I am grateful to Matt Zwolinski and Bleeding Heart Libertarians for hosting this symposium on Free Market Fairness. I am particularly indebted to the main commentators: Dierdre McCloskey, Elizabeth Anderson, Samuel Freeman, Richard Arneson, and Will Wilkinson. Thank you for the care and generosity with which you have treated my book. I have learned from each of you.
The five symposiasts have set out many hard questions for me. More important, they have identified crucial problems facing the project of combining private economic liberty with social justice. Over the next few days, I shall reply to each critic. I begin today by considering the illuminating and foundational challenge to my view set out by Samuel Freeman.
Freeman defends three theses: I) Thick economic liberties should not be recognized as basic liberties. II) The recognition of thick economic liberties as basic is incompatible with my own preferred classical liberal institutions. III) Thick economic liberty makes the difference principle unrealizable. (Jeepers, Sam, nothing else?). Let’s consider Freeman’s argument for each thesis in turn.
I. Thick economic liberties are not basic liberties.
I.1) Within the official Rawlsian scheme, only liberties that are necessary for the exercise of the moral powers of all citizens are candidates for being accorded the exceptional status of basic liberties in R’s sense. [Note: Sam suggests there may be further conditions as well, on which see below.]
I.2) Thick economic liberties, such as the right to privately own productive property, may be important to the life plans of some citizensbut they are not necessary for the exercise of the moral powers of all citizens.
I.3) Thick economic liberties are not basic liberties.
I affirm I.1) but deny I.2): There is a set of core economic liberties, a set thicker than the set detected by Rawls, that all citizens need if they are to exercise and develop their moral powers.
A word about I.1). For some people, like my character Amy, starting and running a private business (Amy’s Pup-in-the-Tub) is central to their life plan (66, 78). But not so for other citizens, such as Gary, who aspires to work on the line at General Motors or Carl, who longs to labor within a worker-owned coop. But, similarly, consider my character Terry, for whom politicking and campaigning for his preferred presidential candidate is central to his life plan (66). No doubt, there are many other citizens, such as Tom, who find presidential campaigns annoying and the idea of flying to a battle ground state to knock on strangers’ doors repellant. But we would be wrong to conclude from this difference that political liberties are not necessary to the exercise of the moral powers of Terry and Tom too. People may experience political liberty in ways that vary dramatically with their life plans, and yet political liberty may be essential to the exercise of the moral powers for them all. Something similar is true of economic liberty, despite the diverse life plans affirmed by Alice, Gary, and Carl. The challenge, of course, is to identify the economic liberties that are valuable to all citizens in that way.
Now, Rawls proposes a thin account of basic economic liberty: a right to own personal property, and a right to occupational choice. In FMF, I offer a substantive argument that the moral-powers considerations that justify the recognition of those two economic rights also justify the recognition of further economic rights: private ownership of productive property, and rights to determine many of the terms on which one is willing to work. Freeman does not challenge my substantive argument. Instead, Freeman simply asks me to explain why the additional economic liberties that I defend are valuable to all citizens, rather than just to exemplars such as Amy. To that request I now turn.
In FMF, I argue that the powers-protecting reasons that lead high liberals to recognize rights to ownership of personal (non-productive) property should also lead them to recognize rights to ownership of productive property (76-79). There are also weighty linkage arguments for recognizing rights to private productive property: the protection of basic civil and political rights is connected to the protection of property rights (84). However, I focus here on a different argument, one that I hope will make vivid how the right to private ownership is valuable to all citizens, whatever their life plan.
A right to private ownership of productive property provides individuals with the right to affirm and to seek to participate in any of a wide variety of ownership configurations, including joint and collective forms of ownership. Individuals with that right can select a life plan that includes their owning their own business, working in a business owned by others, joining with other workers in cooperative (democratically controlled) firms, and any of myriad intermediate forms. Without that right, citizens are vulnerable to having others use state power to impose some ownership configuration upon them. I claim that all citizens have a powers-protecting interest in determining for themselves the form of productive ownership relation to which they aspire. This is true of Amy, and equally of Alice and Carl. A right to private property protects that common interest as a matter of formal (first principle) right.
This liberal right to private ownership of productive property does not make space for every imaginable configuration of property ownership. Unlike Rawls’s thin scheme, the scheme of basic ownership rights that I affirm in FMF rules out regime-types that require “social” ownership of productive property. (Under my market democratic conception of ownership, property is alienable, thus allowing individuals to enter into joint and collective ownership forms, but the right to property is not.) I think this is a virtue of my view. However, the market democratic affirmation of thick private ownership is not based on any assertion about the intrinsic moral worthlessless of all forms of socialism, such as the social ownership regime-type that Rawls calls “liberal (democratic) socialism.” Nor is my claim merely that recognizing a thicker right of private ownership formally empowers citizens to select from a wider range of property ownership forms (though it does). Instead, my suggestion is that a scheme of basic liberties that makes a wide range of ownership configurations formally available to citizens, as opposed to thin schemes that leave citizens vulnerable to having that range closed down, better expresses our commitment to respect citizens as responsible authors of their own lives.
Next, consider liberties of working. Rawls recognizes only a narrow right of occupational choice as basic. But in FMF, I argue that people have a powers-protecting interest in deciding not only which occupation they will pursue but also in deciding the terms and conditions on which they are willing to work. Freeman does not question my claim in FMF that this is an interest characteristic of all citizens, so I shall not rehearse the arguments I have made there for this wider right (of course, Freeman might yet dispute my claim that citizens have a powers-protecting interest in this aspect of economic liberty, though in his post he does not do so). For now, I invite readers to consider a more general issue raised by this dispute about the proper scope of the liberal liberty of working.
In determining what to include on a list of basic liberties, we employ some calibrated test for determining what range of liberties we think necessary for the exercise of the moral powers. But whatever powers-protecting test (PPT) we apply in one domain of activity presumptively applies in other domains of activity as well. (As a fanciful analogue to Rawls’s thin approach to economic liberty, consider a thin defense of religious liberty: individuals have a right to chose which religion to affirm but denied the right to determine how many days a week they go to service or what things they could do once there.) The PPT that I apply in Free Market Fairness does not simply maximize liberty in each domain: I am guided instead by the two moral powers of self-authorship. But I do commit myself to some consistency in application of PPT across domains.In drawing up their list of basic liberties, I suggest, the Rawlsians should do the same. If Rawlsians think that only a narrow range of liberty is needed for powers-protection in the economic domains of people lives, then they owe us an explanation of why a narrow range of liberty is not sufficient in other domains. Alternatively, if they think a wide range of liberty protection is necessary for powers-protection in non-economic areas, then they need to explain why they recognize only narrow liberty in economic ones.
Two technical points. On Freeman’s (characteristically) precise formulation, showing that liberties are required for exercise of the moral powers of all citizens is a necessary but not sufficient condition for those liberties to be affirmed as basic. If Freeman would like to challenge thick economic liberty on the basis of any as-yet-unstated sufficiency conditions, or to challenge the substantive arguments I make for thick economic liberty in FMF, I am prepared to assess that challenge.
Finally, Freeman suggests that, if we did recognize my thicker set of economic liberties as basic, then property owning democracy—an institutional form I reject—would satisfy the requirements of liberal justice better than either of the market democratic forms I affirm. Now, if Freeman is prepared to state that Rawls made a moral error in recognizing only a thin conception of economic liberty, then I would be happy to address that (interesting) question.
II. THAT: affirming thick economic liberties as basic liberties is incompatible with classical liberal institutions.
II.1). Within Rawls’s schema, basic liberties have lexical priority. More precisely, basic liberties in some domain can be restricted only for the sake of securing a fully adequate scheme of basic rights and liberties,
II.2) Thus economic liberties on my thickened basic set cannot be restricted for lexically posterior concerns such as the pursuit of social welfare or economic efficiency.
II.3) But the classical liberal institutions I affirm include features, such as a tax funded social safety net and school support, and efficiency-directed regulations such as laws against price collusion, that require the restriction of economic liberties on my thickened basic set.
II.4) Thus, thick economic liberty is incompatible with classical liberal institutions.
I affirm II.1) and II.2) but deny II.3). The core economic liberties that I say should be recognized as basic liberties, while uncompromising where they apply, have a limited scope. That scope is demarcated by a concern for responsible self-authorship, a concern for which simultaneously sets lower and upper boundary requirements regarding the domain of economic activities that merits this highest form of political priority. For example, I do not think it plausible to assert that, as a requirement of self-authorship, persons have an unrestricted right to their entire pre-tax income, or to leave estates to their children completely untaxed. But I do claim that a concern for self-authorship requires that workers be recognized as having a right to some very significant portion of their pretax income, and to make very substantial bequests. So too, while I think citizens have basic rights to earn a living and to engage in economic activity, I do not think a concern for self-authorship can plausibly be said to generate rights to completely unregulated activity across all economic domains (Price collusion, I believe, is incompatible with respecting one’s fellow citizens as responsible self-authors).
So thickening the set of basic economic rights, as I propose, leaves many economic issues that are not protected as a matter of basic liberty. The scope of the economic liberties that I affirm as basic is wide enough that it rules out Rawls’s preferred institutional forms—liberal socialism and property owning democracy. The affirmation of thick economic liberty restricts the regulatory and confiscatory power of the state with respect to many of the (allegedly) welfarist and efficiency schemes characteristic those regime types, at least as Rawls describes them (most notably on their slow- or no-growth variants). But the scope of my thickened set of basic economic liberties is narrow enough to permit the regulatory and confiscatory powers of government required by classical liberal institutions.
As Freeman observes, in Free Market Fairness I seek to revive a classical liberalism in a (broadly) deontic tradition, rather than the consequentialist approach of classical liberal economist-philosophers of the last century (and, I might add, I aim do this without falling into a deontic libertarianism such as that of Nozick). Of course, my revival of classical liberalism comes with a twist since, along with thick economic liberty, FMF affirms a robust ideal of distributive justice too.
But Freeman is skeptical of my deontic approach to classical liberalism. He says it unrealistically assumes “that economically efficient market relations and outcomes will transpire from the exercise of economic liberties designed to promote something entirely different—individual self-authorship.” This is not a formal part of Freeman’s argument because it is at bottom an empirical issue. Still I find this objection fascinating, and highly revealing. Should we be surprised if identifying (the core set of) economic liberties by way of a value (responsible self-authorship) that effectively empowers diverse individuals to make use of local information in pursuit of projects known only to themselves would turn out in practice to promote efficiency (or, more important, to encourage innovation and economically productive creativity)? Lord Keynes, James Meade, and John Rawls (and Sam) might think so. But Adam Smith, Ludwig von Mises, and F.A. Hayek (and I) do not. But the fact of that great dispute does nothing to undermine this part my argument.
But then what of the difference principle? If Freeman had shown that the list of basic liberties should not be thickened as I propose, or if he had shown that the thickening I propose is incompatible with classical liberal institutions, then he would certainly have given us reason to doubt that market democracy satisfies the difference principle. But he has shown neither of those things. So, for now at least, my argument that market democratic regimes realize the difference principle stands unmolested (226-37).
However, so long as the main argument of FMF stands, the political conclusions of the orthodox Rawlsians do not stand unmolested. Far from it. For in FMF, I propose a market democratic interpretation of social justice. I offer this interpretation as a moral challenger to the host of social democratic interpretations that have for too long dominated the literature. Market democracy includes a rival interpretation of basic economic liberty, the subject of Freeman’s posting. But it also carries within it a rival interpretation of the requirements of distributive justice. Basic rights in place, market democracy insists, we best respect the self-authorship of our fellow citizens through institutions designed to maximize the bundle of material wealth personally controlled by the lowest paid wage earners over time, rather than through institutions designed to enhance their democratic control of the workplace (184-192). On both counts, I believe, market democracy offers a morally superior account of the requirements of democratic citizenship.
I shall reply next to Elizabeth Anderson.