Having written on the paradox of choice (part 1 and part 2), it has come to my attention that there is a confusion between that paradox and paradox of freedom. For some reason, the current view of the paradox is that one is free, but is unable to be free: a form of an innate inability to act freely, while having all the opportunities to do so; or psychological habit to act according to some rule or regulation.
Although both views have some merit, and most probably Lacan would agree on the latter, the paradox of freedom is something substantially different and in a sense also much more simple. In fact, it has much in common with the paradox of tolerance of Karl Popper.
Let us start with Lacan first, but only briefly. What those positing that freedom is paradoxical in the sense of some form of psychological 'habit' mean, can be easily understood by this citation:
"[Referring to Dostoevsky's Brothers Karamazov] If God doesn't exist, the father says, then everything is permitted. Quite evidently, a naïve notion, for we analysts know full well that if God doesn't exist, then nothing at all is permitted any longer. Neurotics prove that to us every day" (Lacan, The Ego in Freud's Theory).
Exactly because god is the institution of law, without god there can be no reference to action. Hence our view of freedom is only possible within the stipulation of its limits. As this will lead us to an entirely different paradox, let us leave it at that. For more information, see this article by Zizek on Lacan.
The paradox of freedom has more to do with our position on uninhibited freedom, and is acknowledged already since Plato, though perhaps best understood by Thomas Hobbes. The idea itself is quite simple, as has been stated: freedom in the sense of absence of any restriction from the other, will necessarily lead to absolute restriction from the other. In other words, as Hobbes well understood, if we are left to complete freedom without any restraints, we will fall prey to absolute chaos - a state of nature as Hobbes called it, or a pre-political order of violence to use Arendt's terminology. This type of 'law of the jungle' where the strong will dominate the weak will eventually mean that only those at the top are free, and those at the bottom are not. Hence the paradox of freedom.
As simple as this may sound, morally speaking each and every political philosopher concerned with this question understood the importance of freedom. It is this fragility of the balance between how much freedom, and in what sense, that distinguishes the whole field from the mere political scientists concerned with questions of distribution, rights, etc. Not surprisingly, this is also the question that has not permanent answer. Plato, for instance, did envisage a society that would not have to struggle with this question, and even he it could be argued did not think his ideal state to be permanent.
We have to think about freedom as more than only a psychological limit to our action. The restraints upon us are not only about trust either - in the form of: if everyone would be a morally good Christian, etc. Most importantly, the paradox of freedom shows the importance of understanding what kind of restraints and at which moments such and such restraints. This is certainly easily abusable, as Carl Schmitt aptly understood with his coining of the phrase 'state of exception' - and indeed the very possibility of the permanence of the state of exception. But it also this understanding that my guide us into understanding what kind of freedom we ultimately desire. If not for eternity, at least for a while in our own lifetime. For it is the nature of desire to be fleeting, and as such to remain that one thing that we may want more, the more elusive she becomes.
Final note: we may not have an easy answer to the paradox, and it is rather doubtful that there is a solution outside of the political distinction between friend and enemy. Nevertheless, our understanding of the paradox may at least shed some light on what we are facing in daily political struggles.
See also: The paradox of tolerance.
Update: see also a response to the article by Joe Weinstein.
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