It’s Time We Take a Closer Look at America’s Three Favorite Words: Freedom, Liberty, and Democracy

Freedom, liberty, democracy… these words are used so often that we give them little real thought, rarely holding them up to the realities of what we see around us. What do these words really mean? Do they currently exist for us to celebrate as we appear to think they do? And if not, is there anything we can do about it?

Let’s take a closer look.

Freedom

Simply put, freedom is the idea that we’re free to do as we wish to do. However, there’s more to it than this. In practice it has a caveat, as we are all surrounded by each other and not in a vacuum; freedom is more realistically defined in a social context as the idea that we’re each free to do as we wish to do, so long as we don’t prevent others from having the same ability. We may wish to be free to hurt someone, but that would limit their freedom to continue free of hurt, and if considered acceptable, would open the door to people hurting us. And so freedom in practice has its one condition – it exists for us all only to the social degree that everyone else has equal freedom themselves.

However, in addition to this sole condition, freedom can also be thought of in two different ways. On the one hand, there is the freedom from being prevented from doing what you want to do by others. And on the other hand, there is the freedom to actually do what you want to do. The former can be thought of as a lack of binding constraints (negative freedom) and the latter an abundance of real opportunity (positive freedom). Which version of freedom is most important is entirely up to the individual, but referring again to freedom’s one condition, both forms must be available to everyone universally, lest one’s freedom be partial.

So how can we universally realize freedom in both forms? What is it that freedom requires?

“The way we can best take care of ourselves is to have land, and turn it and till it by our own labor.”

Opportunity

Thomas Jefferson contemplated the answer to this question and wrote his solution into his version of the Virginia State Constitution:

“Every person of full age neither owning nor having owned 50 acres of land, shall be entitled to an appropriation of 50 acres or to so much as shall make up what he owns or has owned 50 acres in full and absolute dominion. And no other person shall be capable of taking an appropriation.”

Jefferson felt that to realize freedom more fully, everyone needed to have a minimum amount of land, and this ownership of land would release every individual from the coercive power of others, while also empowering them to actually do what they wish. With this universally guaranteed minimum amount of capital in the form of real property, people could choose to live on their own, off their own land with their own labor, bothered by no one. In addition they could also choose to use that land as a source of income, through their own labor, to actually afford the goods and services of others. In this way Jefferson saw a minimum of 50 acres as a guarantee of both forms of freedom.

Decades later, a freed slave and chosen spokesperson of other freed slaves named Garrison Frazier would express the same sentiment as his own answer, when asked about slavery and how to best preserve his and his community of freedmen’s newly proclaimed freedom from it.

“Slavery is, receiving by irresistible power the work of another man, and not by his consent. The freedom, as I understand it, promised by the proclamation, is taking us from under the yoke of bondage, and placing us where we could reap the fruit of our own labor, take care of ourselves and assist the Government in maintaining our freedom… The way we can best take care of ourselves is to have land, and turn it and till it by our own labor...”

The result of this response, is the now infamous Special Field Order No. 15 by General Sherman, which included a promise which came to be known as “40 acres and a mule”, where 400,000 acres of land owned by slave owners were to be redistributed to the now former slaves themselves, in 40 acre increments. It was the freed men themselves who knew that to be truly free required more than a lack of chains, but real opportunity and the power to say “No” to being forced to work for others, that land ownership could provide. Essentially, a minimum amount of capital was required for them to be entirely and forever free from slavery.

Unfortunately, this promise was broken only months later by President Andrew Johnson, and the land returned to its former owners. How would history be different, if this order had not been reversed? Where would we be now if this same order had been extended to all U.S. citizens? Without this bare minimum of real property, does everyone in America today somehow have the equivalent freedom from coercion plus freedom of opportunity such minimum land wealth ownership would allow?

If not, what about liberty?

Liberty

One of the more complete and lesser known explanations of liberty can be found in the late 19th century writings of John Milton Bonham in his book “Industrial Liberty” as a passage from Liberty herself:

“You shall be equal to all others before my law; not equal in faculty or endowment, for my gift to you is of political right, not of natural faculty. Political freedom does not, and cannot, confer natural faculty nor can it change the variety of that faculty. I take you as I find you, with those faculties which nature has thus given you in diversity. I would not change these if I could ; nor would I disturb their diversity; since it is by this very diversity that individuality receives its highest expression, and that the largest results of my gift of political freedom and political equality are realized. Bringing, therefore, to me the faculties which nature has given you, I determine that you shall employ them in your own behalf, in my behalf, and behalf of humanity, with the same freedom as that with which every other man may use his. You may bequeath the fruits of your endeavors, within the limits of your natural affection, to your children and grandchildren. This you may do in order that your incentives to acquisition and possession may be complete. Beyond this you cannot tie up your gains to be held against the incentives and activities of the generations to follow.”

Here we have Bonham as Liberty notifying the reader that it is impossible for everyone to be absolutely equal, that there will always be inequality, but we are all equally guaranteed the same rights before the law, and that we must use our liberty for the liberty of all and always keep in mind that it is possible to go too far — that at some point we end up taking from each other, even long after our own deaths. And so Liberty continues on with again, a sole caveat…

“I confer this gift upon you, upon the condition that you will assist every other unit in the exercise of his like political gift, and that you will not permit any person or combination of persons to exceed the common limit… You may, for the common convenience, permit commerce and industry to be conducted by delegated units; but you must see to it that paramount to all such authority is the supreme equal political right of the individual units, the sacred thing to which all other things must be adjusted…”

So, just as freedom exists within social and economic bounds, so does liberty. The achievement of real liberty requires that each individually ensure that all collectively keep and maintain one another’s equal political and economic rights. This is the cost of liberty — that each individual not accumulate so much money or political power, that the ability of others to accumulate their own is reduced or even outright prevented. Though there will always be those with more money, it cannot be allowed to reach a point whereas it reduces the economic liberty of others. And though there will always be those with more potential political power, absolute equality in this regard must be held as paramount.

So how can we universally realize liberty? What is it that we need?

There can be no liberty if we do not each contribute as is necessary to achieve it and guard it for everyone — excluding no one.

Taxes

Now come to be known as almost derogatory in nature, taxation is actually the very infrastructure of the more grounded idea of liberty John M. Bonham defined as industrial liberty in 1888:

“Industrial liberty consists in the freedom of each individual citizen, guarded by such delegated authority, contributed by each, as is necessary to preserve this individual freedom equally to each…”

In other words, there can be no liberty if we do not each contribute as is necessary to achieve it and guard it for everyone — excluding no one.

This idea of industrial liberty recognized how liberty in practice had been affected by the Industrial Age. Where once we were all a bunch of farmers, industrialization allowed all of that to change through advances in technology. These advances, although great in allowing us to do more with less with ever increasing productivity, served to centralize power via corporations to the point of creating monopolies and concentrating great wealth. This was already seen a century ago as problematic.

A century later, information technology is only further accelerating the concentration of wealth. Where once a corporation required 100,000 employees to create $1 billion in value, we now find companies like WhatsApp being valued at $19 billion with 55 employees. At the same time we see a continually shrinking labor force participation rate. This increasing concentration of wealth at the top and decreasing ability to earn income at the bottom poses a problem to the idea of liberty, because those with the most money have the most liberty, and those with the least money don’t have enough to realize any actual liberty. Taxation becomes even more important as a means of correcting this structural imbalance.

As an economic system that creates and concentrates wealth, capitalism increasingly concentrates more and more wealth in the hands of those who already have it. Thomas Piketty has confirmed this through centuries of evidence and its thorough analysis in his Capital in the Twenty-First Century, making clear that capitalism is a system that requires some form of sufficient redistribution in order to avoid a new form of feudalism. Simply put as the equation “r > g”, wealth will not trickle down faster than wealth builds more wealth. Only through the use of taxation can money unceasingly concentrating at the top be cycled back into the system as a whole to keep the entire system from being torn apart by larger factors like the drying up of consumption and inevitable social unrest.

When liberty exists unequally, accruing mostly at the top along with most of the wealth and income, while disappearing everywhere else, and a sufficiently progressive system of taxation does not exist to help correct for this imbalance, where does this leave the particular system of government we claim to hold most dear?

Democracy

Aristotle defined democracy as a system of government where the people have authority and this authority is distributed among the people — everyone — regardless of wealth or intelligence. He believed that by working together, the whole could be greater than the parts:

“That the multitude (plethos) should have authority rather than those who are best and few in number [is a defensible position]. Even though none of the many is individually a man of excellence, nevertheless they can be better when they are all together, just as a dinner to which many people contribute can be better than one furnished from a single source. With each of the many having a part of excellence and intelligence, when they join together they become like a single person.”

Far from seeing two wolves eating one sheep, Aristotle saw what some scientists are only discovering now, about the wisdom of crowds and their incredible collective knowledge and surprising accuracy.

Sir Francis Galton was one of the earlier scientists to discover this, when he looked at the guesses at a fair’s weight guessing contest. He suspected most people would be way off the mark, and they were individually. Nobody got the right answer of 1,198 pounds. However, when he took the mean result of everyone’s answers, he found that it was the crowd itself who won, with a mean guess of 1,197 pounds. His thoughts on this discovery:

“The result seems more creditable to the trustworthiness of a democratic judgment than might have been expected.”

This finding has been repeated again and again in other experiments, and was even found on the show “Who Wants to Be a Millionaire”, where those opting to get help from the audience have been reported as being right 91% of the time. There are however examples of where crowds are unwise and this leads to certain requirements for greater collective wisdom like diversity, independence, and decentralization. Simply put, the larger and more diverse the crowd, the better the result.

Another unexpected finding is the stability of majority rule among large populations of the uninformed. It is widely believed that the more informed people are the better and the less informed the worse, but there is surprising stability found where large populations of the uninformed serve to dilute the power of minority factions who would otherwise dominate. Essentially, it is the weight of the great masses that pushes against individuals of great power attempting to exert influence in any direction. It is this effective inertia that results in long-term stability.

Democracy really works. The outcomes of the whole can be better than any one single member or small group of members could otherwise make possible, and with greater overall stability. So what is needed for democracy to be more than just an ideal, but a functioning system realized in practice? What is it that is needed?

Democracy requires a high enough level of political equality and a low enough level of economic inequality to sustain long-term stability.

Equality

Aristotle believed that democracy required one citizen one vote (political equality), but saw a danger in the have-nots taking everything from the haves (economic inequality). He concluded the way to make sure the have-nots didn’t use their greater numbers to vote away the very existence of the haves, was to create in the middle a group of have-enoughs, sufficiently content in their own wealth and circumstances so as to not look upon the rich with want and disdain. In other words, democracy requires a high enough level of political equality and a low enough level of economic inequality to sustain long-term stability. If there is too much inequality either way, the system will inevitably break down.

James Madison saw the same problem as Aristotle, but instead helped create a system with a different solution in mind – a lower amount of democracy with more power invested in those with the most wealth. It was Madison who in his fear of full democracy designed a system of aristocratic representation. Political power would reside in the hands of the wealthy — those who by their wealth were seen as more capable and willing to protect the rights of property owners — to act as representatives for the common man but also protectors of the aristocracy. This is not to say he also didn’t see danger in this solution, as he later warned of the day when too much wealth would be in the hands of too few:*

“A republic cannot stand upon bayonets, and when that day comes, when the wealth of the nation will be in the hands of a few, then we must rely upon the wisdom of the best elements in the country to readjust the laws of the nation to the changed conditions.”

*(Note: This quote appears to be a paraphrased interpretation by Daniel De Leon in 1900 of an appendix written by James Madison)

So, what are America’s present conditions? To what degree have they changed and/or need to be changed?

According to a recent study holding up our system to four different models to see which most accurately reflect the United States in 2014, democracy describes neither of the models that best fit our present conditions. The names that both fail to describe our system of government in practice: Majoritarian Electoral Democracy and Majoritarian Pluralism; the names of the models that both succeed in accurately describing our current system of government: Economic Elite Domination and Biased Pluralism. The results speak for themselves…

“When the preferences of economic elites and the stands of organized interest groups are controlled for, the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.”

Another report found that people with an annual household income greater than $100,000 are 80% likely to vote, while those with an income of $15,000 or less were only 30% likely to vote. So those with little money don’t even really vote at all. Is this because they know their voices aren’t being heard, or is it because being poor somehow translates into greater difficulties actually voting? Either way, the effect is real.

So do we at present have freedom, liberty, or democracy in practice? Or are these ideals more theoretical in nature and more illusory in practice? And if that’s the case, how do we go about actually achieving them?

First, let’s start with the now having been established mix of necessary ingredients: opportunity, taxes, and degree of equality. Our potential solutions therefore seem to require:

1. Thomas Jefferson’s minimum land guarantee or its equivalent.
2. A sufficiently designed system of taxation high enough to guarantee equal liberty but efficient enough to be as minimal as possible.
3. Low enough levels of both political and economic inequality to guarantee a more stable and fully functioning form of democracy.

Commonly considered improvements tend to include:

• Minimum wage increases
• Minimum wage decreases
• Increased taxation
• Lowered taxation
• More jobs
• More growth
• More education
• More money in politics
• Less money in politics
• Smaller government in general
• Larger government in general

The reason little gets done is plainly seen in such a list. There is very little agreement on how best to go forward. Meanwhile, some newer solutions are now being discussed by those who claim to see a bit further down the road the potential hazards of a system left unchanged in ignorance of exponential advances in technology and the realities of globalization. These newer solutions include but are not limited to:

• Cryptocurrencies (Bitcoin)
• Massive open online courses (MOOCs)
• Some form of job guarantee (JG) with government as employer of last resort (ELR)
• Work weeks of under 40 hours
• Land value taxation (LVT)
• Global taxation
• Financial transaction taxation (FTT)
• Taxing consumption rather than labor (VAT)
• Expansions of assistance programs like the earned income tax credit (EITC)
• The elimination of poverty through a basic income guarantee provided through a negative income tax (NIT)
• And potentially the most radical of all, an unconditional basic income (UBI) where everyone would get an identical amount of money sufficient to cover their most basic needs such that all income from paid work is earned on top of and in addition to everyone’s UBI.

The question becomes which solution or mix of solutions makes the most sense and does the most good? And what would the resultant effects be on freedom, liberty, and democracy? If the idea involves a decrease in taxes, would its effect be decreased inequality? Or would it have the opposite effect? If the idea involves larger government, would the effect would be greater freedom? Or would it have the opposite effect?

An old favorite to examine, and one still debated heatedly, is raising the minimum wage. On the one hand it functions to transfer wealth from the rich through increased wages, but on the other hand it can (but does not always) increase unemployment. In this way it can leave those with jobs better off while leaving those without jobs worse off. In a world of increasing elimination of human labor through software and hardware advances, this solution appears to fall short on its own without being combined with a stronger public safety net.

Another old favorite, and one now increasingly discussed, is the idea of a shorter work week. By shortening the work week to 35 hours or less, unemployment could be reduced through what is effectively the sharing of labor. We are actually already seeing this as the unemployment rate continues to go down through the replacement of full-time jobs with part-time jobs.

The problem with this is the choice between lowered overall incomes through lowered hours, and maintained overall incomes through increased wages. So, either people suffer through earning a lot less in income, or companies suffer by paying a lot more in wages.

Among the solutions that look to be more widely encompassing and longer-term, two growing favorites also happen to be two with support along the full political spectrum, from far right to far left. Their goals are opposite to each other and yet similar in outcomes. The opposing ideas come down to 100% full employment through the guarantee of a job paying sufficient income, or the 100% guarantee of sufficient income regardless of even having a job.

Supporters of the job guarantee mostly support the idea that work is valuable in and of itself and that living and breathing should require work, or as described in the Bible, “By the sweat of thy brow, thou shalt eat bread.” However, if there is to be no free lunch and work itself has worth, there must be a job for everyone to afford lunch and find their worth in work, and thus a job should be guaranteed.

A job guarantee appears to do a lot of good through guaranteeing a job to everyone, an idea even Franklin D. Roosevelt wanted as part of his Second Bill of Rights. However, it’s also important to note that government guaranteed jobs are inherently inefficient in the amount of money required to create each job compared to the pay of each job. In President Obama’s proposed stimulus plan in 2009, an estimate on the low end of the cost to create each job was $100,000. On the high end it was $646,000. Guaranteed jobs would pay nowhere near these amounts, meant instead only to be at least higher than the poverty line, and so we would be spending potentially $50 in taxes for every $1 of job compensation.

It’s also important to wonder what kind of jobs these would be, and who would be making these decisions as to what jobs to create and where? Would these be jobs creating vital national infrastructure or would they be digging holes and then filling them? Additionally, would these jobs be in California instead of Wyoming because of who was on the job creation committee? And what would happen as technology is able to replace these jobs? Do we keep doing them by hand because we need the jobs to exist?

These are important questions and we need to ask them as we consider such an idea as guaranteeing everyone a job to enable sufficient income for a decent life. Meanwhile, the other option remains the possibility that instead of guaranteeing a job to cover our basic needs, we just guarantee our basic needs be covered without requiring a job.

This idea of eating bread without a sweating brow may reflexively feel wrong to us, but by providing everyone the same minimally guaranteed amount of income so as to create an income floor, all those engaging in paid labor would earn incomes above that set floor. Even more interesting, it could actually function as the equivalent to owning land, in a way more equal to all than land itself, which would vary in quality everywhere.

Instead of minimum citizen land, a minimum citizen income could allow citizens to choose to live simply on their own with their basics covered or voluntarily sell their labor as laborers in a labor market to earn greater incomes. There they’d individually have the ability to say “No” to poor wages and conditions. Also, with one’s basic needs covered, anyone could choose to actually participate in the process of self-government through their time or money and be compensated for currently unpaid labor like care work and volunteerism. In addition, inequality could be reduced to a more sustainable level, and automation of human labor could be invested in much more heavily, once the requirement of human labor has been lifted.

Through just a cursory examination, a basic income guarantee of some form appears to do even more good than a job guarantee. This is not to say however, that they can’t be somehow combined. It’s also important to note that a basic income would involve the elimination of existing federal assistance programs, instead replacing them with cash. To some degree, this could be very advantageous, through shrinking the bureaucracy and paternalism of government. To too great a degree, this could be problematic.

The efficiency of just giving cash is about as maximized as government efficiency can get, however the giving of just cash also allows what could potentially be widely considered as giving too great a degree of freedom and liberty. People would indeed be free to spend their basic income on anything they wish. In this way, just how important really is our idea of freedom? Should we be free to make mistakes? Should we be free to not work and as a result live at the potential poverty level a basic income could provide, or should we always be forced to work regardless of technological achievement? Should there effectively be limits to our freedoms and our liberty? Should we maintain limits to our democracy in fear of what democracy could bring?

For every decision we make, others are affected, and to the degree others suffer or prosper, we as individuals do as well. We are all in this together.

Though we have many decisions ahead of us, and many options not even discussed or even yet imagined to consider, we need to keep in mind the effects of our present and future choices on the ideals we claim to hold most dear. If we do care about freedom, liberty, and democracy, we need to decide to what degree we care about them and to what degrees we should care about the levels of opportunity, taxes, and equality necessary to achieve them. Above all, we should always remember that not one of us exists in a vacuum or isolated on an island. For every decision we make, others are affected, and to the degree others suffer or prosper, we as individuals do as well.

We are all in this together. That’s the simple idea that freedom, liberty, and democracy are all really about isn’t it?

Special thanks to Arjun Banker, Topher Hunt, Albert Wenger, Danielle Texeira, Paul Wicks, Robert F. Greene, Martin Jordo, Victor Lau, Shane Gordon, all my other funders for their support, and my amazing partner, Katie Smith.

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