6.11.2Property-owning democracy

These issues apply not just to the welfare state, but equally to Rawls’ preferred model of a “property-owning democracy” (cf. esp. Justice as Fairness: A Restatement 2001) which is still concerned with providing redistributive social-welfare benefits, but in addition radicalizes the welfare state by demanding a break-up of concentrations of economic power (ownership of means of production and sheer wealth) in favour of wide dispersal, mainly with the aim of ameliorating problems of plutocracy, i.e. domination of the economy by a few super-wealthy, the undue influence of moneyed wealth on due democratic political process, thus perverting the equality of political liberties. Welfare-state capitalism, Rawls says, “permits very large inequalities in the ownership of real property (productive assets and natural resources) so that the control of the economy and much of political life rests in few hands” (JF:137), whereas a property-owning democracy would “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).

It could be said that concentrations of capital and wealth, as concentrations of a specific kind of social power, namely, that of social power reified in value-forms, distort both the playing of the gainful game and the political power struggles around the state, thus making both unfair in giving certain economic and political players too much weight against all the others in the power interplays. With regard to the economic gainful game, this distortion can be booked under the heading of commutative justice insofar as the conditions of fair play in the competitive struggle as a whole are distorted by monopolies and oligopolies. But Rawls argues for a breaking-up of concentrations of capital and wealth on the basis of considerations of distributive justice, namely, that they distort the produced distribution of incomes and of the weightings of citizens’ rights in the political process, thus affecting its outcomes. Strictly speaking, the “fair equality of opportunity” (TJ:303) Rawls invokes is an equality of potential to engage in competitive struggles for positions and offices as distinct from a fair distribution of actual outcomes of these struggles, but this distinction is ignored as if only functions, effects, consequences were at stake. It is not only ignored, but Rawls and his ilk are oblivious to the distinction. The notion of “equality of opportunity” remains entirely diffuse due to utter neglect of the question concerning the ontological distinction in the mode of presencing between a power or potential, on the one hand, and that of a finished, actual presence, on the other.

The problems of capital becoming concentrated in few hands are thus recognized by Rawls and a counter-measure proposed, whereas the problems of society’s underdogs pursuing life-strategies relying chronically on welfare benefits handed out by a totally life-administrating state are not addressed. This is presumably due to the egalitarian biases in Rawls’ theory that allow some sympathizers in the area of social policy to interpret the break-up of large capitals and agglomerations of wealth in conciliatory, harmonizing terms: “The argument for the justice of taxing large-scale wealth in order to secure the fair value of political liberties, institute meaningful equal opportunity, and improve the lot of the least well off in turn mirrors the larger Rawlsian argument for understanding society as a system of social cooperation aimed at realizing a common life characterized by fairness, as opposed to a game in which the aim is to accumulate as many assets as possible within the permissible rules.”127 Fair “social cooperation” is here contrasted with “a game” of asset accumulation within “permissible rules” which is presumably unco-operative and beyond the pale of fairness and justice altogether.

For Williamson and O'Neill, “without the political capacity to break up large accumulations of wealth in practice, Rawlsian aspirations for realizing a just society based on the two principles of justice will remain tantalizingly out of reach” (Williamson/O'Neill 2009). This raises the questions whether social living could ever be characterized throughout by co-operation to the exclusion of competitive power struggles in both the economy and politics, and whether the gainful game is per se unfair and unjust. The favouring of co-operation over competitive power struggles is an attractive moral stance for those seeking harmony and effective outputs but, measured against the socio-ontology of human being itself, is it not self-delusory and therefore specious?

In his article ‘Property in Rawls’s Political Thought’,128 Quentin P. Taylor eloquently presses Rawls on the issue of his neutral, non-committal stance vis-à-vis the property regimes of capitalism and socialism. Taylor quotes Rawls, “the choice between a private-property owning economy and socialism is left open; from the standpoint of justice alone, various basic structures would appear to satisfy its principles” (TJ:228 rev. ed.) even while assuming a “competitive economy” (TJ:137). The late Rawls apparently overcomes this neutrality on such an important issue by coming down in favour of what he calls “property-owning democracy” in which, one would assume, there are secure property rights. Taylor, however, shows us through a judicious choice of quotations that this is not the case. The “allocation branch” of Rawls’ proposed state is mandated with effecting “changes in the definition of property rights” (TJ:244). The “distribution branch” has the task of making “necessary adjustments in the rights of property [to] preserve an approximate justice in distributive shares” (TJ:245). Taylor concludes, “Even in Rawls’s ‘property-owning democracy,’ then, private-property rights (outside of ‘personal property’) clearly are not secure. [...] The insecurity of property rights and the shadowy nature of property relations under Rawls’s scheme would more likely create a climate of uncertainty, distrust, and complacency” (p. 397). It goes almost without saying that neither Rawls nor Taylor know anything at all about a deeper socio-ontological grounding of private property in reified value-forms.

The conception of a property-owning democracy goes beyond breaking up concentrations of capital and wealth that pervert fair, commutative competition to hinder plutocratic control of the economy and politics, to also ‘readjust’ property rights for the sake of secured distributive social justice. Taylor therefore suggests that ‘property-owning democracy’ is a misnomer and asks, “should it not be more accurately characterized as a species of socialism?” (p. 397)129 Indeed, it is apparent already from the “original position” that in his heart of hearts Rawls is an egalitarian:

Since it is not reasonable for him [the hypothetical person in the original position] to expect more than an equal share in the division of social primary goods [including income and wealth], and since it is not rational for him to agree to less, the sensible thing is to acknowledge as the first step a principle of justice requiring an equal distribution. Indeed, this principle is so obvious given the symmetry of the parties that it would occur to everyone immediately (TJ:130).

Justice as fairness for Rawls means equal citizens’ rights (including so-called ‘real opportunities’) and equal shares in material wealth output by the economy. A deviation from egalitarianism is admitted by his two principles of justice only on grounds i) of the necessity of positions of economic and political power which, however, “must be open to everyone under conditions of fair equality of opportunity” (TJ:303) and ii) of efficiency that the materially worst-off in society actually gain from inequalities in income and wealth i.e. that a market economy produces a larger pie through efficiencies brought about by the concentration of capital for large-scale production and by the greater productivity of individuals with greater abilities who are driven by the incentive to earn more. Fairness for Rawls has nothing to do with the fairness of the power interplays of potencies in the gainful game or democratic politics, where power implies potency, potential, possibility rather than attained actuality. Taylor has put his finger on a fundamental antinomy in Rawls’ theory of justice: the freedoms of a market economy based on the gainful strivings of private property-owners are continually curtailed and sacrificed to demands of modified distributive egalitarianism. And yet Rawls sails under the flag of liberalism!
This antinomy can be seen clearly from the vantage point of the socio-ontological constellation called the gainful game. The value-forms are generated originarily by the movements of individual freedom at play already in the form of sociation constituted by the exchange of abilities and their products. Once value gains a reified form of existence in money, nothing can stop its further unfolding to the freedom to hire labour power, which is simultaneously the socio-ontological birth of capital itself as a reified value-form. Nothing, that is, except the suppression of the individual freedom of gainful interchange by a superior political instance, and even then, this is an ontic suppression, not a socio-ontological one. The nub is that where desirous, striving individual freedom is in interplay, there is also money as the reified, value-form medium of this interplay, and this reified social power, in turn, as capital, is able itself to set labour power and means of production into movement on leased land.
Rawls’ conception of a ‘property-owning democracy’ contains an incoherence that necessitates draconian powers for a strong state that is assigned the task of continually curtailing and readjusting the individual freedoms of private property against immense resistance. The diverse private-property interests besieging the state have to be suppressed in favour of modified egalitarian redistribution not only of the economy’s output as expressed in income through heavy taxation, but also of a politically coerced redistribution of the very income-sources of accumulated capital and land themselves. Given that Rawls nevertheless still proposes a market economy, this implies that the gainful game as a socio-ontological constellation could only go underground, being decreed unfair and unjust, or fair and just only up to a point, in Rawlsian terms. The inevitable result would include, on a massive scale proportional to the political suppression necessary, black markets and political corruption through which money would continue to unfold its irresistible social power nevertheless.

6.12Anomalies in the gainful game and the political power play

Strangely (or perversely), it is precisely the reified social power, money, that enables an individual to be a free individual. With this thingly social power in my hand I am able to freely shape my life in my private sphere with considerable degrees of freedom without asking approval from anybody or any authority.130 The constitution of who I am, and who you are, and who we all are through the interplays of estimating and esteeming each other becomes an intimate mirror game behind the wall of privacy that money income affords. Within this private garden of individuality, there may even be a flourishing of singular creativity, freed from the social rituals of public recognition with their inevitably levelling tendencies. Thus, individual freedom goes hand in glove with the reification of sociation via an abstract-universal thing from which, as outlined above, the gainful game unfolds through the many and various value-forms. The garden of privacy, that is, the freedom to lead one’s private life with those one wishes, is the jewel of modern, bourgeois, individual freedom. Private individuality is endangered, however, by encroachments of the state’s administering distributive justice. In this section the (re)distributive, social justice aspect of the state’s raison d’être will be kept in the background, with the focus being instead on anomalies in the gainful game itself and the state’s role in resolving them.

The first duty of the state is the protection of personhood and private property, a duty that arises, as has been shown, of necessity from conflicts over the commutations in civil life. Personhood is the abstract-universal status of the individual human being under abstract right, and this status is the first civil right guaranteeing human dignity. The protection of personhood, i.e. of this first civil right, by the state is a matter of commutative justice, not of distributive justice. This point cannot be overemphasized, for it is fatal for all those approaches to the theory of justice that neglect and suppress commutative justice and its social ontology of estimative interplay. Civil rights movements against social discrimination are movements against the wrong committed against the abstract and dignified status of personhood, and civil rights are grossly misconceived when they are treated as matters of social, distributive justice, i.e. as a matter of how citizens’ rights are ‘distributed’ by the state and constitutionally guaranteed by it. It may disappoint some that civil rights movements could be booked first and foremost under the heading of abstract right rather than basking in the radiance of articles of the constitution, but the rights of personhood lie deeper than the state; they are a matter of natural right, properly understood as rights in the name of individual human freedom per se (insofar as we can still say today that it is the nature of human being to be free). The momentous struggles over the centuries for civil rights and against social discrimination should not be mixed up with issues of so-called distributive social justice. The ambiguity residing in the much employed and revered term ‘social justice’ is toxic and addles thinking on issues of justice. By banishing commutative justice from consideration, Anglophone justice theory has shot itself badly in the foot.

It is not enough, however, for the state to protect personhood and private property, which are the forms, i.e. ideas, ‘looks’, in which the various value-forms, hidden as such from both the state and the players (because they do not think socio-ontologically), are preserved that enable the very movement of the gainful game itself. Apart from the issue of the fairness of the commutations, i.e. the interchanges, that are the metabolic synapses, or ‘touchings-together’, of the gainful game’s movement, there is the major issue of the fairness of the gainful game as a whole, commonly and aptly referred to as the issue of the level playing field. This playing field is not to be level in only one plane, since it has many, many facets and so could be called a multifaceted polyhedron. The gainful game cannot be left to play by itself, for it can get out of kilter through its own movements under the impetus of the many players’ playing strategies for gain. Freely working markets do not simply self-correct, or rather, their eventual self-correction can be a violent, disruptive collapse of the entire game. Laissez-faire capitalism can also push some players to the wall and make playing conditions altogether unfair. A major problem of the gainful game is that some players can become very big, so big, that the other players with whom they play have to accept grossly unfair conditions — the perennial problem of monopoly, oligopoly and cartels on markets of various kinds.

Such monopolies may be labour unions which, through strike action, can hold an industry, a sector, the public or the government to ransom. Therefore the government legislates on industrial relations to lay down the rules under which industrial disputes over wages, working conditions, etc. are to be fought out. To be fair and just, the government must be even-handed in legislating to channel the ongoing struggle between functioning capital and labour (or, on an extended plane, between the state itself and its so-called public servants).

The tendencies for the formation of monopolies, oligopolies and cartels, however, is far greater with capital because capital accumulates of itself, and capital accumulation is a major way in which an individual capital (a company, an enterprise) ensures its survival in the competitive struggle against other capitals. A company that does not grow steadily becomes endangered gradually in its very existence, and may be swallowed by another company. Capital accumulation also enables investments in productivity-enhancing technologies that also improve survival chances in the competition. But once a company has reached a certain size, it attains a market-dominating position that affects the fairness of competition in that sector, including not only competition with similar companies, and also bargaining leverage with suppliers and the power to set selling prices to consumers. In the name of justice as competitive fairness, the government is called upon to redress the competitive balance, perhaps by compelling the company to reduce its size through spin-offs, or perhaps by forcing a break-up of a huge monopoly. In particular, there is the issue of state-enterprise monopolies when the state itself becomes an entrepreneur providing, say, infrastructure (public transportation, roads and railways, telecommunications, etc., etc.). Such state monopolies may decree ‘fair’ prices as they think fit, or, if privatized, crush all competition through sheer size or entrenched and lingering competitive privileges.

One particular sector in which the sheer size of companies is a crucial issue for the fairness of the gainful game is that of finance capital. Finance capital (the private, commercial and investment banks plus finance companies of various kinds) has the function, above all, of providing the interest-bearing loan-capital (called ‘leverage’ in the U.S., or ‘gearing’ in Australia) that lubricates the transactions in a capitalist economy. Such loan-capital is therefore the lifeblood for the movement of the gainful game, and when it dries up temporarily, the movement freezes. The gainful game often gets out of kilter in the phenomenal form of a so-called ‘credit crunch’ that plunges the economy into recession or crisis. Recession is when the gainful game on the whole is not achieving gain, and crisis is when the gainful game is severely hampered, perhaps by the need for entire industries to restructure, which amounts to repositioning in the gainful game.

Because the financial sector is so vital to the economy as a whole and also looks after people’s savings, its strategies and playing conditions in the gainful game demand especial oversight by the state. The government must legislate banking legislation to ensure a proper level of prudence in banking activities. Prudence means appropriately assessing risk, limiting it, avoiding it, making provisions for it, etc. It may be viewed simply as tough luck when an individual enterprise pursues a poor, imprudent, risky strategy and goes bankrupt, but, because of its linch-pin role, there must be state agencies to oversee the financial industry in particular to keep it within acceptable bounds of risk, say, by restricting lending activities or banning certain highly complex and potentially explosive financial products such as synthetic default swaps. Needless to say, overseeing risk and providing regulation for risk management is, of its nature, a risky undertaking, for the gainful game itself and the ever-new strategies pursued in search of gain are full of surprises never envisaged by financial legislation, and also entirely overlooked by supervisory authorities. The necessary regulation of rules of play in the financial sector is inevitably always behind the curve.

A further major problem (seen by Rawls in proposing his property-owning democracy) is the influence that huge, accumulated capitals (also private moneyed wealth, which in turn is always invested in some way or other) has on government and the democratic election process in particular. Private interests lobby government, and large moneyed private interests have the social power to lobby most strongly of all. They may also buy ownership control of the mass media of public opinion that sway it this way and that without ever posing any questions that dig beneath the surface of life. This is the issue of political plutocracy which, through the power of money, can severely distort the workings of government and the state to ensure the fairness and also the prudence and stability of gainful game as a whole. Money as reified social power thus distorts political power. The government may legislate to limit the political influence of accumulated wealth and the interests of big capital, but even this legislative activity is itself exposed to lobbying and hence may have its teeth drawn. Therefore fair play in the gainful game and the proper function of the state in ensuring fairness of play may be put in jeopardy by the power of accumulated capital and wealth.

Furthermore, actions by the government in pursuit of policies of (re)distributive social justice may not only impair the fairness of the gainful game (say, by legislating immoderate job protection), but restrict its overall functioning and success (say, preventing restructuring by protecting social inertia). For those under the influence of conceptions of social distributive justice, the freedoms of the gainful game are dispensable and even morally dubious. The claims of property-ownership and income-earning are subordinated to policies of redistribution for the sake of total social well-being and in the name of state-defined social justice. The fault line between commutative and distributive conceptions of justice, i.e. between the rights of property and striving for income, on the one hand, and the secured rights of material well-being, on the other, is one of the major splits in people’s ways of understanding the social world. This right-left split is played out as a perennial power struggle in democratic politics (cf. Chapter 13) that never attains a final state of equilibrium, i.e. of final closure.