I like your account of ‘removing restrictions’, and I think Sen makes a similar point. Some of his ‘capabilities’ are non-economic, but are about reducing the coerciveness of restrictions. He talks, for example, of ‘being able to appear in public without shame’, which may seem meaningless in the West, but is of vital importance to women in many parts of the Islamic world.

[I note that Will Wilkinson doesn't buy your language argument, and thinks that more liberty can be simply construed as more options. I'm not so sure of this. People can have options running out of their ears, but precious little liberty].

1. It might be good for Tyler to speak of positive capabilities as “positive liberty,” but I think that, nonetheless, his doing so is bad for humankind (as compared to his just speaking of positive capabilities).

2. The expansion of positive capabilities enhances liberty ONLY by the channel that it reduces the coerciveness of restrictions. The coerciveness of a restriction ranges in magnitude, and a restriction is less coercive the less important to you it is. Expanding positive capabilities reduces the importance of any particular restriction. But it is only through this channel that the expansion of positive capabilities enhances liberty. Thus, “negative” liberty remains primary. Positive capabilities figure in only through the channel of negative liberty. Robinson Crusoe, alone on a desert island, is perfectly free, even though his positive capabilities are piss poor.

The barriers to new players entering the banking sector seem pretty huge already, even ignoring the regulatory requirements.

Perhaps. However small scale loan operations exist in the black market and there is in my view every reason to believe that small local banks would be more common in a less regulated market.

I don’t know what the answer is. It is undeniable that the government promising to come in and “solving” all your problems sounds great to voters…so governments keep doing it.

I guess all the other side can do is to keep it real, and point out that sometimes the cure can be as bad as the disease (as with indigenous policy, which has not led to an improvement in indigenous health and education, despite the noble aims of many of those who implemented government intervention). But it’s a less immediately attractive position, to be sure.

I worked in government for 4 years or so, and the proliferation of useless bureaucracy during that period was very frustrating. The people who actually did something useful were not given adequate resources; rather, another layer of bureaucracy was added on top to set out “strategic visions” and suchlike…I still don’t really know what they actually did? Nothing changed at the ground level. Grrr…

I’m not sure that I agree with the analysis that people cede power to the government because they feel helpless. In some ways, I think people like to make things the government’s responsibility so that it’s someone else’s fault when things go wrong. Nasty and cynical, I know, but I can’t help it.

When I lived in the UK, I remember there was an article in the local newspaper about a couple living in a council house where a hole had developed in their garden fence. Their children had managed to escape through the hole onto the road on a few occasions. The article said it was a scandal that the government had taken so long to fix the hole. My first thought was, “Surely if your children were at risk, you’d take matters into your own hands and develop a makeshift solution while you waited for the council to do something? Lash a tarpaulin to the fence, or nail wood over the hole or something?” Obviously for this couple, it was easier to say that was someone else’s fault than to take some responsibility…

So I think another explanation of why people cede power to government is because they want problems to be someone else’s responsibility.