Joseph W.H. Lough
There is a passage in William Stanley Jevons Theory of Political Economy (1871), where we find among the clearest illustrations of how “perfect freedom” in the sense understood by neoclassical economists entails “perfect despotism.”
By a market I shall mean two or more persons dealing in two or more commodities, whose stocks of those commodities and intentions of exchanging are known to all. It is also essential that the ratio of exchange between any two persons should be known to all the others. It is only so far as this community of knowledge extends that the market extends. Any persons who are not acquainted at the moment with the prevailing ratio of exchange, or whose stocks are not available for want of communication, must not be considered part of the market. Secret or unknown stocks of a commodity must also be considered beyond reach of a market so long as they remain secret and unknown. Every individual must be considered as exchanging from a pure regard to his own requirements or private interests, and there must be perfectly free competition, so that anyone will exchange with anyone else for the slightest apparent advantage. There must be no conspiracies for absorbing and holding supplies to produce unnatural ratios of exchange. Were a conspiracy of farmers to withhold all corn from market, the consumers might be driven, by starvation, to pay prices bearing no proper relation to the existing supplies, and the ordinary conditions of the market would be thus overthrown (in Medema & Samuels 2003:427).
On its surface this is none other than the neoclassical definition of the market and, as such, it is entirely uncontroversial. It is only when we begin to imagine the world in which such a market exists that red (or, better, red, black and white) flags should begin to appear. It is a world in which perfect and complete knowledge prevails and therefore presumably also a world where parties to any exchange have been compelled to know completely what others also must know. That said, it is a world in which no party to any exchange has anything but disregard for the “requirements and private interests” of any other party, but regard only for their own requirements and private interests. We must therefore imagine a world in which empathy has been replaced completely by only the pleasure derived from empathy. Yet, notwithstanding complete knowledge and complete independence, no party will be free to conspire with any other party so as to influence in one way or another the outcomes of any exchange. Which is to say that we must imagine a world in which communication with others over needs they may hold in common is specifically proscribed and where political organization on behalf of shared interests is prohibited.
Such a world, of course, is the perfect despotism, a world where πολιτεία in Aristotle’s sense is outlawed and where concern for res publica, the wealth we hold in common, or for “the General Welfare” as announced in the Preamble to the US Constitution are strictly prohibited.
This William Stanley Jevons calls “perfect freedom.”