September 10, 2012 by P. J. Toscano
Freedom is America’s sacred cow. No one can speak against it. Few examine it. The popular obsession with freedom is mostly a product of unschooled delusion.
If polled today, most Americans would probably say that slavery is the opposite of liberty. But this is untrue. The opposite of liberty is order. Liberty and Order are rival elements of the paradox of American constitutionalism. Today Republicans and Democrats alike appear to have forgotten what the framers of the American Republic clearly understood: Unfettered freedom leads to the tyranny of chaos. Unrestrained order leads to the chaos of tyranny.
Thus, the principal objective of this Nation’s founders was not freedom, but the proper balance between Liberty and Order. They understood that unrestrained liberty would allow a ruthless minority to create powerful private institutions dedicated to greed, exploitation, and the enslavement of the majority. They understood, too, that unrestrained order would allow a ruthless minority to seize the government and pass laws that suffocate and enslave (often by favoring some minority by ensuring its wealth, power, privilege and leisure). So, the framers laid the foundation of a constitutional democratic republic that holds sacred neither freedom nor order, but rather Ordered-Liberty.
Ordered-Liberty can be achieved only by laws that, at very least:
(1) Apply equally to all, including the rule-makers,
(2) Recognize the existence of individual, inalienable rights necessary to protect privacy and the private concerns of individuals,
(3) Avoid pre-determined substantive outcomes, eschew all forms of social planning, and avoid criminalizing the normative behaviors of the middle and lower classes, and
(4) Regulate sensibly any dangerous and exploitive collective endeavors.
These ideas were identified and developed in the brilliant work of Friedrich August von Hayek in his Constitution of Liberty (University of Chicago Press, 1960), his multi-volume Law, Legislation and Liberty (University of Chicago Press, 1973), and his popular summary The Road to Serfdom (University of Chicago press, 1944.)
To his discredit, Hayek allowed his critique of governmental social planning to be hi-jacked by that inveterate egotist and relentless self-promoter, Milton Friedman, who used Hayek to propagate Friedman’s Chicago School of laissez-faire economics. Friedman and his ilk refuse to apply Hayek’s deconstruction of governmental social engineering to the private sector and the totalitarian management and planning power structures that typify and animate most large domestic and international corporations and syndicates.
As a result of Friedman’s legerdemain, Mitt Romney’s running-mate, Paul Ryan, can now claim Hayek (along with Ayn Rand) as inspirations for his mindless allegiance to the popular conservative obsession with a “free” market. But like political freedom, market freedom leads to tyranny unless restrained and balanced by order. Unrestrained market freedom inevitably results in market chaos that allows a ruthless minority to prosper at the expense of a principled majority.
The current obsession with the unrestrained free market is antithetical to American constitutionalism based on Ordered-Liberty which, applied to economics, requires sensible regulation of endeavors that pose a likelihood of serious, palpable, or measurable damage to others.
In the spirit of Ordered-Liberty, Congress passed the 1933 Glass-Steagall Act that created the Federal Deposit Insurance Corporation (FDIC) and imposed reforms to control speculation by banks, especially regarding the use of depositors’ money in high-risk securities investments. This act was repealed in 1999 by the Gramm-Leach-Bliley Act, passed in the spirit of unrestrained market freedom that inevitably led to the September 15, 2008, Chapter 11 bankruptcy filing by Lehman Brothers and its $600 billion in assets. This bankruptcy filing was the short heard around the world because it triggered the year 2008 global market collapse and Great Recession from which the world has not yet recovered and from which, I believe, it cannot recover unless the principles of Ordered-Liberty are imposed upon yet unregulated market activities.
To achieve a market of Ordered-Liberty, Americans (especially Republicans and libertarians) must understand that Hayek’s critiques of governmental social planning apply with equal relevance and force to the private sector. The American Dream is not freedom and unrestrained growth for the few. The American Dream is a principled vision of Ordered-Liberty that not only eliminates arbitrary, governmental, outcome-determinative, legal barriers to prosperity for all citizens, but that regulates dangerous and exploitive private collective human endeavors as well.
The risky and improvident behaviors of investment bankers since at least 1999 demonstrate how important it is for citizens of a democratic republic based on Ordered-Liberty to oppose the unfettered freedom of private-sector pirates in pursuit of criminal greed even as they must oppose the gangster-like despotisms of communist, socialist, and fascist regimes.
A sensible and well-regulated economy, however, cannot be created or managed by extremists of the political right or left. It requires centrist pragmatism and a cooperative spirit. It appears, however, that in America these days extreme problems attract extremists to leadership roles rather than principled persons committed to maintaining in both society and the market place the delicate balance required by the founder’s vision of Ordered-Liberty.