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Subject Area: Political Theory
Topic: Progress

Is Free Enterprise Coercive? - Leonard P. Liggio, Literature of Liberty, Winter 1981, vol. 4, No. 4 [1981]

Edition used:

Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.

Part of: Literature of Liberty: A Review of Contemporary Liberal Thought, 20 vols. 19781-982

About Liberty Fund:

Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


Is Free Enterprise Coercive?

Jan J. Wilbanks

  • Marietta College

“Free Enterprise and Coercion.” Reason Papers No. 7(Spring 1981):1–20.

Is the capitalist economic system necessarily coercive as Marx and others judged when they analyzed workers in a free market as alienated from their labor and engaged in coerced, non-voluntary activity? Recently, new versions of this anti-capitalist charge have been levelled by Professors Lawrence Crocker (“Coercion and the Wage Agreement”) and Andrew McLaughlin (“Freedom versus Capitalism”).

Professor Crocker denies that a free-enterprise market economy (FEME) provides the best framework for a free society, claiming that “coercive wage agreements are fairly common features” in a market economy, especially during hard times. Crocker's argument advances through hypothetical examples. First, he outlines what he judges to be a clear case of coercion in a FEME, involving the sale of fire-fighting equipment to needy victims in an emergency. Next, he attempts to demonstrate that the more dubious case of a wage agreement made by needy workers in a FEME also involves coercion. He contends that the wage-agreement case shares the crucial moral feature of the fire-fighting equipment case. Finally, he asserts that we can legitimately extrapolate from these foregoing cases to a wider range of situations in the FEME, because the FEME exhibits generally the analogous features present in the two mentioned natural emergency cases.

The author scrutinizes a number of Professor Crocker's ambiguous terms, such as property, and argues that Crocker has not, in fact, demonstrated that coercive wage agreements are fairly common features of a FEME. Crocker has not convincingly shown that the fire-fighting equipment example taken from Gideon is a clear case of coercion in a FEME, and he has not shown that the wage-agreement cases he bases on the fire-fighting example are instances of coercion. Therefore, Crocker has not provided an adequate foundation for suggesting that a FEME may not actually offer the best framework for a free economy. In addition, to refute Crocker's anti-market case with his dubious criterion of coercion is to provide strong grounds for suggesting that a FEME is a sine qua non of a free society—if by the latter we mean a society in which no one is permitted to aggress against the person or property of another.

Next, the author attacks Professor McLaughlin's anti-market notion of covert “systematic coercion,” which is alleged to occur when there is a systematic structuring of alternatives that a person faces in a choice situation. In effect, the capitalist system coerces one to enter that economy to survive. From this claim, capitalism and FEME are judged to be antithetical to freedom.

The author seeks to refute McLaughlin's distinction between overt coercion and systematic coercion through linguistic considerations which show that “systematic coercion” is not a bona fide form of coercion. Systematic coercion is misleading and does not apply to coercion as understood in a politico-economic context. Systematic coercion can only be coercive to the extent that it involves the threat of injury, overt or covert, by other individuals, and thus would amount to coercion, properly construed. Thus McLaughlin's argument fails to undermine the contention that a FEME can be a free society's framework.