As this blog is about discovering liberty, or freedom, the one thing I've learned in the past couple of years is that the essential foundation for understanding the principles of freedom is an understanding of the principles of economics.
Why is it important to understand economics in order to fully understand the principles of liberty? Well, quite frankly, our daily lives involve many economic decisions. There is no way around it. If you really think about it virtually everything you do has an economic impact and economic considerations guide your actions. You might not think about it in quite that way, however.
Most of us go to work each day. There's an obvious economic impact to that action. Along the way, we might make a decision about which gas station to patronize in order to fill our tanks. We could choose the one that is conveniently located along our commuting route, or we could choose to go a little bit out of the way to stop at the station that we know is a little bit cheaper. It depends on what it more important to us at the time. How low is the tank? How soon do we need to be at work? What is the traffic like today? Sometimes the convenience of the station along the way outweighs the savings to be found by going to the out-of-the-way station. That is just one example of the many decisions each of us makes each day regardless of our occupations. The price of the gas is a factor in our decision making, but not the only factor.
The accumulation of these individual economic decisions that each of us makes each day constitutes the general "economy" that we hear about on the news and that we talk to each other about. The economy is not some separate entity out there with its own free will. It's us.
But for some reason when we think about the economy, we tend to forget that it is really just us. By conceiving of the economy as some singular type of entity, we start to think of it as something whose behavior can be predicted or, even worse, controlled.
The economy can only be controlled in so far as each individual person can be controlled when making the numerous economic decisions they make each day. Now we do know that there are some general things that can influence an individual person's behavior, but we cannot claim to predict exactly what any individual will do in a particular situation. Most of us would choose the gas station with the lower prices, but we won't all make that choice all the time. Thus we cannot predict with certainty exactly what an accumulation of many people will do. Spill some water on a table and you can influence it to flow in a certain general direction by raising one end of the table, but you cannot predict, or control, exactly where it will all flow.
So, what does this have to do with freedom? Well, if the desire is to "control" the economy, then the individual actors within the economy must be controlled. Merely "influencing" them will not achieve the end of control of the overall economy because their actions will still be unpredictable. Control in this sense implies the removal of voluntary action. Now that's where the freedom part comes in. How can an individual person be said to be free if he is being forced into the course of action that the economic controllers want him to take?
The simple truth is that the person is no longer free in this case. Economic freedom is a prerequisite for political or social freedom. So, if the goal is to have political or social freedom, we must first ensure our economic freedom.
Now, here is where the understanding of economics comes in. If you don't understand the principles of economics you cannot defend your economic freedom from those who aim to control the economy and, by extension, you.
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