You have nothing to lose but your chains?

Gabriel F. Benzecry (), Nicholas A. Reinarts () and Daniel J. Smith ()
Additional contact information
Gabriel F. Benzecry: Northwood University
Nicholas A. Reinarts: Hood College
Daniel J. Smith: Tennessee State University

Public Choice, 2025, vol. 202, issue 3, No 13, 529-556

Abstract: Abstract Is capitalism a necessary condition for political freedom? Friedrich Hayek and Milton Friedman argued that capitalism is necessary for political freedom in what is now known as the Hayek–Friedman hypothesis. While previous empirical work relying on economic freedom as a proxy for capitalism has confirmed the hypothesis overall, those results are sensitive to the definitions of capitalism and political freedom. We argue that while Milton Friedman claimed that political freedom could not exist without economic freedom, Hayek argued that political freedom could not exist without private ownership and control of the means of production, a distinction that could affect the results. We test the Hayek hypothesis using V-Dem’s measurement of state ownership and its political civil liberties index, which summarizes annual data going back to 1789. Our primary results identify only one robust example of a country wherein political freedom was maintained temporarily in the context of heavy to complete state economic control: Belarus amidst the fall of the Soviet Union in 1991, a brief transitional phase that does not violate the Hayek hypothesis. We argue that explaining the connection between private property and democratic freedoms requires a humanomics appreciation of those consensus-based institutions. The emergence and exercise of private property rights fosters the individual responsibility, sociality, and tolerance required to preserve democracy.

Keywords: Economic freedom; Political freedom; Civil liberties; F. A. Hayek; Milton Friedman; V-Dem; Polity project; Freedom house (search for similar items in EconPapers)
JEL-codes: O5 P5 (search for similar items in EconPapers)
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11127-024-01223-8 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:pubcho:v:202:y:2025:i:3:d:10.1007_s11127-024-01223-8

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/11127/PS2

DOI: 10.1007/s11127-024-01223-8

Access Statistics for this article

Public Choice is currently edited by WIlliam F. Shughart II

More articles in Public Choice from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().