Property ownership and inequality in Macpherson’s critique of possessive individualism

C.B. Macpherson’s theory of possessive individualism explains how the concept of ownership is inseparable from the economic inequalities of market democracy. Both result from the assumptions of “the individual as essentially the proprietor of his own person or capacities, owing nothing to society for them” and freedom as “a function of possessions,” which correspond with the actual relations of the capitalist market society (Macpherson Reference Macpherson1962: 3–4).Footnote ¹ The combination of these assumptions with individuals’ differential desires, energy, skill, or possessions, alienable labor, land, and other resources which could be exchanged in competitive markets leads to cumulative inequalities of income and wealth. Macpherson argues that the assumptions of possessive individualism cannot be abandoned as long as they correspond so closely to the market societies of contemporary capitalism; yet they undermine the justification for political obligation in liberal democracies. The extension of franchise and the development of a politically articulate industrial class since the nineteenth century not only destroyed the “cohesion of self-interests, among those with a voice in choosing the government, sufficient to offset the centrifugal force of a market society,” but people “no longer saw themselves as fundamentally equal in an inevitable subjection to the determination of the market” (Macpherson Reference Macpherson1962: 273). Macpherson was optimistic that technology and the threat of mutual nuclear annihilation could provide, though by no means guarantee, the required change in Western democratic ideology (Macpherson Reference Macpherson1962: 275–277; Reference Macpherson1973: 24–38). Such optimism is difficult to sustain in the face of increasing polarization and inequalities in many liberal democracies, especially the United States (Remington Reference Remington2023: 1–3, chapter 2), the most powerful ideological standard-bearer for liberal democracy in the current global geopolitical contest.

According to Macpherson, the concept of man as “essentially a bundle of appetites demanding satisfaction” (Macpherson Reference Macpherson1973: 4), and therefore a consumer and appropriator, leads to the justification of liberal democracy as maximizing utilities. Furthermore, accepting unlimited desires as rational and their satisfaction as a legitimate, even the chief, human purpose leads to the establishment of the right of unlimited appropriation, which leads to the concentration of ownership of productive resources, and this in turn exacerbates inequalities between the haves and the have-nots in society (Macpherson Reference Macpherson1973: 18). Within this framework of man as a consumer and appropriator with limitless desires, property ownership is exclusive to the individual (or a group treated as an individual entity) and must be protected as a natural right anchoring all other freedoms against encroachment by others, including the state itself.

Macpherson’s revision of liberal democratic theory rejects the concept of man as consumer and appropriator, replacing it with a different concept of man as “as an enjoyer and exerter of his uniquely human attributes or capacities,” which can be traced back through nineteenth-century liberals such as J.S. Mill and T.H. Green to the ancient Greeks and Christian natural law (Macpherson Reference Macpherson1973: 24). In his view, the purpose of democracy is to provide the conditions for everyone “to make the most of himself, or make the best of himself” and it asserts “an equal and effective right of the members to use and develop their human capacities” (Macpherson Reference Macpherson1973: 51). This requires reconceptualizing property: inter alia, a nonmarket democratic institution of property would not be equated with absolute private property that entails an exclusive right of disposal as well as use and is not conditional on the owner’s performance of any social function (Macpherson Reference Macpherson1973: 126). To serve the democratic purpose and meet the needs of all to make the best of themselves, property as the means for people to use and develop their human capacities or attributes would have to include an individual right not to be excluded from the use or benefit of the accumulated productive resources of the whole society (Macpherson Reference Macpherson1973: 133).

Confucian democracy and the relational conception of persons

The pluralism of today’s discourse on democracy means that not everyone in favor of democracy would endorse liberal theories of democracy. Besides liberal democracy, there are hundreds and thousands of different conceptions of democracy (Gagnon and Abrams et al. Reference Gagnon and Abrams2025), and there are cultures in many parts of the world with views of human beings that differ significantly from those that owe their intellectual legacies to the ancient Greeks, Christianity, and the European Enlightenment. In recent decades, Confucianism has inspired alternative political ideals to challenge those of liberal democracy or to offer solutions to its problems. Proponents of Confucian alternatives, besides differences in their interpretations of Confucianism, are divided on the issue of democracy. Some champion “political meritocracy,” defined as the distribution of political power according to virtue and ability (Bell Reference Bell2015: 6) or some form of Confucian “hybrid regime” (Bai Reference Bai2020: 67–82; Chan Reference Chan2014: 100–110), which still leaves room for democratic elections of government representatives in their institutional design.Footnote ² Others are more positively disposed toward democracy with proposals of “democratic form with Confucian content” (Li Reference Li2024), democratic perfectionism that is a political reconstruction of Confucian democracy as public reason Confucianism (Kim Reference Kim2016), a Progressive Confucianism committed to some form of constitutional democracy (Angle Reference Angle2012: 20), or a Deweyan reconstruction of Confucian democracy as the idea of community and a way of life that promotes human growth through Confucian personal cultivation, combining Confucian excellences/virtues with democratic values of equality, freedom, and community (Tan Reference Tan2004).

These contemporary Confucian political theories, even when they endorse democracy, do not touch on the question of economic democracy, in part because the renewed interest in Confucianism and its cultural revival in China have occurred against the background of the “post-Confucian thesis” that associates the strong economic growth in the capitalist economies of Japan, South Korea, Taiwan, Hong Kong, and Singapore with their Confucian cultural legacies (Kahn Reference Kahn1979: 117–123, 329–383; MacFarquar Reference MacFarquar1980). Besides many studies that explore how Confucian values or cultural traits could enhance capitalist development and free market enterprises, recent disillusion with global capitalism and the rise of China inter alia have prompted suggestions that Confucianism could provide ethical restraint on capitalism (Tillman Reference Tillman2002); some also offer Confucian economic models as alternatives to both neoliberal capitalism and state socialism (Kim Reference Kim2019; Poznanski Reference Poznanski2015; Rosser and Rosser Reference Rosser and Rosser1999). Confucians today have strong reasons to criticize the relentless pursuit of profit and the inequalities that prevail in global capitalism. Confucianism can offer a systemic critique that goes beyond helping individuals cultivate personal virtues that reduce the transaction costs of capitalist economic activities. To fully appreciate its critical potential, we must take seriously the early Confucians’ radically different perspective on economic activities and its relationship to ethics and politics/government, which is completely at odds with the capitalist development of market society underpinned by possessive individualism.

In Confucianism, human beings are not viewed as individuals possessing their own persons and capacities, “owing nothing to society for them.” East Asian societies with Confucian legacies emphasize the importance of relationships, and a Confucian owes her parents for her body and the upbringing that makes her the person she is, and her capacities and accomplishments bring with them a responsibility to contribute to society. While Macpherson’s revised theory remains individualistic in its concept of what it means to be human, Confucianism views human beings as fundamentally relational. A person is constituted by her relationships; some are chosen, but most of them are not, and how she relates to significant others defines who she is. Furthermore, instead of the liberal protection of individual freedom, the main concern of Confucians is personal cultivation to become exemplary persons with the excellences of humaneness (ren 仁), rightness (yi 义), ritual propriety (li 礼), wisdom (zhi 知), and trustworthiness (xin 信), among others, who promote others’ personal cultivation and contribute to social harmony. The Confucian relational conception of persons provides the basis for its ethical approach to politics and economics.

Confucian ethical economics

The Analects, the Mencius, and the Xunzi, which comprise the most important textual sources for early Confucian philosophy (before the Qin dynasty’s unification of China in 221 BCE), discuss economic problems from an ethical perspective. Both Poznanski’s (Reference Poznanski2015) “Confucian economics” and Kim’s (Reference Kim2019) Confucian “moral economy” recognize this and agree that the Confucian ethical approach is superior to the liberal separation of economics from ethics in terms of benefits to the general population, although their theories are different. Poznanski relies primarily on resources from the Mencius. Kim argues that Xunzi goes much further than Confucius and Mencius in elucidating what motivates people to be economically productive and how to prevent the workings of the economy from giving rise to domination and injustice, which undermine social harmony. To provide the context for the discussion of ownership and equality in Confucian economic democracy, this section provides an account of Confucian ethical economics that agrees with Poznanski’s and Kim’s most important claims, although different in some details. The emphasis here is on the different assumptions about human beings and economic activities compared with the possessive individualism of market democracy.

Markets existed very early in China’s history. The book of Mencius, dating back to the fourth century before the Christian era, contains a mention of markets that elucidates the Confucian approach to economic matters.

Confucians reject maximization of profit as a legitimate economic rationale: they consider the pursuit of profit for its own sake without considering others’ interests unethical, and its distributive outcome is contrary to their ethical approach to economic activities.

Economic production has an important place in the Confucian conception of good governance because people’s material welfare and ethical advancement are the government’s responsibility. Confucius’s advice for “leading a state with a thousand chariots” includes “putting the people to work only at the proper time of the year” (Analects 1.5), that is, when they were not engaged in agricultural production.Footnote ⁴ Rather than scheming to extract more taxes from the people it governs to support its extravagance, a good government must first ensure that people have enough to live on (Analects 12.9), and going beyond that, it must “make them rich” before educating them (Analects 13.9). Equitable distribution is more important than a constant increase in production (Analects 16.1), and one should “help the needy” instead of “making the rich richer” (Analects 6.4). The purpose of economic production is to support people’s personal cultivation and ethical life in harmonious communities rather than to gratify the limitless desires of free individuals with exclusive rights to their private properties.

Confucians would frown upon contemporary governments’ unrestrained pursuit of GDP growth in global capitalism, accompanied by widening disparities between the rich and the poor. Mencius was against the unlimited exploitation of natural resources and the accumulation of wealth at the expense of educating the people and nurturing a social order based on Confucian excellences (Mencius 4A1), not because he was against increasing economic productivity or growth per se (Mencius 6B7), but because he deplored the way such activities imposed severe hardship on the majority for the gain of a small minority. Instead of maximizing economic growth, Mencius maintained that the beginning of good government lies in ensuring economic sufficiency for all. In his view, economic security is a precondition of ethical life for most people, and unethical and illegal acts are often the result of material deprivation. A good government must therefore ensure that all the people have sufficient material resources for a decent standard of living, not only for themselves but also to support their families before progressing to the important task of leading them toward goodness (Mencius 1A7).

Economic productivity must be combined with the appropriate distribution of resources and goods to ensure sufficiency for all. Those who are physically disabled or lack family support are entitled to state assistance (Mencius 1B5). Given the importance of land as an economic resource in an agrarian society, Mencius’ answer to the distribution question focused on land reform. He recommended the well-field system (jingdi 井地, later known as jingtian zhi 井田制), which distributes farm land equally among families (Mencius 3A3). According to the system, a plot of land is divided into three-by-three equal subdivisions (the boundaries are created by two vertical lines intersecting with two horizontal lines within a square), with eight square subdivisions surrounding a center piece of land; each of the eight outer subdivisions is farmed by a family for its own benefit, while all eight families contribute labor to cultivate the center piece of land, which is the “public farm” (gong tian 公田); and the public farm’s cultivation has priority over each family’s own farm.

The well-field system allows for inequalities among the families that could result from differences in efforts, abilities, among other factors that determine production; however, excessive inequalities are incompatible with Mencius’s (3A3) view that the unrestrained accumulation of wealth is incompatible with the virtue of humaneness. Contrary to possessive individualism’s concept of man, for whom it is natural and rational to maximize appropriation and consumption to satisfy limitless desire, Confucians consider personal cultivation and ethical life the chief purpose that defines people’s humanity. According to Mencius (7B35), reducing desires is the best way to cultivate oneself and live ethically. In contrast to the emphasis on competition in modern market economies, requiring families to work together on the public farm emphasizes cooperation and contribution to the public good. Besides ensuring that people have the resources to be economically productive and are rewarded for their skills and efforts by combining equality in satisfying basic needs (i.e., sufficiency) with inequality above the sufficiency threshold that incentivizes productivity, the well-field system organizes economic production to support the Confucian pursuit of ethical life.

While they would reject the possessive market society’s concept of man as consumer and appropriator, Confucians do not oppose markets. The passage cited earlier shows that Mencius recognized the usefulness of markets as mechanisms for the exchange of goods. While Mencius explained the origin of taxation in terms of justified intervention in the market to prevent unethical economic behavior and to rectify unethical distributive outcomes, Xunzi condemned excessive taxation by rulers who used tax revenues only for their own gratification and spent nothing on public goods, forgetting their “fundamental functions” of caring for the people (Hutton Reference Hutton2014: 82, 88–87). He was against tariffs that hinder the movement and exchange of goods, which he believed support a state’s capacity to satisfy the population’s varied needs and desires (Hutton Reference Hutton2014: 74). Xunzi shared Mencius’s view that a good government is responsible for the material welfare of the governed and must ensure that all people have sufficient for their needs, with priority given to the worst off. Beyond the threshold of sufficiency, both allowed for inequalities constrained by Confucian ethical considerations, especially social harmony.

Xunzi recognized desires to be part of human nature; unlike Mencius, he did not advocate reducing desires for the sake of personal cultivation and ethical life. Neither did his belief that people’s desires must be satisfied legitimize a free market based on competition and private appropriation facilitated and protected by contracts. Xunzi’s alternative answer to the unlimited pursuit of desires and competition for resources and goods is government with Confucian ritual and social norms (liyi 礼义) to “nurture people’s desires” (Hutton Reference Hutton2014: 201). He believed that the only way to avoid the chaos and poverty that would result from people freely pursuing their unlimited desires is the “division” (fen 分) of labor and rewards according to Confucian rituals and social norms, which ensures that “people carry out their proper tasks and attain their proper places” by determining “the rankings of noble and base, the distinction between old and young, and the divisions between wise and stupid and capable and incapable” (Hutton Reference Hutton2014: 30).

Xunzi’s ideal social order resembles Macpherson’s (Reference Macpherson1962: 49) model of customary or status society, in which the “productive and regulative work of the society is authoritatively allocated” and there is also authoritative provision of appropriate rewards. In the Confucian case, what is “authoritative” is not mere custom or laws that are arbitrarily imposed by autocratic rulers. Confucian ritual and social norms have ethical authority deriving from the sagely wisdom of ancient rulers who either discovered or constructed them as the efficacious way to enhance both economic productivity and social harmony (Hutton Reference Hutton2014: 201). While modern societies may reject the authority of ancient rulers’ wisdom, the thesis that ethical norms, including Confucian liyi, reconstructed for contemporary societies, could enhance economic productivity while ensuring equitable distribution and social harmony could be investigated theoretically and tested empirically.

Kim (Reference Kim2019) argues that, in balancing merit with need as well as equality, Xunzi’s moral economy offers an alternative that would be more just, humane and mutually supportive than the free market in allocating productive resources and determining rewards. Instead of economic performance, merit in Xunzian distribution of jobs and income is tied to social harmony and the welfare of all, with priority given to the worst off. Kim (Reference Kim2019: 518) recognizes that, without political equality, constraining Xunzian inequalities with the Confucian ideal of social harmony may still be unacceptable from a contemporary democratic perspective. Based on his approach to Confucian democracy as the practical reconciliation of democratic institutions accepted as the solution to the “coordination problem” of politics with Confucian “habits of the heart” in East Asian societies, the Confucian doctrine of sufficiency must be constrained by the democratic ideal of public equality (Reference Kim2018: 156–157). Insofar as participation in ownership and democratic control of economic enterprises are necessary to “equal public standing,” Kim’s Confucian democratic sufficientarianism could provide the basis for a theory of Confucian economic democracy.

I propose a different Confucian justification for economic democracy: an economic democracy—enabling democratic participation in the workplace and reducing economic inequalities that undermine citizens’ political equality—is preferable if it is superior to undemocratic economic enterprises in serving the purpose of Confucian personal cultivation and ethical life within harmonious social relationships. This could be understood as a Confucian parallel to Macpherson’s nonmarket democracy’s purpose of providing conditions for everyone “to make the best of himself,” with a different understanding of what it means for people to make the best of themselves. However, Confucian economic democracy would not rely primarily on equal and effective democratic rights, since litigation is the last resort for Confucians who prefer to promote social transformation through ritual and social norms (Analects 12.13; Hutton Reference Hutton2014: 68). Today, Confucian ritual and social norms could be understood as a community’s shared assumptions of how best to conduct social interactions to achieve shared goals while promoting harmony, mutual respect and trust, and personal cultivation and ethical conduct among its members.

Confucianism’s ancient roots and the tendency toward nostalgic traditionalism in some Confucian revivalist movements may raise questions about its relationship to modernity. Confucian economic democracy is not about reviving ancient practices that are incompatible with contemporary realities. It is critical of contemporary institutional forms, such as limited liability companies, tradable shares, and employment contracts, for their tendency toward selfish individualism and alienating effects on human relationships. Confucian ethics provides the critical tools for evaluating current institutions and guiding institutional reform or innovation. However, Confucian ethics is not dependent on any “Pre-Qin Confucian moral ecology” presupposing “durable, face-to-face, ritualized bonds” that have been made obsolete by the transition from Gemeinschaft to Gesellschaft (Ferdinand Tönnies Reference Tönnies and Loomis1957).Footnote ⁵ Confucian ethics remain relevant as long as human relationships continue to have a role in making us who we are and whether we live a good life. While modernization involved structural changes with significant impact on human relationships, psychologists have argued that social belonging, the forming of interpersonal attachments, is a universal human need (Baumeister and Leary Reference Baumeister and Leary1995). Focusing on human relationships to realize Confucian economic democracy does not require the unrealistic and undesirable revival of traditional society in toto. Confucian relational conception of human beings as constituted by their relationships with others, and whose chief purpose is the cultivation of human excellences to become virtuous persons contributing to social harmony, can provide conceptual resources for economic democracy.

Capitalist private property vs. Confucian co-ownership

Although Dahl (Reference Dahl1986: 83) maintains that private property is not a more fundamental right than the right to self-government, and the arguments for private property do not justify a right to unlimited acquisition of private property, his conception of ownership, like Macpherson’s, remains tied to the individualism associated with private ownership. As he admits, even collective ownership of a cooperative by its members remains private viz-à-viz nonmembers (Dahl Reference Dahl1986: 151). Collective ownership of Dahl’s self-governing enterprises (and many actual cooperatives) remains individualistic even though individuals do not own shares in it as private property. The collective itself holds private property rights because it is also treated as an individual and granted the status of a legal person in most jurisdictions. From the individualistic perspective, if one possesses something, then it is one’s private property and does not belong to others, who cannot use or enjoy it without one’s consent; ownership is exclusive and absolute. Collective or joint ownership from this perspective treats the group as a single unit to the exclusion of others not within that group. From the Confucian perspective, such appropriation and absolute exclusive ownership is a selfish act in denying others the use and enjoyment of what one owns, and gives rise to avarice, possessiveness, and conflicts. A Confucian alternative to profit-driven capitalist enterprises will need a different conception of ownership, which I propose to construct from some insights in the Xunzi. With this Confucian conception of co-ownership, economic democracy does not have to insist on equal legal ownership of the means of production.

In modern Mandarin, “si 私” means “private,” and modern societies generally accept a distinction between the private and the public, with some respect for privacy in appropriate contexts. However, in the pre-Qin Confucian texts, this term often has a pejorative sense. Hutton (Reference Hutton2014) translates the term in the Xunzi as “selfish” or “selfishness” most of the time, with only a few instances where it is translated as “personal,” “private,” or “individual.” Whether it refers to selfish desires, selfish interests, selfish intentions, selfish gains, or selfish methods and pursuits, si signifies something that undermines the ethical pursuit of the Confucian way. Even when translated as “personal,” “private,” or “individual,” si is still often opposed to “gong 公,” which Hutton (Reference Hutton2014: 15) translates as “avoidance of prejudice,” meaning a combination of public spiritedness and impartiality or fair-mindedness, a virtue opposed to prejudice in favoring oneself (i.e., selfishness) or selected others (i.e., one-sidedness). The term “gong 公” is used in modern Mandarin to translate “public.” The pejorative connotations of si persist even when it is not explicitly opposed to gong, as evident in the following examples: the exemplary person “is neither excessively harsh when angry or excessively indulgent when happy, because his adherence to proper model overcomes any personal capriciousness” (Hutton Reference Hutton2014: 15); and a minister who “takes deceiving the ruler and plotting personal gain as his task is a usurping minister” (Hutton Reference Hutton2014: 133). For Confucians, private property, in setting up clear and fixed boundaries between self and others to establish absolute exclusive ownership, denies human interdependence and relationality.

Ancient Chinese texts use the term “you 有” (“to have”) to refer to ownership or possession of something, which one obtains (de 得) through various means. In the chapter on “Correct Judgement,” Xunzi made an important distinction between two senses of “you 有”—“possessing in terms of regular procedure” (chang you 常有) and “possessing in terms of their own persons” (qinyou 亲有)—when he dismissed the conventional view that “Jie and Zhou possessed the world. Tang and Wu usurped and snatched it away” (Hutton Reference Hutton2014: 184). In Confucian historiography, King Tang 汤and King Wu 武were the respective founders of the Shang 商(1600–1046 BCE) and Zhou 周 (1046–841 BCE) dynasties, who were revered as virtuous rulers, while Jie 桀and Zhou 纣were the vicious last rulers of the preceding Xia 夏 (2070–1600 BCE) and Shang dynasties. Xunzi explained that Jie and Zhou had ownership in the sense of “possessing in terms of regular procedure” (Changyou 常有) as they inherited the positions from their forebears who had gained the world through virtue, but they themselves did not possess the world “in terms of their persons” (qinyou 亲有). Changyou is equivalent to legal or customary recognition of one’s ownership. The term “qinyou 亲有” does not just mean “personally owning something” in an individualistic sense. In making the distinction, Xunzi questioned Jie and Zhou’s ownership based on criticisms of their relationships to their peoples and the feudal lords, so “possession in terms of their persons” is based on relating virtuously to others, an understanding that follows from a conception of the person being constituted by a network of relationships. This idea of qinyou provides the basis for a conception of Confucian co-ownership.

Xunzi accepted that, by law and custom, rulers of states owned the territories over which they had established their authority. However, no matter how extensive, the land would be of little use to them without people cultivating it and if their territories were not populated by craftsmen to produce other goods and people to serve them in other ways. A ruler’s use and enjoyment of his territories was dependent on his relationships with the population, which, like any human relationships, imposed ethical constraints on all parties. From a Confucian perspective, the resources within the rulers’ territories were for the support of all, not just the gratification of the rulers’ selfish desires; their acquisitions of those territories and resources came with responsibilities for the people who depended on these resources for their livelihood. The rulers’ responsibilities for the people and the people’s dependence on the resources gave the people a claim on those resources, which became not just the rulers’ private property but co-owned by rulers and their people. With co-ownership, rulers did not have the absolute right to do with their states’ resources as they wished; the rulers’ ownership of states was conditional on their performance of their ethical responsibilities to the people. All appropriation, use, enjoyment, and disposal of properties under co-ownership are subject to ethical constraints of the relationships within which property ownership is embedded.

The connection between what Xunzi meant by “using the state” ethically and Confucian co-ownership is explicit in his portrayal of the transitions of power between dynasties of Xia, Shang, and Zhou. King Tang and King Wu gained ownership of the world not by usurping the rulers who preceded them; they were welcomed and supported by the people because their “use of the world” consisted in “cultivating their ways and carrying out what was yi for them, establishing benefits for the whole world and eliminating harms to the whole world” (Hutton Reference Hutton2014: 185). According to Xunzi, the person of ren uses the state in ways that strengthen social bonds and unity and thereby contribute to the security of the state (Hutton Reference Hutton2014: 96). A good ruler’s use of the state is founded on yi (Hutton Reference Hutton2014: 99), the social norms that divide labor and rewards according to ethical merit after everyone’s basic needs have been satisfied, to ensure that cooperative tasks will be carried out optimally and social harmony prevails despite social differentiation. Great rulers are those who make “great use” of their states; they put yi before profit or selfish gains (Hutton Reference Hutton2014: 103). Confucian co-ownership is an ethical conception of ownership, in which the appropriation, use, and disposal of property are subject to ethical norms of relationships that promote everyone’s personal cultivation, ethical life, and social harmony.

We could apply Confucian co-ownership to the relationship between capital owners and the employees of today’s economic enterprises. The ancient Chinese rulers who “owned” the world they governed are similar to owners of land and capital in capitalism, as they all own means of production that allow them to extract surplus through their control over the conditions of others’ labor. Capital on its own cannot produce any goods for the owners’ use or consumption, just as the land and other resources in the rulers’ territories without others’ labor could not benefit them beyond what their own labor could produce with those resources. Although the rulers had much greater authority and coercive power over their people, capital owners also have authority over employees as the contractual terms of employment incorporate the latter into the organizational structure of capitalist enterprises, which comprises relationships of unequal power and authority. As Elizabeth Anderson (Reference Anderson2015: 50) argues in a different context, employment contracts are governance relationships. Xunzi’s insights into ancient Chinese rulers’ “ownership” and “use” of their states could illuminate our understanding of the relationship between employers and employees; Confucian co-ownership offers an alternative understanding of ownership of enterprises besides personal or collective private property in liberal democratic theories.

Confucian co-ownership is not exclusive in the sense of si (whether understood as individual, private, personal, or selfish). In a context where one’s personhood is constituted by relationships, possessions are maintained only within relationships, meaning others also could justifiably use and enjoy what one owns by virtue of their relationships with oneself and therefore have a say in the use and disposal of the property. The modern conception of private property ownership permits nonowners to use the property through legal contracts or less formal arrangements by the owners’ consent. However, Confucian co-ownership is different from such arrangements. It is an ethical category, whereby the legitimacy of the ownership claim is dependent on the means of obtaining it being ethical, not merely legal, and the use of the property is not only for one’s own benefit but also to benefit others in relevant relationships—that is, relationships with those dependent on the legal or customary owner and the property. Others’ use of it is not conditional on the owner’s consent, although that is often sought as a matter of respect, but is justified by their relationships and the use being for a purpose that will promote the material and ethical well-being of all parties to the relationship, and not harmful to the larger society. By rendering property ownership conditional on performance of social responsibilities and nonexclusive, Confucian co-ownership could mitigate the infinite appropriation that results in increasing inequalities and diminishes the well-being of those excluded from the use and enjoyment of resources.

The idea of Confucian co-ownership does not fit into contemporary corporate law and markets infected with the possessive individualism concept of ownership, but it can serve as a tool for institutional innovation. Confucian economic democracy does not have to invent an entirely new set of institutions, although it could contribute to democratic innovations. Many of the democratic experiments to reduce economic inequalities and facilitate participation by all involved in economic activities could be adapted based on Confucian insights into ownership to serve the purpose of everyone’s personal cultivation, ethical life, and social harmony in democratic economic enterprises and the larger society. This article cannot accomplish that task, which must be left to future interdisciplinary efforts by others.

Historical state appropriations of Confucianism with authoritarian results raise the question of whether Confucian norms can be realized without sacrificing liberal protections.Footnote ⁶ The absolute private property rights certainly will not be protected, but the liberal rights that are necessary for democracy to avoid degenerating into a tyranny of the majority can still be respected by a Confucian democracy that accommodates both individuality and relationality. In contrast to the ideology of individualism that isolates the individual and pits her against others in zero-sum competition, individuality recognizes each person as social but with a uniqueness and independent agency that is the source of creativity.Footnote ⁷ This individuality requires a freedom that is not premised on “owing nothing to society”—such freedom is compatible with Confucianism (Reference Tan2014: chapter 5; see also Li Reference Li2014). Co-ownership in a Confucian democracy can resist authoritarian control of enterprises and resources, whether by the state or employers, as it recognizes that property ownership is embedded in human interdependence and that others’ need for specific resources gives them a claim equal to our own need, a claim that has priority over uses and enjoyment that gratify selfish desires.

Inequality without domination in employer–employee relationships

Political democracy fails to achieve the values and purposes of democracy because economic inequalities render political equality ineffective in ensuring that every person has as much input in decisions affecting her own life as any others who are similarly affected, or in giving equal consideration to everyone’s interests or good (Christiano Reference Christiano2010; Gonthier Reference Gonthier2023; Milner Reference Milner2021; Piketty Reference Piketty2014; Remington Reference Remington2023; Wesche Reference Wesche2021). Inequality in the ownership and control of economic enterprises contributes significantly to other inequalities, from employees’ capacities and opportunities to participate in decision-making and governing of economic enterprises, to citizens’ income and wealth, status, skills, access to and control over information, access to political leaders, opportunities in various domains, and life chances (Dahl Reference Dahl1986, 54–55). However, replacing possessive individualism’s conception of ownership with the Confucian conception of co-ownership alone will not eliminate all inequalities that could undermine democracy. Furthermore, any proposal of Confucian economic democracy must address the assumption that the Confucian social order is hierarchical and therefore incompatible with democracy.

From a Confucian perspective, the interrelated cohesion and equality problems identified by Macpherson could not be solved unless citizens in political democracies recognize the extent to which human beings are interdependent: their very persons are constituted by relationships with other human beings. Instead of individuals owing society nothing, Confucians view human beings as responsible for those who depend on them, and all with whom one is related are dependent on oneself to some extent. Recognizing human interdependence has implications for attitudes toward inequalities. Democracy does not require absolute equality, which is not viable; but it is necessary to ensure that Confucian ideal human relationships preclude undemocratic inequalities, that is, inequalities that allow one person to dominate, to subject another to her arbitrary will. A Confucian economic democracy will endorse only inequalities that do not undermine people’s personal cultivation, ethical conduct, and social harmony. Personal cultivation and ethical conduct, even social harmony, require moral freedom, which precludes domination. From this Confucian perspective, economic relationships must be free from domination in order to meet Confucian ethical criteria.

Despite Confucians’ apparent endorsement of the hierarchical society of their times, the Confucian conception of human persons as ethical and relational precludes inequalities that are socially divisive or cause a large section of the population to live in poverty and reduce their chances of cultivating themselves and living as ethical persons. Confucius supported “equitable distribution” of wealth because it would prevent poverty (Analects 16.1). The Mencius (1A.4) condemns rulers who lived in luxury while people “dropped dead from starvation,” while Xunzi warned rulers that extreme inequalities resulting from political leaders enriching themselves without concern for the people would destroy a state (Hutton Reference Hutton2014: 70–71). Rather than being for or against equality as an abstract value, Confucianism evaluates specific equalities and inequalities based on their effects on people’s personal cultivation, ethical life, and social harmony. While Xunzi was convinced that “total equality” would lead to chaos and poverty, the consequences of specific equalities and inequalities in any society are contingent; it is a subject that requires empirical investigation besides philosophical theorizing. Rather than equality and inequality as abstract values, this section will consider the employer/manager–employee relationship in capitalism as an example of unequal economic relationships that undermine democratic participation in the enterprise and, more generally, in society by denying people a say in decisions that affect their interests, including both material welfare and their personal cultivation, equal to others who are similarly affected. I suggest that Xunzi’s ethical-political ideas could be reinterpreted in the modern context to support democratic employer/manager–employee relationships that balance equalities and inequalities in ways that support personal cultivation for all and social harmony.

Xunzi’s ideal society with “utmost balance” (zhiping 至平) (Hutton Reference Hutton2014: 30) is not an oppressive society. In such a society, inequalities of power and rewards are justified by the division of labor with optimal performance, and the conduct of the power is constrained by Confucian ethical norms of humaneness, rightness, and ritual propriety, within relationships in which people cooperate for everyone to live well in a harmonious community. From a Confucian perspective, the inequalities of power between employers and the managers to whom they delegate specific powers on the one hand and the employees subject to their authority through employment contracts on the other must also be governed by ethical norms that acknowledge their interdependence in cooperating for the success of the economic enterprise. Liberal democratic societies attempt to curb abuses of power in unequal relationships with laws that limit the power and authority of individuals and organizations to protect the freedom and rights of all. In contrast, Xunzi sought to replace arbitrary inequalities with inequalities that contribute to people’s ethical life and social harmony. Such unequal relationships are ethical and do not condone the use of power and authority to subordinate and use others in oppressive ways. Confucians constrain unequal power first by emphatically condemning any use of it for selfish purposes at others’ expense, and only when necessary, employ coercive means such as the law to bring about the desired outcome. Instead of rituals and social norms designed for ancient societies, Xunzi’s liyi can be understood within today’s context as a set of standards of excellence and best practices not only in technical tasks but also in human communication and cooperation that cover the various aspects of an enterprise’s operations.

While power would not be equally distributed in Confucian enterprises, inequalities must be justified by what is needed for the success of cooperative tasks, and those who exercise power over others are responsible for doing so in a way that will enhance rather than diminish the latter’s well-being and ability to cultivate themselves and act ethically. For example, a team leader may need the power to make the final decisions on issues for which she is held responsible, and this permits her to order the work process in a way that will best achieve the enterprise’s goals. However, this power is legitimate only if she is really the best person to make those decisions. Furthermore, how the work is organized affects the well-being and performance of all who participate in that work. This means each team member should have a say proportional to the extent the decisions affect her. Democratic participation in Confucian enterprises is justified because it not only enhances employees’ well-being on the job but it also provides them with opportunities to deliberate and contribute to decision-making processes that will promote their personal cultivation as moral agents.

Confucian belief in “raising the worthy and capable” (Analects 2.19; Mencius 1B7; Hutton Reference Hutton2014: 68) supports assigning tasks and corresponding positions and powers in economic enterprises according to relevant knowledge and skills. Xunzi believed that “one’s virtue must have a matching position, one’s position must have a matching salary, and one’s matching salary must have matching uses” (Hutton Reference Hutton2014: 85). The “matching uses” pertain to the performance of one’s assigned tasks and one’s contribution to the common good and social harmony; for those in high position, their “matching” salaries were specifically not for them to “engage in perversity and arrogance” (Hutton Reference Hutton2014: 86). This is different from contemporary economic meritocracy that justifies rewarding employees for their contributions to the firm’s bottom line, and individuals are free to spend their wealth on any desires within the law. Confucians understand that in any cooperative enterprise, a person’s success never belongs only to that individual, since it depends on others doing their parts. Furthermore, one’s merit owes much to others who have contributed to one’s personal cultivation and growth, who have influenced one’s actions and choices, intentional or otherwise. Such an understanding demands not only humility rather than arrogance on the part of an outstanding performer but also that one should share the fruits of cooperative achievements with others rather than appropriate the lion’s share for oneself.

Xunzi maintained that merit-based social divisions “make clear the proper forms for ren and promote the smooth operations of ren” (Hutton Reference Hutton2014: 86). I translate ren as “humane”; Peter Boodberg (Reference Boodberg1953: 330) translated it as “co-humanity.” According to Confucius, persons of ren “establish others in seeking to establish themselves and promote others in seeking to get there themselves” (Analects 6.30). Such persons would care as much, if not more, for others than for themselves. Such empathy and consideration for others are incompatible with huge income disparities, which only gratify some individuals’ perverse desires, arrogance, or self-aggrandizement while others look on in jealousy and resentment. Extreme inequalities in income would undermine the bonds among members of enterprises, who, although distinct in ranks and status, must cooperate with one another to achieve prosperity for all through the enterprises’ economic success. Furthermore, Xunzi contrasted vicious rulers who amassed wealth without regard to the people’s needs and well-being with virtuous rulers who enriched the people and improved their lives by emphasizing that the people gladly approved the virtuous rulers having much more than themselves because they appreciated the positive effect of those rulers’ performance on their own lives (Hutton Reference Hutton2014: 86–88). This could justify employees’ participation in the distribution of profit and decisions on wage differentials that would accommodate yet limit inequalities to benefit the cooperative success of enterprises superior to any rigid distributive egalitarianism.

Drawing on Xunzi’s advice to rulers, good employers should not dominate or exploit their employees; they should use their power to benefit their employees so that the latter can perform well, love their jobs, and have confidence in the fairness of the standards and best practices for performance assessment and rewards. They set examples in their relationship with employees so that employees also relate to one another according to the enterprise’s standards of excellence and best practices that support personal cultivation and promote mutual respect, trust, and social harmony. Given his realistic view of human desires, Xunzi would understand that employers want to receive high returns on the investment of their capital, as everyone naturally prefers to be rich rather than poor. However, he pointed out that a state could not be rich without enriching its people: “in the matter of using the state, he who gets the people to work for him will be rich,” but “he who uses the people without profiting them, works them without showing them care, will endanger his state and clan” (Hutton Reference Hutton2014: 93, 113). Similarly, enterprises will not do well if employers do not take care of their employees.

Xunzi’s idea of caring for people does not mean pandering to their every whim or coddling them “to steal a moment’s praise from them” at the expense of accomplishing important tasks (Hutton Reference Hutton2014: 91). This is as vile a method of governing as being goal-oriented to the point of total disregard for people’s feelings and opinions. Good employers in a Confucian economic democracy will neither pamper employees nor totally disregard their opinions and feelings. Instead, they will ensure that employees’ basic needs are satisfied so that they can perform their tasks. They will achieve their economic goals by getting the best performance from employees without overworking them and by involving them in decisions that affect them. They will encourage employees to develop their skills and cultivate their persons. The interdependent relationship between employers and employees and the cooperation between them, necessary to the enterprise’s success, give the employees a claim on the enterprise’s profit. Instead of paying employees the minimal wage required to stay competitive in the labor market, employers should share the profit according to Confucian distributive principles: equal consideration for all in satisfying their basic needs, with priority given to the worst off. Unequal merit-based distribution above the sufficiency threshold to incentivize performance is constrained by consideration of social harmony, and employees will have a say in the type and extent of such merit-based inequalities.