What is More Important in a Free Society: Democracy or Capitalism?

Drivers of freedom in a society go far beyond the surface-level concepts of democracy or capitalism. Often, misconceptions abound regarding these frameworks, particularly when one tries to measure their relative importance. This piece explores how individual liberty ultimately forms the cornerstone of free societies, providing a deeper context to understand why traditional definitions may fall short.

The Illusion of True Freedom

First, it is crucial to address the idea of a truly “free” society. Societies, by their nature, are constrained by myriad factors such as resource availability, adjacent societal structures, and state-of-the-art technology. There are no societies where individuals are completely unfettered. Each system is shaped by these externalities, and the interplay between them determines the degree of freedom experienced by its citizens.

Democracy and Its Inherent Limitations

Many advocate that democracy is essential for a free society, asserting that it ensures political equality and protects the rights of the majority. However, democracy is also capable of subjugating the minority, as often the will of the majority is imposed on the minority, potentially undermining individual freedom. In the words of Alexander Hamilton, one of the Founding Fathers of the United States, the decision of 51% can effectively disenfranchise the remaining 49%, thus diminishing the essence of true freedom and self-determination.

Capitalism and Its Drawbacks

Capitalism, on the other hand, is frequently seen as an inhibiting factor for freedom, particularly due to the emergence of economic inequality. High levels of inequality can impede political equality, thereby posing a challenge to democracy. Yet, capitalism also offers the freedom to choose engagement or disengagement, which can be a critical component of personal freedom. Once an individual has adequately participated in the capitalist system to own their property, they can transcend the demands of market forces and chart their own path, a feature essential for individual liberty.

The Core of a Free Society: Individual Liberty

Neither democracy nor capitalism alone guarantees a free society. What truly matters is individual liberty. In the United States, the founding principle that inspired the Constitution was not democracy or capitalism, but rather individual liberty, a concept encapsulated in the Bill of Rights and the subsequent amendments. Adam Smith, the renowned economist, also highlighted that true freedom in the marketplace is not about materialism but about the free exchange of goods and services, which contributes to a broader sense of liberty.

The Subjugation of Freedom

The American property tax system exemplifies how democratic and capitalist structures can inhibit individual liberty. Historically, a society founded on individual liberty allowed individuals to subsist after acquiring their land. Today, property taxes coupled with high land costs have effectively eliminated this possibility, forcing individuals into a system that continually drains resources from them, regardless of their desires. This situation is emblematic of how the confluence of democracy and capitalism can undermine the very principles they were intended to protect.

The True Measure of Freedom

The freedom to trade labor and own the fruits of one's labor is the ultimate measure of freedom. Even in a dictatorship, people can enjoy relative freedoms if the ruler permits it. Representative government and self-government were envisioned to better preserve these freedoms, but the masses must actively choose to be free, ensuring that power does not evolve into tyranny.

In conclusion, the essential foundation of a free society lies in the enshrinement of individual liberty. While democracy and capitalism have their roles, it is the ability of individuals to make their own choices and find their path that truly defines the freedom of any society. As we navigate through complex socio-economic structures, it is imperative to focus on these core principles to ensure a truly free and equitable society for all.