Economic Freedom Vs Economic Security

They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety –Benjamin Franklin

People are fond of trotting out the above quote when it comes to the police or military functions of the state. Very seldom, however, do they consider that the same concept, the inherent trade off between freedom and security, applies to economics as well.

All over the world, people have shown themselves absurdly willing to trade long-term economic freedoms for short-term economic security only to find out that their security eventually evaporates. I think this is the fundamental problem that contemporary Europe faces.

Just as an argumentative and contentious democracy provides greater physical security through political freedom than does a superficially more ordered authoritarian state, a dynamic and adaptive economy provides more security than a statist economy. Change is inevitable and an economic system that values security over freedom will value stasis over adaptation. Eventually, no matter how successful the system is in providing economic security at first, it will fail to provide it in the long run.

In general, leftists of all stripes do not view economic activities as creative endeavors requiring experimentation, risk and failure. As a consequence of this blind spot, they see no downside in restricting economic freedom in the name of providing greater economic security. The rise to dominance of the Left in Europe inevitably meant the sacrifice of economic freedoms to provide temporary economic security.

Unfortunately, the time lag between the surrender of freedoms and the loss of security can be on the order of decades. Industrial economies have a great deal of inertia and surplus wealth. It takes a long time for the negative consequences of policy decisions to manifest themselves at a politically significant level. For a generation or more people succeed in having both relative prosperity and security and they grow unwilling to believe that such a state is not permanently sustainable. If most of the population doesn’t view economic activities as essentially creative, they won’t even begin to understand why they need to trade security for the freedom to take risks in the first place.

I think the cultural sea change that needs to occur in Europe is to get enough people to view economic activities as creative endeavors that require freedom to succeed. People need to think of an individual starting a new business as an artist or explorer who must be left free to fail. Only then can Europe’s long slide be halted.

6 thoughts on “Economic Freedom Vs Economic Security”

  1. Correct. The basic choice comes down to whether to eat your seed corn or plant it. And there’s no RIGHT answer, for all circumstances.

  2. Sweden’s kind of recognizing the problem and they have to jumpstart the entrepreneurial class.


    Do we really think Old Europe is big enough to admit we are right?

    That’s what this really comes down to.

    The Unitarian Church in Hinsdale, IL had a workshop yesterday on inequality and what we can do to stop it.

    Unions, higher minimum wage, more power to the people, yada, yada, yada.

    Commies. You should have seen the list of websites they wanted you to check out. I thought the list would burst into flame after I touched it.

    I brought up the point that the backbone of America is small businesses, there’s just no talking w/some of these people. Some had no clue at all about things. Of course, I brought up a lot of things and they just wanted to get thru it and leave.

  3. Nikita Khrushchev said in November, 1956, in a disputed translation, “We will bury you”. This was not a threat as he clarified some years later in Yugoslavia: “Your own working class will bury you”, a nod to the popular Marxist saying, “The proletariat is the undertaker of capitalism”.

    Japan, with its state controlled system, was the future. China is going to become the world superpower.

    Centrally controlled, semi-free, economies can match the US of 20 years ago – doesn’t make much difference what year you are talking about. Freedom, and especially free markets, is the way to nirvana, if not heaven, on earth.

  4. Franklin’s famous saying applies to economics. Succinct, memorable, and easy to understand. I like it, spread the meme.

  5. “In general, leftists of all stripes do not view economic activities as creative endeavors requiring experimentation, risk and failure”..excellent point, and I think it particularly applies to academics. The professor who insists on his *own* freedom often believes that economically-productive people are mere drones who need no such freedom in their work.

    I posted recently about some of the problems with top-down economic thinking, using as a case in point Europe’s failure to exploit the semiconductor opportunity:
    Leaving a Trillion on the Table

  6. Yes. I got my Ph.D. in August and started a business in October – and suddenly I felt that at some kind of primal level I’d woken up, I was challenged, I had to think all the time. I couldn’t muse but had to decide & live with my (often stupid) decisiions. And talking to the businesspeople with whom I now spent my days, I realized that what they were doing every day required analytic abilities that we’d only begun to use in academic circles.

    I’m not saying I don’t like playing with words more than playing with leases & customer bids – clearly I’m better at teaching lit than running a business, clearly it has great satisfactions for me. But that doesn’t mean it is really more creative, more analytic.

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