August 27, 2012

The Metric of Freedom

As my readers know, I’m not very good at economics, but I definitely want to keep up-to-date on this matter. And that’s why—after asking one of my favorite economics gurus for advice—I’m currently reading the following very special books (which I highly recommend to anyone interested in that kind of reading).

  • The Clash of Economic Ideas: The Great Policy Debates and Experiments of the Last Hundred Years, by Lawrence H. White, Professor at George Mason University.

An easy to read and understand guide to key macroeconomic issues during the 20th century, and a comprehensive account of the clash over the role of government in the economy. In other words, as the book description reads, it covers disputes over the free market, socialism, fascism, the Great Depression, the New Deal, war, nationalization, central planning, economic growth, money and finance, inflation, regulation, free trade, government spending, budget deficits, and public debt.

The basic thesis of the book is that the clash of economic ideas of the last hundred years can be epitomized by the intellectual struggle between John Maynard Keynes and Friedrich von Hayek. Of course, according to Lawrence H. White, who is a leading contemporary proponent of the Austrian school, the former was wrong, the latter was right… And I cannot but agree with the author.

  • The Economics of Freedom: Theory, Measurement, and Policy Implications, by Sebastiano Bavetta and Pietro Navarra (the former is professor of Economics at the University of Palermo, Italy, the latter is professor of Public Sector Economics at the University of Messina, Italy; they both are visiting professors at the University of Pennsylvania, USA, and research associates at the London School of Economics).

This is a really interesting survey of the philosophical literature on liberty, combining philosophical analysis, economic theory, and empirical research. As far as I can understand, at the core of the book are three themes: the value of choice, the measurement of freedom (the authors develop an original measure of freedom called “Autonomy Freedom,” consistent with J. S. Mill’s view of autonomy), and the effects that the alternative measures of freedom have on the functioning of the economy and the working of political systems. By the way, according to my economics guru the new metric of freedom proposed by the authors is exactly what the Italian center-right lacks (to say nothing about the center-left and left).

By means of an interdisciplinary approach and a sophisticated econometric methodology, as the book description says, the authors take an explicit stand in defense of freedom and set the basis for a liberalism based upon people’s actions and institutions. Well, what to say? I think Bavetta and Navarra have contributed a good deal to our understanding of the nature and value of freedom. Because freedom is not just a concept, but instead should be our daily experience, and there is no freedom without the sense of individual—and the restriction of that which would hinder it.