Rejoinder: Philosophical underpinning of “economic freedom” laid bare

Published on real-world economics review, issue no. 47, by Jim Stanford, Canadian Auto Workers, fall 2008.

In their response to critiques of their measurement of economic “freedom”, Joshua C. Hall, Robert Lawson, and Will Luther have done us a favour in laying bare the extreme libertarian philosophies which underpin their work.

The Economic Freedom of the World project (an international initiative coordinated by Canada’s right-wing Fraser Institute) attempts to quantify a highly neoclassical conception of freedom: namely, the extent to which economic agents (investors, entrepreneurs, workers, and consumers) are free from interference or constraint from government regulations, taxes, collective bargaining, or other intrusions. As Hall et al. explain, this conception is a nominally neutral conception of “negative liberty”: that is, it measures the extent to which individual agents are not interfered with. But it captures no positive rights which individuals may claim in the economic sphere – such as the right to employment, the right to a basic standard of living, or the right to organize a union and bargain collectively …

… In short, economic freedom is very much in the eye of the beholder. The Fraser Institute’s EFW index, despite its pseudo-technical trappings, represents a highly ideological effort to further the neoliberal policy agenda (deregulation, privatization, tax cuts, and globalization) that has so exacerbated inequality in the global economy. And as both myself and the late Margaret Legum suggested in our initial contributions to the post-autistic economics review on this subject, it would be a worthy project for a network of progressive economists to develop a quantitative index of economic freedom for those of us who live on the other side of the tracks. (full text).

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