Colin Bradley has a foolish article in Aeon titled-
Liberalism against capitalism
Since liberalism gives people the freedom to enter or refrain from entering financial transactions, it follows that if people want to allocate investment funds through capital markets (which is what Capitalism means) they are free to do so. If they are too lazy or improvident to have any such desire, there will be no Capitalism. But no Liberal regime can prevent the thing's existence- provided that's what people want.
The work of John Rawls shows that liberal values of equality and freedom are fundamentally incompatible with capitalism
No. Rawls work shows nothing at all. Where non-convexities (i.e. economies of scale) exist, or exigent cirucumstances prevail, his Utopia is consistent with slavery, genocide, or things more repugnant yet. If people believe Society has to be horrible to survive, then 'behind the veil of ignorance' they may choose a horrible regime in the hope that they are one of the lucky ones.
Bradley speaks of
a contradiction that seems to lie at the heart of liberalism. On the one hand, the promise of a liberal society is of a society of equals
No. That's Communism, dude.
– of people who are equally entitled and empowered to make decisions about their own lives,
a meaningless assertion. Who is to say a prisoner awaiting the hangman's noose is not, in some sense, more entitled or, indeed, more empowered, to make decisions than the Head of State? After all, we don't know there isn't an after-life or that free-will really exists.
and who are equal participants in the collective governance of that society.
Liberalism makes no such stipulation. As a political philosophy, its influence peaked before most people got the vote or were eligible to hold public office.
Liberalism professes to achieve this by protecting liberties.
Either people protect their own liberties or those liberties don't exist. Ask the people of Ukraine. Liberalism never claimed any magic powers.
Some of these are personal liberties. I get to decide how to style my hair,
unless your employer, or school, says otherwise.
which religion to profess,
again, this depends on your job. A Bishop can't decide to become a Jew or a Muslim while remaining a Bishop.
what I say or don’t say,
This guy hasn't heard of the laws on libel or the official secrets act.
which groups I join,
some groups may be proscribed. An American citizen who joins ISIS may be sent to jail.
and what I do with my own property.
No. There are laws which restrict what you can do to your house and garden.
Some of these liberties are political: I should have the same chance as anyone else to influence the direction of our society and government by voting,
this is not a necessary condition for Liberalism. Felons may be disenfranchised as may people under a certain age. In the past, Liberal regimes often had a property and gender qualification for suffrage.
joining political parties, marching and demonstrating, standing for office, writing op-eds, or organising support for causes or candidates.
Again, there may be reasonable restrictions on all these activities.
On the other hand, liberalism is usually uttered in the same breath as capitalism.
No. Reagan was for Capitalism. He was against 'the L word'. In Nineteenth Century England, there was a Liberal party but it was fiercely opposed by a Conservative party. Tories aren't generally considered to hate Capitalism.
Capitalism is a social system characterised by the fact that private persons (or legal entities like corporations) own the means of production.
No. It is characterised by open markets which allocate investment funds.
Combined with liberalism’s protection of rights and liberties, this means that, just as I get to decide what to do with what I own (a 2004 Hyundai with a busted A/C unit and squeaky wheel bearings), so did the legal entity US Steel get to decide what to do with what it owned: the Youngstown Works.
In 1952, President Truman tried to take control of that Steel Plant so as to prevent a strike disrupting production during the Korean War. The Supreme Court judged that he had acted unconstitutionally. However, had Congress backed Truman, the move would have been perfectly legal. The fact of the matter is that militant Trade Unions caused the Steel industry to become uncompetitive. In any case, there would have had to be a reduction in employment but the thing could have been gradual.
Why did the local people not buy the Steel Works to keep it open? The answer was that the thing was a money-pit. The workers may have hoped that the Federal Government would bail out the industry. But the tax-payer showed no enthusiasm for feather bedding over-paid, inefficient, steel workers.
Liberalism’s apparent commitment to capitalism threatens to prevent it from delivering on all that it promises.
So what? The thing is useless. Reagan mocked Dukakis for being too yellow to use the 'L word'. The notion was that everybody had come to loathe the thing. It was ballot box poison.
To see this, it is important to remember that formal political processes do not exhaust the way our society governs itself. One of the main tasks for a society is to organise economic production.
No. That is a task for those who actually produce stuff.
We humans are a species that makes stuff.
Many of us are too lazy or lacking in skill to do any such thing.
We make tools, dwellings, food, art, culture, more little humans, and much else. Moreover, we usually do this together, as a joint activity.
No doubt, Colin's mummy and daddy called in the whole neighbourhood to help them conceive the little cretin.
Such cooperative production inevitably produces a division of labour:
A cooperative enterprise may choose to eschew the division of labour. It won't be much good though.
some hunt while others gather; some fish while others sow; some design artificial intelligence while others squeegee windows at the stop light.
This is a 'competitive' or Nash equilibrium. The cooperative equilibrium may be better but it would be difficult to enforce.
When societies industrialise, achieving economies of scale and the capacity to purchase cutting-edge technologies needed for profitable production becomes extremely expensive.
The reverse may occur. New technology may remove 'barriers to entry'. Apple and Google and Microsoft were once minnows. People thought IBM would dominate the market.
So expensive, in fact, that it is possible only for a relatively small number of people or entities to do it. This leads not just to a division of labour, but to a class-stratified society.
Yet, we know that primitive societies with little specialization and trade may have more intense social stratification and an onerous 'caste system'.
Some people – capitalists – own the materials or technologies that produce society’s wealth,
The beneficial owners of most industrial wealth are in fact ordinary people who buy insurance or have a pension plan. Control rights, on the other hand, may be narrowly concentrated in the hands of a few company promoters.
while other people – workers – have to work for the capitalists in exchange for a wage. In such a class-stratified society, capitalists not only make the important investment decisions
No. Institutional investors decide. They may choose to back certain celebrity company promoters but they may also pull the plug on them.
that guide society’s overall direction, but they are also effectively private dictators telling their workers what to do, when to do it, what to wear, when to pee, and what to post online.
No. A dictator gets to kill you if you don't do what he wants. Hitler didn't threaten people with the sack. He strung them up with piano wire. On the other hand, Mummy is definitely a 'private dictator'. She stops me from peeing in the punch bowl.
Given liberalism’s defence of the capitalists’ rights to do all this,
Who gives a fuck what something utterly useless- like 'liberalism'- defends or fails to defend? Is Zelensky seeking to raise up the ghost of John Rawls to go kill Putin?
it is hard to see how liberalism might reliably achieve its goal of bringing about a society of equals in which we all have a share in our collective governance.
It is stupid to think any 'ism' has this magic power. Don't study political philosophy. It is a waste of time.
Hence the contradiction at its heart, and Judge Lambros’s ambivalence.
Lambros wasn't ambivalent. The fact was the Mayor of the City had given the Company 14 million dollars just five or six years previously. Had the Company made promises on which it was now reneging? Perhaps the City was owed some equity in the Company. Would that make a difference? The answer was that either the City did have equity in which case it could buy out the other shareholders and do as it pleased- but this required stumping up more cash- or else the Mayor was merely posturing. He knew the thing was a money-pit. He had bought himself some votes by dispensing tax-payer money but, now it had become clear that the plant was unviable, he had not intention of slashing the City budget so as to subsidize a loss making industrial unit. Back then, some Law Professors spoke airily about some new 'common law doctrine' which might, by some magic, keep loss making plants in operation but the plain fact was the law couldn't force either tax-payers or shareholders or anybody else to featherbed overpaid, inefficient, workers in loss making plants.
Liberals rarely question the basics of political economy like who owns what and lords it over whom
Who cares what those cretins question? We are content if they don't masturbate in public.
The political-economic background of the Youngstown closure is an object of ongoing controversy among historians, economists and sociologists.
Donald Trump made some bombastic promises of reviving the Rust Belt. Obama was more blunt and truthful though he overstated the decline in employment. Going forward, we can expect smaller plants more tightly focussed on recycling rather than raping the Earth.
All agree that it was part of the phenomenon of ‘globalisation’. But whereas the former US president Bill Clinton – whose administration oversaw the construction of the Lambros Federal Building – could declare in 2000 that globalisation was ‘the economic equivalent of a force of nature’, nobody seriously believes that anymore.
Thanks to Trump. Is Colin secretly a MAGA supporter?
Under US leadership (itself a response to Chinese rivalry), the world is turning toward ‘neomercantilism’, embracing strategies whereby governments protect domestic industries while intervening mightily in markets, imposing carrots and sticks to steer private investors toward targeted economic goals like place-based investments in green technology.
We have been here before. Obama had a 'Green New Deal'. Whatever happened to it? On the other hand, it is great fun to be liberal with other people's money- more particularly the tax-payers.
This means that the way society organises production has re-emerged as a contested political issue. But it does so in a fractured ideological moment. Liberalism’s hegemony is perhaps at a nadir. Populist authoritarians and ‘illiberal democrats’ have attracted a surprising level of legitimacy and support, while post-liberal ideologies look ahead to new possibilities.
Liberalism has no magic power. The Biden doctrine is if you want to defend your society from a brutal invader- you have to do the fighting yourself. Thankfully, the European tax-payer is willing to spend on Ukraine's defence and the US too sees that if Putin and Xi prevail, then they will have to return to isolationism while the terms of trade move against them.
Critics on the Left and the Right offer two main visons of the near-future. On the Left, critics suspect that the return of industrial policy might be less than the ‘new economic world order’ its proponents tout it to be, reflecting liberalism’s inability to get to the root of capitalism’s problems.
Critics on the Left are constantly clutching their pearls and expressing great shock that Judges are not setting up concentration camps for Merchant Bankers and other such evil bastards.
Those who hold this view, like the economist Daniela Gabor, see legislative efforts like the US president Joe Biden’s Inflation Reduction Act (IRA) or the European industrial policy proposed by the French president Emmanuel Macron as merely underwriting private profit-making by using the state to ‘de-risk’ some capital investments, making them safer for capitalists who reap massive rewards with little downside.
Sadly, the downside matters less than the upside. What we will get is 'Cartelization' and higher barriers to entry. This means more rent-seeking and less innovation.
Some socialists even go so far as to suggest that Biden’s IRA is a regression to a kind of feudalism.
Why stop there? Why not say it is a return to the days of Atilla the Hun?
On the Right, some so-called post-liberals, like the political theorist Patrick Deneen, hope that an industrial policy focused on restoring blue-collar manufacturing jobs to the US heartland will turn out to be a revolutionary first step toward throwing out liberalism with all its (hypocritical) aspirations for individual liberties and social equality.
Joe Lunchbucket really loves abortion and LGTQ activism- right?
This dichotomy ignores the possibility of a liberal anticapitalism.
Why not a Liberal Maoism?
This may sound like an oxymoron. Neither liberals nor their critics disentangle liberalism from capitalism (though some historians have begun to).
The Germans have a tradition of top-down 'liberalism of the officials'. It is perfectly possible for Labour to agree to a 'Stability and Growth' pack such that they exchange job security and 'worker participation' for wage cuts during bad times. But German society is differently constituted to Anglo Saxon societies.
Most liberals even emphasise the happy marriage between the two. Among those liberal egalitarians who stress the redistributive New Deal as liberalism’s moral core,
But the New Deal failed. It was only re-armament and entry into the War which got rid of mass unemployment.
few seriously grapple with big issues of political economy. Liberals advance institutional and procedural solutions – ‘structural change’ to representative processes, expanding voting access, etc – but rarely question the basics of political economy like who owns what and lords it over whom.
Colin may not have noticed this buy lawyers and politicians spend a lot of time settling these questions.
That makes it all the more surprising that liberalism’s greatest philosophical exponent,
John Stuart Mill not
John Rawls,
who neglected Knightian Uncertainty- as Arrow, Harsanyi etc did- and thus wrote nonsense. The fact is, since all possible states of the world are not known, we are stuck with 'incomplete contracts' but the economic theory of such contracts came too late for Rawls. Yet, it must be part of the 'plug-in' for those behind the 'veil of ignorance' who immediately say 'because of Knightian Uncertainty, it is Hannan inconsistent for us to agree to any theory of fair distribution. Under incomplete contracts, there has to be a redistribution of benefits in line with unexpected events.'
developed a sustained, systematic and principled argument that even the most humane, welfarist form of capitalism is incompatible with the possibility of achieving liberalism’s deepest aim: free people living together in a society of equals.
That is not the aim of Liberalism. If it were, Liberals would be obliged to concede that one can depart from Liberal principles in the short term if that is the only way to achieve the desired end. This may involved the redistribution of reproductive rights or the horrors of eugenic sterilization.
These arguments should be much better known.
So we can laugh heartily at those who make them. But the result would be a defunding of the discipline and a refusal to recognize credentials gained in it.
Contrary to a common caricature of his views, Rawls does not reduce politics to technocratic nudges and tinkering with marginal tax rates.
He talks useless bollocks instead. Sadly, some of the great economists of the period were indulging in mathsy masturbation rather than looking at the real world and thus Rawls was steered towards stupidity of an a priori, nomothetic, kind.
Liberalism is a philosophy of the ‘basic structure’ of society.
No. It has not a philosophy of the family or of religion which tends to militate for endogamy and thus household formation.
The basic structure includes a society’s fundamental institutions:
Not really. Those institutions can change with no fundamental change occurring. It is not the case that British Society changed fundamentally in 1832 or 1867 or, more recently, when for the British Supreme Court was created about a dozen years ago. It would be trued to say that Societal change drives institutional change. The latter are supervenient on the former. Of course, one could speak of marriage as an institution. Then we discover, that people who cohabit and raise children aren't that different from those who do so under the seal of holy matrimony. In England, people spoke of 'common law marriage'. Was it or wasn't it an institution? Who greatly cares? There was a pragmatic recognition of the arrangement for some important purposes. That's all that mattered.
not only political structures like constitutions (where they exist), but also markets and property rights.
Rights are only as good as the effectiveness of the remedy. They may exist or cease to exist no matter what the Law says. Remedies which are 'incentive incompatible' disappear. The Government may promise everyone a 'Basic Income'. Then the country goes off a fiscal cliff and there is entitlement collapse.
Everything is up for moral assessment,
or hypocritical virtue signalling
not just considered abstractly, but with respect to how different institutions interact with one another and with ordinary human behaviour, over the course of generations.
Stupid people are welcome to babble any paranoid nonsense they like. But if the Government follows stupid policies, either it falls or is forced to backtrack to remain solvent.
‘Everything’ here includes the basics of political economy like who makes what and who owns what, and who decides.
This is only known with a time-lag- if it is ever known at all.
Crucially, for Rawls, this includes the way society organises the production of goods and services.
If this isn't being done by the Government, then it isn't 'Society' which is doing it. The thing happens in a spontaneous way and what has actually happened is only discoverable with a time-lag though even then that knowledge will be highly imperfect.
Focusing on the inequalities and domination that arise from the way capitalism empowers a small group to control how we produce society’s wealth,
It is foolish to speak of a 'group' if its members don't know each other and are responding to 'public signals'- e.g. price changes or changes in the length of queues.
Rawls argues that no form of capitalism can ever cohere with the liberal ideal of a society of equals.
Nothing real coheres with stupid ideas pedagogues prattle on about.
Social equality and basic liberties will always be thwarted by it.
Only in the same sense that my ability to twerk as sexily as Beyonce is thwarted by the occult powers of the Nicaraguan horcrux of my neighbour's cat.
Rawls’s corpus is complex and contested.
It is absurd.
But we don’t need to agree with him on everything.
or anything. He taught a shitty subject. At the time people may have thought SCOTUS is bound to return to the supposed direction taken by the Warren Court. But having to sit through lectures on nutters like Rawls caused the smarter type of Law student to gravitate to the Federalist Society. It turned out that 'due process' was a double edged sword. Roe v Wade has been reversed. Clarence Thomas is said to be against Sullivan v NYT. Biden seems to be dragging his feet on reform of the Bench. But, if he gets a second term, that may change.
Even if we ditch the larger Rawlsian apparatus and the many tweaks he made on particular topics after the publication of A Theory of Justice (1971), he stated the core of a liberal, anticapitalist political economy, and never abandoned the conviction that a liberal society must overcome capitalism.
How? The stagflation of the Seventies delivered a simple message- you can only tax 'rent'- i.e. inelastic supply. But Capital is more mobile than Labour and hence more elastic. So 'Justice as Fairness' means the upper working class taxing itself to subsidize 'Welfare Queens'. That dog wouldn't hunt.
For Rawls, liberalism revolves around two ideals: society as a fair system of cooperation, and people as free, equal, capable of acts of joy, kindness and creativity; and disposed – if not always without reluctance – to cooperate with one another to flourish.
Lenin and Mao may have had the same idea. The question was whether the thing could be done by force. Rawls's appeal, like that of Leninism, was that you can ignore what people actually want and say, on the basis of a 'gedanken' of a silly sort, that actually what they really want is to fuck themselves over so Social Justice can prevail. But, the political history of the Seventies shows a working class rebellion against redistributive policies. Even the Scandinavians abandoned the notion of 'solidarity wages' at that time.
Rawls shows that these ideals lead to principles that we can appeal to in designing, improving and maintaining our basic political and economic structures.
Reagan showed that nobody who aspires to the highest political office can afford to be labelled a Liberal.
Capitalism is an economic system with three features.
No. There is only one feature. Investment funds are allocated primarily through the market. It may appear that the State is funding some Capital Goods. But it gets its investment funds, one way or another, through the market and, if it makes bad decisions, then- like any private Corporation which makes bad decisions- it either falls or is forced to pull in its horns.
First, Rawls said it is a ‘social system based on private property in the means of production’.
No. For Capitalism to exist Capital markets must exist. We can imagine an agrarian economy of subsistence farmers. Some may indeed 'invest' by digging ditches or building barns. But if this is done outside the market- e.g. the Amish helping each other in such tasks- there is no Capitalism.
It allows almost unfettered private ownership of not only personal property, but also the highly valuable and productive industrial and financial assets of a society – what Vladimir Lenin in 1922 called the ‘commanding heights’ of the economy.
But 'ownership' may vest in Pension funds or Insurance Companies or the Banks which pool the savings of ordinary people who in fact are the 'beneficial owners'. However, 'control rights' may be narrowly concentrated in a small class of technocratic entrepreneurs.
Second, it allocates access to private property primarily via markets.
No. Most private property will be inherited or gifted outside the market. All that matters is whether investment funds are predominantly allocated by relatively open markets.
This includes markets in goods, markets in financial products, and markets in labour.
All these things can exist without Capitalism existing. An agrarian economy with no significant Capital Stock may still have markets where people exchange their apples for pork bellies. Some may receive annuities- which may be paid in kind. There may be forest dwelling tribes who turn up to provide agricultural labour at harvest time and they may receive woven cloth or shiny beads in exchange.
That leads to the third feature: most people – workers – try to earn enough to support themselves or their families by selling their labour for a wage to a capitalist who owns the means of production.
More yet are self-employed or provide domestic services- e.g. housewives.
As a result of this, capitalism is an economic system that produces a class-based society
But Aristocratic and Clerical and Artisanal castes existed much before there was any significant Capital formation or, indeed, much in the way of market based transactions.
and division of labour.
But division of labour became widespread at the time of the Agricultural Revolution! Indeed, a hereditary caste system was often associated with pastoral tribes conquering agricultural populations.
This is what Rawls’s liberal anticapitalism targets, focusing on the obstacles that a class-stratified society of owner-capitalists and workers poses to a genuinely cooperative and emancipatory liberal society.
No. He is concerned with distribution. His argument was that 'risk aversion' would cause people to agree that whatever happened the needs of the least well off would be prioritized. However, in practice, people do fear that they may become incapacitated or that they may suffer loss of wealth. The solution is to 'hedge' by buying insurance or accumulating a diversified portfolio while also 'investing' in credentials or 'reputational goods' of various types.
Rawls argues that capitalism violates two core tenets of liberalism: the principles of social equality,
which has never been a tenet of liberalism. Classical liberalism thought only male property owners, preferably those with a liberal education, should exercise the suffrage or, if that was impractical, monopolize seats in the Legislature.
and of extensive political liberty.
Save for blacks, women and other such obviously unworthy folk.
Moreover, reforms that leave the capitalist core in place are unlikely to be stable.
Either a Society can defend itself from internal and external threats or it won't be stable irrespective of its political philosophy or economic regime.
Let’s look at each of these in turn.
Social equality
One component of social equality is fair equality of opportunity.
No it isn't. Social equality means being the equal of other people in Society. If Doctors are treated better than drunken layabouts, Social equality does not obtain. The good thing about Aristocracy as a Social system is that a Duke who is a drunken layabout is still the social equal of the King's Doctor.
Opportunities are stochastic. This student had the same opportunity as that student of becoming a Doctor. Sadly, this student fell ill and thus could not take the qualifying exams. By the time he had recovered, it was too late. He had to settle for working on the family farm.
Your chances at attaining or succeeding in any valued role should not depend on aspects of your birth or circumstance over which you had little or no control.
We have little control over falling ill or getting hit by a bus.
All current societies fail to meet this: race, gender, religion, disability, sexuality and other circumstances favour the chances of some over others.
But so do considerations like not falling ill or not being hit by a bus. On the other hand, there is such a thing as 'statistical discrimination' which can be proved in a court of law and thus become the basis of a change in how opportunities are allocated.
Likewise, in a class-stratified capitalist society, whether you or your parents own productive assets significantly determines your life chances.
Having nice parents- as opposed to being an orphan raised by wolves- determines your life-chances. Should babies be taken away from their Mummies and Daddies and raised in State run orphanages o they have 'equal opportunities'? No. Mummies and Daddies will kill anybody who tries to rob them of baby.
So, fair equality of opportunity is unlikely under capitalism.
or any other regime. However, in unfettered Capitalism where demand and supply is elastic, there is an incentive to hire more of any discriminated against group because the odds are higher that you get better quality candidates. But, under any regime, what matters is elasticity.
I say ‘unlikely’ because it is possible that a capitalist welfare state could promote equal opportunity by investing heavily in education and healthcare.
Sadly, as Prof. Le Grand used to explain to us at the LSE, the middle class is very good at capturing those benefits. This was the central claim of 'Director's Law'. The fact is, those with certain traits benefit more than proportionately from public spending on merit goods. Because I'm stupid, lazy and like eating and drinking things which are bad for me, my health and educational credentials are worse than most of my contemporaries- including those from deprived backgrounds. But that's only fair.
But even a society that fulfilled equal opportunity would still fall short of the full ideal of liberal equality.
Everything falls short of every ideal. Why not focus on the lamentable injustice that I am not able to achieve inter-stellar space travel because my farts simply aren't powerful enough for me to attain escape velocity? In, an ideal world, most people who know me would agree, my flatulence should have removed me from this Solar System.
More difficult to specify but infinitely more powerful than equal opportunity is the value Rawls called ‘reciprocity’. This is the idea that it matters that we are, are seen by others as, and see ourselves as, fully participating members of society, on equal footing and status with other participants.
Fuck off! That's what leads to the curse of virtue signalling and the great nuisance of public demonstrations demanding the Government do stupid shit. True reciprocity involves you telling me that my farts smell real bad and my telling you that I fucked your mother.
Capitalism makes reciprocity impossible because it requires a division of labour that prises apart the ‘social roles and aims of capitalists and workers’.
No it doesn't. Both aim to keep the Company solvent. Both take a role in demanding that cheap imports from China be kept out of the country. It is a different matter that there is always a conflict between the guy getting paid for something and the guy who is paying. The latter would be best pleased to get the thing for free. The former wants a higher price than the latter is willing to pay.
Consequently, Rawls said, ‘in a capitalist social system, it is the capitalists who, individually and in competition with one another, make society’s decisions’ about how to invest its resources and what and how to produce.
No. The Capitalist isn't stupid. He knows he can't decide what to do with somebody else's land or labour. He knows that the customer might not buy the things he decides they really ought to purchase. Capitalism is about doing deals. Nobody gets everything they want but, hopefully, everybody is better off.
This makes it hard for workers to see themselves as active participants in directing society because, well, they aren’t (with the limited exception of voting in a ballot every few years).
It also makes it hard for workers to see themselves as directing the Cosmos. Personally, I'd like it better if Andromeda could get a little closer to the Lesser Magellanic Cloud.
Capitalist make important decisions on behalf of society,
No. They do deals with other people in Society.
yet their interests diverge from those of the working class
Everybody's interests diverge from everybody else's. Women, in particular, don't feel it is in their interest to sleep with me. Sad.
This is what the people of Youngstown learned when the owners of US Steel decided to move the factory away. Likewise, today the CEO of McDonald’s can tell his employees that ‘we’re all in this together’ until he’s blue in the face, even though he gets more than 1,150 times what they do per hour and makes all the decisions about how they spend their time.
CEOs can be virtue signalling hypocrites just the same as Professors of Political Philosophy. Did Rawls insist on sharing his earnings with the custodial staff?
When this is true, ‘society’ simply feels like something we are ‘caught in’ rather than something we are making and sustaining together, Rawls wrote in Political Liberalism (1993).
But the same was true of the College Department he and his fellow dinosaurs presided over like feudal magnates. Still, at least the guy wasn't grabbing the pussies of his Grad Students.
Such capitalists make important decisions on behalf of society, yet their interests diverge from the interests of the working class. This is a form of social domination. Rawls worried that those who do not own the means of production will be ‘viewed both by themselves and by others as inferior’ and will likely develop ‘attitudes of deference and servility’
his students were tugging their forelocks at him like nobody's business
while the owners grow accustomed to a ‘will to dominate’.
Just like Heads of Department in posh Colleges.
This conflicts with a true ‘social bond’ between equals, which calls on us to make a ‘public political commitment to preserve the conditions their equal relation requires’, as he wrote in Justice as Fairness: A Restatement (2001).
Everybody should be given a PhD in Poli Sci from Princeton at birth. What Colin is complaining about is a Paretian 'Power Law' where, in some fields, rewards are very unequally distributed. But this is more true of the Academic Profession- where some celebrity Professors earn millions in royalties and are paid very high salaries by Colleges competing to employ them- than of Capitalism where the rate of return on Equity tends to reflect risk though, no doubt, Capital Gains can be very unequal. But most people- or rather the Institutional Investors who manage their money- hold diversified portfolios so average retuns are more equal.
Political liberty
Capitalism is also inconsistent with the basic liberal value of political liberty.
So is Liberalism- at least that has generally been the voters' verdict.
Political scientists
ignorant, opinionated, tossers
have been arguing for some time that advanced democracies like the United States and Western Europe are probably better characterised as oligarchies, since their policies bear almost no relation to the interests of the poor when these deviate from those of the wealthy.
The interests of the poor dictate that more poor people should not enter society. Oddly, they don't seem to mind if highly productive people- albeit of the wrong colour- become citizen's and pay a lot in taxes.
The usual suggested solution is to ‘get money out of politics’ by reforming campaign finance rules.
More than 50 years ago, Finklestein showed how Money could disintermediate Political Parties by directly financing single-issue pressure groups. But Soros can do this just as well as the Koch brothers.
But the Youngstown Works story suggests something even deeper. The steelworkers actually enjoyed considerable political support in their fight. They were represented by President Johnson’s former attorney general, Ramsey Clark. Meanwhile, the Youngstown City Council, the Ohio State Legislature, and the US House Committee on Ways and Means all took some action on their behalf. But, as Judge Lambros finally conceded, none of these were a match for the power of capital.
The question was whether the Federal Government would shoulder the burden. But the tax-payer didn't want to have his pocket picked so steel-workers could be featherbedded. Anyway, everybody back then had come to believe the Teamsters were a branch of the Mafia.
Anticipating the economist Thomas Piketty’s claim in Capital in the Twenty-First Century (2013) that capitalist societies ‘drift toward oligarchy’,
a point Balzac had made more vividly almost two hundred years ago.
Rawls argued that economic and political inequality ‘tend to go hand in hand’,
There can't be much in the way of either without increasing both. Personally, I blame evolution. We should have been content to remain single-celled creatures.
and this fact encourages the wealthy to ‘enact a system of law and property ensuring their dominant position, not only in politics, but throughout the economy’.
Why bother? If you are wealthy, hire a bunch of thugs and set up as a 'Stationary Bandit'.
The wealthy use their dominant position to set the legislative and regulatory agendas, monopolise public conversation, hold political decision-making hostage by threatening capital flight, and engage in outright corruption.
No they don't. They may pay a little money to get other people to do all this. Being wealthy has to do with not bothering with boring shite.
Reforming campaign finance rules to keep money out of politics is perhaps an important start in curbing this tendency.
It won't make any difference. Look at India and its Electoral Bonds.
But it’s just a start.
No. It is pointless.
Rawls was sensitive to Karl Marx’s criticism that liberal rights might be empty or merely formal – naming protections without really providing them.
Marx claimed to have a Structural Causal Model of the economy. That's why he mattered. Rawls' work was worthless because he neglected Knightian Uncertainty and the theory of incomplete contracts- which is what we have in the real world. Incidentally, in an Arrow Debreu world, there would be no need for Language, let alone Political Philosophy.
In response, Rawls insisted that rights to political participation must be given ‘fair value’.
Which might have been a good thing to argue prior to the 1965 Voting Rights act. The bigger question had to do with
1) the unrepresentative nature of the Senate
2) the lack of an independent Election Commission
3) politicization of the choice of Judges.
Rawls ducked any substantive issue. He was following an ignorant Economic availability cascade to do with 'distributive justice'. But he was behind the curve. Kantorovich, Morisima and other Marxist mathematical economists were giving a shadow priced theory of 'rational' or 'labour theory' based distribution. But the information aggregation problem was intractable. Anyway, Knightian Uncertainty militates for non-algorithmic solutions. However, even they aren't immune to something like Kuhn's 'no neutral algorithm' theorem. This is because Category theoretical 'naturality' must be very restricted in scope by reason of the epistemic nature of the 'intensions' involved.
In A Theory of Justice, he observed that the full policies needed to protect political liberty ‘never seem to have been seriously entertained’ in capitalist societies.
All sorts of crazy shit has been entertained. There really is nothing new under the Sun.
The reason is that the conversion of economic inequality to political domination happens quickly.
Unless it doesn't at all. There have been many instances of 'ethnic monopoly' where a particular group gets wealthy by catalysing economic growth. But they may have to run away or face pogroms.
‘Political power rapidly accumulates’ when property holdings are unequal, and the ‘inequities in the economic and social system may soon undermine whatever political equality might have existed’.
Which is why, FDR never got to be President.
Ensuring political liberty therefore requires us not just to restrict the use of money in politics but, in Rawls’s words, ‘to prevent excessive concentrations of property and wealth’ in the first place.
Kill the Jews. Then get busy stringing up those nasty 'Boston Brahmins' and East Coast Liberals. As for them Hollywood libtards, lets take our time with them. Did you know Sandra Bullock isn't actually a bullock? If the Media elite can lie about a thing like that, what else are they hiding? I heard Oprah Winfrey has turned the Post Office into a cover for a paedophile ring.
Altering property rights goes near the heart of capital’s power
No. Coase's theorem applies. Who owns what doesn't greatly matter. Anyway, what matters are 'appropriable control rights'. As in a third world country, you don't put your own money into the plant you are building there. The natives may seize it or it may become a 'stranded asset' for some other reason. So, you use leveraging and let some other poor schmuck take the downside risk. But what works in the Turd World can also work in America.
As Piketty and his colleagues have shown, today’s stupefying level of inequality has two primary sources: massive income inequality aided by lower top-marginal tax rates, and a high rate of return on capital compared with returns on labour.
Unless you can keep furriners out. Build that Wall!
Compound interest for the rich keeps making the rich richer as the poor get relatively poorer.
It takes two people to make a baby who is also likely to be poor. What causes poverty to decline is women refusing to have babies. They prefer to buy nice shiny stuff and go on foreign holidays. Who can blame them? Not me. Nobody wants my low quality jizz so it's not as though I'm losing out.
Rawls argued we need to address both: the first via taxation and wage controls,
There really was a 'Nixon Shock' around that time. Then people got to thinking, would the Government really jail teamsters? What about the owners of a Mom & Pop which puts up the price of a can of baked beans? Maybe, under conditions of total war, the Government could get away with this. But those days were gone. During the Seventies, there was 'fiscal drag'- i.e. inflation caused the working class to end up paying a higher and higher proportion of their wages in tax. This was one reason the Federal Government could expand welfare programs and increase bureaucratic bloat. But this reduced work incentives. As for taxes, one could always settle for more three martini lunches and afternoons on the Golf Course in return for lower nominal renumeration. Also, since it was no longer illegal to own gold, one could move out of equities without taking too much of a beating. Reagan's time had come. The 'L word' was now taboo. The Professors ignored these developments and continued to babble nonsense while their students signed up with the Federalist Society.
and the second by altering the ‘legal definition of property rights’.
Because Corporate lawyers are underpaid. We must help the partners of white shoe firms buy themselves bigger mansions and yachts by changing 'legal definitions' and thus providing them with the opportunit to earn billions.
It is easy to overlook how radical this latter proposal is. As the legal scholar Katharina Pistor has shown in The Code of Capital (2019), capitalism relies on the legal definition of property rights.
I have shown she was talking nonsense. But everybody knows this. The thing is just an availability cascade. One might as well write about UFOs.
Not all property rights accumulate at the rapid rate of capital,
I suppose Colin means that some types of property appreciate in value more rapidly than others.
nor confer on their owners as much control over other people.
Being a shareholder in the company I work for doesn't give you any control over me. Managers exercise control rights. But they may own no shares in the Company.
Altering property rights therefore goes near the heart of capital’s power.
No. Rights are meaningless absent effective, incentive compatible, remedies. Even if you go to court and get a judgment saying such and such Corporation should fist itself regularly, you can't enforce it because it has ceased trading. Its owners may have created a new Company doing the same thing, but that has different legal personality.
This could take the form of recognising ‘community property rights’ of the sort that Judge Lambros suggested and then backed off from.
The City had given the plant a lot of money. Did this entitle it to a share in the equity? Perhaps. The case could certainly be made. But the case wasn't made. Suppose it had been and Lambros had given the City a percentage of the Shares. Would the City have bought out the other owners? No. The thing was a money pit.
Or it could involve separating the capitalists’ ownership rights over factory equipment, say, from the rights to manage how that equipment gets used, reserving the latter rights for the workers who actually use it.
But this may cause no change what so ever. The worker may fear that if he doesn't do what he is told, he won't get paid. Anyway, what exactly does it mean to say a worker can 'manage how the equipment gets used'? Can he take it home with him or lend it to his friend? Can he use it to make stuff for a competitor? It is one thing to give 'property rights in jobs' which cashes out as hefty redundancy payments for people who have been with the company for a long time. It is another thing to say that a guy operating a million dollar machine can sell it or lease it to somebody else.
Liberalism may protect property of some kind, but not necessarily give the turbocharged property rights that capitalists enjoy today.
Coase's theorem says it won't make any fucking difference though some lawyers may get rich. It is a different matter that you can always fuck up existing property owners. The problem is that you can't fuck up those who take over the control rights save by completely fucking up your economy.
Stability
But can’t we just reform capitalism piecemeal along social-democratic lines to alleviate these problems?
My guess is that America will go for increased 'subsidiarity' based on 'Tibout models' such that different districts will have a different fiscal mix and concentrate on different niche industries. There may indeed be worker-participation on the German model. To some extent, this is already happening.
Rawls says no: reformed capitalism would just swiftly revert back to inequality and domination.
The economy could simply collapse. The skilled and smart run away.
This is the problem of instability. We must ask of any proposed regime, like a reformed welfare-state capitalism, whether it ‘generates political and economic forces that make it depart all too widely from its ideal institutional description’.
Why ask anything of stupid proposals? Anyway, ideal institution are ones run by smart and good people. Who runs things matters. Descriptions of ideals don't.
To assess a conception of justice or an institutional arrangement intended to satisfy it, we need to consider how the political, social, psychological and economic dynamics it is likely to foster will play out over time.
In which case we realize that because of 'Knightian Uncertainty' it is foolish to have a conception of justice or to blather on about institutional arrangements. Either we do smart- or at least sensible- things today or we may be unable to do anything at all tomorrow.
Central to Rawls’s understanding of stability was Marx’s observation in ‘On the Jewish Question’ (1844) that ‘while ideally politics takes precedence over money’, under capitalism, ‘in fact politics has become the servant of money’.
Unless politics concentrates on robbing those with money. In Marx's time, Kings and Dukes and such like weren't exactly skint. Some German Jews managed the money of the Princes but their position was perhaps not as safe as they liked to think.
It’s not enough to recognise some domain as ‘political’ and to try to summon the ‘political will’ to change it. Political power – the legislative and policymaking power of the state – cannot simply achieve anything it desires. It is constrained by, among other things, the power of capital.
No. It is constrained by the resources it can raise without triggering an economic collapse.
It is vital to understand how the dynamics of capital ownership may thwart proposed political interventions.
Only in the sense that it is vital to understand that the Nicaraguan horcrux of my neighbour's cat is causing me to be very very fucking flatulent.
Many of these are familiar: the regulatory race to the bottom fuelled by the threat of capital flight;
Capital doesn't run away from places where productivity is rising rapidly. But only low quality capital will be attracted to a place whose only selling point is that it doesn't mind being raped.
‘market discipline’; creditors imposing austerity and structural adjustment on not-so-sovereign nations.
Not to mention a bloke like me who can't even get a credit card though I'm the Sovereign of the Empire of Iyerland.
Rawls had little to say about how social organising might challenge capital’s political hegemony,
by turning the economy to shit.
and here perhaps most of all we must look elsewhere for guidance.
Try Varoufakis. He fucked up Greece good and proper.
But he understood that, so long as capital reigns, liberal politics is doomed to be ineffective.
Whereas it was doing great under Mao and Stalin.
Any exertion of political will that leaves in place the political economic core of capitalism will preserve a class-stratified society based on the unequal ownership of the means of production and a destabilising and demeaning division of labour.
Very true. Nobody should be forced to teach this shit. It is demeaning. Let parrots do it. They can have fun flying around the Lecture Hall shitting on the heads of students.
At this point, one might wonder how useful all this abstract moral criticism of capitalism really is.
It is encourages students to register as Republicans.
On the Right, some may dismiss it as otiose since there is no serious alternative to capitalism, and anyway these moral criticisms haven’t acknowledged capitalism’s primary advantage: its productivity and ability to make more stuff for more people. On the Left, some may suspect that abstract political philosophising is perhaps interesting, but ultimately useless – like a Fabergé egg, as the Marxist political theorist William Clare Roberts described Rawls’s theory: beautiful, well-crafted, but ultimately useless. Capitalism won’t be overcome by convincing ourselves that it is unjust: that requires revolutionary action.
William Clare Roberts assassinated Trudeau and transformed Canada into a People's Republic.
But as advocates of ‘moral economy’, including the legal scholars associated with the Law and Political Economy project
which I have exposed as crazy shit.
acknowledge, there is an important role for moral criticism of political economy of the type that Rawls and others have furnished. This can provide clarity and focus. Especially when empirical information about economic trends is noisy, moral critique provides a kind of compass.
It points you in the direction of talking ignorant bollocks.
This leaves the question what liberal anticapitalism looks like.
The answer has always been 'Owenite'- i.e. cooperative enterprises, worker participation, etc.
Rawls thought there were two, possibly just, types of regime. One, a ‘property-owning democracy’, allows private ownership of the means of production, but only on the condition that private capital is held in roughly equal shares by everyone, preventing the emergence of a significant split between classes of owners and non-owners.
That may be the original position but it won't last long. People have different 'time preference' or suffer misfortunes at different times. You could have periodic redistribution- but only in a closed economy with no possibility of 'exit' and no disutility from work.
This requires hefty wealth and inheritance taxes
which can be evaded by the really wealthy.
to spread out ownership of productive assets, and a background welfare state to ensure robust ‘human capital’ by providing both education and healthcare.
Till the country goes off a fiscal cliff and there is entitlement collapse.
Rawls’s liberal critique of capitalism leaves us not with a silver bullet, but with a moral compass and an agenda
No. It wastes our time unless we only read him for shits and giggles. The man was a moron. He didn't get that in an uncertain world, people buy insurance or find other ways to 'hedge'.
The other type of just regime is liberal, or market, socialism.
Like Tito's Yugoslavia? That didn't end well.
Under market socialism, the state controls the economy overall, but worker-managed firms are left to compete in a closely monitored and adjusted market.
But worker cooperatives favour insiders and keep out young people who aren't 'Dad's lads'. Also, sooner or later, they do stupid shit. On the other hand, Mondragon hasn't done too badly though more profitable enterprises tend to leave rather than contribute to shoring up failing units.
This is an attempt to harness the allocative efficiencies of markets and the price mechanism within a socialist system that democratises major investment decisions and prevents private accumulation of significant wealth.
But what matters is good management. Both cooperative and private and government enterprises can do well under good managers and go bankrupt under bad managers or, to be frank, a concatenation of unfavourable circumstances.
Rawls saw in the actually existing socialist states of the 20th century an intolerable absence of political liberty.
Just as they did looking at a deeply racist, drug addled, Mafia overrun, America.
This is why he insisted that a just socialism would be liberal and should to large extent rely on markets rather than central planning.
No. A just socialism would ensure I did not have a needle dick.
But the liberal critique of capitalism that Rawls developed in his later work gives us reasons to be wary still of either of these alternative regimes. It is reasonable to fear, for instance, that markets will simply reproduce the destabilising dynamics Rawls himself identified, as Marx had before him.
presumably Colin means 'Socialist Markets will simply reproduce & c'
The Marxist philosopher G A Cohen might well have been right when he declared in Why Not Socialism? (2009) that ‘[e]very market, even a socialist market, is a system of predation.’
Very true. I just bought a cake from the local store. I offered to pay the cashier with kisses but she insisted I hand over cash. I feel like I've been raped.
This is where Rawls’s liberal critique of capitalism leaves us. Not with a silver bullet, but with a moral compass and an agenda. His critique leaves out some important things.
Because he wasn't quite as stupid as some of his colleagues.
Notably, he had little to say about race
Fair point. Still, many at the time felt that Rawls was articulating something close to what Dr. Martin Luther King would have done had he not been killed. Both were good Christian people though Rawls was misled by the mathematical economists who gained salience after the War. The fact is, he ought to have remained a Bergson/Samuelson Social Welfare theorist demanding substantive, not deontological, solutions.
and ignored the dynamics of ‘racial capitalism’. No reckoning with capitalism is complete without this dimension. Nevertheless, he helped illuminate the important fact that what we need, and many of us want, are decentralised, cooperative forms of economic production that are consistent with the core liberal values of social equality and basic liberties.
We may want what we have to be consistent with everybody having an above average IQ but, alas!, we can't have it. The thing is 'incompossible'.
But we’ve yet to discover at scale how to have this cake and eat it.
Because you can't have your cake and eat it. Does Colin really not know this?
Rawls’s work provides little help on this, but fortunately we do not need to rely on his theoretical and philosophical approach in isolation. Here we can turn to social science and to the countless examples of activists and visionaries – from Jackson, Mississippi
whose Mayor is named Chokwe Antar Lumumba. His father was a Black Nationalist. Lumumba did manage to prevent the local zoo from running away. Sadly, there is no potable running water in people's taps.
to Preston, England –
a Labour, not a Liberal, stronghold
developing participatory economics, community wealth-building, and other new and richer forms of what the political theorist Bernard Harcourt today calls ‘coöperism’.
A well managed 'Tiebout model' can indeed build wealth in a community but what matters is whether it can turn itself into an Marshallian industrial district hosting a high value adding niche sector.
These social experiments are continuations of the efforts of the people of Youngstown in 1980 to claim a right to make decisions about the management of the factory that sustained that community and was sustained by the labour of the steelworkers who operated it, and the women who supported them. These are among small-scale efforts that give us some reason to hope for a more equal and socially just world.
They are irrelevant. A small town can indeed do a lot to make itself a nice place to settle and open a business. But most small towns are doomed to decline. The smartest young people are going to move to the bright lights of the big city. Still, people are living longer and are more active so demographic loss can be compensated for. Still there is a basic fiscal problem of an unfavourable dependency ratio.
Is Colin right when he suggests that Liberalism is incompatible with freedom because it is actually Stalinism in disguise? No. Liberalism means being generous more particularly to those starting up in life who may had a different type of education or upbringing than your own. This can mean investing in some fancy shmancy company, run by a barefoot hippie, which claims that people will soon want to buy computers for their homes. But it can also mean funding worthless shitheads spouting nonsense. The pay-off in the latter case is that you cause ordinary people to vote for the biggest, most populist, redneck they can find. At least that's what Soros has been doing.
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