5. Property, Freedom, and the Essential Job of Government

Capitalism: Success, Crisis and Reform (PLSC 270)

A practical theory of freedom is discussed, based on Hayek's Constitution of Liberty. Free societies can be thought of as great learning machines capable of aggregating individuals' knowledge and accomplishments. Professor Rae uses examples from automotives and university administration to illustrate how freedom allows everybody to profit from others' knowledge. Professor Rae also highlights Hayek's story of the rock climber who is stuck at the bottom of the crevasse, and discusses whether refusing to assist another is an implicit act of coercion. Hayek's theories of freedom are applied to modern cases of extreme poverty in developing countries. Professor Rae also discusses Yale University Press' decision not to publish controversial cartoons depicting the prophet Mohammed within a recent book. The lecture concludes with de Soto's notions of live and dead capital, and the importance of property rights in unlocking the productive power of capitalism.

00:00 - Chapter 1. Introduction
04:19 - Chapter 2. The Hayek Framework
39:14 - Chapter 3. The Nation State Framework
44:14 - Chapter 4. The De Soto Framework

Complete course materials are available at the Open Yale Courses website: http://open.yale.edu/courses

This course was recorded in Fall 2009.