To Become a Prosperous and Livable Nation

Historically, liberty and prosperity have been inseparable. Humanity was able to escape poverty only when individual freedom was guaranteed, and the countries that protected individual freedom most effectively were the ones that prospered. The fact that a nation prospers only when individual freedom is secured is the result of the realization of the ideals of (classical) liberalism. Yet today, there seems to be a serious lack of understanding about the relationship among liberalism, individual freedom, and prosperity. Our society is moving in a direction that undermines individual freedom while expanding the role of the state. As a result, growth has stagnated for a long time, and conflicts among individuals, groups, and social classes are increasing throughout society.

Liberalism is a political philosophy that places the highest importance on individual freedom. This does not mean that, because liberalism values individual freedom, it claims other values people generally regard as important—such as honesty, diligence, and family—are less important. What liberalism asserts is that individual freedom should be maximized in political, social, and economic life. For individual freedom to be maximized, private property rights, the rule of law, and limited government must be established. These are not independent of one another, but are of course interconnected.

Individual freedom and property are closely related. The product of one’s own labor is the most fundamental and important form of private property. A person who does not have rights to this cannot be a free person. Likewise, if the state owns all means of production—in other words, if individuals own no means of production (property)—then no one can freely start a business. Thus, when the state eliminates private property rights, all individual freedom disappears, and the more private property rights are restricted, the narrower the scope of freedom people enjoy becomes. Wealth is not created by the government, but by individuals’ mutual cooperation within the spontaneous order of the market. Prosperity is achieved through the invention, creativity, saving, and investment of free individuals, and through voluntary exchange for mutual benefit. The social order in which wealth is created—through specialization and trade made possible by private property and contracts—arises from this simple principle. That is why restricting private property makes a country poor. This is why socialist countries that did not recognize private property collapsed.

The rule of law requires that two conditions be met. First, the content of the law must conform to the ideals of liberalism. In other words, it must include guarantees of private property rights and punishment for acts that infringe upon individual freedom. Second, people must be governed by established laws rather than by the arbitrary decisions of government officials, and everyone must be equal before the law regardless of sex, race, religion, language, or kinship. No one should stand above the law. There is an important reason why everyone must be treated equally before the law: to guarantee individual freedom and prevent conflict among individuals. Involuntary relations of subordination must not arise among individuals. Only free workers can fully exert themselves and, in return for their efforts, live the life they desire. And when the law is applied unequally, conflict arises among members of society, social disorder follows, and in the worst case society itself may collapse.

Finally, there is limited government. There are good people in the world, and there are those who are not. The more evil a person is, the more likely he is to harm others or try to seize all or part of their property. If such harmful conduct is not restrained, peaceful cooperation among people becomes difficult. To maintain a peaceful society, force and coercive power must be used to stop those who endanger it. In other words, coercive power must be available to compel those who do not respect the lives, bodies, individual freedom, or private property of others to comply with the rules of social life. This is precisely the function of the state. Accordingly, the role of the state is fundamentally to protect life, the body, freedom, and private property from violent attack. However, although the goal of social stability and preservation justifies the activities of state institutions, if that power is abused, people will suffer, society will become unstable, and it cannot be well maintained. Moreover, when state power becomes excessive, more people will seek profit by using political activity to gain subsidies or privileges through state power, rather than by working hard and being rewarded for their own efforts. In that process, rent-seeking, collusion between business and politics, and corruption increase, and conflict among members of society intensifies. This is why liberalism seeks to limit state power to the minimum. It is because liberalism believes that this is the way to minimize the harms that can arise from the expansion of state power.

For Korea to break out of stagnation, make another leap forward, and become an even more prosperous, peaceful, and livable country, it must become a society in which the political philosophy of liberalism is realized.

Jaewook Ahn / Professor of Economics, Kyung Hee University

---

Original title: 부강하고 살기 좋은 나라로 도약하려면

Author: Jae-wook Ahn

Date: 2017-09-05

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=17&idx=10567