Preface THIS book contains the fruits of a dozen years' reflection on the question whether it is possible to envisage a market economy that fulfils the core ideals of socialism. Its plan may become clearer if I explain how my thinking has evolved over that period. I began in the early 19708 with fairly ill-defined socialist beliefs that seemed naturally to entail an antipathy to markets as a means of economic co-ordination, a point of view which I suppose is still fairly common. I was shaken out of it by encountering, in the middle part of that decade, various libertarian writings that set out polemically, but still powerfully, the arguments in favour of markets. These encounters left me with two basic convictions.
Contents Introduction I PART I A CRITIQUE OF LIBERTARIANISM 1. Freedom 23 2. Procedural Justice 47 3. Market Neutrality 72 4. Altruism and Welfare 98 PART II A DEFENCE OF MARKETS 5. Consumer Sovereignty 127 6. Distributive Justice 151 7. Exploitation 175 8. Alienation and Communism 200 PART III THE POLITICS OF DEMOCRATIC SOCIALISM 9. Community and Citizenship 227 10. Politics as Dialogue 252 11 Toleration 276 12. The Socialist State 294 Conclusion 321 Bibliography 338 Index 355.
INTRODUCTION I My aim in this book is to work out a political theory for democratic socialism, and in particular to defend a certain view of socialism, which I call market socialism, against the challenge posed by the neo-liberal thinkers of the New Right. The practical relevance of such a project should hardly need stressing. Socialist ideas have, over the last decade or so at least, been pushed on to the defensive by the resurgence of neo-liberal—that is, market-oriented, anti- state—thinking, to the extent that many have thought to write the obituary of socialism itself. Alongside this movement of ideas, there has been a general shift of public policy away from long- established forms of economic intervention by the state towards greater reliance on market mechanisms. This has been true not only in Western countries, where markets have always been relied upon to provide most goods and services, but also in Eastern Europe and China, where the recent past has seen a variety of reform movements, all to a greater or lesser extent involving a turn away from central planning towards co-ordination through markets.
I FREEDOM I As their name implies, libertarians are centrally committed to the value of freedom. Sometimes they speak as though their entire social philosophy flowed from this one single commitment. In fact the matter is more complicated, and other values—justice and efficiency, for instance—play their part in the overall defence of institutions such as private property which libertarians favour.
2 PROCEDURAL JUSTICE I Libertarians are not merely concerned to draw out the practical implications of their view of freedom. They also want to show that other values—values like justice and welfare—point in the same direction, towards a free market and a minimal state. The debate about justice is of crucial importance, since many would share Rawls's view that 'justice is the first virtue of social institutions as truth is of systems of thought'.1 For most participants in the debate, justice means social justice: institutions are just in so far as they tend to generate social outcomes which meet one or more criteria—for instance, criteria of desert or need. Libertarians reject this identification. They see the very notion of social justice as intellectually misguided and as disastrous in its consequences.
3 MARKET NEUTRALITY I Much liberal thinking in recent years has been dominated by the principle of neutrality. According to this principle, a defensible social order must aim to deal impartially or even-handedly with the aspirations of all its members. It is not difficult to understand the appeal of such an idea. Liberalism begins from a premiss of individual diversity: each person has his own unique conception of what it is that makes life worth living, and is therefore entitled to pursue that conception to the best of his ability. A natural corollary is that social institutions should form a neutral arena in which each conception is given an equal chance of success.
4 ALTRUISM AND WELFARE I In the last chapter I examined the general claim that a market economy of the kind favoured by libertarians dealt even-handedly with the various conceptions of the good life that individuals might want to pursue. We saw that there were good reasons to doubt this general claim. In this chapter I want to focus on a particular issue, the problem that arises if we assume that people are altruistically concerned about the welfare of others. Most people do in fact appear to manifest such concern. They are distressed if others—particularly other members of their own society—are exposed to poverty and suffering. If these feelings are universally shared, there is a strong case for a scheme of redistribution in favour of the badly-off, since such redistribution may advance everyone's conception of the good: it aids the badly- off in an obvious material sense, but it also satisfies the altruistic preferences of those who contribute to the scheme. Provided these preferences are strong enough to outweigh the material costs of contribution, we have the conditions for what economists call 'Pareto optimal redistribution'.' Very few libertarians would want to deny the widespread existence of altruistic concern. They would simply deny that concern of this kind can justify compulsory redistribution by the state in favour of the needy. Their case might be put as follows. If people are indeed altruistically concerned about the welfare of their fellow citizens, then it is perfectly possible for them to make private arrangements to express their altruism, through chari- table giving. Indeed such charitable activity is not only a possible alternative to a compulsory scheme, but is actually superior to it in 1 See H. M. Hochman and J. D. Rogers, 'Pareto Optimal Redistribution', American Economic Review, 59 (1969), 542-57.
5 CONSUMER SOVEREIGNTY I The critique of libertarianism which I have offered in the last four chapters has been developed as far as possible from premisses that libertarians themselves should be able to accept. The case for an unrestricted capitalist economy and a minimal state has been assessed in terms of values—freedom, justice, neutrality, effi- ciency—to which defenders of such an order characteristically appeal. As we have seen, the case collapses on close scrutiny, or is salvageable only by introducing new and unpalatable assumptions (such as the restrictive notion of moral responsibility considered towards the end of Chapter i). Libertarianism turns out to be indefensible even in its own terms.