Social Justice, Libertarianism

Does Market Democracy Sanction Class Domination?

Free Market Fairness (FMF) presents a fusionist theory of liberal justice, one affirming both private economic liberty and social justice. I call this market democracy.

In a symposium on FMF hosted by Critical Review, a new objection has been arisen against market democracy, the objection that market democracy sanctions class domination. This objection is raised explicitly by Annie Stilz, but I think it underlies several other critiques as well (most notably those of Joseph Carens, Samuel Arnold, and Alex Gourevitch).

I shall present the objection about class domination by way of an example. The example my own, but I think it makes vivid the worry raised by Stilz. One path of response, which I sketch below, would involve a significant revision to market democracy. I would be interested to hear what BHL readers think of this problem, and how they think market democracy could best answer it.

Imagine a person named George living in a market democracy that I will call Alpha Land. George, let’s imagine, rose from nothing to become a hedge fund titan. Central to George’s life plan is the ambition to establish his family as a dynasty. Using his great wealth, George makes large gifts to the most elite university in the land, Alpha University, in order to help his children gain admittance. George also makes large bequests to his children and grandchildren, enabling them, in turn, to help their children and grandchildren to gain admittance to Alpha University when the time comes. And let’s imagine that George is not the only person in this market democracy with dynastic ambitions. Let’s say that most, or all, of the students who gain admission to Alpha University come from families with great wealth. With the superior education they receive there, and through the contacts they make, the graduates of Alpha University come to constitute an elite class in the society. The very most desirable positions in industry, science, art and political life are most always held by Alpha alums.

Further, let’s imagine that all the requirements of my market democratic conception of social justice, free market fairness, are satisfied in Alpha Land. Along with liberty of association and expression, for example, the constitution Alpha Land protects thick private economic liberties of labor and ownership. What’s more, Alpha grads are well-trained, and so achieve great success as leaders of the great industries and institutes of their country. Alpha Land thus enjoys an exceptionally high rate of growth so that, over time (say, over the course of a generation or two) the least advantaged members of Alpha Land enjoy better opportunities and have more private wealth than would have been available in any other regime type (as required by the social justice component of market democracy, recall).

However, and here is the objection, this success comes at a price. While opportunities and benefits are maximized to the least well-off, the top positions in society are effectively closed to members of that class. Further, the members of this lower class are aware of this. The basic institutions have been arranged so that they can do very well, but they know that a certain strata of social positions is effectively closed to them. The horizons of their dreams for themselves and their children are thus curtailed. We can point out to them that the social arrangements of Alpha Land maximize their position compared to that available to them in rival regimes. Still they have doubts about themselves and, specifically, about their standing as fully free and equal members of their society. They live in a system of class domination (or at least, note, of class division). Being aware of this, their self-respect, which includes their confidence in the worth of their own life-plans, is eroded.

Would universities such as Alpha collude with wealthy people such as George in giving coveted admission slots to children from wealthy families? Maybe not. But in a market democracy such as Alpha Land, I imagine that universities would mainly be private. They would not receive the tax exemptions that have allowed private universities in the United States to amass their huge endowments. But, let’s say, within market democracy these private schools would have wide freedom to admit students according to their own criteria. Competing against Beta University and other strong schools, it seems plausible to imagine the trustees of Alpha directing the admissions office to consider wealth when selecting each year’s incoming class.

What are we to make of this? One response is to deny that class domination such as this could arise or long endure within a (fully just) market democratic institutional scheme. Free markets unleash creative destruction and new elites rise meteorically to overtake the elites of a generation before. Still, given Alpha University’s king-maker role in this society, I think it is plausible to imagine class domination to persist in Alpha Land, even granted that the elite class will occasionally be joined by some parvenues (such as our friend George).

Alternatively, we might respond by pressing the distinction between class division and class domination. As formulated in FMF, market democracy accepts the Rawlsian idea that the political liberties have special status and so must be guaranteed at their “fair value.” In FMF, I explain how market democracy satisfies this stringent test (247-254). So if the worry is that Alpha alums politically dominate their fellow citizens, market democracy already has resources to explain why domination of that sort is objectionable. I could say much more here but I will just say that I find this unsatisfying. Even if the objection is only based on class division (and not political domination), the worries about self-respect raised by the example seem serious. I believe those worries are not adequately answered within market democracy as formulated in FMF.

Another response is to idealize up and away from the objection. The great good of social justice need not be achievable in all social contexts and at all times. If social justice is not achievable in some set of social conditions, that in itself is no mark against social justice. If the social conditions of Alpha Land really are such that they allow simultaneously for the satisfaction of all the requirements of free market fairness and for the creation of an elite class, then we might simply say, with regret, that the great good of social justice is not achievable under that set of social conditions. I believe that a technical defense of free market fairness could be mounted on these grounds, leaving intact all the main specifications of market democracy as I laid them out in FMF. However, frankly, that approach seems to me a dodge. Market democracy would be stronger, and more attractive, if we can adjust its criteria so as to provide a direct response to the worry about class domination that Stilz and others have raised.

How might we do this? One option is to adjust free market fairness so as to allow rules that limit the freedom of people like George to make gifts to elite universities (and other elite-forming organizations or clubs), or rules that prevent places like Alpha from amassing their great endowments. Since, as I am imagining in my example, market democracy does not grant private universities tax exemptions, it already contains features that at least do not encourage the building up of such endowments. But there are many types of organization and club that can aid in the formation of an elite class such as we see in Alpha Land. So this path would lead to imposing pervasive restrictions on people’s economic liberty. We cannot take this route without making great changes to the base of market democracy.

The other option, of course, is to adjust market democracy so as to limit the freedom of people such as George to make bequests to their children. On balance, I believe that this option coheres better with the core commitment of market democracy to respect all citizens as free and equal authors of their own lives. So I am open to adjusting my account of thick economic liberty so as to allow rules that would limit people’s liberties to make bequests. Specifically, I now believe that market democracy should be formulated so as to allow the state to impose substantially progressive tax rates on transfers of wealth between generations.

Market democracy is born from a sincere commitment to make room for the reasonable life plans of liberal citizens. The market democratic paradigm stresses the importance to people of making economic choices that are basic to their own life plans, an aspect of freedom that is systematically neglected under social democratic accounts of justice. However, this does not mean that market democracy must make room for every life plan simply because it includes an economic element. Dynastic ambitions such as those of people like George run against the market democratic commitment to treat all citizens as free and equal moral beings. Market democracy is not committed to social structures that make full room for people to fulfill such ambitions.

Let’s return to my claim in FMF that people have a basic liberty regarding the private ownership of property (personal and productive). We can think of this liberty as a bundle of elements protecting the freedom of people to own, use and control property as they think best. That liberty, like all the other basic liberties, has a central range of application. That range is defined in terms of its significance, that is, the strength of its connection to the development and exercise of the moral powers. Under market democracy, the moral powers are the capacity of citizens for self-authorship, and their capacity to respect all of their fellow citizens as self-authors too. To protect the most significant aspects of the right to property, and to craft that basic liberty so that it works as a component part of the other basic liberties considered as a set, it may be necessary to scale back on some dimensions of the right to property that we protect. So I am open to adjusting my account of the right to property so as to remove the liberty of citizens to pass on great wealth free of any substantial tax. If I take this route, this would be a significant revision to market democracy.

How significant is this revision? Well, a central feature of property-owning democracy, one of the two institutional ideals affirmed by social democracy recall, is steeply progressive taxes on intergenerational transfers of wealth. If we adjust market democracy so as to allow progressively rated taxes on bequests (and perhaps inheritances), does this mean that market democratic institutional forms go rushing toward the ideal of property-owning democracy?

The answer to this question, perhaps surprising to people sympathetic to the market democratic program, is: Yes. But the adjustment that I mention would point us towards distinctive, economic liberty-friendly interpretations of property-owning democracy. This is the tradition of property-owning democracy affirmed by political leaders such as Margaret Thatcher. I am open to market democracy’s being developed in this direction. Indeed, this suggests a new set of contributions that might be made by people working within the market democratic framework: the revival, and development, of the market friendly and economic liberty-affirming tradition of property-owning democracy. Call this property-owning democracy, free market style.

Published on:
Author: John Tomasi
  • dL

    You can’t say with certainty that it would not. However, you can say with demonstrative certainty that the progressive state results in the protection and perpetuation of class domination. Just look around….It’s like getting repeatedly punched in the face by someone while he chants “without me to protect you, you would be on your backside getting repeatedly punched in the face.” Well, all I know who is doing the punching right now…

    • Theresa Klein

      Indeed there are all sorts of progressives who think it’s positively imperative for the government to funnel money towards elites, so that the vulgar market doesn’t determine what sort art the peasants are exposed to.
      Supposedly, we’ve got to have government funding for symphony orchestras and ballets, or else the poor beneighted masses will get their culture from Jerry Springer.

      (And you can say pretty much the same thing about scientific research. If anything, progressives are extremely worried that in a free market elites WON’T get to decide what sort of goods the market produces.)

  • Bryan McGraw

    The trouble I see with this response is that it isn’t (really) the huge intergenerational bequests that make such a huge difference. Julia doesn’t get the advantage of going to Brown because she has a huge inheritance coming to her when poppy dies. She gets the advantage because of all the opportunities afforded to her before she goes to college – schools, tutors, internships, etc. And even if those aren’t in play, then maybe her parents read to her, closely attended her progress in school, etc. The trouble with this revision is that it seems to lead toward significant intrusions in family relations – so you get economic liberty at the price of parental liberties?

    • Kevin Vallier

      Inclined to agree with Bryan here.

    • Why would this lead toward significant intrusions in family relations? Is anyone proposing to prohibit Julia’s parents from reading to her, or hiring a tutor for her, or doing other things a typical parent might do for a K-12 student?

      (As a side note, it’s an open question how much this sort of thing matters anyway–a lot of people question how much effect shared family environments really have on career success vs. inherited characteristics–so there may not even be much of a point in trying to control it.)

      • Bryan McGraw

        I guess I find the idea that family environments don’t matter very much wildly implausible, but even if I’m wrong, it’s obvious as to why John’s proposal would invite family engineering (we could call it). Suppose you impose severe intergenerational taxes. Well, the first question is: when do the taxes go into effect? If they only go into effect once the parents die, they won’t be very effective in preventing the parents from getting their children into the Alpha pipeline. So John would be forced to agree that they can’t at least pay for college – that should help even things out. But then he’s got to make sure that meritocratic college admissions aren’t tilted toward the children of Alphas, so he needs to make sure that they aren’t able to send their kids to the best high schools and junior highs and elementary schools. And he needs to make sure that they don’t hire them tutors or get them into cool summer camps that stimulate their interests. Or get them better health care so that they’re able to study more effectively. And so on and so on.

        • Kass

          The material covered in Bryan Caplan’s Selfish Reasons to Have More Kids is relevant here. The twin and adoption studies left me thinking that genetics are of high importance when it comes to adult traits, whereas a specific family environment is far less important.

        • For the effect or non-effect of family environments, Kass’s comment is relevant. As for “family engineering” I personally am skeptical of Tomasi’s argument about taxation reducing people’s impulse to try to get kids into the best kindergartens/private K-12s/elite colleges/etc. At most what could likely be aimed for is funding services for the less fortunate, e.g., pre-school, child care, etc. The point of this would not be to bring equality of outcome (an impossible task), but rather to help ensure every child has a reasonable minimum level of support and isn’t actively being harmed by their environment.

      • murali284

        I have heard some progressives over where I live actually argue that the government should heavily regulate or even prohibit the private tutor industry (which is fairly big over here in Singapore. Upper-Middle class parents send their kids for private tuition). Lefties over here argue that the ability of the upper middle classes (and large parts of the middle class as well) to send the kids for private tuition gives them an unfair advantage over their equally untalented working class peers. They also argue that all this private tuition stifles social mobility.

    • TracyW

      But if Julia has a better education because of the efforts of her parents and going to Brown, then it’s plausible she will be better at her job in the future, and thus society will be better off. Eg if Julia’s better education means that as a surgeon she has half the death rate of the average surgeon (in her surgical speciality), then that means a fair number of people will live longer. If Julia is an engineer and figures out how to get cold fusion working, the gains are even larger.

      This is society, we benefit from people doing better. It’s not a zero-sum game.

      • Bryan McGraw

        Well, the objection that John is trying to meet is that Julia might get to be a surgeon in large part *because* of her parents’ influence. And so even if “society” gets better, that doesn’t mean it is fair. Since John is committed to meeting Rawls’ moral standards, he can’t make that tradeoff.

        • TracyW

          Halving a death rate is unfair? Seriously?

          • Bryan McGraw

            In Rawls-world, it would depend on how the folks on the bottom did. I suppose you’re right that in that particular case (or in the case of fusion energy), it’s plausible to suppose that the trade-off would be worth it. And given that I think it’s plausible to read Rawls as thinking that inequality itself is a bad thing, it’s not a straightforward calculus. (I should note that I’m not persuaded by the view – I’m just responding to John’s point and trying to think inside the moral standards he’s taken up).

          • TracyW

            If I recall Rawls correctly, his idea was min-max: maximise the outcomes of the worse off. I rather think that dying is something that puts you at the bottom of outcomes, regardless of your past income. It certainly eliminates any chance of your income ever getting any higher.

            Note, personally I find the framing of Rawls’ criteria in terms of income pretty silly, some mental illnesses strike me as leading to far worse lives than being poor by itself does (eg people who believe that everyone is out to kill them), even if the mental illness is experienced in relative material comfort.

            As for other cases: let’s say Julia produces food a bit cheaper because of her better education, and Julia is the marginal farmer, so food costs are a bit cheaper. Wouldn’t that trade-off be worth it? Or Julia is a bit better at managing the budget process and saves $100 million. Wouldn’t that trade-off be worth it? Or Julia is a very effective plumber, and thus the poor people in her home town have their toilets fixed in half the time? Wouldn’t that trade-off be worth it? Toilets are pretty darn important to happiness and health.

          • Bob_Robert

            One of the mistakes in using “income” as a measure is that money value is not constant. In a free market, costs are continually decreasing.

            My first PC costs $800. My last, $250 (even with 30 years of inflation), and it was for all practical purposes infinitely more powerful and useful.

            You bring up toilets. Fact is, Queen Victoria at the apex of the British Empire didn’t have flush toilets. Now everybody does, and it didn’t happen at the “cost” of anybody.

            Yes, the wealthy get more wealthy in a free market. So what? So do the “poor”.

          • TracyW

            I wouldn’t say that costs are continually decreasing in a free market. That’s the general tendency, but it does depend on supply and demand. To take the extreme, works by a famous dead artist such as Rembrandt might well always increase in price because no new ones are getting made.

            But yes, I agree with you that new inventions like those you mention increase wealth. What I’m arguing for here is that slight improvements in efficiency are also generally beneficial, even if they come from someone having unequal advantages.

            By the way, the first flushing toilet in England was invented in Queen Elizabeth I’s time, apparently she had one installed in one of her palaces.

          • Bob_Robert

            I highly recommend the daily article on the Mises Institute for an outline on how markets work. Those “slight improvements in efficiency” that occur all the time decrease costs. Capital investment decreases costs. The less restrictions on a field, the faster innovation and capital investment decrease costs.

            You write about increasing _price_ for a Rembrandt, yet what I speak of are _costs_, as in the cost of production. Cost may be measured by money, but costs are born by labor, capital investment, natural resources, higher factors of production, and so on.

            Prices can go up due to the supply of money, called “inflation”, that has nothing to do with production at all (until the effect of inflation changes the structure of production, that is, but that is way past this lecture).

            The so-called “Long Depression” around 1880 is an excellent example, where it has been called a “Depression” by some because wages in general decreased. At the same time, _costs_ were decreasing so much more (railroads, refrigeration, telephones, telegraph, and so on) that the actual buying power of people with those declining incomes increased.

            So any barriers to innovation and investment, such as taxation, regulation, licensing, forfeiture, etc., retards the natural tendency for improvement and keeps costs high.

            Yes, I know the invention of flushing goes way back, but the installation lagged tremendously. Outhouses and chamberpots were used by everyone. The wealthy, including Victoria, simply had them emptied by someone else. I recall a documentary on Victoria’s train cars, where it showed her toilet, gold plated, with a hole through the floor of the train so the waste would simply fall out and be left behind.

          • TracyW

            Good point, my mistake I should have noted that costs are different to prices.
            Although installing a flush loo on a train is a different problem to installing one in a stationary building.

          • Bob_Robert

            Oh, I agree completely! It remains true that at the start of the hundred peaceful years (relatively) between the fall of Napoleon and the first World War, global trade was relatively free, especially compared to now, people were free to trade in anything and earn unlimited incomes, while costs (and prices because of commodity money) continuously fell, while the Luxuries of Kings at the start became common place for everyone by the end.

            The miracle of secure rights to private property is capital investment. That investment creates cumulative growth in production, in ever more round-about and lengthy processes, but which fuels the one thing that has made the greatest difference to the greatest number of people:

            Turning luxuries into commodities.

          • sebadangerfield

            “So any barriers to innovation and investment, such as taxation, regulation, licensing, forfeiture, etc., retards the natural tendency for improvement and keeps costs high.”

            You haven’t made that argumnt at all.

          • Bob_Robert

            “You haven’t made that argumnt at all”

            Do tell, what argument do you think I made?

            How did what I say fail to support the conclusion?

            In what way do you want to disagree?

            Have you ever considered a course in formal logic, so that I don’t have to ask such questions ?

          • sebadangerfield

            I quoted your argument and stated that you had not made it… I’m not sure what’s to explain but to be clear, I’m saying that you’ve asserted something – that all tax and regulation is bad for growth – with no evidence or supporting argument.

            Clearly some taxes and regulation are good for growth and others aren’t.

            Cheerio

          • Bob_Robert

            “Clearly some taxes and regulation are good for growth and others aren’t.”

            Taxes retard since they must be paid, which raises the costs of doing anything. Regulations retard because they must be both known and complied with, which raises the costs of doing anything.

            Both taxation and regulation require the overhead of a bureaucracy for administration and enforcement, which must increase taxation in order to be paid for itself.

            While you may want to believe that some regulations are “good” because you agree with their stated goals, the motivation you present, “good for growth”, is an abject falsehood.

            Your argument is false, your conclusions are false, and if you continue to assert these falsehoods you must do so knowing they are false.

          • sebadangerfield

            taxation to pay for roads and education and the police and a legal system? regulation of natural monopolies?

            You’re obviously a bit dim. Cheerio xx

          • Bob_Robert

            “taxation to pay for roads and education and the police and a legal system? regulation of natural monopolies?”

            Correct. Taxation and regulation remove the ability for an individual to spend their resources on what they value. Taxation and regulation substitute the values of the taxer, the regulator, the bureaucrat, for the values of the individual.

            The inevitable result is that there is more of what the bureaucrat wants, and less of what the individual wants. Since the natural tendency of a bureaucrat is to protect the bureaucracy, anything that threatens that bureaucracy is therefore retarded. Innovation, new products, new services, all threaten entrenched bureaucracies.

            That is over and above the compliance costs, which must be paid before anything else, a direct drain on any positive result that might occur by happy accident.

            Look at the examples you give. The education “system” is in shambles, the roads are decrepit, the police are militarized, murdering people daily and getting away with it. The very name “justice system” has nothing to do with its actual function, the punishment of people who do what government doesn’t like and making of profits for the prison-industrial complex.

            Please name one “natural monopoly” that is not created and maintained by the bureaucrats you want taking money from me by force.

            As to “dim”, that’s only because your eyes are shut.

          • sebadangerfield

            Okay, we shall have to agree to disagree on this one Bob. Apologies for calling you dim.

          • Bob_Robert

            Well, sadly, there is no “agree to disagree”, since my disagreement is irrelevant to the tax collector. The people holding a gun to my head do not care what my opinion is, so long as I pay the taxes.

            The taxes that you support.

          • sebadangerfield

            Intellectually speaking.

          • John Tomasi

            Tracy, I just posted a question at the bottom of the comments that may interest you: a proposal to reverse the lexical priority of FEO and DP (sorry, Rawls tech terms, but explained below). What I say there very much tracks your idea here that efficiency may be more “beneficial” than more fully equalized advantages.

          • TracyW

            More generally, I know that you personally don’t agree with Rawls, but generally, I’ve learnt that if it sounds like someone is saying something very stupid (such as “halving a death rate is unfair”), it’s very likely that I’ve misinterpreted something, or they misspoke/miswrote on that particular topic and a wider view of their thinking makes it clear that’s not their view. It seems very implausible to me that anyone would argue that better outcomes from surgery makes a society less fair.

          • Bob_Robert

            “…makes a society less fair.”

            Funny thing, I’ve heard exactly that.

            Because such innovation starts small, available to the more wealthy first, that is somehow “unfair”. The idea that innovation will make such luxuries available to more and more people seems lost on the nay-sayers.

            There lots of people who see how wealthy some people are and cry foul, while forgetting to look around and see just how much everyone else has, too.

          • TracyW

            I wasn’t talking about innovation in that particular response, I was talking about someone being a bit better surgeon because of her better education. That’s the situation where I’ve never heard anyone say that “halving a death rate is unfair”.

          • Bob_Robert

            Tracy, I was agreeing with you.

    • AgoristRevolutionary

      The progressives are controlled opposition

  • Theresa Klein

    I think there is another possible answer. In a market democracy, class domination shouldn’t really *matter* much, because absent a big government that is dictating the rules of exchange, the sphere of agency of any individual cannot not be meaningfully constrained by the preferences of the elite. Anyone is free to establish their own alternative power structures, and the elite cannot legally stop them from doing so.

    • “In a purely free market, the traditional elites can do nothing to stop people from forming alternative ‘elite’ groups within their own alternative self-formed communities.” This is correct, however being in such an “elite” wouldn’t necessarily translate into real economic reward and social influence, and most likely wouldn’t do so unless you got funneled through the right institutions and social networks. To take open source as an example, an elite contributor to a major open source project, no matter their background, has a reasonable shot at parlayng that into a well-paying corporate position. However if that contributor wants to be in a position to make a major score then they’re much more likely to be able to do so if they go to an institution like Stanford and can get plugged into the Silicon Valley VC scene as a potential tech co-founder.

      And that’s for skills that have significant economic value. Becoming an elite contributor to something like Wikipedia requires a comparable amount of intelligence to being an open source contributor, but the chances of making a living at it, much less amassing major wealth, are pretty low. You’d mainly be doing it for personal satisfaction, and you’d need to have a day job doing something else.

      • Theresa Klein

        however being in such an “elite” wouldn’t necessarily translate into real economic reward and social influence, and most likely wouldn’t do so unless you got funneled through the right institutions and social networks.

        But those things that are economically rewarding are rewarding only because *consumers* not elites, choose to make them so. Those things that carry social influence, are influential only because *society* chooses to be influenced by them. However rich certain elites are, they cannot force consumers to buy their products and they cannot compel people to listen to them, without the consent and cooperation of buyers and listeners.

        There is nothing either good or bad, but thinking makes it so.

        • “But those things that are economically rewarding are rewarding only because *consumers* not elites, choose to make them so.” This may be getting away from Tomasi’s topic somewhat, but you’re assuming here that consumers != elites, or more correctly, that the set of non-elite consumers is large relative to the set of elite consumers. This is true in some cases but not in others; for example, creators of films can realize large economic rewards by serving a mostly non-elite audience, while creators of contemporary art for the most part depend on elite favor.

          An interesting question is whether and how this situation might shift over time. I think the answer depends on several factors, including the total buying power of the non-elite vs that of the (much smaller but much wealthier) elite, marginal cost of production to serve additional consumers (where digital products have an advantage), and matters of taste (products with wide appeal vs. products with specialist appeal).

          • TracyW

            Thomas Kinkade, Painter of Light (TM), is an obvious example of a contemporary artist who doesn’t depend on an elite audience. And what’s-his-name who does those prints of people in evening dress dancing on beaches. Banksie is popular with both sets. Norman Rockwell is a historical example.

          • Theresa Klein

            Well, artists who depend entirely on elite audiences don’t make nearly as much money. Which I thought was the whole reason why membership in the elite is so desirable.
            If a bunch of people want to go make art for eachother and exclusively cater to eachother’s refined tastes, why should I care, and why should I feel entitled to an equal shot at being a member of such a wierd insular group?

          • Note that my specific example was contemporary art, and in that world elite-catering artists like Damien Hirst, Jeff Koons, etc., are definitely the ones pulling down the big bucks. See for example this 2012 list of the 15 richest living artists. Thomas Kinkade’s net worth at about the same time was estimated at $70M, which would put him no higher than #8 on that list.

          • TracyW

            How much do you make that a fortune of $70 million doesn’t strike you as “pulling down the big bucks”?

          • TracyW

            Also, note that those wealth lists are built from estimates done by journalists up against a deadline. And while shareholdings of public companies are easy to value, most other sources of wealth are not.

          • My point was simply that comments here seemed to be advancing the position that the real money in art was serving a popular audience, and that serving an elite audience was a money loser. This is not in fact the case when it comes to contemporary art; someone like Thomas Kinkade is the exception and not the rule, with almost all truly successful contemporary artists dependent on patronage by the 1% (really the 0.1%).

            Incidentally, I don’t claim that all artistic fields will end up being like contemporary art; this is especially true for artists like musicians or moviemakers who produce works of broad popular appeal that they can distribute digitally at near-zero marginal cost to large audiences.

          • TracyW

            On thinking about it, the contemporary art world is a weird one. If you look at the lists of which authors or musicians or actors are the wealthiest it’ s definitely the ones with general popular appeal.

            Maybe there’s something particular about art in that there are a lot of people who can churn out works that appeal to mass tastes, eg pictures of kittens, landscapes, portraits of famous people. Certainly photography changed art a lot, everyone can now cheaply take photos of whatever subject matter appeals to them.

      • TracyW

        When you talk of social influence, and not being an elite, I thought of this xkcd comic about how social influence could well be useful, even if very non-elite:

        http://boingboing.net/2009/05/31/stephenie-meyer-vs-4.html

    • Les Kyle Nearhood

      Agree completely Theresa

  • I’m going to argue two sides on this, just for fun, starting with side 1 in this comment: “Confidence in the worth of their own life-plans” is basically a subset of “feeling good about themselves”, and justice does not require making people feel good about themselves. “Social justice” in the BHL sense would be served simply if the material position of the disadvantaged improved over time, either in terms of growth in their real income and wealth (as in Jason Brennan’s “ParetoSuperiorland” thought experiment) or in terms of being able to afford better things (iPhones, etc.) on otherwise stagnant incomes (as envisioned by Tyler Cowen in “Average is Over”).

    As for the advantaged, studies of long-term social mobility like Gregory Clark’s suggest that the upper class in Alpha Land might owe their positions as much or more to inherited cognitive and personality characteristics as to initial material and social advantages per se. Other things being equal the flattening of environmental variation (nutrition, etc.) in modern societies would increase heritability of such characteristics, and inter-marriage among the Alpha Land upper classes would speed this along. So they could (and no doubt would) justify themselves as being a natural aristocracy deserving of their good fortune, and would see the rest of society as best fitted either to serve them (if able) or otherwise to just live on a minimal UBI and stay out of trouble.

    In this view of society, to the extent that there were members of the lower classes fit to move up, they could be skimmed off by testing and given special attention, much as the Church used to identify promising members of the peasantry. So you’d end up with a society with thick economic liberties, some ongoing improvement in material circumstances for everybody, and a reasonable justification for everyone’s place in society. To paraphrase Cowen again, it would basically be a medieval social structure updated with modern health care, technology, etc.

    • TracyW

      So you’d end up with a society with thick economic liberties, some ongoing improvement in material circumstances for everybody, and a reasonable justification for everyone’s place in society. To paraphrase Cowen again, it would basically be a medieval social structure updated with modern health care, technology, etc.

      First time I’ve heard of medieval society having a reasonable justification for everyone’s place in society. What with all the wars over who should be king, witch-burning, persecution of Jews, etc.

      Or, for that matter, thick economic liberties. Medieval societies tried things like setting maximum prices for poor people’s labour, regulating what clothes people could wear, regulating interest rates, legally restricting skilled work to guilds, etc.

      • At the time medieval society certainly was justified in the sense of having a justifying narrative accepted by most if not all people: nobility were God’s representatives for worldly matters, the clergy were God’s representatives for spiritual matters, and the peasants were put on earth by God to serve both. Maybe the Jews and the “witches” didn’t buy into this, but to my knowledge no theory of public justification assumes or requires unanimous agreement.

        In any case, no analogy is exact. I was simply pointing out that the “Average is Over” vision seems to replicate this tripartite division: 1) a “nobility” (a few “high”, most “petty”) that controls the vast majority of wealth and whatever political influence accrues to it; 2) a “clergy” that has above-average skills but relatively little wealth compared to their cultural influence; 3) a “peasantry” with average or below-average skills that lives in a modern-day analogy to the “Mathusian trap”: They labor in near-perfect competition with all the other people with average or below-average skills and hence have relative stagnant incomes and very limited ability to build wealth.

        • TracyW

          At the time medieval society certainly was justified in the sense of having a justifying narrative accepted by most if not all people:

          And we know this based on the extensive opinion surveys done of the general population during medieval times.

          Nope. Our ignorance about medieval society is vast. We have bits and pieces of information, but very little about what anyone beyond the literate few thought. You can’t support this claim.

          nobility were God’s representatives for worldly matters, the clergy were God’s representatives for spiritual matters, and the peasants were put on earth by God to serve both.

          Note the total absence of merchants in there. Or for that matter, Jews, or Muslims. This was not a narrative that justifed everyone’s place in society.

          Maybe the Jews and the “witches” didn’t buy into this, but to my knowledge no theory of public justification assumes or requires unanimous agreement.

          A lot of the time Jews and “witches” were being killed. That sounds like that not only did the Jews and witches not buy into this, but the people doing the killing also thought that the Jews and witches had no reasonable justification for being in their lives. You don’t kill people who you think you have good reason to keep around. (Note for the hard-of-thinking: I think the persecution of Jews, witches, heretics etc in medieval times was a bad thing.)

          On top of this, under this incredibly loose definition of “reasonable justification”, which is roughly that someone somewhere had some vague story about how this all fit intogether, I doubt there’s been a single society anywhere ever that didn’t have a “reasonable justification” for everyone’s place in their life.

          was simply pointing out that the “Average is Over” vision seems to replicate this tripartite division

          And I’m pointing out that that tripartitie division didn’t apply to real medieval societies, whatever some arm-chair theoretician in a monk’s habit may have written down.

          I also note that the real medieval Church was incredibly wealthy.

          • “And we know this based on the extensive opinion surveys done of the general population during medieval times.” Of course not. It was a narrative created to justify why the institutions of society should be arranged to some people’s liking and not to others’. (In other words, it was like a lot of political philosophy through the ages.)

            As for your other points, I accept the imperfection of my analogy, and return to the point I was originally trying to make with my comments: If you accept the “Average is Over” and similar visions as plausible, then at least in the US context that would herald a major change in the country’s conception of itself as a middle-class country and land of opportunity. From a BHL perspective there are then two ways to look at that. One is basically not to worry about it, and assume that market forces (perhaps supplemented by a bit of noblesse oblige) will produce at least some material improvement in everyone’s life. That minimally satisfies the BH in BHL: you can justify the state of affairs to the least advantaged, and then to the more advantaged but non-elite you can justify it on the basis that they have at least some chance to join the elite, and thus that their interests are and should be identical to the elite. (For example, that the logic that applies to passing on a small business or family farm should hold with equal force to passing on a multi-billion dollar fortune.)

            The other way is to also worry about questions of self-authorship, etc., in a world where for most people the scope for self-authorship is very limited compared to even the relatively advantaged but non-elite. This is a problem for Tomasi’s FMF project because he’s made self-authorship so core to his justification for thick economic liberties. The question is whether the FMF project, and the concept of market democracy more generally, can be revised to address this concern while still remaining a recognizably libertarian project. I don’t know if that’s possible, but it’s certainly a tough assignment to take on.

          • TracyW

            The other way is to also worry about questions of self-authorship, etc., in a world where for most people the scope for self-authorship is very limited compared to even the relatively advantaged but non-elite.

            The notion that in the digital world the scope for self-authorship is more limited strikes me as deeply implausible.

          • TracyW

            For example, that the logic that applies to passing on a small business or family farm should hold with equal force to passing on a multi-billion dollar fortune.

            Indeed, with a multi-billion dollar fortune the benefits to society from slightly-stronger incentives to keep investing in its productive capacity are probably much larger than those that apply to a small business or family farm. Consequently my argument applies with more force to the logic for passing on a multi-billion dollar fortune.

            (Assuming, as always, a generally well-functioning market-society.)

  • Now to argue the other side: If we assume variation in inborn talents and personality factors conducive to success, and reasonably high heritability of the same, then the Georges of Alpha Land would be putting their thumbs on a scale that is already tilted their way to start with: They’re accumulating wealth and influencing the structures of society in the goal of ensuring their children’s prosperity, but it’s quite likely their children would be prosperous anyway. Given that, for those of us who are not libertarians, and hence don’t rule out taxation of wealth, inheritances, etc., on principle, it would be allowable and perhaps prudent to impose some reasonable burden of taxes not just for funding basic government services but also for other reasons.

    First, such taxes could be used to help ensure that everyone has some reasonable store of wealth to which they have a claim (e.g. through a sovereign wealth fund or similar scheme). Among other things, this helps people avoid being put in the position of being depending on others, and especially being dependent on the wealthy in a medieval peasant/lord sense. This serves the interest of self-respect (assuming we care about promoting this) and (if I’m reading her right) promotes something like Elizabeth Anderson’s “democratic equality”.

    Second, flattening wealth inequality somewhat might promote social stability, not by stifling the modern-day equivalent of peasant revolts, but rather by lessening the incentives for intra-elite conflict (as, for example, discussed by Peter Turchin). If we’re using medieval analogies, we’re trying to limit incentives for “lord vs. lord” warfare where government in particular becomes an arena for one group to claim special privileges and rewards for itself.

    • TracyW

      the Georges of Alpha Land would be putting their thumbs on a scale that is already tilted their way to start with

      You appear to be assuming a zero-sum society here.

      They’re accumulating wealth and influencing the structures of society in the goal of ensuring their children’s prosperity, but it’s quite likely their children would be prosperous anyway.

      And how do you get prosperous in a well-functioning market society? By providing services and goods that people want more efficiently than your competitors.

      So, by their efforts, the Georges are making everyone better off.

      (Note, if it’s not a well-functioning market society, by which I mean one where the incentives are set up to reward people for doing things that benefit everyone else, including after accounting for environmental costs, then the right thing to do is to change those incentives, not try to limit people from bettering themselves or their children.)

      First, such taxes could be used to help ensure that everyone has some reasonable store of wealth to which they have a claim

      Because as we all know wealth springs magically from the ground. It doesn’t require continual investment.

      Among other things, this helps people avoid being put in the position of being depending on others

      Hmm, so being provided with wealth from the efforts of others means you’re not dependent on anyone? How do you think that works?

      Take the Norwegian sovereign oil fund. That only exists because people around the world can afford to buy oil from Norway. Farmers consider soil conditions and mend fences and calculate fertilisers, and fret about droughts or go out into the freezing rain and cold at 3am in the morning to check on their sheep during lambing season, to provide food to the Norwegians. And then all that food must be transported to Norway and to individual homes. Ditto with everything else that the Norwegians might spend their oil wealth on.

      • [My apologies for a quick reply here.] I’m not sure why you think I’m assuming a zero-sum society in the “fighting over a fixed-size pie” sense. I think there will be great wealth created in future (pie getting much bigger) but it’s plausible that most of that wealth will accrue to a relatively small group of people (most people getting a very small slice). That’s basically the subtext of “Average is Over”, for example, which I don’t think is exactly a socialist tract.

        This isn’t a function purely of crony capitalism either. If you look at Silicon Valley, for example, we see that a relatively small number of firms (Google, Facebook, etc.) have captured most of the value created through Internet services, mainly as a function of the increasing pervasiveness of the Internet, globalization, network effects, and economies of scale– not a whole lot of rent-seeking going on there. And within each of those firms a relatively few people capture the value created by the firm; for example, ignoring VCs, at the time Facebook had its IPO only six individuals held almost half the shares.

        I don’t have time right now to address the rest of your comment. But as I was trying to get at in my “on the one hand, on the other hand” comments, it’s really a question whether or not this trend is compatible with Tomasi’s vision of a “market democracy” that includes “social justice as the ultimate standard of political evaluation” (to quote from FMF). And if it’s not compatible, how might that vision be modified in a way that preserves the other features, including most notably “capitalistic economic freedoms as vital aspects of liberty”?

        • TracyW

          You’re ignoring consumer surplus. I use Google every day. Google’s search engine is far better than Yahoo or Alta-Vista, and even those search engines were far better than library catalogues for most purposes. The value I get from Google is many multiples of the money I spend on advertising I see there – and of course many things I buy as a result of advertising I get even more value from. Google only captures a tiny percentage of the value they create.

          That’s part of Cowan’s argument in Average Is Over, that the digital world is creating huge value for people even on very low incomes.

  • TheBrett

    Did you have the comparison with black people in American when thinking of the Alpha Land example? That strikes me as a real historical case example of it happening – even in places where discrimination and racial violence were relatively minimized, black folks found themselves closed off from many societal positions and elite political and economic places regardless of effort.

    • TracyW

      Yet blacks still reached elite societal and economic places. Eg Harold Amos: joined the Harvard Medical School faculty in 1954. Edward Bouchet got a PhD from Yale in Physics in 1876, Madame C.J. Walker and Annie Turnbo made fortunes around a million dollars in the first couple of decades of the 20th century.

      And of course Frederick Douglass, Booker T Washington and Martin Luther King became famous and very influential.

      • TheBrett

        A handful of people making it in over the course of more than 100 years isn’t the same thing as cracking into the elite.

        • TracyW

          Hold on. You claim that black folks were closed off from many societal positions and elite political and economic places. I pointed out cases of blacks achieving these positions. So, clearly blacks could crack into the elite.

          Discrimination and racial violence made it a lot more difficult for blacks to do so, but discrimination and racial violence can be objected to on their own grounds, regardless of whether rich people attempt to set up a dynasty.

          • TheBrett

            If black folks were breaking into the elite at a level proportional to their share of the population, then I’d agree with your point. As is, a handful of exceptional people making it in doesn’t change the general point that it’s effectively closed off (especially since those people were often then excluded from many of the social organizations of the rich white people around them).

          • TracyW

            A handful of people making it in does indeed make it clear that it’s possible to get in. If a black kid in 1950 was dreaming of earning a PhD in Physics from Yale, or being called on for advice by US Presidents or becoming a millionaire, they had examples to point to of blacks who had already achieved that.

            That blacks didn’t break in proportion to their share of the population indicates that racial discrimination and racial violence was probably a problem, but it’s just wrong to say that those positions were closed off.

            And it’s an elite – of course it’s only exceptional people who get in. If anyone could get in then it wouldn’t be an elite.

          • TracyW

            A handful of people making it in does indeed make it clear that it’s possible to get in. If a black kid in 1950 was dreaming of earning a PhD in Physics from Yale, or being called on for advice by US Presidents or becoming a millionaire, they had examples to point to of blacks who had already achieved that.

            That blacks didn’t break in proportion to their share of the population indicates that racial discrimination and racial violence was probably a problem, but it’s just wrong to say that those positions were closed off.

            And it’s an elite – of course it’s only exceptional people who get in. If anyone could get in then it wouldn’t be an elite.

  • Joseph A. Solomon

    Speaking of Thatcher:

    The children of former UK prime minister Margaret Thatcher will avoid paying millions in inheritance tax because their mother’s house in Belgravia, London, is registered to an offshore trust.

    Thatcher, who died in April, left £4.7 million to her family in her will, with a third each going to her children Mark and Carol, and the remaining third to be shared between her grandchildren when they reach 25.

    Not mentioned in the document is the house in Chester Square, recently valued at £12.5 million by Zoopla, which Thatcher lived in for the last decades of her life, reports the Mirror.

    Under UK law, those who inherited the property to would have had to pay inheritance tax of 40% of its value, or up to £5 million, if it were registered as belonging to a UK resident.

    The house was bought in 1991 by Bakeland Property Ltd, which was then based in Jersey, and then sub-leased to a firm of the same name registered in the British Virgin Isles, another offshore tax haven.

    John Christensen, of the Tax Justice Network, said: “There are huge financial benefits for an offshore company to own a property or leasehold, particularly in connection with stamp duty and inheritance tax.

    “A company doesn’t die. If a person dies the property has to be passed on to someone else – obviously this is not the case with a company.

    “This can be very beneficial indeed and can save a large amount of money in taxes which would be othewise due.”

    In 2002, the Guardian reported that the company’s shares were held by Hugh Thurston and Leonard Day, Thatcher’s friends and financial advisers.

    Accountants said that they were acting as nominees for a trust with concealed beneficiaries.

    One of Thatcher’s first acts on becoming prime minister in 1979 was to erase government restrictions on the amount of money that could be moved abroad, leading to the growth of offshore tax havens.

    “It has always been strange that Margaret Thatcher, that most British of PMs, enjoyed the benefits of a property registered in the BVI. It is possible that Denis Thatcher set up the trust or other offshore arrangements in order to save tax,” Richard Murphy of Tax Research UK told the Mirror.

    http://www.ibtimes.co.uk/thatcher-tax-offshore-haven-property-will-526405

    I realize you were focused on Thatcher’s vocal support for the concept of ‘property-owning democracy’, but she probably shouldn’t be held up as an example to emulate on the issue of bequest/inheritance taxes.

    • TracyW

      Estate/inheritance taxes discourage the accumulation of property to the extent that they are effective, and thus are anti-property-owning democracy. Let’s take the case of someone with significant property, and a terminal illness diagnosis. Without an estate tax, they can pass on all of their property to their relatives. An estate tax adds a nudge towards instead spending their property on enjoying life in the last few days in a binge of consumption.

      And with avoidance possibilities, estate taxes mean that people waste money on accountants and lawyers, both avoiding the taxes, and the tax department trying to stop people from avoiding the taxes. These are not good for society overall.

      So, if you favour a property-owning democracy, you should be against bequest/inheritance taxes.

      • Joseph A. Solomon

        Hey, I’m open to the argument, but was just pointing out that Thatcher’s behavior doesn’t necessarily jive with Tomasi’s (cautious) support for progressive taxes on bequests/inheritances.

      • John Tomasi

        I gather that in a (roughly) Thatcherite ideal of “property-owning owning democracy,” business-ownership/co-ownership would be celebrated not just for elites but for many. But I understand your skepticism about estate taxes actually leading to that result.

        • TracyW

          When I started my own business I did indeed throw a party to celebrate. So we can tick that one off the list.

    • TracyW

      Plus Richard Murphy is a known loon. If you doubt me, go to his blog and ask a tough question about his arguments, and you’ll get blocked.

    • Salem

      On the contrary, this is a fine example to emulate on the issue of inheritance taxes. Stay within the law, and don’t let the gaping maw of the state grab your hard-earned.

      • Joseph A. Solomon

        I don’t disagree necessarily, but see my response to TracyW above

    • John Tomasi

      In the US, the Kennedy’s did far worse (I mean, from the perspective of their stated political positions in favor of estate taxes). Not nec. exculpatory for the Iron Lady. Just say’n.

      • Joseph A. Solomon

        The Dark Side of Camelot…

  • TracyW

    Let’s imagine an alternative market democracy. In this there is an Alpha University. The Alpha University selects students based purely on their performance on various exams and tests, totally ignoring wealthy parents’ attempts to bribe it or use political influence or whatever. Its students come from a diverse range of socio-economic, ethnic, religious, etc backgrounds (we can attribute this to an excellent system of primary and secondary education, or Alpha Univeristy adjusting those exams and tests for background, or something else).

    With the superior education the students receive there, and through the contacts they make, the graduates of Alpha University come to constitute an elite class in the society. The very most desirable positions in industry, science, art and political life are most always held by Alpha alums.

    While opportunities and benefits are maximized to the least well-off, the top positions in society are effectively closed to members of the class that doesn’t get accepted into Alpha. Further, the members of the non-accepted class are aware of this. The basic institutions have been arranged so that they can do very well, but they know that a certain strata of social positions is effectively closed to them. The horizons of their dreams for themselves are thus curtailed. While people may have hopes for their children, nearly all parents realise at some point that their children are not going to get into Alpha university, be that at age 5 when they receive a diagnosis of serious mental difficulties, or age 12 when they accept that their kid just doesn’t have the academic nous, or age 17 when the rejection letter arrives.

    We can point out to them that the social arrangements of Alpha Land maximize their position compared to that available to them in rival regimes. Still they have doubts about themselves and, specifically, about their standing as fully free and equal members of their society. They live in a system of class domination (or at least, note, of class division). Being aware of this, their self-respect, which includes their confidence in the worth of their own life-plans, is eroded.

    Me thinks the problem is with Alpha University.

    • John Tomasi

      I like this example a lot. (also, stylistically, reminds me of J Brennan’s send-up of G.A. Cohen!). Thanks for posting it.

  • Xeno

    I think the biggest problem is in your assumptions. Primarily, “With the superior education they receive there, and through the contacts they make, the graduates of Alpha University come to constitute an elite class in the society.” I think you’re over-valuing education. Most of the value in a college degree, especially amongst the already wealthy is signaling. And absent rent seeking, guild protection, and government largess, all of which contribute towards making credentialism work, a degree will have greatly reduced value.
    Plus, isn’t it more the fact that the “elites” attend Alpha that makes it an elite university? If the value of Alpha was really market based, they would be subject to market pressure and creative destruction, as you suggest. So really we’re talking about Alpha as a social institution catering to the needs and wants of the elites. If you accept free association, then I don’t see how Alpha is intrinsically a problem. On the other hand, if the issue is Alpha serving as “king-maker,” I think it is entirely unlikely that it would be able to maintain that position in the idealize world you set forth. If for no other reason than there would be competition among the elites themselves. Great houses rise and fall.
    Ultimately, I see your conclusion about a perpetual dominant class with near perfect stability as a consequence of flawed assumptions and premises. (I regret I am constrained by time to add anything further.)

    • John Tomasi

      I’m accepting the idea that we properly evaluate whole institutional systems by considering how the tend to operate over the course of a generation or two. It seems plausible to think that great houses (read: elite universities) would not rise and fall much over that short a time span, even within the market-based societies I affirm. But I too see, and worry a bit, about the ambiguity in my “king-maker” phrase.

  • Salem

    I think you are quite right that we can imagine potential problems with unlimited bequests rippling through the generations. But we can also imagine potential problems with stiff taxes on inheritance (indeed, we need not look only to our imaginations). You need to consider not just the possible existence of a disease, but also its likelihood and the harm done, and compare that to the likelihood, and harm done, of the proposed cure.

    The relevant question is not “is Alpha Land conceivable?” (Ans: Yes, but highly unlikely). It is not even “Do the benefits of the inheritance tax outweigh the harms?” (Ans: No). It is “Do the benefits of putting the possibility of an inheritance tax (or other confiscatory taxes) in the political arena outweigh the harms?” (Ans: Clearly not).

    I would add that people will always want to pass on advantages to their families, and prohibiting inheritances will merely cause people to look for other, likely more pernicious, ways to do so. Perpetuating family status by market means (bequests) is far less damaging to the “Open Society” than doing so by political dynasties, nepotism, etc.

  • Two questions
    1) Do you accept that Uncertainty must exist for Market Democracy to be desirable?
    (If the Future is known, the market solution is easily dominated and, instead of Democracy, we’d just have a once and for all Social Contract. This holds trivially if resources are used up in the functioning of the Market and the Democratic process. If no resources are used up then we can always show with a bit of fancy maths and infinite arbitrage chains that this field of discourse is empty )
    2) If you accept Uncertainty then can you explain how Market Democracy can ‘sanction’ anything including ‘class domination’? It is the unpredictable future fitness landscape which decides what outcome obtains.
    (All assets are hedges which could be wiped out. Factor in cognitive bias and being rich today is a recipe for being the poorest of the poor tomorrow.)

    Now you can still have a debate on this topic but it will have to be couched in the language of evidential decision theory. At the margin, this means this discourse cashes out as Organisation theory.
    Ultimately as Alan Kirman points out, ‘representative agent models’ are worthless because no Social or Biological process can be modelled in that way provided we evolved by Natural Selection.

  • Jason Brennan

    I’m really unimpressed by Rawlsian institutional theory. It seems to me, and some other philosophers of significant import whom I won’t here name, to be a degenerate research project.

    Are we doing ideal theory or not? If we’re doing ideal theory, then by definition we’re supposing everyone is committed to justice, and so we don’t have to worry about John’s favored institutions “allowing” injustice. People won’t do unjust things, and they will voluntarily act in ways that prevent injustice from occurring. State action will be necessary only if people are in a bizarre and blameless dire epistemic situation where they can only escape if someone uses a gun.

    Alternatively, if we’re doing non-ideal theory, we have to take people as they are (including as they can be changed in light of different institutions and environments), and then ask what institutions will best achieve justice, recognizing that that there are no “guarantees”.

    As Cohen pointed out, and I agree, what Rawls calls “ideal” theory isn’t really either of those two things. It doesn’t tell us what a just society would look like, nor does it tell us what’s the most just feasible way to deal with unjust people. It’s in this sort of nether-region where it idealizes human being just enough to be useless and not enough to tell us what a truly just society looks like. (A truly just society, of course, looks like Mickey Mouse Clubhouse Capitalism.)

    I just think Tomasi’s playing a game not worth playing. And another reason it’s not worth playing is that the Rawlsians get to change the rules at will to suit themselves. So, for instance, as I’ve pointed out before, when Rawls or Freeman defend their favored institutions, they stipulate that people will not abuse the institutions because people are just, but when they criticize, say, Jim Buchanan’s favored institutions, they drop this stipulation.

    • Blain

      Brennan clearly does not like Rawlsian ideal theory. However, it seems that he doesn’t like it because it doesn’t fit into his particular conception of what ideal theory should be. It seems that Brennan thinks that ideal theory should be something like: citizens in a just society will act justly (whatever that means) no matter what. But that’s simply not Rawls’s conception of ideal theory.

      Rawls’s conception of ideal theory is that citizens will act justly, i.e., according to their sense of justice, so long as they have assurance that (an adequate number of) other citizens will do likewise. Rawls’s ‘sense of justice,’ then, is a commitment to reciprocity (not altruism, or being just ‘no matter what’). Hence it is important to Rawls to show that a society with just institutions will inculcate and support citizens’ sense of justice – understood as a commitment to a liberal conception of justice based upon reciprocity – over time.

      This is why Rawlsian ideal theory actually includes *two* stages. In the first we outline the features of a society with a basic structure that satisfies the principles of justice, assuming full compliance. In the second stage, we determine whether citizens’ sense of justice can be sustained over time, or whether the principles of justice impose excessive ‘strains of commitment’ on citizens over time. (Undermining the social bases of self-respect impose such strains.) If a just society cannot be stable over time, then that is sufficient reason for rejecting the conception of justice in question.

      In _A Theory of Justice_ Rawls’s account of the second stage of ideal theory involves his argument for congruence. In _Political Liberalism_ the ‘overlapping consensus’ replaces congruence in the second stage of ideal theory.

      Whatever the merits of Rawls’s version of ideal theory, it is internally coherent. It is ‘ideal’ in that it assumes that citizens have a normally effective sense of justice, understood as a form of reciprocity (not altruism). But it also tries to assume a realistic moral psychology: hence Rawls’s concern that the principles of justice not impose excessive strains of commitment on citizens (and that citizens have assurance that the conditions of reciprocity be satisfied, etc.).

      Rawls describes his version of ideal theory as involving outlining the main features of a ‘realistic utopia’. Brennan seems to think that ideal theory must be purely utopian in nature. That may be fine for him. But for Rawlsians, issues of stability are important. Hence the worry that Tomasi raises is a legitimate one within the framework of *Rawlsian* ideal theory.

      • Jason Brennan

        Blain, I realize I didn’t spell out what my complaints are about Rawlsian ideal theory in much detail in this comment. I put it there more for John’s benefit, since he’ll know the background. But I don’t think your explanation contradicts my view of what Rawls is up to or what my complaint about him is. I’ll just leave it at that, though you’ll of course be puzzled.

        • Blain

          If your complaint is available elsewhere, I’d be grateful for the reference(s) and/or link(s).

          What I especially object to in your comment is this: “If we’re doing ideal theory, then by definition…”

          The “by definition” bit seems obviously implausible. I don’t think that there is a single form of ideal theory. Theorists can idealize in different ways, and to different degrees. (Traditional economic theory, for instance, is full of idealizations.)

          We might disagree over whether such idealizations, or different forms of ideal theory, are useful or not. But surely you don’t think that there simply is *one* way to do ideal theory?

          It seems that you don’t like Rawls’s particular version of ideal theory. Okay. But it seems implausible that Rawls simply failed to grasp what ideal theory *is*. The assumptions of Rawlsian ideal theory, in both of its stages, are pretty clear.

      • John Tomasi

        Thanks, Blain. this is roughly how I understand it too. In FMF I try to set out market democracy in a way that matches the idealization of the Rawlsians, point by point. I’m increasingly interested in lower-ideal theoretic defenses of market democracy. In the Crit Review symposium, Mark Pennington has a nice piece on this.

        • John Tomasi

          re some problems with Rawlsian idealization in context of FMF, J Brennan posted something here last year that I thought was really good.

    • What is a ‘degenerate research project’? Is Brennan, worthless cunt that he is, referencing Lakatos? Why? Even he can’t be stupid enough to believe that Rawlsian stupidity is a ‘degenerative Scientific Research Program’.

      If so, what did D.G. Saari just do? Either transitivity is global or ‘local dictators’ don’t matter. What’s fucking degenerate about the relevant open question in Math? Brennan has a PhD. He teaches. Does he really not understand that there is a concurrency/race hazard angle to this?

      This is his idiotic comment- ‘Are we doing ideal theory or not? If we’re doing ideal theory, then by definition we’re supposing everyone is committed to justice, and so we don’t have to worry about John’s favored institutions “allowing” injustice. People won’t do unjust things, and they will voluntarily act in ways that prevent injustice from occurring. State action will be necessary only if people are in a bizarre and blameless dire epistemic situation where they can only escape if someone uses a gun.’

      To be clear, ‘ideal theory’ isn’t about homothethetic preferences. Brennan is extraordinarily ignorant to suggest otherwise. The foolishness of this post arises from its ignorance of Knightian uncertainty. You can have ‘ideal theory’ of ‘Muth Rational Schelling focal points’ based on Knightian uncertainty and people make money by pretending there is a Choquet workaround for this.
      Brennan, cunt that he is, doesn’t know from comonotonicity (which is like Actuarial Science 101) He has nothing to contribute. But he still sticks his oar in doesn’t he?
      The cunt pretends the OP was actually about what Rawls said. It isn’t. It’s a totally different bowl of shite & onions.
      Brennan doesn’t know even basic Math. He can’t make an argument to save his life. Still, he writes worthless books. The Jesuits must be so proud.

  • Daniel

    ” market democracy should be formulated so as to allow the state to impose substantially progressive tax rates on transfers of wealth between generations.”

    There is a risk that inheritance taxes would affect the worst-off since the generational transition of family-owned businesses might force the new owner to cut jobs.

    “Germany’s Constitutional Court will rule this week whether it is legal to grant family-run firms inheritance tax breaks”
    http://www.reuters.com/article/2014/12/16/us-germany-court-tax-idUSKBN0JT1NM20141216

  • Bob_Robert

    Market dominance is irrelevant. Market success does not prevent anyone else from success, because building wealth does not come at the cost of anyone else.

    I don’t care how much money Bill Gates has, because nothing he has came at my “expense”, I gained wealth by buying computers, other people gained by using his products, and so on.

    I will never understand the “bleeding heart” idea that success only comes at the expense of others.

  • John, as I understand you, the worry you’re addressing (and largely taking onboard) is that allowing the existence of economic dynasties is likely to cut against the core of market democracy by creating conditions that fail to respect all citizens as free and equal authors of their lives. In particular, such dynasties are likely to erode the bases of self-respect for those who are not lucky enough to be members of the dynastic economic class. In response, you propose to alter market democracy by disallowing bequest, or at least heavily limiting individuals’ standing to bequeath their property.

    I agree with everything you say: it seems to me that bequest does threaten equal freedom in exactly the way you suggest. However, I worry that your fix does not go far enough. Suppose that in Alpha Land, bequest is restricted as per your suggestion. This still leaves the possibility that persons will, without the help of bequest, amass enormous fortunes and then use those fortunes in ways that both “restrict the horizons” of many people’s dreams and undercut economic independence. The latter is important because, as Freeman points out (and I think you’d want to agree), economic independence, or the absence of economic mastery, is an important component of the bases of self-respect among free and equal persons.

    Let me offer an example. Suppose that in bequest-free Alpha Land, a woman named Anna builds up a very large business empire. Let us suppose that she does this in a totally upright way, without cheating or family-based luck of any kind. Anna uses her business enterprises to completely dominate the market in a relatively economically weak portion of Alpha Land. Before long, there are only half the number of businesses that used to operate in that region of Alpha Land, and those that remain are directly or indirectly dependent on Anna. Were she to close her enterprises or move them elsewhere, the region would be economically gutted. It seems to me that in this scenario, all of the problems you correctly identified in connection with economic dynasties are present, albeit perhaps less permanently (since Anna’s children will not be able to inherit the empire). People’s horizons are severely limited, and their bases of self-respect are insecure at best or absent at worst, not least because whatever economic options they enjoy (at least at any kind of manageable cost) exist at Anna’s pleasure. Since this kind of condition can exist even in the absence of bequest, it seems that the principles that lead you to reject bequest should lead you to accept more aggressive intra-generational redistribution as well. Or if you don’t think so, I’d be interested to hear why.

    • TracyW

      Before long, there are only half the number of businesses that used to operate in that region of Alpha Land, and those that remain are directly or indirectly dependent on Anna. Were she to close her enterprises or move them elsewhere, the region would be economically gutted.

      Firstly, if Anna did close her enterprises or move them elsewhere, what would stop other enterprises from moving in to take up the gap in the market? If this region is profitable for Anna to operate her widget-making business because there’s a deep network of skilled labour for hire and independent firms providing services to those, then those things would be there for another widget-making company to move in.

      Secondly, people can move away from the region, or set up their own businesses selling to people living outside that region. There’s no reason why someone with the ability to work need let their economic options exist at Anna’s pleasure if this bothers them.

      Yes, people’s livelihoods are insecure, but people’s livelihoods are *always* insecure. If you build your livelihood on a market basis, another competitor might come in and out-compete you, or invent an entirely new product. Or your clients’ tastes might just shift. If you build your livelihood based on government protection, a new government can decide that, no, subsidising your livelihood is no longer a desirable political objective (perhaps because the country is going broke). Look at the closure of ship-making businesses or coal-mining in the UK, or the massive government lay-offs under Rogernomics in NZ.

      • Thanks for your reply, Tracy. I’ll try to say something about each of your points.

        First, it certainly is true that if Anna were to move out, a similar large business would probably move in. But if it’s objectionable to have Anna as a kind of economic master, then whoever might replace her would be objectionable as well. To use a political comparison, if it is objectionable to have a king, it does not help matters if that king is certain to be replaced by a challenger in the event of abdication or defeat.

        Second, moving away from a region to improve one’s economic options is itself a very costly option. If people must either operate on Anna’s terms or undertake a very high cost and possibly very risky move, then Anna still has extremely significant and one-sided economic power. This, it would seem, is enough to constitute some considerable degree of objectionable domination. Now, if people enjoyed some kind of substantial basic income or access to wage-independent grants for the purpose of moving to better markets, this problem would be significantly alleviated. However, such income or grants would constitute substantive redistribution beyond the restriction on bequest that John has offered, which is exactly what I’m suggesting John is under pressure to allow. Likewise, although people have the right to set up their own businesses, it is unlikely that those working in the Anna-centric economy would have easy access to the capital, know-how, or sheer spare time necessary to dig themselves out from their condition of dependence, at least without some kind of substantial assistance in the form of basic income, guaranteed low-interest loans, etc. (or unless Anna herself decided to help out). If they did enjoy such substantial assistance, Anna’s enormous economic strength would be much less problematic. However, again, such assistance would constitute substantial redistribution beyond the ban on bequest.

        Third, I agree that there is an inherent instability in economic life, and I don’t mean to say that instability per se is objectionable on grounds of non-domination. Markets are not themselves masters, and it is always possible for market changes (or, as you rightly point out, government changes) to push people towards economic paths that they would have prefered to avoid. What is objectionable is one-sided dependence on the will or choice of another person in order to access important goods or to pursue one’s conception of the good. Since this is the threat in question, it certainly wouldn’t help to have government agents control what particular economic options people may pursue or what goods or services they may produce. After all, government agents can be dominators too! What I have in mind is a dispersal of income and wealth of a sort that it would both (1) make it difficult for economic empires to form, even if only for a generation, and (2) make it difficult for government agents to assert their wills over people’s economic choices in the way we have seen in cases of central planning. One kind of policy that might be a step in this direction would be a basic income guarantee of the sort that a number of BHL folks have been talking about lately, although there are no doubt others as well.

        • TracyW

          First, it certainly is true that if Anna were to move out, a similar large business would probably move in. But if it’s objectionable to have Anna as a kind of economic master, then whoever might replace her would be objectionable as well.

          But you haven’t shown that Anna is a kind of economic master. Your argument was that Anna could destroy the local economy by moving out. But, if her moving creates an opening for somemone else to move in then her leaving can’t destroy the local economy. Complaining about her being the king in this case is like complaining about Michael Jackson being the King of Pop. Yes, he might have been very dominant, but that doesn’t mean that his “rule” was objectionable, nor does it mean that his death deprived us of music.

          Second, moving away from a region to improve one’s economic options is itself a very costly option.

          As someone who has done this several times myself, including moving country, nope, not really that costly.

          If people must either operate on Anna’s terms or undertake a very high cost and possibly very risky move, then Anna still has extremely significant and one-sided economic power.

          But they don’t. Apart from the cheap option of moving, they also have the option of setting up a business in their own region selling to people outside their region, or otherwise finding work that isn’t dependent on Anna.

          Also, moving a business isn’t exactly cheap either.

          Now, if people enjoyed some kind of substantial basic income or access to wage-independent grants for the purpose of moving to better markets, this problem would be significantly alleviated.

          Such as, for example, the income they might be earning from working for Anna’s business?

          Likewise, although people have the right to set up their own businesses, it is unlikely that those working in the Anna-centric economy would have easy access to the capital, know-how, or sheer spare time necessary to dig themselves out from their condition of dependence, at least without some kind of substantial assistance in the form of basic income, guaranteed low-interest loans, etc.

          Huh? Seriously, what? Where is this logic coming from? You’ve got Anna hiring people, contracting with local firms, thus giving them money, and access to contacts. You do realise that employers prefer to hire people with more work experience rather than less, don’t you? That even when hiring graduate positions they look for people who’ve done something beyond study, such as after-school jobs or sports, etc.

          I mean, back in the 19th century, working class people managed to immigrate in their millions from the countryside to the cities and even to the USA and other colonies, without guaranteed low-interest loans, substantial assistance in the form of basic income, etc. Nowadays, poor people in the third world keep managing to smuggle themselves in to rich countries despite the efforts of the rich countries’ governments. The notion that people need substantial assistance to move is just wrong.

          (or unless Anna herself decided to help out).

          The lovely thing about markets is that they create a great incentive for people to help out in the process of making themself better off. When Anna hires someone, on average, both parties win. Anna gets work done more cheaply than she could do it herself, the new hire gets money and experience.

          . If they did enjoy such substantial assistance, Anna’s enormous economic strength would be much less problematic.

          Yes, indeed, that Anna hiring people is giving very substantial assistance by employing people is exactly what does make enormous economic strength much less problematic in a market economy.

          And this is even ignoring all the benefit that Anna provides to people more generally by providing whatever goods and services her business produces. Becuase of Anna, people outside the region in question have more wealth and thus are more capable of affording whatever other services and goods the region offers.

  • John Tomasi

    I think this Freeman piece by Aeon Scoble is very interesting.

    http://fee.org/freeman/detail/capitalists-should-love-the-estate-tax

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  • John Tomasi

    Something I’ve been wondering: Is it really clear that market democracy must find an AlphaLand-type outcome objectionable? What if, as several people here have commented, the effects of taxes on bequests is that economic growth is slowed? As a result, let’s imagine, the policies enacted to make the top positions more open to all (Fair Equality of Opportunity, FEO) has the effect of reducing the wealth personally controlled by the least well off (market dem interp of the Difference Principle, DP). Rawls places FEO lexically prior to the DP, and I follow that route in FMF. But Steve Wall and others have made me begin wondering about this feature of the Rawlsian view. Perhaps market democracy should reverse the lexical priority, so that respect requires that we satisfy the DP before satisfying FEO (note that the commitment to equal liberty for all would still be intact and lexically prior). After all, is it obvious that parties in the original position would accept lower wealth under their private control simply to ensure that the very top positions in society are to some degree (indeed, under FEO priority, perhaps to *any* degree) more available to them? That seems to me like a status-based interpretation of liberal justice, rather than an agency-based one like I wish to pursue in FMF. So perhaps market democracy should reverse the lexical priority, putting DP prior to FEO. Would such a construal of the requirements of justice obviously be disrespectful of the least advantaged citizens? I’m not sure that it would. Thus AlphaLand would be acceptable to market democracy, so long as the effect of the operation of its institutions was to maximize the wealth of the least well-off over time (compared to any rival regime-types, including those that impose heavy tax rates on bequests). Its just an idea that I am playing with for now. Would welcome people’s thoughts.

    • John, I don’t think I’m totally clear on the distinction you want to draw between agency-based interpretations of liberal justice and status-based interpretations. Intuitively, it would seem that a person’s degree of agency would depend on her status in relation to others. For the extent to which a person’s path through life is an expression of her agency rather than an expression of other people’s agency would seem to be a function of her status in relation to those other people. Maybe there is a good reason to sharply distinguish these two interpretation as distinct directions for the liberal project, but I’m just not sure I see it clearly.

      • TracyW

        Is that really true? Let’s take Barrack Obama, or any other US President. Very high status, but also very limited in what he can do with that status by political realities. And in part, that status reduces his agency, people pore over his words for possible insults in a way that generally doesn’t apply to anonymous people.

        Or consider Summers being driven out of Harvard University. Again, high status job, but that doesn’t mean more agency.

        Obviously this isn’t everything, a Nobel Prize Winner or an author has high status and generally pays less of a price for saying something politically-incorrect than someone with high political status. But this does depend on circumstances.

      • John Tomasi

        I don’t mean the distinction to be dichotomous: it is a difference of emphasis, though a foundational one. Both schools of social justice, my market democratic one and the more familiar (academically dominant) social democratic one, affirm citizens as free and equal moral beings. But while social democratic theories of liberal justice affirm the agency of citizens, they give special weight to the status of citizens as equals when it comes time to fill in the details of the requirements of justice. Market democracy affirms the equality of citizens, but shades weight to the importance of their agency. It was Keith Hankins, then an undergrad at Brown (now a PdD candidate at Arizona) who first suggested these terms to me. I discuss the idea in FMF at pp. 180-196.

    • TracyW

      Well, the obvious point is that many people are born with or later acquire, through sheer bad luck, major health problems that rule them out of reaching the top positions in society. And indeed create numerous other problems and lower their quality of life more generally.

      Redistributing money to the poor can’t change that.

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  • Mike Tolhurst

    These objections point, I think, to a type of good that free markets can’t maximize, a good that is by its nature zero-sum: rank order in society. Trade and markets can make more goods, doo-dads and technological innovations but only one person can be ‘first.’ (Though market democracies likely create more fields in which one could be ‘first,’ a not insignificant fact)

    What seems to be behind the concerns of the better off, but still least well off, is that they can’t improve their *rank* order. (prestige, honor, fame, status etc.) It’s pretty clear that people have often cared about these things, but they’re a type of ‘good’ that isn’t capture by either Rawls or, as far as I’m aware, Tomasi’s account of a just society.

    To address this question would require an examination of the type of ‘good’ these things are, and whether they are something individuals, and societies, should care about.

    • TracyW

      These objections point, I think, to a type of good that free markets can’t maximize, a good that is by its nature zero-sum: rank order in society.

      What rank order? What rank does George W. Bush occupy, taking into account the number of people who hate him versus the number of people who hate the average citizen? What position does Elizabeth II occupy? The Pope to non-Catholics? Richard Dawkins to fervent atheists versus fervent Christians? The leader of Scientology, whomever that is?

      What seems to be behind the concerns of the better off, but still least well off, is that they can’t improve their *rank* order. (prestige, honor, fame, status etc.)

      Why not? Join a local club and do volunteer work to help with its activities. If you’re very disabled nowadays you can find opportunities to do this online. Prestige, honour, fame, status just went up.

      The people who can’t do much to improve their rank order are the ones very nearly at the top. Prince Charles is kinda stuck right now.
      And people who are already maxed out on their social/charitable endeavours but generally they don’t have the energy to be stressing out about their social status.

  • Nick Geiser

    I have two objections to this argument for progressive taxes on intergenerational bequests. The first is on the distinction between class division rather than domination, and the second is the relationship between class division and self-respect.

    First, I don’t see why it’s problematic that certain positions in society are effectively closed to some members of society, independent of whether it leads to their subjection to arbitrary power or threatens their political liberties.

    I think that it’s hard to disentangle our intuitions about division vs. domination in the case of institutions like “industry, science, art, and political life,” so let me suggest the case of elite sports as a possible instance of class division without domination. Elite professional athletes in many societies enjoy substantial prestige, notoriety, and influence, and unchosen factors like genetic endowments and upbringing largely regulate membership within the class of elite athletes. Moreover, these restrictions on entry, and the power the status of elite athletes confer, is common knowledge. I would claim that. Is this class division problematic from the point of view of justice? I don’t think so. Even though elite sports is closed to most of us, that division doesn’t seem wrong. In fact, we all benefit from competition among an exclusive class of elite athletes.

    Second, I don’t see why class division necessarily erodes the capacity for self-respect. As an empirical matter, most of the research on the psychological effects of inequality on self-respect shows that local inequalities are what matter, not the fact that some abstract “strata” of society is closed to me. How exactly does division threaten the confidence of the least-well-off in the value of their own life plans? The least-well-off have more opportunities to develop life plans and self-respect in Alpha Land than under any other regime, including opportunities to benefit their fellow citizens and receive recognition from them. Isn’t the value of their life plans and the standing they hold constituted by the actual value those plans create for others and themselves? Does the existence of a class division threaten their capacity for agency? Is there something about the closure of a particular set of institutions–the sciences, art, criticism–that threatens the confidence in the value of their own life-plans? Why do these institutions in particular need to be open? How is that set of institutions specified?

  • mtipton

    So what’s the standard for ‘Social Justice’. When is a society considered just in this framework? If it’s not attempting to have largely equal outcomes in the lives of all people, such as everyone makes about the same amount of money? What is it that progressives and social justice types aim for? What is the measuring stick measuring?

  • AgoristRevolution

    Even if a truly free market resulted in an elite class, people would probably rotate in and out of that class (there would be a high degree of social mobility) because those who reach the elite class wouldn’t be able to lobby the state to protect their market share from potential competitors; thus, each generation of old money capitalists would stand a far greater risk of being supplanted by a new generation of innovators. Equality of opportunity (lack of market barriers) not equality of outcome is what matters to libertarians.

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