Are We Witnessing the Declining Marginal Utility of Freedom?

A story that is riveting Europe, if not necessarily much of the world, continues to play out on the streets of Ukraine’s capital Kyiv. President Viktor Yanukovych stunned the European Union a week away from its Summit in Vilnius at the end of November by announcing that Ukraine would not be signing the Association Agreement that the government had been working towards since 2007 (and that it initiated in 2012). This decision, coupled with anger at the continued mismanagement of Ukraine, has erupted into weeks of mass demonstrations that perplex both the authoritarian east and the complacent west. Indeed, the size and scale of the protests have ignited more than just the dissatisfaction of Ukrainians with the path their country has been following since the dissolution of the Soviet Union in 1991.

At the same time, the continuing problems with the rollout of “Obamacare” in the US show a different side of the struggle for liberty; one where the proponents of government expansion seem to be winning the war, even if they are losing this particular public relations battle. The re-election of Barack Obama against a sea of negative economic news (albeit possibly abetted by functionaries in the IRS, the Census Bureau, and, of course, the media) means that President’s “signature achievement” has remained intact. It has also exposed that, contrary to President’s point-blank assurances that people will be able to keep their insurance coverage, as many as 93 million Americans (by the estimates of President’s own advisors! ) stand to have their private insurance decision pre-empted by the government.

These two opposite developments and the reaction of the polity in both cases lead one to wonder if freedom, and in particular free-market capitalism, contains the seeds of its own destruction. Ukraine has shown that their problems are our problems: the great statist enhancement that has occurred since the “global financial crisis” (naturally the failure of markets to anticipate risk as well as governments’ actions!) and has continued to depress economic activity and oppress civil liberty. But while Ukraine may be one end of the spectrum in terms of its blatant corruption and statist planning, it is not far from where the world (and the rest of Europe) is heading. Indeed, the struggle for economic liberty around the world seems to be the ever-present trade-off of boots versus pills.

Boots versus Pills: A Continuum of Liberty?

The idea of boots versus pills may need some explanation. While economists like to point to the simplistic trade-off of guns and butter as the example of opportunity costs, the experience of Europe in particular, and the world in general, has shown that the meta-challenge is, both economically and philosophically, between freedom and “security.” The boot is the antithesis of freedom, and by “boots,” I of course mean George Orwell’s famous depiction of the future in his dystopian novel 1984, which he envisioned as “a boot stamping on a human face – forever.”

The past century was indeed a century of boots thrashing the human face, as the short-lived burnout of Nazism and the unrepentant slow burning of Communism demonstrate. But along with this oppression of political and economic liberty, people have dared again and again to challenge the power structure and risk it all so that they, and possibly their countrymen, can breathe freely. East Germany 1953, Hungary 1956, Czechoslovakia 1968, Poland 1981, Beijing 1989; each of these dates is a monument to the individual standing against the mighty state, with no picture perhaps encapsulating it better than the image of an unknown protester standing in front of a row of tanks in Tiananmen Square on June 5, 1989. The human face yearns to shake off the boot, and thus the past 100 years has been a story of not just oppression, but struggle against oppression.

Ukraine: Removing the Boot

This is precisely what is happening in Ukraine, albeit to what end, it is still undetermined. Ukraine has had a history of these sorts of protests and, sadly, it has been disappointed before; most notably, the “Orange Revolution” of 2004 prevented Yanukovych ascending the throne after blatantly fraudulent election, instead allowing his then-rival Viktor Yuschenko to become the president. However, Yuschenko proved to be a major disappointment to Ukraine, spending much of the latter part of his term squabbling with Yulia Tymoshenko and fighting with Parliament (when not trying to dissolve it). His disastrous performance in the 2010 presidential election led directly to Yanukovych’s rise to power, which then led directly to Tymoshenko being jailed on spurious charges… and to the dismantling of much that Yuschenko wished to see achieved.

This time it may be different, as Ukraine’s incomplete transition is still preferred to its explicit backsliding towards the Soviet model. The protests in Kyiv and other (mostly western Ukrainian) cities have thus mutated from people’s opposition to an abrupt decision to retreat from the European project (which was seen as capitulation to Moscow and Vladimir Putin’s heavy-handed threats to Ukraine) into something else. As The Economist put it,

Standing in temperatures of minus 13°C, ready to be beaten up, the people on Maidan were defending something far greater than an association agreement with the EU, which was the initial cause. They were standing in the way of a police state, defending fundamental European values and defying the post-Soviet order imposed by Russia. Whatever advantage the riot police had in equipment, the protesters had moral superiority. They were on the right side of history, pushing against the authoritarian power of President Viktor Yanukovych.

This quote is both spot on and also a bit off the mark (as we shall see). First of all, the EU agreement, while still a key demand of the opposition, is not the real issue. The protesters aren’t standing against the police and bitter cold to cast their vote in favor OF Europe – it is rather hard to believe that people are outside in the snow hoping to one day be a part of the Common Agricultural Policy or to have their say in helping Brussels to define what a “banana” is. Instead, the initial disappointment with the fiasco of the EU agreement was just a spark that quickly turned into anger at Yanukovych’s initial, Putin-like response to crackdown on protests in the early morning of 30 November . This in turn metastasized into a general rage at Ukraine’s faltering direction and the unbelievable corruption of Yanukovych and his “family” (the derisive name given to the clique of oligarchs around the President). With losses to the “family” estimated at nearly $8 – $10 billion per year, it may be time when much of Ukraine has had enough of the kleptocracy that they helped to elect.

Obamacare and the Allure of “Free” Pills

However, this desire to be free from the boot of the state may have its limits, as the example of Obamacare shows. A colleague of mine at the Hayek Foundation mentioned that the Slovaks stopped looking to the US as an exemplar of free markets a long time ago, which, as an American, cuts me to the core. But sadly, it is true; the transformation from the beacon of liberty to just another boot happened long ago, beginning during the era of Woodrow Wilson, America’s most petty and vindictive president, and continuing through Franklin D. Roosevelt and many presidents of the 20th century. What is rather frightening now is its acceleration: the United States continues to shed any responsibility as the world’s leading free-market economy, sliding to the 17th position in the 2013 Economic Freedom of the World ranking. The size of the state also continues to expand, with Obama adding a record 330 new “major” regulations (those with an economic impact of US $100 million or more), and an expansion of the public debt that continues to boggle the mind.

Obamacare (or, as it is known legally and ironically, the “Patient Protection and Affordable Care Act”) has been just one more symptom of this expansion of government, injecting the government into an already heavily regulated area of the economy. The failures of the Obamacare website have brought the technical failings of such a regulatory endeavor to light (as do the cancellations of existing coverage), but the broader moral failings behind it remain an afterthought of public debate. The US Supreme Court famously affirmed that Obamacare’s penalty is just a “tax,” albeit a tax on something you DON’T buy; no one seems to have been bothered by this expansion of state power. Moreover, a Georgetown law student, Sandra Fluke, famously testified before Congress that the public picking up the tab for her contraception was somehow a human right; similarly, those who objected were attacked viciously as if they had questioned the sun and the moon. As if on cue, those on the left manufactured the idea of a “war on women” if the cost of contraception was not somehow socialized, further equating the “right” to contraception as part of a phalanx of human rights heretofore not discovered.

The denouement of this story is, of course, unlike in Ukraine, as throngs of masses are not in the squares demanding that the legislation be repealed. Well, there may be some in the streets demanding this, but they are vilified by the media as a bunch of loonies, or by the President himself as “tea-baggers.” Instead, there seems to be a resignation to the current state of affairs, reminiscent of the 1970s, when “malaise” was the new norm and the failings of government were an exogenous fact, not generated by human action but by impersonal historical forces. Perhaps even more unbelievable is the fact that Obama sailed easily to re-election facing dismal economy and unpopular policies (testament again perhaps to the idea, coined by PJ O’Rourke, that Republicans are the party that believes the government doesn’t work and then gets elected and proves it). To recap, the US government brazenly lied and, via obscure parliamentary procedures, maneuvered the law into such a place that it is now wrecking an important segment of the US economy, while allies in the media continue to cheerlead it and equate free pills with the most basic of human rights. What has happened to make the choice of pills more important than the choice away from boots?

The Marginal Utility of Freedom: A Continuum of Liberty?

Put in other words, does the desire to push away the boot suddenly dissipate in the presence of such a temptation as “free” pills? Granted, the United States achieved its independence over 237 years ago, and the boot it faced was never as oppressive as that faced by Ukraine, Estonia, Poland, Cambodia, or other countries even over the past 40 years. This lack of memory may explain the fact that the US seems to be willing to tolerate the boot more and more in order to get free pills or some other tangible good (Obamaphones!). However, a more insidious parallel can make the point stronger, especially regarding the US: slavery was once a part of America; today usually utilized by those on the left to demonize those on the right (America was never perfect, there was slavery and it was written into the Constitution), but without acknowledgement that it was the government that guaranteed slavery. In fact, “private” slavery, also known as “kidnapping,” is far less prevalent than government-sanctioned and sponsored slavery; it would be difficult to conceive the idea of slave trade if it had not been safe, legal, abundant, and supported by governments as a way to help the economy grow. But despite such past, the greatest and most monolithic voting bloc for the Democratic Party today is the black vote, often turning out with 90% in favor of whichever Democratic candidate is running. At some point, the same state that once enslaved them has now become the guarantor of their hopes and dreams.

This tale of two countries begs the bigger question: is there an “optimal” level of freedom that can actually be stable and not lead to one generation forgetting what the previous generation fought to achieve? There must be some point where freedom can be optimized between the human desire to escape the boot and the desire for the same government that once oppressed to now provide “free” contraception. In this sense, perhaps freedom contains its own seeds of destruction, simply because it allows the economic and technological progress that makes fascism seem, well, quaint. Free-market capitalism enables prosperity like no other system, which may then make the trade-offs seem not as frightening: in a world of plenty, we will also have more progress to sacrifice a small bit for security/equality/contraception. Additionally, like in Ukraine and Russia and everywhere else in the world, economic success attracts the vultures of politics in a more intensified way (after all, vultures do not feast where there are no scraps). While nothing succeeds like victory, there is also no surer way to draw the ire of regulators and the interest of politicians.

What Ukraine and the US demonstrate is perhaps on a more basic level the failure of memory, a focus on the value of laughter and forgetting (in Kundera’s iconic phrase) rather than the reality that freedom really is never more than one generation away from extinction. The West in particular has forgotten the value of freedom, not only in an economic sense but in a moral sense too; in this manner, it is tough to perhaps say with certainty, like the Economist does above, that freedom is the right side of history. It certainly is the correct side, but it is not inevitable. It requires a struggle. With this in mind, we wish the protesters in Ukraine well and hope that their situation, where the confrontation with the state is direct, visible and imminent, also clarifies it to the rest of the world that the struggle is always there. To think otherwise is to lose oneself in a haze of pills, not even noticing the presence of the boot.