Freedom, Markets, and Voluntary Exchange

Abstract

A capitalist market system of social exchange is justified primarily because it protects individual freedom. This system, its advocates claim, achieves the complex task of production and distribution through a process of voluntary exchanges; coordination is effectively achieved without coercion. I argue that this claim is largely unwarranted. The negative concept of freedom that underlies voluntary choice (the absence of interference by others) is unable to differentiate between instances of freedom and unfreedom. As a result, it is not possible to determine whether exchanges are voluntary or coerced. A more adequate conception of free choice (as the relevant capacities and conditions for deliberate decisions and actions) suggests that a capitalist market broadly and systematically denies the possibility of voluntary agreements. This general failure to protect individuals' freedom is examined in relation to the acquisition of property, the transfer of property, and the process of production.