I've argued before that I think freedom & determinism are compatible. Now I want to look at it from the vantage point of moral responsibility.
Suppose morality is an essentially social phenomenon. Its pragmatic societal function is the socialisation of individuals - the manipulation of their desires through the mechanisms of blame and praise. (I will try to defend this view in a future post, for now just bear with me. I hope it sounds at least vaguely plausible.)
Then, presumably there would be no point to holding morally responsible anyone for whom blame/praise would have no effect (e.g. addicts, the mentally ill, or the coerced). This is consistent with our intuitions, I think.
This moral perspective can help to clarify some aspects of a compatibilist freedom, supposing S is free iff S is morally responsible. One compatibilist conception of freedom is based around the idea of freedom from coercion, i.e. we are free only if we are not coerced. The difficulty here is in identifying precisely what coercion consists of, and where to draw the line. Presumably we are coerced if someone points a gun to our head. But what about if they merely threated to kick us in the shins? Or splash us with a water pistol? Presumably the latter, at least, is not real coercion!
I think the consideration of counterfactuals, or close possible worlds, can help us here. Coercion (and thus moral responsibility) is a sliding scale, whereby we are more responsible the more open we are to the influence of praise/blame (recall the pragmatic basis of morality we are using here).
Consider those close possible worlds where S had been socialised slightly differently. We then ask, does S behave differently in those worlds? If so, then S is clearly receptive to socialisation (blame & praise), and so we can consider S morally responsible. If not, however, then it would seem that it is inappropriate to hold S responsible. For either the blame/praise did not alter S's desires (e.g. if S is a mentally ill sociopath), or S was coerced such that his own desires were not the causes of his behaviour. Either way, the social exercise of moral dis/approval would have no impact on S. S, in this case, is not to be considered a moral agent.