Is Economic Freedom Important?

Whether we like it or not, we are all homo-economicus. I find it amazing that economic freedom is considered an essential part of freedom, but of course homo-economicus would think so. Some time ago, I went to a talk on fieldwork in Cuba by a friend of a friend. I didn’t do anything about these notes then, but having re-read them, it strikes me that these thoughts are worth sharing. What follows is my reflection on the phenomenology of economic freedom.

Ramble alert. I am not an economist. Neither am I am anthropologist. I am only commenting on a presentation about economic life in Cuba by an anthropologist.

Cuban Life

I have an utterly inadequate mental image of Cuba. My earliest memory of Cuba is that of Fidel giving a marathon speech at the NAM summit in Delhi in 1983. I remember escorting a distant cousin from Chennai to MAMC in Delhi, where he was interviewing to study Oncology in Moscow. The cousin’s dream was to become a doctor in Cuba. I was too young then to probe him about his desires; in any case, everyone capable wanted to leave India at that time.

As I aged, the Cuban revolution took on a greater role in my consciousness. Fidel, Che and others became my heroes as they did for so many others. I became aware that the Cuban missile crisis almost caused a world war. There’s this image of NATO and Soviet tanks facing off at the Berlin wall that still sticks in my memory. Even later, I learned how Africans were transported to Cuba to work on sugar plantations; how sugar became one of the world’s first commodities on the back of slave labor. As you can see, none of these memories are memories of Cuba, they are memories about Cuba — a Cuba seen through the lens of politics and struggle rather than a memory of Cuba itself.

Yesterday’s WDG meeting was a welcome correction, a presentation about life in Cuba rather than it’s symbolic importance. Mrinalini Tankha, who spent several years in Cuba for her PhD dissertation talked about life in post-Soviet Cuba. The picture that emerges from her presentation is very different from the imagined Cuba in my head. Daily life in Cuba seems unequal and petty, of a dollar (and convertible peso) economy with glittering chandeliers, of black doorman and white receptionists, of tourists who never enter Central Havana and never realize that there’s another currency being used by the natives. Then there’s another Cuba of scarcity and everyday thievery, where simple transactions are impossible, of ubiquitous surveillance (or at least the possibility of surveillance), a Cuba where you can’t trust your neighbor with the news that you might be sailing away to Miami. A Cuba where people take pride in Robin Hood moments of commandeering state resources for private use. There’s also a third Cuba, a Cuba seen through Indian eyes, where no one looks emaciated, the streets are clean and relatively empty, of people taking pride in their achievements in health and education, of being a special country.

I want to thank Mrinalini for sharing her experiences. Toward the end of the discussion, just as I was about to leave, Amit Basole noted that Mrinalini’s presentation would gladden the hearts of those who stress the importance of economic freedom, the free minds and free market sloganeers. Until Cuba had a protector in the Soviet Union, it could afford to regulate economic activity with a heavy state hand, but it’s been downhill once the sugar daddy disappeared. Does this mean that economic freedom is a universal human need? Can we do without economic freedom?

Necessary Freedoms.

I don’t have the expertise to talk about the ethics and economics of market freedoms. Instead, I am going to talk about the experience of economic freedom, what it feels like for me to be free to buy, sell and trade as I wish. Phenomenology is just a fancy term for the analytic description of that experience.

What does it mean for me to experience economic freedom? Let’s first start with the freedom bit: what does it mean for me to experience freedom? We can talk about the experience of freedom for centuries without arriving at a conclusion, so let me cut short the hairsplitting by defining the experience of freedom (which will be shortened to freedom from now on) as follows:

To be free is to feel that I have the capability to reliably achieve my valued goals. A necessary freedom is a freedom that we deem essential to our publicly defensible needs.

The first half of the definition has four crucial elements: goals, value, reliable and capable.

  • A goal is something one would like to achieve.
  • A valued goal is a goal that matters to us, one whose thwarting causes anguish
  • Reliability indicates that the achievement of the goal isn’t a matter of chance, that it’s within the capacity of the resources that we can marshall to our cause.
  • Freedom isn’t about the goals themselves as it is about the capability to achieve one’s goals.

Of course, getting to Mars might be a freedom for some people, but it’s not a need, unless you are a billionaire. Even in that case, it’s not a publicly defensible need. Broadly, I want necessary freedoms to be those that I expect society to provide for me, i.e., my rights. Conversely, society can ask for me to help guarantee necessary freedoms for others, which is to say, they are also my responsibilities.

Now we can pose the question that started this reverie:

  • Are economic freedoms necessary freedoms?

The Necessity of Economic Freedom

Without an economy, there’s no need for economic freedoms and the idea of an economy and of economic man is itself a modern idea. Access to food is a necessary freedom for every living creature. Livelihood isn’t, for the idea of a livelihood presupposes a society that marks certain activities as productive activities. A hunter-gatherer who forages for fruits and rodents doesn’t need a livelihood; she needs a lush and conserved ecology. A carpenter on the other hand needs a livelihood.

Even a livelihood is a couple of abstractions away from a full blown economy which for me is a mode of social relations in which production is always in terms of goods and services whose value is measurable in terms of a shared denominator, most commonly money. A subsistence farmer has a livelihood but doesn’t need an economy. Even a carpenter is only a carpenter, not an economic man. He may exchange chairs and tables for food but the exchange isn’t monetized. We can project our monetary economy back onto the barter system, but that’s a conceptual error.

It’s only when societies become truly complex and specialized, when my perceived needs include candy and fine jewellery that economic freedoms become salient freedoms. Once money or any other common measure of value take root — in a socialist country like Cuba, cash might not be the common denominator as much as access to state granted privileges — we almost certainly feel the need for economic freedom.

In any case, in modern economies — including post-liberalization India — we are well best the turning point for economic freedom. We are all economic beings in the phenomenological sense of how we feel the world around us. We automatically experience and evaluate all production in terms of it’s cash (or equivalent) value. Money is the source of all meaning, it’s the symbol that makes all other symbols intelligible to us.

(Jargon alert) The semiotics of modern life is economic

Economic life is our condition and we can’t deny it and even when we are aware of it, it constitutes us. Which is why one might argue that economic freedom is even more important than political freedom — our daily lives are constituted by economics but not by politics. That’s why China and Cuba reasonably expect to keep their citizens happy by loosening economic restrictions while keeping a tight leash on political activity.

The joke might be on the fuddy-duddies of the CPC(hina/uba): instead of an insurrection, the party might be defeated by irrelevance. By unleashing the economic beast, you are setting the conditions for a new state whether you like it or not.

That said, market activity isn’t the only form that economic man can take. While the Soviet Union was alive, Cuba had functioning (necessary) economic freedoms that were guaranteed by the state. It’s true that the freedom was guaranteed by an externality, namely, the USSR, but so are modern market freedoms — the earth and our natural environment. As that collapses, we might all start living in Cuba.

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