Centralization, Economic Freedom, and the Skills Divide

To what extent could individuals still govern themselves, in contrast with how nations tend to be envisioned as "governing ourselves"? This question has become increasingly complex and important, as societies rely more than ever on knowledge to get things done.

Self governance was a simpler option for example, when property owners could still eke out a living from a productive plot of land. Whereas much of today's production involves high levels of knowledge and skill, not to mention levels of social coordination which go well beyond familial responsibilities. In a world economy increasingly dominated by knowledge and skill, does that mean it is no longer realistic to conceive of economic freedom as meaningful choice in interaction among individuals?

Too many time based services have been unnecessarily subjected to losses of economic freedom, via forms of external organizational control which reduce the possibility of meaningful interaction. But unlike many forms of final product, time based services tend to be experiential in nature, which often suggests they could be effectively managed and negotiated by the individuals who voluntarily choose to take part. Time based product is different from the specifications of tradable sector product, in that it often assumes snowflake forms. Indeed, this particularly holds true when we are young and still actively engaged in educational processes. Without real possibilities for mutual voluntary services association, people can end up experiencing difficulties establishing healthy boundaries, mutual respect, and trust as they go through their lives.

Over time, divisions of labour for time based services have become restricted in ways which not only inhibit total factor productivity, but also limit the nature of how providers and recipients could otherwise experience the personal exchange. Put simply, externally defined divisions of labour make more sense for the precise qualities needed in tradable product, than for the experiential nature of time based services. What's more, the non tradable sector divide in skills use potential, has been perpetuated by liberals and conservatives alike.

Perhaps these implicit agreements among professionals affect economic conditions in ways not always considered. Pierre Lemieux provides some interesting context in "Lessons and Challenges in The Limits to Liberty" where he takes a closer look at James Buchanan's Limits to Liberty (1975). For instance, Lemieux noted Buchanan's support of individualism in the latter's quote "each man counts for one, and that is that", and then continues:

It follows that individual liberty is a value and that the social system should be based on unanimous consent. Any limit to liberty must thus be consented to by each and every individual.

Alas, where do we observe this presumed liberty in action, given the lack of freedom so many now experience in the use of their own time, especially in relation to the time of others? If we do not believe that a diverse range of services could be freely chosen and provided, how can we really believe in free markets in the 21st century? How much of the present fiscal budgetary dilemma is due to our governments ensuring services markets remain as unfree as possible, on behalf of the interests they protect?

Not surprisingly, it turns out there are limits to the freedoms which James Buchanan believed to be possible. For one, Lemieux emphasized how Buchanan argued in favour of government provision for public goods as a social or constitutional contract. Yet what's different in this instance, is Buchanan's reasoning for doing so. As it turns out, his beliefs regarding personal aptitude and ability also factor into his proposed economic outcomes.

In contrast to other contractarian theorists, Buchanan does not assume equality in terms of resource utilization or personal capabilities. From this it follows that some minimum of welfare state may therefore be necessary. Private and public goods both depend in part on the rules of the economic game, whereby freedom is mostly agreeing to take part in what is already proposed, or refusing to do so. It's easy to imagine that sometimes the state needs to intervene when people refuse. Doing so costs money. Hence this quote from Buchanan:

The dividing line between private and public goods depends, in part, on how the property rights of persons are defined.

The twentieth century gave rise to many domestic forms of applied knowledge protectionism, long before the tradable sector protectionism which arose more recently. Essentially, knowledge and skill has also been made rival in non tradable sector circumstance, in part because protected knowledge has to do the heavy lifting of meeting the organizational costs of quality product and costly real estate. And with the giving to special interests of these exclusive production rights, comes the rationale for a welfare state as well. Hence conservatives and progressive alike, would tend to view welfare as means to reduce public rebellion or even revolution. Indeed, I recall an instance among friends in a local welfare office decades earlier, where local progressives expressed the rationale of public assistance exactly in these terms.

Again, Buchanan is hardly alone in assuming relatively permanent differences in aptitude and human potential at the outset. After all, many progressive arguments for government job guarantees or some form of "living" wage, contain the same underlying assumptions regarding how workplace conditions and skills requirements "should" consequently be defined. Nevertheless these assumptions blatantly disregard the potential for mutual reciprocity and well being, when societies allow as many as possible to pursue full engagement and meaningful interaction.

A limited welfare state is desirable for societies to protect the old and the weak. That said, there are millions who actively resist remaining weak. Some of the latter I might either respect or fear. But I don't find welfare states acceptable on the rationale of keeping out those who could potentially thrive but presumed too dumb or weak for society to allow to take part. Social and economic exclusion is not going to work in a knowledge based economy, especially when many forms of production and former employment are tended to by technology and automation. Let's don't create permanent skills divides between groups. That's a recipe for disaster. Doing so would not only prevent millions from assisting one another, but also incline some among these groups to rebel in a thousand ways that no government can prevent.