Liberty vs economy: How far can we go?

November 26, 2007

A photo of a bunch of pennies

Freedom. Economics. The two are interconnected on a basic level. Neither can exist while the other languishes.

This is the basic philosophy of libertarianism or “classical liberalism,” as some put it. Supporters of the Libertarian Party and its relations vary in their interpretation of this philosophy. Some - in fact, from what I have seen, a good many - wish for total absence of government in the field of the economy. That seems to me to be fallacy.

While the government should not have a strong hand in the economic affairs of its citizens, it should not have no hand at all. Inevitably the government will make mistakes, but that is the nature of human things - we make mistakes, and nothing can change that. The government's hand in the economy is necessary to protect against other human mistakes. While the wisdom of the majority is questionable at times, the process necessary to alter a machine on the scale of the federal government is slow. This allows for “testing periods” that might otherwise be rendered too short by an overzealous legislative process, as is the case in a direct democracy. The rule of the economy by large financial entities - such as corporations - can thus be tempered in its fickle nature by the relatively stable hand of the government.

By the same token, though, we must be watchful that the government does not take too large an interest in the affairs of business. It is far too easy for large tariffs, taxes, or bureaucratic procedures to stifle innovation or competition which might otherwise be beneficial to the health of our nation's economy.

When pressed for a vote on a particular example of this clash of liberty versus economy, one must always, without fail, closely examine as many of the major consequences as is feasible before making a determination. Voting on party lines or by rhetoric alone - be it libertarian, neoconservative, or liberal - is to invite disaster on an epic scale. Such, I fear, is the case with our current financial situation in the United States. I imagine that the collapse of the subprime market, the increase in the price of gasoline and its attendant effects, and the subsequent slowing of the American economy can be traced to poor decisions in the balancing act of liberty and economy.

Sometimes, the liberty of business needs to take a back seat to governmental interference in the machine - and sometimes, the reverse is true.