Good question!

Over at Econlog Bryan Caplan asks a good question – he asks why economists who often rail against the free market will also often state that they strongly support civil liberties. Fundamentally he is asking, why do these people not support freedom to trade but do support freedom of expression.

Now I agree with Dr Caplan that economists should use the same tools to discuss civil issues as they do trade issues – any limits on civil liberties should be the result of externalities, asymmetric information on the value or relevance of ideas, or the undue power of an idea which in turn reduces social welfare (in the same way that in trade, people will rally against externalities, asymmetric information, and undue market power).

However, this does not suddenly imply that I am a stanch supporter of a completely free market – in the same way that I am not a stanch support of blanket calls to remove regulations that reduce civil liberties. Ultimately, in both cases there are trade-offs, and our ultimate goal is to maximise social welfare.

Lets discuss the “social-democrat economist’s bias” a bit more below the flap:

Dr Caplan says:

I think that the typical social democratic economist’s arguments in favor of civil liberties are much weaker than the typical free-market economist’s arguments in favor of laissez-faire for the broader economy.

And you know what, I agree with him again. However, I reason I agree with him provides part of the answer for why economists are more keen to introduce regulation in markets then they are in the case of “ideas”.

I think that social democratic economist’s arguments for civil liberties are less well developed then their arguments about markets – as it is not their area of expertise. Economists know about markets. That knowledge informs them about types of market failure, and puts them into a situation where they feel some form of social organisation may be able to make an improvement.

Economists do not know much about civil liberties, and so their opinions are more strongly influenced by the impression of people around them. In the West we have a strong belief in individual freedom – and as a result, those without information will just pick that up and run with it. Furthermore, people that become economists do so because they have an affinity with “freedom of choice” (or else they would have dropped out in first year). A knowledge of the market helps overturn part of this in the economist – but a lack of knowledge about civil liberties ensures that freedom is the default frame they turn to.

As a result, someone that actually studies the flow of ideas, the value of choice, and how information flows could be provided more clearly (as surely part of the goal of liberty is to provide people with the right information) would realise that a blanket “civil libertarian” stance is not optimal. These people would then come up with policy considerations in order to solve these issues that would sound the same as the economists externality, asymmetric information, and monopoly type arguments.


Ultimately, I believe that economists are more willing to regulation the market then they are civil liberties because they understand the market more.

I believes the questions that Dr Caplan ask provide a very useful exercise for economists – as it forces us to put our own value judgments in perspective. However, I suspect that once the economist thinks about it, he is more likely to see the limits of blanket civil liberties rather than suddenly feeling that his/her beliefs about how the market functions are wrong.

Update: Bryan Caplan answers the direct questions he asked.

6 replies
  1. goonix
    goonix says:

    I was actually thinking about this issue just the other day. I can’t see how anyone can seriously say they are pro-freedom in the market and not be pro-freedom on social issues, and vice versa. Tying it into the political compass ( ) discussion the other week, anyone in the ‘Authoritarian right’ or ‘Libertarian left’ sections are, to some degree, hypocritical (sorry Matt, but I believe you fell into the latter 😛 ).

  2. Matt Nolan
    Matt Nolan says:

    “(sorry Matt, but I believe you fell into the latter 😛 )”

    Indeed I did 🙂

    And as I’ve discussed in this post – this bias may be because I understand issues of trade more than I understand issues of civil liberties, a point I am more than willing to concede.

    However, also it might stem from their being some fundamental difference in the issues – if I understood more about these issues I might be able to state why 🙂

  3. goonix
    goonix says:

    You are in the ‘social freedom’ category (libertarian, or south of the compass). You are not in the ‘economic freedom’ part of the compass though (the right).

  4. Matt Nolan
    Matt Nolan says:

    “You are in the ’social freedom’ category (libertarian, or south of the compass). You are not in the ‘economic freedom’ part of the compass though (the right).”

    Indeed, that is what I was agreeing to.

    As I said in the post – economists default to a position of “freedom is good”, that is part of the inherent “bias” in our discipline.

    As a result, if I don’t understand something I move to this default position – which is the case in the social category.

    When it comes to economic/trade issues I do have some small level of knowledge. This knowledge allows me to move past my initial default position and recognise some of the other issues. On weighing these up I end up a smidgen to the left in the economic category.

    As a result, my position is completely consistent with the reasoning I’ve provided. If someone painted civil liberty issues in the same frame as economic issues I may end up less “blanket liberal”.

    Note The reason that economists that are like me are willing to constrain freedom in trade is because of issue that we believe influence other peoples “liberty”. In other words, it is not that we are trying to say “liberty is bad” in any sense – we are just accepting that complete economic freedom does not imply that welfare, or peoples liberty will be maximised. Government has a role in promoting liberty – as well as a role constraining it.

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