The “property question,” that is, the “historic question” of ownership of the means of production, comes down to the choice between liberal socialism and property-owning democracy. It is a decidable question in justice as fairness. Rawls never worked through the necessary steps, but he framed the question in a way that determines an answer, a unique answer, within his system of thought.
In his 1995 “Reply to Habermas,” Rawls depicts the constitutional decision whether or not to inscribe the “modern” first-principle liberties – for example, thought and conscience, basic rights of the person and personal property – into a bill of rights as one “on all fours with” the choice between property-owning democracy and liberal socialism (PL 416). Whether or not to inscribe the basic liberties in a written constitution, “thereby subjecting parliamentary legislation to certain constitutional constraints … is a matter to be decided by the constituent power of a democratic people …. The question is one of constitutional design” (PL 414–415; emphasis added). The “thereby” must not be misconstrued. In a constitutional democracy, “there is in effect a constitution (not necessarily written) with a bill of rights … interpreted by the courts as constitutional limits on legislation” (JF 145). Necessarily, “certain matters,” such as the principle of toleration, are “fixed” and are to be taken off the political agenda “once and for all … [b]y using that phrase citizens express to one another a firm commitment about their common status. They express a certain ideal of democratic citizenship” (PL 152 n. 16; emphasis added). The question is whether social ownership of the means of production performs the same expressive function as the principle of toleration. It is a separate and further question whether this “taking off the political agenda once and for all” is to be accomplished by incorporating explicit language to that effect into a written constitution. Bear in mind that for Rawls the constitution is fundamental or higher law that need not be reduced to writing. In fact, Rawls goes so far as to say that the processes that normally suffice for amending a written constitution do not necessarily allow alterations in the fundamental law (PL 237–239).Footnote 1
The principle of reciprocity demands that the equality of free citizens as cooperating members of society as a productive enterprise be publicly evident, and the principle of publicity demands that it be the “evident intention” (JF 196–197) of the institutions of the basic structure to treat each citizen as a political and social equal.Footnote 2 These principles frame the problem of assuring the fair value of political liberty in the circumstances of politics, where the strategic value of political influence already commingles with the strategic value of economic advantage, and the strains of commitment are already being felt.
The demand of publicity is harder to satisfy in Part Two of the original position procedure. Excusable envy and unusual extremes of risk aversion and risk tolerance combine to put additional stress on the index of primary goods. An index restricted to objective primary goods – principally, income and wealth – is to be preferred to a wider index that tries to register, additionally, the degree of self-respect enjoyed by different classes. Even with an objective index of primary goods, the difference principle is already unsuited to furnish a judicially enforceable standard. It is a provable lemma of Part Two of the original position procedure that institutions, and regime types, are disfavored if they permit inequalities that will motivate a persistent call for subjectivizing the index of primary goods. This is a straightforward consequence of the fact that a political contest between the excusably envious and the (in)excusably spiteful is destabilizing.
The issues of capital ownership and assurance of fair value are simultaneously under consideration at the constitutional stage of the four-stage sequence. Because both are properly raised there, they cannot be treated in isolation. The form of reasoning at the constitutional stage, as elsewhere, is holistic. It is accomplished, in part, by applying the “counting principles” that exhaust the content of the concept of rationality (LP 88; TJ 1st ed. 411–415). In particular, as between two regime types, it will be rational to choose that type, if there is one, which dominates the other on each relevant measure. This, of course, is subject to the ultimate test, that of wide reflective equilibrium.
In this chapter, I compare liberal socialism with property-owning democracy, following as closely as possible the procedure that Rawls uses in the Restatement in the first fundamental comparison between justice as fairness and utilitarianism, and in the second fundamental comparison, between the difference principle and the principle of restricted utility. These comparisons belong to Part One of the original position procedure. Part Two introduces the special psychologies, but the points of comparison remain essentially the same. I begin by reviewing the “common content” shared by the two ideal regime-types. In the following chapter, I proceed to the point-by-point comparison. To streamline the discussion, I assume the point of view of the delegates to the constitutional convention in Part Two of the original position procedure. We thus press beyond Rawls’s “illustrative and highly tentative” discussion in the Restatement by bringing under scrutiny the assumption in place there that each regime can “be effectively and workably maintained” (JF 136).
This way of proceeding highlights the difficulties raised when the assumption is relaxed.
Marx would say that, even accepting the ideal of property-owning democracy, such a regime generates political and economic forces that make it depart all too widely from its ideal institutional description. He would say that no regime with private property in the means of production can satisfy the two principles of justice, or even do much to realize the ideals of citizen and society expressed by justice as fairness.
Again, we find Rawls in conversation with Marx, who is now imagined as having a view about realizing justice as fairness, as well as sharing the goal of perfecting the ideal of a constitutional democracy. The political and economic forces in question are of course those that Rawls himself has cataloged. Rawls continues:
This is a major difficulty and must be faced. But even if it is in good part true, the question is not yet settled. We must ask whether a liberal socialist regime does significantly better in realizing the two principles. Should it do so, then the case for socialism is made from the standpoint of justice as fairness.
Liberal socialism may also generate forces that drive it away from its ideal description. The comparison looks to be ready to proceed,
[b]ut we must be careful here not to compare the ideal of one conception with the actuality of the other, but rather to compare actuality to actuality, and in our particular historical circumstances.
It is unclear what Rawls means by this caution (and he abruptly turns to a different worry, about what Marx would say about the scope left for workplace democracy). Proverbially, one must not compare apples with oranges. Actual liberal democratic socialist regimes have existed: for example, Great Britain under Attlee.Footnote 3 But no property-owning democracy in Rawls’s sense, or in James Meade’s sense, exists now or has existed. One can compile a long list of attempted but failed socialist democracies, but no country has ever aspired to be, or struggled to become, a property-owning democracy in Rawls’s or Meade’s sense. No country, in the struggle for property-owning democracy, has veered from democracy into totalitarianism. In Theory, by way of illustrating possibilities of institutionalizing justice as fairness, Rawls asks the reader to “assume that the regime is a property-owning democracy since this case is likely to be better known” (TJ 242; crediting “the title of ch. V.” in Meade Reference Meade1964 with the term).Footnote 4 It is puzzling why Rawls should have said that property-owning democracy was “better known” than socialism, because, as I pointed out in Chapter 2, Rawls cited Meade as his single source, and was evidently oblivious to the vexed history of the term. Martin O’Neill and Thad Williamson are closer to the mark when they point out that “Rawls never followed through on this institutional prospectus [given in Theory] by providing a more detailed specification of the architecture of a fully functioning property-owning democracy …. [T]he results of this relative silence are that property-owning democracy is still not well understood as a central idea in Rawls’s entire theory of justice” (O’Neill and Williamson Reference O’Neill, O’Neill and Williamson2014, 4). Charity requires that property-owning democracy be interpreted in the best light, but it would be frivolous to pretend that it is a more familiar idea than socialism.
So, the comparison Rawls wants to conduct has to be made in terms of general knowledge and historical analogy. Comparing “actuality with actuality” is not a possibility. We have to compare the two ideal-types – as ideal conceptions – with respect to their relative capabilities to stabilize a well-ordered society given the general and particular knowledge available at the constitutional stage. Negative material in the historical dossier on socialism will not be ignored insofar as it indicates potential troubles. We have to ask ourselves whether, given the assumptions we have found it reasonable to make, a liberal democratic socialist regime would stand the better chance of stably realizing justice as fairness; as Rawls says, “Should it do so, then the case for liberal socialism is made” (JF 178; emphasis added).
The Common Content
Just as Rawls does in the second fundamental comparison, I prepare an inventory of what the two regime types have in common by stipulation. This will encompass not only stated features but also possible refinements and elaborations, each of which may be, though need not be, pursued under either regime.
Justice as Fairness
The core of the common content of the two regime types is that they are designed to realize justice as fairness:
Both a property-owning democracy and a liberal socialist regime set up a constitutional framework for democratic politics, guarantee the basic liberties [including a right to private personal property] with the fair value of the political liberties and fair equality of opportunity, and regulate economic and social inequalities by a principle of mutuality, if not by the difference principle.
The final clause conveys the later Rawls’s intimation that justice as fairness, featuring the difference principle, is but one of a family of reasonable liberal conceptions of justice. I postpone until the following chapter the question of the significance of this change. The term “principle of mutuality” serves here to emphasize that welfare-state capitalism – which, like property-owning democracy, permits “private property in productive assets” – cannot satisfy the “principle of reciprocity” merely by guaranteeing a social minimum. I take the terms “principle of mutuality” and “principle of reciprocity” to be synonymous in the lexicon of Rawls’s theory. Liberal socialism and property-owning democracy are both, on this score, distinguished from the principle of restricted utility, which does not concern itself with reciprocity. But restricted utility at least guarantees fair value, which welfare-state capitalism ignores. This tells us something interesting: that guaranteeing fair value does not, by itself, satisfy the principle of reciprocity. Fitness to satisfy the principle of reciprocity is a further question that is separate from the question of fitness to secure fair value. Liberal socialism and property-owning democracy are similarly committed to both fair value and reciprocity. It is their comparative fitness to stably secure both that is in question. It bears repeating here that the overarching argument for justice fairness presented in the Restatement places greater weight on reciprocity and publicity than the 1971 argument with which many readers are more familiar.
Rawls conceives property-owning democracy “as an alternative to capitalism” (JF 135–136; citing Elster and Moene Reference Elster and Ove Moene1989 for “discussion of other alternatives”).Footnote 5 Socialism too, it hardly needs to be said, is an alternative to capitalism. This, then, is the core common content shared by the two. Both are constitutional liberal democratic alternatives to capitalism, which are committed to fair valued political equality and a distributive principle of reciprocity.
Redistributive Policies
Much of the remaining, “non-core” common content has to be gleaned by inference from what Rawls says by way of contrasting property-owning democracy with welfare-state capitalism. He never directly compares welfare-state capitalism with liberal socialism, but Rawls all but states that such a comparison would go much the same way. There can be no doubt that in a direct comparison between liberal socialism and any form of capitalism, justice as fairness, and Rawls decisively favor socialism.
To begin: “The background institutions of property-owning democracy work to disperse the ownership of wealth and capital, and thus to prevent a small part of society from controlling the economy, and indirectly, political life as well” (JF 139). Here, a means and an end are attributed to property-owning democracy: the means is to disperse wealth, the aim is to prevent concentration of wealth in (presumably private) hands. Nothing yet distinguishes property-owning democracy and liberal socialism. Rawls continues:
Property-owning democracy avoids this, not by the redistribution of income to those with less at the end of each period, so to speak, but rather by ensuring the widespread ownership of productive assets and human capital (that is, education and trained skills) at the beginning of each period, all this against a background of fair equality of opportunity.
I will return to the “periodicity” idea later, but evidently a liberal socialist regime will likewise promote education and training, as part of the guarantee of fair equality of opportunity. Also, a liberal socialist regime will likewise, with but the one defining difference, ensure that productive assets are widely available. Access to non-major productive assets may be furnished via private rights of ownership, but of course society’s major productive assets will always remain in common ownership. Rawls is not always explicit that the aim of property-owning democracy is widespread private ownership of productive means, as contrasted to assured private access, as when he says,
In a property-owning democracy … the aim is to realize in the basic institutions the idea of society as a fair system of cooperation between citizens regarded as free and equal. To do this, those institutions must, from the outset, put in the hands of citizens generally, and not only of a few, sufficient productive means for them to be fully cooperating members of society on a footing of equality.
One can (permissibly) have one’s hands on something one does not own. Likewise, one can have the exclusive right to use and enjoy a thing that one does not own. But I will assume that Rawls means private ownership of productive assets in the whole Hohfeldian “bundle of sticks” sense that includes, importantly, the right to rents and to alienate by sale or gift, subject to the usual modern panoply of regulatory limitations. In Rawls’s scheme (as in Mill’s), limits on private accumulation over generations take the form of taxes on recipients, leaving individuals nominally in possession of the same “testamentary freedom” they enjoy under capitalism. Nothing stands in the way of a liberal socialist regime allowing for this kind of ownership where non-commanding-heights productive assets are concerned. So, widespread private ownership of non-major productive assets, whether as a means or an end, is available under both property-owning democracy and liberal socialism.
Devices to Assure Fair Value
Justice as fairness guarantees the fair value of the political liberties, meaning that all citizens have a roughly equal chance to affect political outcomes. The reason why this is a requirement of justice, given the fact of domination, was explained in Chapters 3 and 5. In the Restatement, Rawls says
I cannot consider here how this fair value is best realized in political institutions. I simply assume that there are practicable institutional ways of doing this.… Reforms to that end are likely to involve such things as the public funding of elections and restrictions on campaign contributions; the assurance of a more even access to public media; and certain regulations of freedom of speech and of the press (but not restrictions affecting the content of speech) …. In adjusting the basic liberties one aim is to enable legislators and political parties to be independent of large concentrations of private economic and social power in a private-property democracy, and of government control and bureaucratic power in a liberal socialist regime.
Rawls elsewhere cites other devices. In a property-owning democracy, “the emphasis falls on the steady dispersal over time of the ownership of capital and resources by the law of inheritance and bequest, on fair equality of opportunity secured by provisions for education and training … as well as on institutions that support the fair value of the political liberties” (CP 420).Footnote 6 Liberal socialism can employ these devices as well. Maintaining fair value in a liberal socialist regime must guard against undue partisan patronage in government employment and contracting – which is contrary to fair equality of opportunity – and high-handed bureaucratic isolation from popular sentiment; but similar challenges face property-owning democracies that have complex economies.
I have used the term “insulation devices” to designate means that are intended to protect the political process from accumulations of wealth and power that are otherwise permitted. Insulation devices, as Rawls notes, are difficult to design in a way that is both fair and effective (PL 362–363). Given the fact of domination, those with social and economic advantages can be expected to use them to assure that the insulation is porous. Rawls asks,
When politicians are beholden to their constituents for essential campaign funds, and a very unequal distribution of wealth obtains in the background culture, with the great wealth being in the control of corporate economic power, is it any wonder that congressional legislation is, in effect, written by lobbyists, and Congress becomes a bargaining chamber in which laws are bought and sold?
Legislative safeguards to prevent this are, naturally, going to be among the first items to be bought and sold unless there are prior, constitutional constraints firmly in place. Not only can the well-off be expected to weaken or oppose insulating legislation; nothing prevents their gaining such influence within the judiciary that judicial review undoes rather than reinforces legislative measures to assure fair value. Rawls acknowledges that judicial review “has its dangers: courts may fail in their task and make too many unreasonable decisions not easily corrected” (JF 147).
In the worst of cases, the judiciary might declare that the legislature is forbidden to regulate the political process to promote fair value (PL 359–363). That is precisely the teaching of a line of U.S. Supreme Court decisions running from Buckley v. Valeo, 421 U.S. 1 (1976), to Citizens United v. Federal Election Commission, 558 U. S. 310 (2010), to McCutcheon v. Federal Election Commission, 572 U.S. __ (2014). As legal scholar Timothy Kuhner writes,
Passing a comprehensive package of campaign finance reforms between 1971 and 1974, Congress aimed to “equalize the relative ability of all citizens to affect the outcome of elections” and slow “the skyrocketing cost of political campaigns[,] thereby … open[ing] the political system more widely to candidates without access to sources of large amounts of money.
Within a remarkably short interval of time, these goals had been declared unconstitutional. Yet even if the Supreme Court were to recognize the fair value of political liberty as a constitutional essential, Rawls would allow it to be balanced against other first-principle rights, such as free speech and press, so long as the “central range of application” of each was secure (cf. JF 111–112, 113–114). Moreover, Rawls rightly insists that it is not for the Court to declare “what kinds of electoral arrangements are required … but to make sure that the arrangements enacted by the legislature accord with the constitution” (PL 362) – that is, that legislative arrangements do not unduly burden free speech. Unless fair value and the principle of reciprocity are accorded some more salient protection, they are subject to the vicissitudes of judicial no less than legislative balancing against competing values.
Both regime types face this problem. Given the fact of domination, it is not easy to see how to assure rough equality of political influence without giving a credible prior assurance that no individual or class can possess a dominating share of capital resources. Put differently, there is an unsolved assurance problem at the heart of the project of operationalizing justice as fairness. The difference principle does not and is not designed to solve the problem and, owing to the nature of the political, it cannot. Judicial review that reduces to nothing more than balancing fair value against free speech is scant protection.
This is not at all to say that a supreme judiciary can do whatever it wants anyway. Consider, for example, Article V of the U.S. Constitution, which declares that “no state, without its consent, shall be deprived of its equal suffrage in the Senate.” The effect of this is highly undemocratic. A Wyoming voter has about sixty-six times the influence of a Californian in the U.S. Senate.Footnote 7 The Senate itself has outsized influence with respect to the popularly more representative branch, the House of Representatives. (The Senate alone may confirm or block appointments of officers of the United States, try officers the House has impeached, and ratify treaties.) The process of amending the Constitution (which would otherwise permit a three-fifths supermajority of the states to reform the makeup of the Senate) expressly gives each state a veto over any amendment that would reduce the equal representation of the states in the Senate. The “one person-one vote” principle recognized by the Court in Wesberry v. Sanders, 376 U.S. 1 (1964) is inapposite, for it applies only to the House of Representatives. No scholar, politician, or observer of the Court has ever suggested that the Court could cut the Gordian knot by simply voting to abolish the small-state veto over making representation in the Senate more democratic.
Full Employment
There is more common content to be gathered from beyond the Restatement. In Political Liberalism, Rawls writes:
[S]tability for the right reasons … is always lacking in a purely formal constitutional regime. An indication of institutions required for this stability is the following:
…
d. Society as employer of last resort through general or local government, or other social and economic policies. Lacking a sense of long-term security and the opportunity for meaningful work and occupation is not only destructive of citizens’ self-respect but of their sense that they are members of society and not just caught up in it. This leads to self-hatred, bitterness, and resentment.
This mandates full employment. In effect, if not intention, private employers are deprived of a “disposable industrial reserve army” (Marx Reference Marx, Engels and Tucker1978 [1867], 423), for which they may create, and upon which they may bestow, jobs according to their pleasure. A full-employment mandate is one that both types of regime can pursue and can be added to their common content.
Summing Up
In summary, the common content of property-owning democracy and liberal socialism includes access to all the devices mentioned in this chapter: insulation devices, limits on inheritance and accumulation, full employment, and so forth. The one exception is that, in a property-owning democracy, the constitution allows private ownership of the means of production, subject presumably to some sort of anti-monopoly proviso. Liberal socialism does not permit such ownership. This difference affects how the fair-value problem manifests itself in the two types of regime. The independence of legislators and political parties can be assailed from two different directions. In a property-owning democracy, the most pressing problem is checking the “large concentrations of private economic and social power” that are permitted. In a liberal socialist regime, more pressing is the problem of “government control and bureaucratic power” (JF 149–150). Rawls’s plausible supposition is that the form of ownership of the means of production on commanding heights of the economy is likely to tip the weight of the problem one way or the other.
Where private capital determines social investment, legislators and political parties – not to mention public officials – are liable to be influenced in myriad small and large ways to make decisions that effectively increase returns to private capital. Recall Rawls’s glum observation, noted earlier in Chapter 5, that in constitutional democracies the “necessary corrective steps” to offset the influence of “the more advantaged social and economic interests … have not been taken, indeed, they never seem to have been seriously entertained” (TJ 198, reordered). Where social investment is chiefly a matter of deploying publicly owned capital, much decision-making authority will be delegated to agencies of government, staffed by a perhaps coordinated bureaucracy that will in part be motivated by its own interests and conceptions. Either way, maintaining the fair value of political liberty for each citizen looks to be a formidable challenge.
