Daniel Klein writes,

In my view, economic understanding, by experts and the general public alike, would gain by economists doing more of the following: (1) using the voluntary/coercive distinction in their formulations, analysis, and discourse; (2) making that utilization explicit and unabashed; (3) thinking hard about the content of that distinction, particularly by clarifying the holes and gray areas; (4) making it clear that, while they may promote a presumption of liberty, they do not mean to suggest that the distinction carries a necessary condemnation of coercion.

In a survey, Klein found that a number of economists who support the minimum wage do not think of the minimum wage as coercion. To Klein, it is self-evident that market transactions are not coercive and government policies are coercive.

To play devil’s advocate, I would note that many people would disagree.Doug Rushkoff’s Coercion lists many ways in which people are manipulated by firms into making their consumption choices. On the other hand, I think a lot of people believe intuitively that government laws on issues like smoking or the minimum wage are not instruments of tyranny but attempts to overcome difficulties in co-ordinating to obtain conformity to widespread social norms.

Thus, the effectiveness of a law against smoking in restaurants is not that the state threatens bodily harm against smokers. The effectiveness comes from drawing a clear red line, making it easy for restaurants to enforce rules against smoking.

For example, suppose that I go to a no-smoking restaurant, and, to my annoyance, another diner lights up. I will feel more comfortable raising objections if there is a law against smoking in restaurants than if there is no such law. I can appeal to the smoker’s desire to be perceived as a law-respecting citizen.

In this example, the social norm exists and is supported by the relevant parties (the restaurant owner and non-smoking customers). However, having a formal law makes it easier for the relevant parties to act on their own to enforce the norm.

Another point here is that the smoker would prefer to smoke, and he has to be coerced into not smoking. Whether he is coerced by private individuals on the basis of the restaurant’s no-smoking policy or by the state law seems to be of secondary importance.

Perhaps the distinction between governments and markets is not that the former uses more force or that people follow laws reluctantly and undertake market transactions willingly. It may be that the distinction is that people can more easily switch jurisdictions in market situations than in government situations. Customers can choose whether or not to patronize restaurants with no-smoking policies. But once I choose to live in my county, I necessarily become enmeshed in its public school system.