets of Kampala in Uganda and saw their possessions seized by the police. Far more frequent than these large operations, though, are small-scale acts of oppression and harassment that subject informal entrepreneurs to bribes and to the confiscation of their goods by public officials.
Libertarians have typically been concerned about the status and protection of economic liberties-left-liberals, not so often. The latter are often suspicious of such liberties because they tend to think that being able to hold productive property and to enter into market competition is valuable to successful entrepreneurs and tycoons, such as Bill Gates or Carlos Slim, but it is of little worth to most people and, in particular, to the worst-off members of society, who often lack marketable and financial assets. They therefore argue that economic liberties deserve lesser protection than other liberties deemed more fundamental, and should be subordinated to the latter as well as to the common good.
This one-sidedly negative picture of economic liberties is unwarranted. The poor have a strong interest in having their economic liberties respected. Indeed, in developing countries approximately half of the workforce is self-employed. This includes pushcart vendors, itinerant barbers, shoemakers, and other entrepreneurs that run small businesses against all sorts of government failures-onerous and cumbersome business regulations, bribery, and corruption. Such obstacles not only make it extremely difficult for them to succeed in the market and to earn a livelihood. They also create a division between them and wealthy individuals who can handle regulatory costs and are able to hire legal aid in navigating the maze of red tape. To put it bluntly, infringements of economic liberties can perpetuate poverty and deepen inequalities in the marketplace. When this happens, economic unfreedom harms the poor even more than it harms the rich.
An important step in protecting the interests of the entrepreneurial poor is to recognize a core set of economic liberties as fundamental and condemn their violation as a serious form of injustice. Such liberties ought to be defended for the same reason that social liberals claim to protect other basic liberties-because they protect and enhance individual autonomy.
Economic liberties are autonomy-protecting because they are decisive to avoid some of the worst forms of domination. They allow workers to engage in independent economic activity and establish themselves as self-employed producers, hence avoiding subordination to a managerial authority that can-and in fact often does-arbitrarily interfere with them-for example, by discriminating among them in promotion and compensation, by distributing tasks and rescheduling hours capriciously, and by using verbal and physical abuse in supervision. More generally, in contexts where jobs are scarce, economic liberties offer an alternative path to subsistence that allow people to provide for themselves, with neither having to take exploitative offers nor to rely on someone else. For example, women that can manage their own economic affairs are less likely to suffer domestic violence than those who have to rely on their husbands.
Economic liberties are also autonomy-enhancing. For they broaden the set of occupational choices available to individuals by creating adequate opportunities to engage in independent economic activities instead of wage work. The point is not simply about having more options. It is about securing an important option-becoming self-employed-in a sphere-work-where it is crucial to have ample and meaningful opportunities available, at least for two reasons. For one, work is inescapable. Most of us have to engage in economic activity in order to make a living, and can only exercise autonomy by filling in the details of such activity-e.g., what to do for a living, and where and how to do it. For another, the effects of occupational choices are long-term and pervasive. Like decisions concerning whether or not to have children or where to live, occupational choices set life paths and shape the range of alternatives available in other areas of life. When governments prevent, or make very difficult, the use of private property for productive purposes, they seriously restrict the ways in which individuals can be the authors of their own lives.
The linkage between economic liberties an individual autonomy suggest that libertarians have a point when they vigorously defend such liberties-left-liberals should take note of it. However, the point may be smaller than what many libertarians think. Economic liberties will only protect the autonomy of the worst off if they have an effective opportunity to exercise them. This requires, among other things, replacing laissez faire capitalism with market regulations that place limits on the economic liberties of big corporations, so as to protect small businesses. If economic liberties are indeed fundamental they can and should be regulated for the sake of ensuring an adequate scheme of economic liberties not for the few-but for all.
Jahel Queralt is a Serra Hunter lecturer in Law at Pompeu Fabra University (Barcelona). Her research focuses on economic rights and global poverty.