State Power v. Economic Power

Conservative thinkers have rightly pointed out that institutions such as the welfare state or labor unions can place limits on individual freedoms. However, in general, they have entirely ignored the empirical reality that the vast majority of individuals already have their freedoms limited by a general lack of economic power.  The basic point that in wage negotiations employees have less power than employers goes back to at least Adam Smith. Unions and political regulations both serve to increase the power of labor, leading to a trade-off, in which an individual who wishes to maximize their actual, practical, and not just legal freedom from coercion must decide which form of coercion they find less threatening.

Benjamin Radcliffe explains it well, writing:

…the question becomes whether one prefers the coercion of the market or the coercion of the welfare state and the labor union. In one scenario, the ordinary person faces the potential coercion of the government, the regulatory agency, and the labor union. However, each of these is at least ostensibly devoted to the individual’s well-being, and is at least ostensibly answerable to them when it fails to devote itself to that goal. In the other scenario, citizens face a corporate profit-making enterprise that views them as a commodity, has no interest in their well-being, uses them only as a means to the end of profit for themselves, and is answerable only to the shareholders who enjoy such profits. (The Political Economy of Human Happiness, Kindle Location 1636)

Not surprisingly, I agree with Radcliffe in thinking that it’s generally better to give a democratically elected state power or to join a labor union than to remain in a condition where I have to sell my labor as a commodity and be underpaid due to my poor bargaining position. However, what really frustrates me is the seeming inability of most conservative philosophers and politicians to even adequately address this trade-off. Instead, it seems to simply be assumed that state power is the only type of power that exists, rather than the reality of a balancing act between state power and market power. So, conservatives, if you want to convince me that we need a less powerful state, you need to show me how to address the issue of economic imbalances of power without a welfare state and a labor movement. Any argument that doesn’t address the issue of differential economic power in the market simply isn’t going to work.

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One thought on “State Power v. Economic Power

  1. Agree. Power exists and the real issue is who and how that power will coerce. To interpret ‘freedom’ as meaning ‘free of the coercive effect of power’ is simply nuts.

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