Analyse & Kritik

Journal of Philosophy and Social Theory

Property-Owning Democracy

2013 (35) Issue 1
Guest-Editors: Francis Cheneval / Christoph Laszlo


In recent years, ’property-owning democracy’ (POD), defined by widespread ownership of productive assets, has become one of the key-factors in the assessment of the institutional design implied in John Rawls’s theory of justice. The wider implications of this inquiry also engage scholars who do not subscribe to Rawls’s conception of justice but are broadly interested in normative questions of political economy and the basic structure of a just polity. In the course of this debate, the in...

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Table of Contents

Title: Property-Owning Democracy and the Difference Principle
Author: Samuel Freeman
Page: 9-36

Abstract: John Rawls says: ’The main problem of distributive justice is the choice of a social system.’ Property-owning democracy is the social system that Rawls thought best realized the requirements of his principles of justice. This article discusses Rawls’s conception of property-owning democracy and how it is related to his difference principle. I explain why Rawls thought that welfare-state capitalism could not fulfill his principles; it is mainly because of the connection he perceived between capitalism and utilitarianism.

Title: The Property-Owning Democracy vesus the Welfare State
Author: Albert Weale
Page: 37-54

Abstract: The political theory of the property-owning democracy can be seen as a way of overcoming the ideological conflict between individualism and collectivism. Rawls offers the contemporary reference-point for this theory. Rawls contrasted the ideal-type of the property-owning democracy with the ideal-type of a capitalist welfare state. However, the terms of that contrast are not well drawn and raise a number of questions, in particular regarding Rawls’s a priori specification of the welfare state. An inductively derived specification of ideal-typical welfare states suggests that horizontal redistribution, in line with the principle of social savings, is more important than vertical redistribution. Rawls’s preference for a social dividend or negative income tax scheme can be contrasted with the use of social insurance, but the latter has a claim to instantiate Rawlsian ideals better than a social dividend. There is a potential problem with the pre-emption of private savings in the welfare state, but this turns out not to be troublesome empirically or conceptually. The irony of the discussion is that those who have interpreted Rawlsian theory as justifying the welfare state have the better of the argument, despite Rawls’s own views.

Title: Thoughts on Arrangements of Property Rights in Productive Assets
Author: John E. Roemer
Page: 55-63

Abstract: State ownership, worker ownership, and household ownership are the three main forms in which productive assets (firms) can be held. I argue that worker ownership is not wise in economies with high capital-labor ratios, for it forces the worker to concentrate all her assets in one firm. I review the coupon economy that I proposed in 1994, and express reservations that it could work: greedy people would be able to circumvent its purpose of preventing the concentration of corporate wealth. Although extremely high corporate salaries are the norm today, I argue these are competitive and market determined, a consequence of the gargantuan size of firms. It would, however, be possible to tax such salaries at high rates, because the labor supply response would be small. The social-democratic model remains the best one, to date, for producing a relatively egalitarian outcome, and it relies on solidarity, redistribution, and private ownership of firms. Whether a solidaristic social ethos can develop without a conflagration, such as the second world war, which not only united populations in the war effort, but also wiped out substantial middle-class wealth in Europe thus engendering the post-war movement towards social insurance is an open question.

Title: Comment on John E. Roemer
Author: Martin Beckstein
Page: 65-69

Egalitarian Political Economy beyond Market Socialism

Abstract: On reflecting about the prospects of advancing the egalitarian cause in the United States, John Roemer makes the case for more traditional strategies than the coupon socialism model he advocated in earlier work. First of all, he suggests, an ethos of solidarity must be developed and the super-rich be subjected to higher taxation. This comment assesses this proposal. On the one hand it is discussed whether the ethos of solidarity Roemer calls for in order to counteract the culture of greed among American elites requires nurturing an undesirable culture of envy among the rest of the population. On the other hand it is considered whether the neoclassical principal-agent model that Roemer believes must be contested in order to popularize a steep progressive income tax might be one of the more promising tools to restructure the incentives of economic elites and curb casino capitalism.

Title: Property-Owning Democracy and the Priority of Liberty
Author: Gavin Kerr
Page: 71-92

Abstract: The distinction drawn by Rawls between the ideas of property-owning democracy and welfare state capitalism parallels his distinction between justice-based ’liberalisms of freedom’ (including his own conception of justice as fairness) and utilitarian-based ’liberalisms of happiness’. In this paper I argue that Rawls’s failure to attach the same level of significance to essential socio-economic rights and liberties as he attached to the traditional liberal civil and political rights and liberties gives justice as fairness a quasi-utilitarian character, which is incompatible with the fundamental objective of protecting the highest-order interests of citizens conceived as free and equal. I argue that in order fully to protect these interests, rights to access to non-human capital and productive resources should be assigned the same level of significance as that assigned to the civil and political rights and liberties, and prioritized over the lower-order rights and benefits regulated by Rawls’s second principle of justice.

Title: Comment on Gavin Kerr
Author: Ivo Wallimann-Helmer
Page: 93-97

Not Losing Major Liberal and Rawlsian Insights

Abstract: In this comment I challenge Kerr’s claim that a coherent expression of a ’liberalism of freedom’ needs an extended first Rawlsian principle of justice incorporating the principle of fair equality of opportunity for two reasons. First, such an extended first principle leads to illiberal consequences by narrowing down the scope of individual responsibility for choice and effort way too much. Second, such an extended first principle misses a main Rawlsian insight, namely that in a theory of justice the principle securing basic liberties and the principle of fair equality of opportunity serve different purposes.

Title: The Concept of Property in Rawls's Property-Owning Democracy
Author: Tilo Wesche
Page: 99-111

Abstract: Understanding the relationship of democracy and property ownership is one of the most important tasks for contemporary political philosophy. In his concept of property-owning democracy John Rawls explores the thesis that property in productive means has an indirect effect on the formation of true or false beliefs and that unequal ownership of productive capital leads to distorted and deceived convictions. The basic aspect of Rawls’s conception can be captured by the claim that for securing the fair value of the political liberties a widespread dispersal of property in productive resources is required that minimizes the formation of delusions and therefore improves the conditions of deliberative democracy.

Title: Comment on Tilo Wesche
Author: Jan Narveson
Page: 113-119

On Property-Owning Democracy

Abstract: The gist of Welsche’s argument seems to be to pick up on an idea he attributes to Rawls, that in a true property-owning democracy, productive wealth would be distributed more broadly ’ex ante’ rather than, as now, ’ex post’, the point of demarcation being the use of capital to generate wealth and income. As against this, I argue that ex ante distribution of capital is impossible, because business activity creates wealth, and thus we don’t know what there is to distribute ex ante. Moreover, the prospect of greater wealth for the producers ex post is what especially motivates them to produce, and without production we are poor. It is also noted that Rawls’s ’difference principle’ does not in fact have the egalitarian implications he supposes, nor really any distributive implications, despite Rawls’s intentions.

Title: The Place of the Market in a Rawlsian Economy
Author: Jahel Queralt
Page: 121-140

Abstract: Rawls identifies only two arrangements, the liberal socialist regime and the property-owning democracy, as being compatible with justice. Both are market-based economies, suggesting that a just society must include the market. This article questions this idea by looking at three Rawlsian arguments in favour of the market. Two arguments, which link the market to certain basic liberties, are unsound because the market is shown to be nonessential in protecting these liberties. A third argument points at the instrumental value of the market to make the least advantaged as well off as possible. It is based on an interpretation of the difference principle in which justice requires maximizing the position of the worst off within the most productive economic system. Although commonly accepted, this reading of the principle should be questioned, and thus the third argument is also inconclusive.

Title: Between Sentimentalism and Instrumentalism. The Societal Role of Work in John Rawls's Property-Owning Democracy and Its Bearing upon Basic Income
Author: Michael G. Festl
Page: 141-162

Abstract: In recent years research on John Rawls has experienced a surge in interest in Rawls’s elaborations on the economic order of a just society. This research entails the treatment of the issue which societal role Rawls attaches to work. Somewhat dissatisfied with these treatments the article at hand develops an alternative account of the function Rawls has in mind for work. It will be argued that within Rawls’s idea of a just society the societal role of work consists of three components: an ’efficiency component’, a ’self-respect component’, and a ’sense of community component’. Based on that reconstruction of the Rawlsian position I will investigate whether such a position is reconcilable with the demand for an unconditional Basic Income. The article’s contribution is mostly exegetical albeit in dealing with Basic Income it elucidates how an oft-proposed policy consideration with a bearing upon work can and cannot be justified.

Title: Fraternal Society in Rawls’ Property-Owning Democracy
Author: Andrew Walton / Valeria Camia
Page: 163-186

Abstract: This paper discusses what type of sociological context is appropriate for Rawls’ ’property-owning democracy’. Following certain suggestions offered by Rawls and in the work of Joshua Cohen, it explores, in particular, the kind of fraternity and social interaction suitable for citizens in Rawlsian society and the role of the state in engineering these bonds. Utilising a normative framework based on Rawls’ discussion of a property-owning democracy and various data sets, the paper argues that bonds of social trust, active participation in trade unions and enrolment in public schools, and the use of state policy to organise a mixture of public, cooperative, and private economic institutions would be suitable for a Rawlsian society to adopt because it appears that these structures are favourably connected to the ends of Rawlsian justice.

Title: Comment on Andrew Walton
Author: Carina Fourie
Page: 187-192

The Basic Structure Objection and the Institutions of a Property-Owning Democracy

Abstract: Andrew Walton argues that a Rawlsian property-owning democracy (POD) requires a fraternal ethos and certain forms of social interaction, such as high trade union membership. The basic structure objection could be used to challenge these claims as it indicates that Rawls’s principles of justice should only be applied to the basic structure of society, and not, for example, to an ethos. Walton has two responses to the objection: firstly, that it does not apply to his argument, and, secondly, even if it were to apply, the objection itself is unconvincing. In this article I argue however that (1) the basic structure objection does apply as a fraternal ethos is difficult to reconcile with Rawls’s understanding of what should be included as part of the basis structure, and (2) although I do not defend the basic structure objection, it is not made explicit in Walton’s argument why the objection should be dismissed as unconvincing.

Title: Background Justice over Time: Property-Owning Democracy versus a Realistically Utopian Welfare State
Author: Michael Schefczyk
Page: 193-212

Abstract: In Justice as Fairness, Rawls presents a case for property-owning democracy (POD) which heavily depends on a favourable comparison with welfare state capitalism (WSC). He argues that WSC, but not POD, fails to realise ’all the main political values expressed by the two principles of justice’. This article argues that Rawls’s case for POD is incomplete. He does not show that POD is superior to other conceivable forms of WSC. In order to present a serious contender, I sketch what I call a realistically utopian welfare state (RUWS) that (a) guarantees the fair equality of political liberties and opportunity and that (b) maximises the situation of the worst-off via a kind of participation income. The main aim of the article is to give credibility to the claim that RUWS is not obviously worse than POD by Rawlsian standards and therefore deserves a fair hearing in further research.

Title: Comment on Michael Schefczyk
Author: Fabian Schuppert
Page: 213-217

In Search of a Just Political Economy: Why We Should Go beyond Rawls's POD and Schefczyk’s RUWS

Abstract: This commentary challenges Michael Schefczyk’s proposal for a realistically utopian welfare state (RUWS). As it stands, RUWS says too little about the concrete measures it will offer to avoid political domination and harmful inequalities. Moreover, RUWS follows Rawlsian Property-Owning Democracy (POD) by being silent on crucial issues such as banking regulation, the governance of investments and the issue of actual control over capital. Ultimately, it therefore seems that RUWS does not present an attractive alternative to POD since it suffers from very similar problems and shortcomings as POD.

Title: Investing for a Property-Owning Democracy? Towards a Philosophical Analysis of Investment Practices
Author: Emilio Marti
Page: 219-236

Abstract: In this article I show why investment practices matter for a property-owning democracy (POD) and how political philosophers can analyse them. I begin by documenting how investment practices influence income distribution. Empirical research suggests that investments that force corporations to maximise shareholder value, which I refer to as ’shareholder value investing’, increase income inequality. By contrast, there is evidence that socially responsible investing (SRI) could bring society closer to a POD. Following that, I sketch how financial regulation fosters investment practices and discuss how SRI could be boosted if regulation attempted to influence investment decisions, although many people in the public discourse would see this as exceedingly patronising. Finally, I outline how political philosophers can evaluate financial regulation. I argue that drawing on Hegel or Rawls helps to justify efforts to influence investment decisions and that proponents of a POD should therefore develop and support regulatory ideas which foster SRI.

Title: Constitutionalizing Property-Owning Democracy
Author: Thad Williamson
Page: 237-253

Abstract: This paper explores how a regime recognizable as a Rawlsian property-owning democracy might be enshrined constitutionally in the context of the U.S. Five specific constitutional amendments are proposed: establishing an equal right to education, establishing a guaranteed social minimum, clarifying the legitimacy of regulating corporate political speech for the sake of political equality; establishing an individual right to a share of society’s productive wealth, and assuring communities of significant size the right to remain economically viable over time. The substance and reasoning behind each proposal is discussed in length, and the paper also briefly discusses why a focus on constitutional amendments may be helpful both in clarifying how a property-owning democracy might be realized in practice and in establishing clear goals for social movements motivated by the aim of establishing a more equitable distribution of wealth, power, and opportunity in the United States.

Title: Property-Owning Democracy and the Circumstances of Politics
Author: Francis Cheneval
Page: 255-269

Abstract: The article argues that Rawls’s property-owning democracy should not be understood as a necessary standard of democratic legitimacy. This position contradicts Rawls’s own understanding to some extent, but a rejoinder with elements of political liberalism is possible. He concedes that justice as fairness is a ’comprehensive liberal doctrine’ and that a well ordered society affirming such a doctrine ’contradicts reasonable pluralism’. Rawls makes clear that reasonable pluralism in combination with the burdens of judgment lead to rare unanimity in political life and to the necessity of majority and plurality voting procedures.