Sunday, June 21, 2015

The Pope and I Are Having a Complicated Day


            The Pope and I agree on many things.

            We agree that economic growth does not solve all problems, and that it creates some.

            That the real question about an economy is what lives, relationships, and work are possible within it.

            That we use ourselves up in getting and spending, even in getting and spending experiences.  That this is waste.

            That the real work is to be open to others, especially the strange and inconvenient.  That this is very, very hard.

            That the natural world is part of all of this.

            That the world’s beauty is a sign of its goodness.  That its value is deeper and broader than our convenience.

            That we should make the places we live beautiful, open to the world, and serving to relationships.

            That there is a difference between working hand in hand with the natural world and dominating it, and that we should work hand in hand with it, as we should with one another.

            That the best way to these goals is not for each to get as rich as possible, and maybe give it away in old age.  That the world is too small for that, time is too short, and we have better things in us.

            The Pope and I disagree on many things.

            I don’t think that, without the backstop of God, we can only become selfish, insatiable, and trapped in ourselves.  That is, I don’t think climate change is a crisis of secularism.

            I don’t think that women’s choice is a symptom of our selfishness.

            I believe that much of the equality, cooperation, and love of the world that the Pope voices comes from the experiments of free people, often radical, scorned, and resisted, and that he is adapting to these values, not creating them.  Maybe one day women’s equality and choice will also change his church.

            I don’t think the world – what the Pope calls creation – contains a blueprint for its own right use.  I think we have to find that ourselves, in ethics, aesthetics, and politics.

            And I don’t share the Pope’s politics – which is, basically, what the Europeans call Christian democracy: capitalism with a human face, an updated, idealized society of orders.  But I note that, compared with the defenders of American capitalism today, the Pope is easy to mistake for a socialist.

            At base, I am uneasy when anyone’s high priest tells the world what should concern it most.

            But I take what the Pope says as ethics, aesthetics, and politics, clothed in theology.
           
            And he takes what people like me say as spilled theology, ethics that doesn’t know it needs God.

            In 500 years, I hope the world will be green and full of equals, that new forms of cooperation will have come, and that love will be pretty much the only law.  There will be no priests, just elders, teachers, friends, and wise advisers.

            The Pope’s future is different, but we want to move in the same direction out of this particular dark patch of time.

            And, although the disagreements concern “philosophical” questions, they will not have theoretical answers, only historical ones.  Time will tell.

            The Pope and I agree, as he says more than once in his encyclical, that “Realities are greater than ideas.”

            Here’s to the uncertain future of this one.

Friday, June 19, 2015

Constitutions of Violence (essay for the first issue of Scalawag)


The first constitution to govern what is now North Carolina, other than the original royal charter, was written for hire by the political philosopher John Locke, who served as secretary to the colony’s Lords Proprietors.  These rich Englishmen directed their draftsman to open with a statement of purpose: “that we may avoid erecting a numerous democracy.”  It was an ironic moment for the theorist of natural freedom and self-government, who later founded a theory of human equality based on the idea that people are “promiscuously born to all the same advantages of nature.”

Locke’s Carolina constitution, adopted in March 1669, for a region that included portions of today’s North and South Carolina, may be the strangest fundamental law ever to govern a piece of North America.  It populated the new colony with “signories,” “landgraves,” and “caciques,” and more familiar feudal categories – baronies and manors – under the government of a Palatine and his council of seven Lords Proprietors.  It sets out a hereditary aristocracy, with precise and unalterable proportions between political authority and land ownership.  Ratios of acreage, office, and power interlock and turn back on themselves like an Escher drawing.   Locke’s baroque scheme strikes the modern ear as more Dungeons & Dragons than Constitutional Convention. 

Indeed, no convention produced this constitution, just a board meeting.  In the new colonies, political governance was corporate governance.  Labor was to be done by a hereditary class of serfs called leet-men, who lived under the direct governance of their landed lords (who would administer law to the lower orders in “leet-courts”).  Below them were “negro slaves,” property at the whims of their owners.  Neither leet-men nor slaves were part of the body politic formed by Locke’s constitution.  His charter opened, “We, the lords and proprietors … have agreed to this … form of government.”  That is quite a contrast to “We the people,” the phrase that famously opened the US Constitution in 1789.  Most of the people in Locke’s Carolina were not the People, but the help, or just the stuff.  This constitution was intended to shut down all future democracy “in the most binding ways that can be devised.”

I feel a macabre fascination with John Locke’s constitution.  And, honestly, I find it funny.  It is funny because it is so rococo, racialized exploitation and political tyranny done up in ruffs and lace, a slave state from the Eastern Lands of Game of Thrones.  Daenerys Targaryen would have liberated John Locke’s Carolina.  Or maybe it’s not funny, but I wish it were.  I wish it were because I wish we could laugh away the absurdities of race, wish that all undemocratic and arbitrary power were as nakedly preposterous as what Locke proposed.  But of course what he wrote didn’t seem at all preposterous to him, or, more to the point, to “we the lords and proprietors.”  The world you have yet to change usually seems obdurate and halfway natural, while the injustices of faraway times and places feel fundamentally insubstantial: they should disappear like the Wizard of Oz, with a tug of a curtain.    

***

Locke’s phrases sometimes swam through my head at Moral Mondays rallies in 2013 and 2014.   There we were, still trying to erect a numerous democracy.  We were promiscuous in our equality, the kind of proud motley Carolina that generations of white supremacists have feared.  But we were also still unequal among ourselves, marked by lines of wealth and privilege, and subject to laws that have made the state less democratic: Locke’s Lords Proprietors would not have been entirely displeased by Thom Tillis’s North Carolina.

You don’t have to be, like me, a constitutional lawyer and political theorist to think of constitutions at a Forward Together rally.  Constitutional language is sacred text in the mouth of Reverend William Barber, head of North Carolina’s NAACP and the visionary of Moral Mondays and the Forward Together movement.  As anyone who has even dropped in on a rally know, Reverend Barber works with two canons: one religious, the other civic.  The Bible resonates everywhere in his speeches.  “Without vision the people will perish,” he quotes from Proverbs, and you realize that everything you have been hearing is in cadences and phrases that English speakers are trained to vibrate to, whether we are churched or unchurched.

But it’s the civic canon that really catches me.  When Reverend Barber raised the roof at 2014’s Netroots Nation, an annual gathering of progressive activists, he opened with several minutes of provisions from North Carolina’s Reconstruction constitution, written in 1868.  This later document established a principle of equal and universal citizenship to the state for the first time.  It outlawed slavery forever in the state.  Its drafters deliberately echoed the Declaration of Independence, declaring it self-evident that all people are created equal.  They also added “the enjoyment of the fruits of their own labor” to the people’s inalienable rights, a potent statement of the anti-slavery principle.  The Reconstruction constitution took Thomas Jefferson’s words, the fine phrases of a slaveholder, and applied them to everyone – restoring them to their right meaning, or, if you prefer, dismantling the master’s house with the master’s tools.

Constitutional language is living tissue in Reverend Barber’s fierce, looping rhetoric.  His speeches move in several dimensions at once.  They interpret the history of Reconstruction, interracial fusion politics, and white reaction, bending time’s arrow into a mythic loop, in which the present becomes the past, a second Reconstruction arising in the Civil Rights movement and Barack Obama’s election, a second Redemption (white supremacists’ favored term for their attack on Reconstruction) in the Tea Party and North Carolina’s right-wing legislature.  The language mimics this movement, phrases and images recurring and gathering force with each pass.  These cycles of ever more forceful recitation come to suggest an upward spiral, in the energy of the repeating words and the historical promise of the echoing events, until both explode into prophecy—not a promise of help from above but a call to act where you stand.  In dark times, the speeches manage to say that history is on your side, that language itself is on your side.

Barber would be the first to point out that North Carolina’s Reconstruction constitution was written with the ashes and blood of the Civil War still present to the minds of its authors.  Some of those authors were freedmen, recently enslaved people like Abraham Galloway, one of the Reconstruction constitution’s 15 black authors, who freed himself by escaping to Canada in 1857, returning to North Carolina as a Union spy and abolitionist tactician during the Civil War.  It is in part a peace treaty and document of surrender, abjuring secession forever and thanking God for the preservation of the Union.  It is a victor’s document, but one written to enshrine the rights of those its own canon – the Declaration and the US Constitution of 1789 – ignored.   Today it is the civic sacred text of a movement of underdogs, the charter of a dream deferred.

Like the Christian Word, civic sacred texts carry the memory of blood and wounds.  The idea of equal citizenship took on life and power among slaveholders, and also among settlers who expelled and slaughtered Native Americans, confident that both God and history were on their side.  Equal citizenship for some came with excluding others from citizenship altogether, either as enslaved laborers in the South or as inconvenient savages on the frontier.  Yet the lived reality of political equality among the oppressors worked the ideal ever deeper into American myth, imagination, and practice.  This reality drenched the fine phrases of equal citizenship in the blood of lynchings and massacres, associating them indelibly with what we have learned to call white privilege.  But these same phrases are also the civic catechism of Reverend Barber’s peaceful, democratic, and entirely unfinished revolution.  

***

How can slaveholders’ words anchor a language of prophecy and redemption?  (I am deliberately using redemption, the word that white supremacists used for their attack on Reconstruction, because it is also the right word for progressive constitutional prophecy.)  How does the record of hypocrisy and violence call Moral Mondays marchers – as Reverend Barber put it in his refrain at the mass rally of February, 2014 – to higher ground?  What are we doing when we treat a constitution as civic scripture?

            A constitution may do what its name suggests: constitute – form, make up – not just a system of government but a people.  A people, of course, is partly an imagined thing, a way of thinking and seeing.  When you imagine that you are part of such a people, constitutional language offers to tell you something about who you are.  The Civil Rights movement of the 1960s used such language to say, “As Americans, you are already committed to equality.  Now it is time to be true to yourselves.”  This is arguably strange or alienating, reaching inside you to make you someone else, while claiming not to change but to perfect you.  Yet this is also the language of transubstantiation, of redemption, of being born again into the self you were meant to be, the self you always were, but secretly or imperfectly.

            This redemptive attitude treats the glittering generalities of constitutional language, and of the Declaration of Independence, as a Word yet to be made Flesh. 
But it is not just a matter of borrowing religion for politics.  Something is happening in common between the two.

How do I, a secular marcher behind Reverend Barber, hear the language of prophecy and redemption?  There is a tradition in philosophy holding that all religion is a kind of Word yet to be made Flesh: that its promises of equality, dignity, and harmony express a worldly human possibility that has not yet become real.  If religion is a human creation, this tradition says, then it must be explained by human wishes and human capacities, not supernatural sources.  Seen this way, constitutional prophecy and redemption are not displaced forms of religious passion.  Instead, both constitutional and religious prophecy express the human knowledge that we contain more worlds than we have yet made and inhabited.  They are ways of naming and imagining a world we know we should make, a world we want, which we have not yet found the way to create.  It is a world of equality and inalienable rights, where there is no slavery and the fruits of your labor are your own.

            A constitution, then, is a line of tension connecting the world that exists with other worlds that might be possible, which we name to try to imagine them, and imagine to try to bring them nearer—or at least to see more clearly the distance between their ideals and the unredeemed present.   We use words to form this line of tension, to name the distance between worlds, if not exactly to measure it.

To my mind, this is true and powerful.  But there is a danger in redemptive imagination that is part of its power: it gathers all history into covenant, all injustice into reminders of a promise betrayed.  It can obscure the waste, suffering, and horror of past and present, so that its gloss becomes the highest truth about moments of felt possibility, but also quite inadequate, even false, to the lives where we spend most of our time.

Each of these Carolina constitutions is threefold.  Each is a record of its time’s violence and exclusion: a record of a bloody social settlement, an imposed peace in a long struggle.  Each is also an occlusion, a cloak over violence, and so a record of hypocrisy.  From the open neo-feudalism and slavery of Locke’s constitution through the freemen’s constitution of 1776 and the nominal universalism of 1868 – which proved to be a hospitable framework for Jim Crow – the balance shifts from an open record of violence to a subtler and more tragic record of hypocrisy.  It is partly here, in the gap such hypocrisy produces between words and reality, that the third aspect of these constitutions, the prophetic possibility, emerges. 

***

Locke’s constitution didn’t last long.  By 1700, it had mostly faded from relevance.  That said, Locke’s constitution was widely printed and circulated in the colony for three decades, and was fundamental law in those strange and turbulent decades (which spanned a restoration and revolution in the home country). Later Carolina constitutions are comfortingly familiar.  The phrase “We the people” would not open a North Carolina constitution until Reconstruction, but already in 1776, the newly independent North Carolinians declared in their state constitution that “all political power is vested in and derived from the people only.”  This constitution is studded with personal rights and protections against abuse of power.  The trick is that these apply only to “freemen.”  It is a freeman’s constitution, meaning, mostly, a white man’s covenant.  A form of democracy had come, but those who were left out of it now did not even merit a mention, unlike the leetmen and slaves that Locke’s constitution had called out by name.  Only silence marked their exclusion in 1776, the unspoken implication that “freemen” had an opposite. 

Such early state constitutions formed the template for the Supreme Court’s notorious 1858 decision in Dred Scott v. Sandford, which just before the Civil War declared that the US Constitution should be read to mean “we the white people,” the Declaration of Independence to declare “all white men are created equal,” and that white supremacy was the implicit, permanent commitment of American nationhood.  This, of course, is what Reverend Barber’s beloved 1868 constitution was written to destroy.  And even this egalitarian vision lasted only thirty years. Then the violent reassertion of white supremacy was constitutionalized in new amendments that created literacy tests for all voters except those who had been eligible to vote in 1867—that is, the white people who had been “freemen” under the old, slavery constitution.  Those amendments brought a poll tax as well.  This was the constitution of Jim Crow and separate but equal, which only the Civil Rights Movement, the Second Reconstruction, would displace.

***

Locke’s colonial constitution – there, it still holds me! – holds that any ambergris found on the Carolina coast belongs to the Lords Proprietors of the colony.  Ambergris, for those who don’t recall, is a potent gray mass produced in the digestive tracts of sperm whales.  Before the magic of chemistry, it was a major raw material for perfume.  A rare ingredient for a luxury good, it was prized and costly.

            This is a telling little irony.  When Locke described the origins of property in his most influential work, the Second Treatise of Government, he offered ambergris as proof that the world primordially belonged to everybody and nobody, but a person could make a part of it his own by taking hold of it.  Isn’t it true, he wrote, that a walker who finds ambergris on the beach becomes its owner, and demonstrates this ancient, basic human power to make nature into property?  Well, not so much in Carolina.

            This small betrayal of Locke’s celebrated principles may stand for many larger betrayals.  Locke was a theorist of human equality, which nature had spread “promiscuously” throughout the species.  He argued that anyone who tried to get you in his absolute power had, in effect, declared war on you, and that you could kill him in self-defense.  Unless, apparently, you were a “negro slave” in Carolina and he your master.  In that case, his absolute power over you was part of the constitution, which has no more room for promiscuous equality than for a numerous democracy.

            ***

            These kinds of inconsistencies capture my imagination partly because, as a constitutional lawyer, I belong to a strange subculture whose members sometimes imagine principles as Archimedean points: if we could just find their true meaning, we could shift the world.  We are trained to go after inconsistencies the way acupuncturists go after blocked meridians.  In that sense, we are technicians of constitutional prophecy, trying to bridge the pregnant gaps between words and the world.

            But this is not just technical, professional craft;. here again, the redemptive idea makes itself felt.  If only we could overcome these betrayals and errors, it suggests, we could make things right, as they were always meant to be.  This is the implicit idea of the whole tradition of civic preaching that Reverend Barber echoes, and which goes back to Abraham Lincoln and the abolitionists, and runs through Martin Luther King, Lyndon Baines Johnson, and others who portrayed the first Emancipation and the second Reconstruction as redeeming the country’s original promise.  This is an American story with a Christian template: original sin destroys what should be perfect harmony; only a sacrifice of blood, faith, and patience can redeem it and restore the primal design.  Those who like to say this is a Christian country may not realize exactly how right they are.  They should be answered: yes, conceived in sin and redeemed in blood.

            But even the story of redemption makes it all too neat.  Powerful as it has been as a tool of emancipation, it misses something else, something the Declaration of Independence and the Reconstruction constitution conceal, but Locke’s constitution lays bare.  The settlements that became the United States did not begin as an imperfect democracy, struggling to work itself pure.  They began as a project of settler colonialism, building a new world of economic opportunity for free settlers and the investors at home – the Lords Proprietors of the Carolina Colony.  The American Revolution took the home investors out of the picture and consolidated self-government for free settlers – but still on the backs of enslaved people and the lands of expelled peoples.  The exclusion and oppressions of American history began not as original sin but as what conservative constitutional theorists call original meaning.  Steps toward equality and genuine democracy have not have been corrections to a founding mistake, but revolutionary reallocations of power and privilege.  They radicalized the idea of citizenship that white male settlers claimed for themselves with their revolution; but in radicalizing it, they transformed it, because exclusion and oppression were built into it from the start and by design – albeit over the objections of genuine democrats like the immigrant Thomas Paine and the free black radical David Walker.

            What does this mean?  Well, for one, that an adequate Reconstruction needs to be just that – a deep engagement with the roots of continuing inequality in inherited wealth, economic structure, between races, and in institutions such as schools and the criminal justice system.  We are fooling ourselves if we believe the key is already hidden in our old principles, if we could just get them right – no matter how potent and attractive this idea is, no matter how much partial good we can manage with it.  The problem is not just to perfect a flawed democracy, but to decolonize national life.  The constitution that would do that has not been written yet.



           
             


Thursday, June 18, 2015

South Carolina, 1782


Asked to dine with a South Carolina planter,
Hector St. John Crevecoeur took a small,
Cool path through the woods.
“Examining some peculiar plants,”
He felt the air disturbed, though the day was calm and sultry.

He saw “large birds of prey, anxiously endeavoring to perch”
On a cage, raised over the path, which held
“a negro: the birds had picked out his eyes,
his cheek bones were bare.
No sooner were the birds flown,
than swarms of insects covered the whole body.”

Crevecoeur lifted water to the dying man,
Then “mustered strength enough to walk away.”
His dinner host said that the slave
Had killed his overseer.

In his letter Crevecoeur hoped this scene
Would account for his “melancholy reflections,”
For which he apologized anyway:
“While all is joy in Charles-Town, would you imagine
that scenes of misery overspread the country?
Where do you conceive that nature
Intended we should be happy?”

His host, wrote Crevecoeur,
Had given all the usual arguments,
Self-protection and the order of nature,
“With the repetition of which I shall not trouble you.”

Saturday, June 13, 2015

Inequality, Democracy, and Law (keynote address, 2015 SELA conference, Rio de Janeiro, Brazil)


Inequality is very old.  Until now, indeed, deep economic and social inequality has been perennial in all remotely complex societies. 

Democracy, by contrast, is arrestingly new.  Manhood suffrage is 100-150 years old even in the so-called “mature” democracies.  Women’s suffrage is a product of the twentieth century.  In the United States, effective enfranchisement of African-American and Latino citizens dates to the passage of the Voting Rights Act of 1965, and policies like denying former felons the vote continue to qualify the right. 

            How should we think about the relationship between one of the oldest features of social life – inequality – and our new political condition – democracy, at least nominal and aspirational democracy?  I put the question this way emphasize that, historically speaking, these questions are fresh as well as difficult, and we shouldn’t be surprised to be unsure or baffled in answering them.  Everything I will say has the tentativeness appropriate to this novelty and uncertainty.

            Now, although inequality is old, it feels fresh, even surprising, just now. 

            To recite a cultural history that you already know as cliché, Thomas Piketty’s Capital in the 21st Century alerted Americans to a body of research that had been developed over more than a decade, showing both income and wealth growing sharply more unequal around the world.  Piketty warned that a new rentier class of inherited wealth and social prestige is on the verge of emerging.

            It has become mandatory to raise an eyebrow at “Pikettymania,” and Piketty himself has had the good grace to profess bemusement at all the attention, but the fact remains that the book is a watershed from which many streams of inquiry are beginning. 

            There was a period in the North Atlantic countries, between the end of World War Two and the 1970s, when profound inequality seemed a thing of the past, growth was widely shared, and the shares of capital and labor in national income looked stable. It was easy to assume that those years were Act V of a comedy, watching history’s conflicts resolve into harmony. But maybe those years were instead Act II of a tragedy, observing but failing to understand inequality-producing dynamics that were at work below the surface. If so, we are now in Act III or IV of that tragedy.

Besides giving the numbers, Piketty’s book charts cultural changes that we’re all witnessing: the financial power of the one percent and the 0.1 percent change social life. Talent and ambition follow the money.  They go where capital either trades (Wall Street) or ventures (Silicon Valley). The professions seem drab and mediocre by contrast, and building up a good life by working for wages is becomes unrealistic. Working-class security, middle-class mobility, and stable, respected professions all give way to a rush for big money.  Picking the right parents becomes the key to good prospects — or marrying into the right family if you are born into the wrong one. Piketty lingers over Jane Austen’s asset-oriented marriage comedies with affection but also a certain horror: the need to marry someone with the right capitalization level, a central assumption of those plots, is no longer a quaint feudal relic. It is courtship in advanced capitalism.
           
            As his most acute respondents have pointed out, Piketty’s work opens more questions than it answers.  He has no theory of how the economy produces and distributes value.  Numbers — powerful ones — are what he has. He has counted things that were harder to count before now — income, asset value — and adorned the bottom line with some nice formulas for holding onto their importance. But the famous inequality r > g, as Piketty readily admits, is not a theory of anything; it is a shorthand generalization from some historical facts about money’s tendency to make money. Those facts held in the agrarian and industrial societies of Europe and North America in the nineteenth century and seem to be holding in today’s industrial and post-industrial economies. But these are very different worlds. Is there something constant that unifies different versions of inequality — that unites plantation owners and Apple shareholders, in their shared position above bondsman and Best-Buy techs — or is the inequality itself the only constant? Without answers to these questions, we don’t have a theory of capitalism, just a time-lapse picture of it.

            The growing interest in connecting private law with theories of inequality, which Amy gave us a terrific introduction to on Friday morning, is one attempt to use law to begin filling in these gaps.  Part of what is happening here, I think, is trying to nail down the thought that Piketty’s famous r, the rate of return on capital, is in part the product of struggles, struggles between those who own the world and those who just work here. Sometimes these are contract negotiations, sometimes strikes, and sometimes elections and lawmaking.  

 Maybe the basic question is power, arrayed along various dimensions, including the comparative power
of organized wealth on the one hand and organized working people on the other. Focusing on this question means putting human struggle at the very heart of any analysis of economic life. As the author of an earlier book titled Capital put it (though not in that book), the root is man.
           
The period of shared growth in the mid-20th century was not just the aftermath of war and depression, which Piketty makes much of. It was also the apex of organized labor’s power in Europe and North America, which came from many decades of organizing, not a little of it bloody, not a little under the flag of democratic socialism. Various crises cleared the ground, but the demands of labor, and an organized left more generally, were integral to building the comparatively egalitarian, high-wage world that came after the wars, with its strong public sector, self-assertive workers, and halfway tamed capital. A new attention to the distributive effects of the law of the economy – what we tend to call “private law” – is an attempt to get specific about the world that this egalitarian politics built, what became of it, and what might be involved in building a successor to it.

**
The kinds of changes we are discussing must pass through politics, which is to say, in various versions, that they must succeed democratically.  But of course, democracy, like capitalism, is not one thing but a pattern with many versions.  The culture of unequal wealth, with its patterns of status, influence, and ambition, shapes the practice of politics.  As Zephyr Teachout has emphasized in her important book, Corruption in America, unlimited spending in elections by the wealthy produces dependence on the part of candidates, who need money for political survival.  The result is not usually the outright bribery that the Supreme Court classifies as “corruption,” but a subtler reorientation of attention and concern.  You might think of it by analogy to the ways one sees and hears in a crowded room: where does the eye go, which voices does the ear pick up?  Who, a day later, does one remember was there?  In a democracy that depends on private wealth for its basic activities of communication and mobilization, candidates see and hear the wealthy, because they need them.

Here, then, we are beginning to see the entanglement of unequal wealth and democracy.  It is increasingly common to say that inequality matters to democracy in this way, that it undermines a version of civic equality that democracy presupposes.  But of course this is not obvious.

There is no pre-theoretical formulation of democracy’s relation to unequal wealth.  The question depends on one’s conception of democracy, and also on one’s conception of economic order.   The stronger one’s commitment to a idea of robustly equal citizenship, and the more strongly one believes that a political community might choose among a range of economic orders, the more of a problem unequal wealth looks to be for democracy, because it undermines citizenship and constrains the choices that belong to the political community.

Conversely, the more one sees politics and law as handmaidens to a naturalized set of market relations, the less is at stake in unequal wealth among citizens.  The naturalization of markets is a long tradition.  Its eighteenth-century version rooted rights of property and contract in human nature and divine design.  The twenty-first century version is more likely to proceed negatively, asserting that – in the famous phrase - “there is no alternative” to markets –on account of incentives, information costs, or some other constraint on institutional design.  In either case, the basic logic of the argument is demotion of political sovereignty by the naturalization of market economics.

Let me bring down to earth this question about the work that theories of wealth and democracy are doing, and connect with the role of law in structuring inequality.  Consider the U.S. Supreme Court’s First Amendment cases on money in politics.  What are the implicit theories of markets and democracy here? The Court’s ready assimilation of money to speech assumes that there is, in principle, no conflict between political argument and economic accumulation, that these are compatible, even mutually supportive.  The Court’s embrace of for-profit corporations as essential participants in the process of American democracy also highlights its confidence that there is no contradiction between the accumulation of great wealth and the survival of effective self-rule.

And why would the justices think those things?  Part of the answer may lie in an implicit theory of what self-rule is.  These decision hold that campaign-finance regulation cannot be justified by the goal of equalizing influence among citizens or avoiding so-called “distortion” of political debate by moneyed interests. In other words, equal citizenship as a constitutional value does not imply any rough equality of political means, influence, or efficacy – other than the vote itself.

Instead, the Court’s concern for democracy seems much more minimalist: to avoid the entrenchment of a political class through self-serving campaign laws, even at the cost of ensuring the entrenchment of a class of wealthy donor-citizens who effectively set policy.  That is, as it happens, the role to which twentieth-century economist and political theorist Joseph Schumpeter restricted democracy: facilitating elite rotation while declining as romantic the idea that ordinary citizens should, or can, participate in self-government in any meaningful way.  The patronage relationships that the Court’s decisions foster between wealthy donors and their preferred candidates and movements are exemplary Schumpeterian politics, intra-elite disruptors that change the menu of choices for voters who are mainly passive.
**
By invoking Schumpeter, I mean to do a little more than name-drop.  When I emphasized the newness of democracy at the start of this talk, part of what I had in mind is that much of the experience of widespread and stable mass democracy occurred in the halcyon years when economic inequality seemed to be in abeyance, those years that seemed to be the late act of a comedy.  In that time, from the mid-1940s through the mid-1970s, the worry that market-driven inequality would undermine democratic equality seemed to have been resolved in practice.  At the same time, resources – intellectual and institutional – for dealing with conflicts between the two were being eroded.  But of course that didn’t seem to matter so much if no conflicts should be expected to arise.

During these decades, a line of argument widely broadcast in the United States by Schumpeter and Walter Lippmann, among others, held that actually existing mass democracy could not instantiate any robust account of collective self-rule.  Voters were ill-informed, emotional, and often in states of fantastical confusion.  Majorities were contingent and fleeting.  Even at its most lucid, the will of the majority was simply visited on the minority like an authoritarian dictate.  The idea that democracy involved a collective body deliberately choosing its direction was insupportable outside certain archaic circumstances, such as the Greek polis or Swiss canton.  The most optimistic account one could give of democracy was to describe majoritarian elections as a rule of decision to resolve contests among rotating bands of elites – the position Schumpeter adopted.  These arguments appeared between the 1920s and the 1940s: by the 1970s, a sophisticated body of public-choice literature portrayed government as, in effect, a subset of economic life: a congeries of rent-seeking by industries and constituencies, power-accumulation by bureaucrats, and, at worst, utopian flights of reformist fancy free of the discipline that cost-internalization imposes on private decisions.

            But there remained a confidence that markets would solve their own problems with respect to inequality.  We had, with help from technocrats, enough democracy to serve as a handmaiden to markets, if not much more than that.  It might have seemed to be enough then; it might not now.

**
            I am describing the return, in the 21st century, of a 19th-century drama: the worry that the economy has a logic of its own which intrudes on other institutions & domains of life.  It is also the revival of the question what we can do about it.

            In the nineteenth century, among those who thought a basic conflict between market order and political community was real and a serious problem, one can identify two alternatives.  The first, associated with various strands of socialism, sought to absorb economic life fully into the community of equal citizens, that is, to overcome the distinction between the political and economic domains and dissolve all forms of unequal economic power into the sovereign power of democratic politics. 

The other, associated with Progressive reformers in the United States and in Europe with social democracy and, later, Christian democracy, took the opposite approach. It used the power of the state to strengthen the boundary between economic relations and non-economic social life, notably in the domains of the family, education, culture, and professional activity.  The latter was the basic strategy of the accommodation that structured post-War life in the twentieth century.

            Trans-Atlantic social democracy, then, was more social than democratic.  It took seriously the appetite for security in a relatively familiar, stable, and manageable social world, whether that of the factory, the union, the neighborhood, the university or profession, or the family.  Through pluralistic representative institutions, it sought to maintain a reasonable balance among interests.  Its basic strategy of reform was to open up existing institutions of representation and advancement to previously excluded groups while also redefining the state’s relation to individuals through an increasingly homogenous and libertarian scheme of negative rights that was complemented by a scheme of social provision.  It all seemed to be working well enough – until a reassertion of market principles and market power began to break down the barriers protecting various secure domains of social life and revealed the lack of power, or maybe lack of will, in the democratic state to reassert their protection.

The most sustained and influential intellectual attack on this Great Society optimism came from economist Friedrich Hayek.  Hayek argued that, contrary to welfare-state promises of security, an economy could do its work only if it maintained a measure of insecurity and arbitrariness.  Hayek famously argued that the economy should be understood as an information-processing system, conveying data about the relative scarcity of goods, time, and talent, and the extent and intensity of desire for them.  Effective communication of this data laid the groundwork for rational decisions about the trade-offs between possible uses of resources that are the ligature of economic life.

The key to this informational function was the price mechanism, which expressed the kaleidoscopic facts of economic life in uniquely succinct and usable form.  Prices could do this work only if they were in fact allowed to coordinate decisions about distribution and use of resources: every redistributive or regulatory mandate clogged and diverted the flow of information, turning a healthy vascular system of data into a swampy delta of drifting decisions, culminating in an administered state.  Faced with a choice between liberalism – which for him meant the classical liberalism of laissez-faire – and democracy, Hayek argued, one should prefer liberalism.  The more democracy developed in social-democratic directions, the more it tended to force the choice.

On the strength of these arguments, Hayek has become the exemplar of the approach to political economy often called neoliberalism.  Less a program or system of thought than a constellation of programs united by an intellectual mood, neo-liberalism is sometimes bolstered by the claims that markets secure liberty and equality (which Hayek argued), fairness (which he did not), or welfare (which he did, but in qualified form), but the heart the neo-liberal position is a negative one: there is nothing much for the state to do but make and maintain markets.  Ambitious political projects that aim at equality or fairness will undermine these and take welfare welfare with them.  A market regime is the least-worst for all of these values.

These ideas form an important part of the intellectual climate in which new revelations of growing inequality have been received.  One of the major divisions in today’s political economy must come over why neoliberalism has advanced as it has.  Was it because Hayek’s recuperation of market theory, combined with a long-running theoretical demotion of democracy, was intellectually right, and sensible policy-makers saved the world from incipient statism?  Or was it because, as Wolfgang Streeck has argued, capital revolted against the broadly social-democratic mid-century accommodation? Put differently, is the surging inequality of recent decades a feature of the best of possible worlds, or of a world where false necessity enforces an undue impression of inevitability in the very market arrangements that produce and sustain inequality?  Obviously, the stakes of this question are not small.  They concern whether the inequality-generating logic of economic life limits the possible forms of democracy or, on the contrary, the real possibility of democratic decisions about the shape of the economy has been suppressed by a counter-democratic revolt of capital.

            **
            Now I would like to suggest that we treat this question in a pragmatic light, not trying to answer it generally and in the abstract, but concretely as a matter of experimentation.  I want to suggest that law fills in a large part of the picture of how inequality is produced and reproduced that is missing from Piketty’s account.  This gives us pressure points where we might find out how far it is possible to do things differently, and with what result.  And – this is a key further step – law is also the vehicle that will foreclose experimentation in these dimensions, if it is foreclosed.  What I presented earlier as a pair of abstract, theoretical questions – whether one views democracy more or less robustly and whether one sees market-driven inequality as contingent or necessary – may turn out to be a very practical question about how law is used concretely.

            I suspect that for many of you, the idea that law produces inequality will not be as novel as it might be to some US lawyers, especially private-law scholars for whom, as Amy pointed out yesterday, questions of distribution were exiled as pointless a generation ago.  The examples are not hard to find.  Law is the source of the original allocation of productive assets, and repeated new allocations, ranging in the US from the first land grants to settlers in the eighteenth century to the federal housing policies of the twentieth century, all favoring certain races and other groups.  Labor law, especially but not only the law of unionization and collective bargaining, shapes the push and pull between profits and wages.  Antitrust law limits or tolerates industry concentration, meaning both wealth and the power to shape markets.  Amy helped us to see on Friday how thoroughly intellectual property distributes control of wealth – and also direct control of goods essential to life, such as certain medicines.  When Piketty says that the economy produces inequality, it is only natural for lawyers to lift the hood and ask, How does law produce the economy?

            And how does law reproduce inequality, embedding it in the class structure Piketty warns against?  Answers come so quickly that you have already thought them.  Income taxes.  Inheritance taxes.  Wealth taxes.

            But taxes are merely the explicit part, the favorite policies of a tax-and-transfer era.  Our earlier examples, like labor law and antitrust, looked at how the economy produces and distributes income – under the hood, so to speak.  Now let’s ask how the shape of economic power helps to shape those laws, the legal rules of economic life.  For instance: the massive and very effective lobbies for pharmaceuticals and entertainment, which are endowed by IP law and, in turn, get to write IP law – including defining international IP law from their US base.  Or think of how antitrust and financial deregulation helped to produce the too-big-to-fail banks that were widely seen to constrain policy options in the US after the crisis of 2007-08.  Or move directly to politics: labor law feeds back into a recent finding that more than half of US business executives surveyed said they pressed their employees to be politically involved, and, of those, more than three-quarters were pushing for donations to specific candidates, showing up at rallies, voting for certain initiatives that they saw as business-friendly, and so forth.  Here is the return of a kind of dependency relationship that would have horrified the more idealistic republicans at the US founding, and was part of the reason that many radicals and progressives in the late nineteenth and early twentieth centuries argued that democracy under modern conditions had to become economic democracy.

            And I have not yet mentioned spending on elections.  Here, the situation in the US is astonishing.  The advocacy group Public Citizen estimates that between the 2008 and 2012 elections, spending by outside groups, newly empowered by the Supreme Court’s Citizens United decision, rose almost 250 percent.  If you are a Republican candidate for the US presidency, you need a billionaire patron.  If you are Hillary Clinton – well, it takes a village of wealthy donors cultivated over the Clintons’ unprecedentedly lucrative years between White House stints.  When political scientists Martin Gilens and Benjamin Page published a study last year finding that the distribution of policy influence across economic classes in the US was less suggestive of democracy than of oligarchy, it drew attention less because it was news than because it came as a certain kind of technical confirmation of what was already widely believed.

            **
            So.
            Does it have to be this way?

Unless you are a thoroughgoing fatalist, it seems fair to judge from the last seven decades that there is a range of possibility in both the ways that law structures economic life and, in turn, the ways that the economy structures politics and law.  The social-democratic accommodation of the mid-twentieth century represents a genuine alternative to a marketized social and political order.  This is true despite whatever social democracy’s internal failures were (notably failures of inclusion), and despite the doubts that its decline raises about its sustainability in the face of marketizing pressure.  As I noted earlier, however, social democracy, always had more to do with securing a strong form of social membership for citizens than with the active political supervision of economic life: it was, to repeat, more social than democratic.  This may have been its Achilles heel.

            Now I want to turn to another way that economic inequality can colonize the production of law.  LAW’S CONCERN WITH JUSTIFICATION MAKES IT AN IDEOLOGICAL BATTLE-GROUND: it contains vocabulary for both criticizing and justifying inequality.
           
            Under democratic conditions – even loosely, imperfectly democratic, or aspiringly democratic, to justify the law is to argue that it is law fit for a community of equals.  The question then becomes: what is a community of equals?  What does it look like?

            This is a self-referential question: the question itself has to be answered by such a community.

            In the US, we are now seeing a trend in legal interpretation that deepens inequality by entrenching it in the way law structures and reproduces the economy; but it also does something more: it interprets basic values such as liberty and equality in ways that tend to reinforce market logic by identifying it with the defining commitments of a democratic community.

            I already talked about the Supreme Court’s interpretation of free speech in the cases on political spending.  These decisions are dismissive of the idea of a robust conception of equal citizenship or sovereign community.  The liberty they protect is the liberty to project your own interest or opinion as far as your bank account allows. 

There are plenty of other examples.  Sebelius v. NFIB, the Supreme Court’s first encounter with the Affordable Care Act, came very close to overturning the keystone of the law – a requirement that individuals purchase health insurance – to protect consumer sovereignty, the freedom not to be told what to buy.  The Court has used free speech principles to invalidate regulation of tobacco advertising and restrictions on pharmaceutical companies’ sale and commercial use of prescription data.  It has warned that it may invalidate laws requiring workers represented by unions to pay union dues.  In a whole series of cases, individual liberty has meant to liberty of a company to resist regulation, or of an individual to impose a collective-action problem on a scheme of regulation designed to overcome just such problems, such as mandatory insurance and collective bargaining.

            And what about equality?  The same justices who are driving the anti-regulatory interpretation of personal freedom are also advancing a view of constitutional equality, color-blindness, that interprets the civil-rights cases of the twentieth century as forbidding government to take account of race even in remedial policies such as affirmative action.  These opinions describe racial classification as an affront to the dignity of the individual.  They are idealistic, in their way.  They insist on the autonomy of self-defining persons, whose identities and relationships are theirs to form, and may not be dictated by a supervisory state.  But in a world where racial stratification remains pervasive and tracks economic and educational inequality, this form of constitutional individualism can be simply unreal.
           
            If there is a neoliberal approach to race, this is it: respectful of a certain kind of individual choice, wary of political intervention, and mainly blind to the ways that inequality persists and makes race real in practice.  In our doctrines of equality as well as our doctrines of liberty, then, Americans are finding in our law an increasingly laissez-faire, or neoliberal, image of a community of equals.  It is an image in which individual choice comes to the fore and collective interventions into structure recede or become unthinkable.  That is, it is an image in which mobilizing law to engage the sources of inequality becomes that much harder to do.


            **
It is increasingly common to believe that economic inequality must be brought under control for democracy to realize, or recover, its potential.  As we have seen, this claim depends on one’s conception of democracy; but it is highly plausible for any conception of democracy that aims at meaningful version of collective self-rule, rather than simple elite rotation. 

And there is something further: robust democracy may be necessary if wealth is to realize its potential for social benefit.  Indeed, democracy must be able to intervene in the definition, creation, distribution, and use of wealth precisely to capture the humanitarian and emancipating benefits of growing total wealth.  A political scheme of social provision, and political limitations on the scope of inequality, are the most plausible means to prevent growing wealth from undercutting its own benefits through inequality that limits life-prospects, creates hierarchy, and distorts the image of a community of equals – and, in turn, makes inequality that much harder to combat.

            In the abstract, inequality is not good or bad; it is just a ratio.  In practice, its effects must be measured, like those of any economic order, by the kinds of lives it makes possible, the kinds of relations people live out within it, the human powers that it fosters and those it inhibits and constrains.

            We can key growing inequality to many such powers – or, if you prefer, capabilities: health, mobility, self-development and self-expression, the sense of dignity and efficacy at work and in personal life.  But the most basic danger is that inequality might undercut a political community’s capacity to master inequality itself, making inequality self-perpetuating and all but natural, inscribing it in culture, politics, and personality as well as in the economy.  In this setting, democracy stands for the power of collectively choosing the structures in which we make our private choices, for the idea that a community of equals can aim at equality in many dimensions, and does not need to accept inequality as fate.

            Of course, these thoughts all add up to nothing more than an experiment in trying to think our situation.  But, as a long-dead lawyer with misgivings about equality once told us, all of life is an experiment.  Democracy is a way of owning and sharing the experiment, rather than submit to be experimented on by blind economic and historical forces that are, themselves, just the residue of earlier human choices.


Monday, June 8, 2015

Essay on Wealth and Democracy for Nomos


            Jedediah Purdy
            Essay for Nomos, Wealth issue
            Draft: June 7, 2015

            Wealth and Democracy

It wasn’t supposed to be like this.  The present that we are living in is not the future that we were promised.  Wealth was not supposed to be so unequal, and its inequality was not supposed to be such a problem for democracy.  Thinking about wealth today means taking stock of a rude awakening.

            Of course, to put it this way simplifies the matter dramatically.  But let us take it in steps.  To recite a cultural history that readers already know as cliché – but not less true for its familiarity – the 2014 appearance in English of Thomas Piketty’s Capital in the 21st Century alerted Americans to a body of research that had been developed over more than a decade, showing both income and wealth growing sharply more unequal around the world.  The strongest data concerned the wealthy countries of the North Atlantic, where inequality has been growing since roughly 1970 and, Piketty warned, a new rentier class of inherited wealth and social prestige is on the verge of emerging.

            As his most acute respondents have pointed out, Piketty’s work opens many more questions than it answers.[1]  My major concern here is what growing inequality means for democracy and the rule of law, a topic where Piketty himself is more suggestive than informative.  Others have focused on disaggregating Piketty’s findings: how much comes from real-estate, from first-wave returns to technological innovation, and so forth.  Both sets of questions are necessary in moving from measuring inequality to assessing it.

Inequality, as a merely formal or statistical feature of the economy, is not good or bad; it becomes good or bad only as it affects those things that people value and have reason to value.  Indeed, inasmuch as the word “inequality” in common use implies something bad, a problem, it is a derivative concept, taking its intelligibility from some (explicit or implicit) idea of what would count as an appropriate kind of equality.  And because wealth is itself an instrumental good, valuable only because it enables people to have and do things that they value, any idea of an appropriate level of inequality will presuppose a series of things: what wealth enables one to do in a given society, which things wealth cannot buy, which things are available regardless of wealth, and, of course, what kinds of things are important to be able to have and to do.  Part of this web of presuppositions is the conception of citizenship implied in any picture of democracy: what it means to have standing in the political community and among other private individuals, and how wealth structures these relations.

To diagnose unequal wealth, then, one must disaggregate its effects and relate them to a scheme of values and the institutions that embody those values – such as schemes of social provision, market-making and market-limiting rules, and so forth.  Another kind of disaggregation is also essential, this kind concerned less with the effects of wealth than with its sources.  To do anything with respect to unequal wealth, one must know something about what causes it and what kinds of interventions are possible around those causes.  How much inequality of wealth is the result of simple rent-seeking, such as featherbedding by executives and compensation committees?  How much comes from broader political choices, such as tax policy or laws governing labor unions?  How much is a structural result of technological innovation, or of globalization, or of some persistent dynamic in the spectrum of economic orders that we call “capitalism”?  How much is specific to changes in a specific area of the economy, such as real estate, and are such changes basically contingent, or are they symptoms of some structural dynamic?  For any of these sources, but particularly the last two, how much political space is open to mitigate the effects of inequality, and at what cost?

Moreover, both questions – what does wealth mean and where does it come from? – are all the more important in how they interact.  To put the question in a way that is somewhat over-stylized, how do capitalism and democracy interact?  Is there a tendency toward rising economic inequality that erodes putative commitments to civic equality?  Does civic equality presuppose and require certain economic arrangements – whether laissez-faire, social-democratic, or otherwise?  This, of course, is not a question that could be answered once and for all: because it concerns dynamic interplay between two spheres of braided equality and inequality (broadly, the economic and the political), it might get a different answer at any moment in time, depending how events had played out to that point, what kinds of institutions were in place, and so forth.

Although this last question, the issue of interacting spheres, is sweeping and elusive, it is also the most important, because it joins the work of explaining and assessing wealth inequality with the work of acting on it.


Wealth and Democracy in the Age of Kuznets and Keynes

The rediscovery of massive and growing wealth inequality brings an inconvenient realization: much of the thinking of recent decades has been subtly inflected by empirical premises that seem to be turning out false.  First among these is the expectation that economic inequality in developed countries should settle at stable and tolerable levels.  This expectation was crystallized in the famous “Kuznets curve,” named for economist Simon Kuznets, which found (based on a limited sample of mid-century tax records in the United States) income inequality growing for a time, then leveling off.  Soon matched by doppelgangers such as the “environmental Kuznets curve” (which showed pollution rising early in the development process, then falling as wealthy societies adopted environmental regulations), the Kuznets curve came to be a kind of macroeconomic emoji for optimism about the social meaning of economic growth.

If the first vulnerable promise belonged to Kuznets, the second can be fairly identified with economist John Maynard Keynes: the benign statist assumption that expert governance has more or less wrestled economic vicissitudes to the ground and is now firmly in control of economic life.  Although the core of Keynes’s contribution to post-war economic governance was the management of business cycles through demand stimulus (via public spending or relaxed interest rates), it rested on a larger image of political and social life in which, as Keynes famously put it, the “economic problem” (basically the problem of scarcity) was on the way to being solved.[2]

Taken together, these two premises describe the common sense of the North Atlantic countries in the “thirty glorious years” following World War II, when high rates of growth, effective national controls on the international movement of capital, and a strong political role for organized labor resulted in widely shared prosperity.  (There were important exceptions to the trend of economic inclusion, notably African-Americans in the United States, but it was typical of the time that these, like certain other pockets of poverty or social vulnerability, were regarded as exceptions, and the assumed solution among elites was to incorporate them into a system generally regarded as working for everyone.)  This common sense implied that there was no great reason to expect wealth inequality to be self-compounding, and that, if inequality did grow, no reason that a democratic political order should not be able to sort it out.

This is not to say that there was perfect complacency, but that the conceptualization of issues at the intersection of private wealth and public power assumed that they were soluble: of a manageable scale and subject to powerful tools of governance.  For instance, John Rawls’s Theory of Justice, published in 1971, devoted a bit more than two pages to “the fair value of political liberty,” that is, the problem of ensuring that formally equal rights to political participation should not be undermined by unequal economic power.[3]    Rawls recognized that unequal political power might arise from unequal economic power, then entrench itself in the legal rules of the game (both political and economic).[4]  He responded with what was in effect a strong expression of the Keynesian assumption: in its distributive capacity, government should maintain an ongoing re-sorting of wealth to avoid excessive concentrations of economic power, while also using public financing of elections to sustain boundaries between the political process and private wealth.  All of this appeared in Rawls’s thought as, in effect, an important administrative problem for a post-war state assumed to have the power, expertise, and legitimacy to carry it out.   Rawls offered no sustained reflection on the ways that unequal wealth might arise from within, or break free of, a basically social-democratic state and impose its own logic of power throughout both economic and political life. [5]

Rawls wrote that if such questions arose, they would “belong to political sociology,” rather than to his theory of justice.[6]  But the thought that a theory of justice could set aside problems of “political sociology” got the point exactly backward, at least in one key respect.  Rawls’s theory of justice had the appeal that it did because it could presuppose a political sociology characterized by the assumptions of Kuznets and Keynes.  It could stand as an idealizing and rationalizing account of a certain kind of post-war state, one poised to manage economic life so thoroughly as to make economic processes thoroughly objects of political choice and control, rather than allowing them to become agents of political power and change.  To write of the economy as Rawls did, as the site of distributive shares, to be organized by rules that allow only those inequalities that benefit the least advantaged, while also treating the choice between socialism and private ownership as an open one, assumes that economic life is basically a plastic object of regulation, not a source of barriers to, and disruption of, the political project of justice.

Because it rests on these (in hindsight) heroic assumptions, Rawls’s project is in some sense the apogee of a body of thought that preceded the post-war period by many decades but came to its fullest flowering then.  This line of thinking expected to see the importance of the distinctively economic domain of life diminish as scarcity receded and humanity emancipated itself from material insecurity.  Whatever organizing principles scarcity and self-interest imposed on economic life would turn to be, in effect, transient features of a passing era.

In its liberal version, this tradition owed a key debt to John Stuart Mill.  In his Principles of Political Economy, Mill argued that the era of money-making and business-driven busyness that he was living through would prove an anomaly, an historical peculiarity.  In good time, Mill predicted, people would recognize that their material needs had been met by growing social wealth, and would turn to other priorities, the “higher pleasures” of refinement, self-unfolding, and non-instrumental personal relationships.  The forecast was consistent with Mill’s tendency toward an optimistic, humanist libertarianism woven into the fabric of a perfectionist utilitarianism.  In Mill’s account, social life, the realm of sociability that is defined neither by the instrumental rationality of the marketplace nor by the formality and sovereign authority of politics, would spontaneously and fluidly implement post-economic, humanistic priorities – for no great, or lesser, reason than that women and men would grow bored of money-making and appreciate that they had better things to do with their lives.  A culture devoted to making money had something wrong with it, Mill reckoned, and the perspicacity of free individuals would recognize this and set it right.

Keynes’s forecast in “Economic Possibilities for Our Grandchildren,” that the problem of scarcity might be overcome after another century, was little more than an extension of Mill’s argument, augmented by intervening decades of compound growth.  Keynes proposed that the defining question of collective life would no longer be how to create wealth, but rather how to use leisure.  The most socially prized people would be those who showed others gracious, edifying, and pleasurable ways to spend their time and powers toward non-accumulative ends.  Keynes even suggested, following Mill and perhaps waxing a bit mischievous, that the pursuit of wealth as an end in itself, having exhausted its social usefulness, could be handed off with a shudder to experts in mental disorders.  Like Mill, Keynes seemed to imagine that tastes for leisure and refinement would assert themselves organically once material needs ceased to be pressing.   The engine of capitalist wealth-production would slow and cease, having used up its fuel of human cupidity.

By the end of the 1950s, the engine had not even slowed.  This was the puzzle that Keynesian economist John Kenneth Galbraith set himself in one of the twentieth century’s major American social-theoretic treatments of wealth, The Affluent Society.  Galbraith argued that Keynes’s utopia of leisure had not arrived for two reasons.  First was the perverse persistence of economic insecurity in a wealthy society: although the United States was rich enough to provide a decent and secure living for all, economic life continued to be shadowed by the prospect of vulnerability and deprivation for those who fared badly.  Galbraith argued that whatever rationale these fearsome incentives might have had in an earlier, poorer era that needed to make a priority of economic growth could no longer apply in the age of affluence.  The feeling of scarcity and vulnerability was a kind of collective neurosis in economic life – albeit one given a very real material basis by lawmakers’ failure to provide security for Americans in the form of social provision and protection in their employment.

Second, Galbraith sought to explain the unsettling fact that the appetite for consumption of material goods had not abated, even as the economy provided nearly everyone with levels of material prosperity that, a century or even fifty years earlier, would have seemed to solve the problem of material want.  Here he introduced a kind of deus ex machina: he advertising industry produced new wants in pace with economic production, artificially keeping consumer demand high enough to stoke the engines of industry.  Galbraith distinguished between those wants that preceded the production process and those that, as he described it, were created as part of the production process itself.   He argued that human happiness could be fostered just as much by avoiding the creation of new wants as by satisfying those wants once they existed: after all, the sum of satisfied wants is a joint product of the level of wants and the degree of their satisfaction, and one may produce full satisfaction as easily by subtracting inessential desires as by multiplying means of satisfying them.

The weak point in Galbraith’s account is the would-be distinction between natural and artificial desires.  There is, to be sure, something important here; but it is not enough to say that desires without an old pedigree have less weight than those known to Homer and the Victorians.  The reasons are familiar from Marx and from market-oriented technological optimists alike: in a deep way, human life is a joint product of the organic and the inorganic, our individual bodies and personalities and our collective technologies of production.  We create ourselves and discover our potential – our powers, desires, and discontents – through an historical process of innovation.  This innovation sets in motion a constant series of revolutions – technological, political, cultural, and at the level of consciousness itself.  People had, at one time, not heard of racial equality, same-sex marriage, or safe and effective control over reproduction; but there is nothing deficient in our demands for these things today.

In Galbraith’s view, then, wealth was both an achievement and a problem; but the problem lay essentially in the fact that the society had not yet matured enough to take full advantage of wealth’s revolutionary humanitarian potential.  The way to do this would be by legislating, rather than simply waiting for, the culture of leisure and refinement that Keynes had forecasted.  The legislation would take the form of social provision, in personal security (job protection and pensions, for example) and public goods, the latter cultural as well as infrastructural.  This was, in effect, the theoretical version of President Lyndon B. Johnson’s Great Society: a program for a humanistic, post-material utopia of lifelong education, leisure, reflection, and self-development.[7]  Galbraith identified a vanguard for this change: what he called the New Class, a social stratum whose members valued work as a source of intrinsic satisfaction and self-expression, rather than a hard bargain of instrumental labor in exchange for unrelated wants.  This population was already moving into the post-material world of satisfaction in activity rather than things, in doing rather than consuming.  The goal of any affluent society, Galbraith argued, should be to usher as many of its people as possible into this class, and so to realize the emancipating potential that wealth represented.  

In Galbraith’s account, as in Rawls’s, there is a clear assumption that the Keynesian state stands ready and able to realize the potential of affluence to solve the problem of scarcity and release people into a post-scarcity society.  Both of these assumptions – the availability of a post-scarcity situation and the capacity of the state to usher it in – came under pressure from both left and right in the decades following Galbraith’s 1958 book.

Doubts from the Left: Positional Goods and the Persistence of Scarcity

Fred Hirsh’s Social Limits to Growth made both cases in [1974].  Hirsch, an economist and former International Monetary Fund official, argued that Keynesian optimism had rested on a pair of assumptions that turned out to be historically contingent – and, increasingly, no longer held.  First was that the lion’s share of economic demand would be for goods that served classically material needs, such as food and shelter.  Economic growth straightforwardly serves more of these needs as it progresses: more food, bigger houses with more bathrooms, more consumer electronics, and so forth.  But, Hirsch argued, economic development brought growing emphasis on positional goods, goods whose capacity to satisfy their owners or consumers is relative to what others have.  Affluence created a paradox: the value of positional goods was eroded precisely by increasing material wealth, so that the satisfaction produced by economic growth was often a matter of two steps forward, (at least) one step back.

Positional goods were mainly of two kinds.  First were material goods subject to congestion, such as cars and suburban houses – goods that appeared luxurious when few people had them, but turned out to be much less enjoyable when widely distributed, precisely because wide distribution meant crowded roads and clogged, increasingly remote suburbs.  Inasmuch as economic growth produces positional goods, it constantly undermines its own promise: what one sets out to achieve is less satisfying once one finally gets it.

Hirsch’s second type of positional good is the pure positional good, the thing that is scarce by its nature, such as leadership positions or other bases of prestige. Hirsch’s lead example was higher education.  As material wealth increases, ever more spending flows into competition for positional goods, which do not increase in number (at least not in proportion to the increase in overall wealth).  With increased competition for positional goods, pressure increases on universities to serve as sorting institutions, allocating leadership positions, prestige, satisfying work, and so forth.  Results include longer certifying processes, increasing rates of matriculation, (one might add today) rising tuition, and, at the heart of the matter, years spent in education that is purely instrumental to achieving a positional good, or, even worse, purely defensive – like a home-security system, a way of avoiding a loss, the loss in this case being a decline in social standing.  All these uses of wealth to pursue positional goods are, Hirsch argued, mainly social waste.  Such waste is unavoidable in a materially wealthy society with a highly uneven topography of positional goods.  Because of positional goods, economic growth does not overcome scarcity, but displaces it from the straightforwardly material sphere to the positional sphere.

Hirsch’s second paradox takes us to the crucial issue: the interaction between capitalism and democracy.  Hirsch argued that the traditional agenda of economic development, associated with a broadly utilitarian state (whose policies were to be laissez-faire under the Benthamite dispensation, managerial in the Keynesian incarnation), was coherent only because of invisible but indispensable boundary on the domain of economic self-interest.  Individual economic actors were expected to pursue their self-interest to the full, but always within the rules of the game, while principled and public-spirited officials were charged with enforcing those rules in an even-handed fashion.  But these boundaries would prove unstable.  Absent some independent social morality, there was no reason for people, professions, and industries not to try to game and change the rules in their favor.  Reciprocally, there was no guarantee that officials would not put the rules up for sale, if not crudely and nakedly, then in the familiar, revolving-door style of capture that has become familiar in the capitalist regulatory state.  There was reason to expect these trends to quicken as the status of economic self-interest as a sole and sufficient account of rationality eroded the quasi-religious social ethics of businesspeople and professionals and the mandarin noblesse oblige of public officials.  Such extra-market social ethics, Hirsch argued, was the implicit sociological linchpin of the regulated market that the Keynesian state supported; but the market’s logic tended to undercut this sine qua non of its own regulation.

For these reasons, Hirsch argued, political intervention would be necessary to create a social state in which prosperity would not undercut its own promise.  As he put it, the market provides a range of choices to the individual, but only politics provides the power to choose among multiple ranges of choices, that is, to shape the playing field and the rules themselves in a deliberate way.  And individual choice alone would prove insufficient to deliver the promised escape from scarcity and insecurity.  It is interesting, in hindsight, that Hirsch felt it urgent to make this case: in his view, a benign and effective regulatory state could no longer be assumed, and this at the very moment when growing evidence suggested that market-led economic growth could not fulfill its promise without political intervention.

From the (center-) Right: Doubts about Democracy and Neoliberalism’s Rise

Part of the difficulty was this.  Throughout the twentieth century, as the regulatory state took on ever-greater importance as the assumed linchpin of political economy, it was losing plausibility as a vehicle of democratic feedback.  A line of argument widely broadcast in the United States by Walter Lippmann and Joseph Schumpeter held that actually existing mass democracy could not instantiate any idealistic conceptual account of collective self-rule.  Voters were ill-informed, emotional, and often in sway of fantastical confusion.  Majorities were contingent and transitory.  Even at its most lucid, the will of the majority was simply visited on the minority with the arbitrary decisiveness of authoritarian dictates.  The idea that democracy involved a collective body deliberately choosing its direction was insupportable outside certain exceptional and archaic circumstances, such as the Greek polis or Swiss canton.  The most optimistic account one could give of democracy was to describe majoritarian elections as a rule of decision to resolve contests among rotating bands of elites – the position Schumpeter adopted.  Lippmann took a gentler tone but was not much more optimistic, describing popular majorities as weighing in occasionally on questions of great moment – not all that rationally, but more or less decisively – but otherwise little connected with the activity of governance, which was the work of institutions, not populations.  These arguments appeared between the 1920s and the 1940s: by the 1970s, a sophisticated body of public-choice literature portrayed government as, in effect, a subset of economic life: a congeries of rent-seeking by industries and constituencies, power-accumulation by bureaucrats, and, at worst, utopian flights of reformist fancy free of the discipline that cost-internalization imposes on private decisions.  Hirsch thus wrote in a world in which Galbraith’s rather easy assumption of a legitimate, effective, and benign state was under considerable intellectual pressure.  Recognizing the need for regulation was already a matter of reclaiming contested ground, not simply bathing in near-consensus.

The most polemical, sustained, and – in hindsight – emblematic attack from the right on Great Society optimism came from Friedrich Hayek.  Hayek argued that, contrary to promises of post-material security, an economy could do its work only if it maintained a measure of insecurity and arbitrariness, and that social provision did not complete the promise of economic development, but instead undercut it.  Hayek argued that the economy should be understood as an information-processing system, conveying data about the relative scarcity of goods, time, and talent, and the extent and intensity of desire for them.  Effective communication of this data laid the groundwork for rational decisions about the trade-offs between possible uses of resources that are the ligature of economic life.

The key to this informational function was the price mechanism, which expressed the kaleidoscopic facts of economic life in uniquely succinct and usable form.  Prices could do this work only if they were in fact allowed to coordinate decisions about distribution and use of resources: every redistributive or regulatory mandate clogged and diverted the flow of information, turning a healthy vascular system of data into a swampy delta of drifting decisions.  The consummation of secure prosperity that Galbraith sketched would be, in effect, the end of economic life as Hayek described it, and its eclipse by the bureaucratic life of an administered state.  One could expect such a state to be inefficient, arbitrary, and actuated by envious and irrational passions, quite unlike the relatively lucid instrumental rationality that the price system enforced on market choices.  Faced with a choice between liberalism – which for him meant the classical economic liberalism of laissez-faire – and democracy, Hayek argued, one should prefer liberalism.  The more democracy developed in the directions that Galbraith and Hirsch urged, the more it might force the choice.

On the strength of these arguments, Hayek has become the exemplar of the approach to political economy often called neoliberalism.  The heart of this revival of classical economic liberalism is the claim that there is no viable alternative to a market system, and therefore any attempt to use state power to do what Galbraith presupposed and Hirsch urged – to choose collectively among sets of choices – is an error.  Less a program or system of thought than a constellation of programs united by an intellectual mood, neo-liberalism is sometimes bolstered by the claims that markets secure liberty and equality (which Hayek argued), fairness (which he did not), or welfare (which he did, but in qualified form), but the heart the neo-liberal position is a negative one: there is nothing much for the state to do but make and maintain markets.  Ambitious political projects will undermine liberty, equality, fairness, and welfare together.  A market regime is the least-worst for all of these values.  This is, increasingly, the intellectual mood in which revelations of growing inequality have appeared.[8]

One of the major divisions in today’s political economy must come over why the forecasts of Keynes and Galbraith did not come true.  Was it because Hayek’s recuperation of market theory, combined with a long-running theoretical demotion of democracy, was intellectually right, and sensible policy-makers saved the world from incipient statism?  Or was it because, as Wolfgang Streeck has argued, capital revolted against the broadly social-democratic mid-century accommodation that thinkers like Galbraith assumed and sought to perfect?[9]  Put differently, is the surging inequality of recent decades a feature of the best of possible worlds, or of a world where a relatively egalitarian regime was recently dethroned and false necessity reigns, enforcing an undue impression of inevitability in the very market arrangements that produce and sustain inequality?  Obviously, the stakes of this question are not small.  They concern whether the inequality-generating logic of economic life limits and conditions the possible forms of democracy or, on the contrary, the real possibility of democratic decisions about the shape of the economy has been suppressed by a counter-democratic revolt of capital.

A Step Back: The Long History of Markets, Democracy, and Social Life

            The recognition that markets have their own logic, which imposes an order on social activity and allocates resources and capabilities among social groups, and which may conflict with other principles of social organization and distribution, is basically a nineteenth-century one, although it appears in germ in works as diverse as Adam Smith’s Wealth of Nations and Jean-Jacques Rousseau’s Discourse on Inequality (aka, the Second Discourse).  As David Grewal argues in his forthcoming Invention of the Economy, modern social and political thought, going back to roots in the seventeenth century but flowering in the latter part of the eighteenth, is marked by a pair of contrasting utopias, two pictures of how a society of equally free people might coordinate its common life.  The economic utopia, associated especially with Adam Smith and David Hume, envisions a non-coercive structure of cooperation emerging organically, in the form of proto-legal rules of property and contract akin to the structures of grammar.  Such rules require no central authority to create or specify them; rather, they are, so to speak, pre-programmed into human nature (again, in the manner of grammar) and manifest themselves under the pressure of increasing interdependence and social complexity.  This is the origin-point of a laissez-faire conception of social order in which mutuality of interest, coordinated by commonly recognized rules, enables people to structure their lives around obligations freely and rationally assumed, without arbitrary imposition.

            Grewal’s other utopia is political.  The political utopia is founded on citizenship and sovereignty.  The emphasis on sovereignty reflected the view that the organizing principles of social life arise from the binding decision of what Thomas Hobbes identified as the sovereign.  A sovereign, for Hobbes, was not necessarily a monarch or any other specific institution.  Rather, it was an analytically necessary feature of any legal and political order.  In such an order, there must be some entity with the power to make, interpret, and enforce its rules, a holder of the last word.  This was the sovereign, whatever form it took in any polity (court, council, assembly, monarch, etc.).  The political utopia is a utopia of equal citizenship: each person has an equal share in the production and legitimation of the sovereignty, and thus of the rules that shape their common life.

            At a deep level, the clash between the two utopias was rooted in conflicting accounts of the relationship between law and human nature.  Smith and Hume’s naturalistic jurisprudence tied a uniquely functional and beneficial set of laws to an account of human beings as organically intertwined through sociability, a disposition to join in bonds of mutual interest and intelligibility.  Law was a product of human cooperation, not its precondition, and the range of laws that would emerge from organic cooperation at any stage of economic development was narrow enough that one could speak of it as a domain of natural law.  By contrast, Hobbes’s positivism denied the possibility of an organic, emergent law: the epistemic situation of uncertainty and mutual endangerment that Hobbes famously diagnosed as the “state of nature” (that is, a social world imagined without law) was as far as horizontal, spontaneous encounters would take people.  The conditions of mutual intelligibility and assurance that cooperation required could arise only through legislation and enforcement of law by a third party outside the would-be cooperators, that is, the role of sovereign.  (Of course, the sovereign, as an artificial juristic entity, might just be the will of a majority of members of the political community.  This was precisely the idea of the political utopia of equal citizenship.)   Law, and social order, were therefore constructed in quite a radical sense: nothing about them was natural except the need for them.

            In later developments, the two utopias have, of course, not existed as pure types, but rather as regulative principles, asymptotic ideals that have motivated competing schools of thought.  Nonetheless, when one asks into the relationship between markets and citizenship, one is speaking within this tradition of conflict, asking how far the contemporary extensions of one version of a society of equally free persons constrain and distort the ambitions of the other version.

            The two utopias coexist in social and legal thought with a third ideal-type of social life, which is organic and horizontal, in the manner of Hume and Smith, but does not find its consummation in the market.  This vision has its exemplary twentieth-century expression in Karl Polanyi’s Great Transformation, which portrays laissez-faire doctrine as artificial dogma, achieved only through aggressive, state-led reform.  The organic form of social cooperation is not that of the market, but arises from loose reciprocity and deeper ties of solidarity.  These motives produced a “moral economy” that included ideas of just prices and wages, various forms of security, and, above all, forms of obligation that were ethical, religious, and emotional as well as, and often rather than, self-interested.

From this point of view, the state is neither the source of ordering principles, as for Hobbes, nor the superintendent of market order, as for Smith and Hume. Instead the state would be either the guardian of organic patterns of reciprocity or the battering ram of disruptive, market-making reforms.  Polanyi is famously associated with the formula “Laissez-faire was planned,” but it is just as illuminating to see him as arguing that planning was spontaneous: society mobilizes in its own defense.[10]  Less abstractly, people mobilize to defend security and established patterns of social relations, and, quite naturally, call on the state to help them in doing so.

            The point of this taxonomy is that there is no pre-theoretical formulation of the question of democracy’s relation to unequal wealth.  The question depends on one’s conception of democracy, and also on one’s conception of economic order.   The stronger one’s commitment to a idea of robustly equal citizenship, and the more strongly one supposes that a political community might choose among a range of economic orders, the more unequal wealth seems to foreclose the work of a sovereign polity, predisposing political judgment in favor of the present economic regime.  Conversely, the more one sees politics and law as handmaidens to a naturalized set of market relations, the less is at stake in unequal wealth among citizens.  While the eighteenth-century naturalization of markets was affirmative, claiming to root rights of property and contract in human nature and providential design, and the twenty-first century version is more likely to be negative – asserting that “there is no alternative” to markets on account of incentives, information costs, or some other constraint on institutional design – the basic logic remains: the demotion of political sovereignty by the naturalization of market economics, which in turn demotes citizenship to a symbolic status rather than a substantive part in collective governance.

            Among nineteenth-century figures who identified a basic conflict between market order on the one hand and social or political community on the other – those, that is, who rejected the naturalization of markets – there were two predominant responses.  One, associated with Karl Marx and various strands of revolutionary socialism, sought to absorb economic life fully into the community of equal citizens, that is, to overcome the distinction between the political and economic domains and dissolve all forms of unequal economic power into the sovereign power of democratic politics.  The other, associated with Progressive reformers in the United States and in Europe with certain strands of social democracy and, later, Christian democracy, took the opposite approach, using the political power of the state of strengthen the boundary between economic relations and non-economic social life, notably in the domains of the family, education, culture, and professional activity.  While the first approach updated and radicalized the utopia of equal citizenship, the second represented a compromise between the two utopias and, in the style of Polanyi, a political defense of non-market orders in the reproduction of biological, social, and cultural life.  The latter was the basic strategy of the accommodation that structured post-War life in the twentieth century.

Trans-Atlantic social democracy, then, was more social than democratic.  It took seriously the quest for security in a relatively familiar, stable, and manageable social world, whether that of the factory, the union, the neighborhood, the university or profession, or the family.  Through pluralistic representative institutions, it sought to maintain a reasonable balance among interests conceived of through these collective categories, even as, through the period, rights-based claims to greater individual liberty and the end of various caste systems also proliferated.  Its basic strategy of reform – not premeditated, but consistent in application – was to open up existing institutions of representation and advancement to previously excluded groups while also redefining the state’s relation to individuals through an increasingly homogenous and libertarian scheme of negative rights.  It all seemed to be working well enough – until a reassertion of market principles and market power began to break down the barriers protecting various secure domains of social life and revealed the lack of power, or will, in the democratic state to reassert their protection.

            The Poverty of Our Philosophy

            All of this is to emphasize the peculiar situation in which wealth is now emerging as a political issue.  Unequal wealth is widely (though by no means universally) recognized as an urgent question even as the terms of the problem remain ill-defined, to the point that it is difficult to say just what is at stake in it.  Much of the thought that we have about wealth and its relationship to democracy comes from the anomalous period of the mid-twentieth century, when that relationship seemed to have been resolved in practice, even as resources – intellectual and institutional – for dealing with conflicts between the two were being eroded.

            Yes even in this theoretically impoverished situation, theories of wealth and democracy are doing a lot of work.  Consider the Supreme Court’s implicit theories of markets and democracy in its First Amendment cases concerning money in politics.  The Court’s ready assimilation of money to speech assumes that there is, in principle, no conflict between political argument and economic accumulation, that these are compatible, even mutually supportive, dynamics.  The Court’s embrace of for-profit corporations as essential participants in the process of American democracy also highlights its confidence that there is no contradiction between the accumulation of great wealth and the survival of effective self-rule.[11]

And why would the justices think that?  The key may lie in an implicit theory of what self-rule is.  The Court’s rulings holding that campaign-finance regulation cannot be justified by the goal of equalizing influence among citizens or (the observe of the same principle) avoiding “distortion” of political debate by moneyed interests indicate that its conception of democracy excludes the robust idea of equal citizenship at the heart of what I have called the utopia of sovereignty.  Instead, the Court’s concerns appear basically Schumpeterian: to avoid the entrenchment of a political class through self-serving campaign laws, even at the cost of ensuring the entrenchment of a class of wealth donor-citizens who effectively set policy – that is, in Schumpeter’s terms, facilitating elite rotation while declining the romantic idea that ordinary citizens should, or can, participate in self-government in any meaningful way.  The patronage relationships that Buckley v. Valeo and Citizens United (rather more the first, despite the notoriety of the second) produce between massive donors and their preferred candidates and movements are exemplary Schumpeterian politics, intra-elite disruptors that change the menu of choices for the mainly passive voters.

This is just one example of the work that implicit theories of wealth and democracy are already doing sub silentio – and, hence, one piece of evidence for the need for explicit engagement with these questions.  And what might that engagement look like?  Here I suggest four strategies for starting out with deficient resources for thinking through these problems – up from poverty, as it were.

1/ Life-Cycle Analysis: This term is usually applied to assessment of industrial processes, but I mean it in a different, mischievous but also entirely serious sense.  One of the most provocative, if underdeveloped, features of Piketty’s Capital is his account of the life-prospects and likely priorities of young people in societies with various levels of wealth.  Drawing on nineteenth-century fiction, he shows that, past a certain level of inequality, “careers open to talent” gives way to “marriage open to ambition,” that is, that the key to a good life is winding up in the right, highly capitalized family, whose advantages ability and hard work cannot match.  In such a society, ambition, effort, and esteem all flow toward established concentrations of wealth, with predictable consequences for the quality of the professions, the hierarchy of prestige, and, to name elusive but real qualities, the texture of social sentiment and imagination.[12]

Now carry the same kind of question from personal life to the political activity of democracy.  What kinds of leaders does a highly unequal democracy produce when wealth flows freely into campaigns?  As Zephyr Teachout has emphasized in her important book, Corruption in America, the flip side of “free” spending by the wealthy is dependence on the part of candidates, who need money for political survival.  The result is not usually the outright bribery that the Supreme Court classifies as “corruption” – the only evil it permits campaign spending laws to address – but a subtler reorientation of attention and concern.  One might think of it by analogy to the ways one sees and hears in a crowded room: where does the eye go, which voices does the ear pick up?  Who, a day later, does one remember was there?  In a democracy that depends on private wealth for its basic activities of communication and mobilization, candidates see and hear the wealthy, because they need them.  The careers of Bill and Hillary Clinton since the end of his presidency may serve as emblems of this economy of attention: although they remain standard-bearers of the more egalitarian of the two major American parties, they have spent fifteen years relentlessly cultivating the company, attention, and largesse of the world’s wealthiest people.  That, after all, is how things get done.

2/ Disaggregating Wealth: In principle, the same disparities in purchasing power might have many different meanings, depending on certain distinctions.  Of the basic goods of life, which (A) must be purchased, (B) are guaranteed without purchase, and (C) are protected from monetization and may not be purchased at all?  The more robust a set of social guarantees (category (B)), such as guarantees of education, basic security in one’s person, health care, and retirement, the less wealth matters, even if it grows more unequal.  Conversely, the more basic goods must be purchased on the market, the more differences in wealth put lives on divergent courses, quite apart from talent, effort, need, or whatever else one regards as an appropriate distributive criterion.

Of course these categories are dynamic, and wealth produces potential demand for differentiation in such goods.  This is why category (C), the non-monetizable category, is so important.  Particularly important is whether political influence, the basic feedback mechanism that determines revisions in these categories, is itself monetizable.  Where it is, wealth will tend, other things equal, to become more salient across all categories of goods.

3/ Recognizing the Primacy of Politics: The Legal Realists were right, as was Hobbesian positivism long before they wrote: economic life takes its shape, and property rights – including claims to wealth – arise only with the legal framework that political action creates.  Rough-and-ready conventions for certain resources may arise in small and tight-knit groups, particularly against a backdrop of state definition and enforcement of other claims; but where there is conflict or uncertainty beyond such a community – that is, where there is anything resembling complex economic activity – someone must decide, and that someone is sovereign.  This is a decisive argument against any radical naturalization of economic claims.

Of course this argument remains very far from implying that anything goes in the political creation of the economy.  From Hayekian arguments concerning the informational complexity of economies to liberal claims about autonomy to conventional neo-classical economists’ worries that no system gets far without appealing to self-interest, there may be decisive reasons to organize any given area of economic life along market lines.  The point is that this is a choice – a political choice.  The utopia of property-and-contract, of market sociability and reciprocity, runs through the utopia of equal citizenship, of political sovereignty, and any case for it must be made there.

4/ The Democratic Pivot: This point returns the discussion to what remains its crux.  What does it mean to submit basic economic questions to political judgment, and what is the most one might hope to accomplish there?  The answers depend on how one understands political processes, and how robust a set of goals one believes democratic sovereignty, the utopia of politics, can support.

These goals come in two dimensions.  First is the conception of citizenship as a form of social membership: what kinds of security, empowerment, opportunity, access to institutions, and so forth should be guaranteed to every member in good standing of the social order?  This political economy of citizenship, as Joseph Fishkin and William Forbath show in this volume, goes all the way back in the United States, and has a distinctive social-democratic version in the twentieth century (identified in the US with the New Deal) whose future is now in considerable doubt.

The second dimension of citizenship concerns active self-rule: how far, after the doubts that marked twentieth-century thought and demoted political judgment to an undisciplined mix of self-interest and fantasy, can a polity actively shape its own economic life, making the rules of material interdependence a matter for choice rather than happenstance?

Unless one is a thoroughgoing fatalist, it seems fair to infer from the last seven decades that there is a range of possibilities along both dimensions.  The social-democratic accommodation of the mid-twentieth century represents a genuine alternative to a marketized social and political order.  This is true despite whatever social democracy’s internal failures were (notably failures of inclusion), and despite the doubts that its decline raises about its sustainability in the face of marketizing pressure.  As noted earlier, however, social democracy, always had more to do with securing a strong form of social membership for citizens than with the active political supervision of economic life: it was, to repeat, more social than democratic.  This may have been its Achilles heel.

There may, however, be something essential to learn from social democracy about self-governance.  This is the importance of organized people, as opposed to abstractly empowered individual citizens.  Proposals to increase the influence of citizens – for instance, by allocating campaign-contribution credits to each adult as a way of matching the influence of the wealthy – are admirable and likely to be helpful; but they also share the neoliberal emphasis on the choosing individual as the pivot of collective life – a de-collectivized view of collective life, in which aggregating individual choice is the whole work.  By contrast to this neoliberal vision, the pluralist politics of the social-democratic states rested heavily on intermediary institutions, notably labor unions, to provide virtual representation and, perhaps as important, to create bonds of identification around common interests and agendas.  Such institutions may be key features of a “political sociology” that could make active self-rule a more plausible ideal for a roughly majoritarian system.

Here, however, one encounters the next challenge.  As discussions of Piketty’s proposed global annual wealth tax highlighted, the scale of wealth accumulation and transfer is now worldwide in its basic dynamics.  Sovereignty remains almost exclusively a phenomenon on the national scale.  Indeed, social democracy was marked, as much as anything, by being the mode of social life that arose when strong working-class movements in relatively rich societies could sustain their victories because capital was mostly contained within national borders.  Today, inequality resembles climate change in its formal dimensions: a global problem at which national political order often flails ineffectually.  As David Grewal has pointed out, because we work in circumstances more closely resembling those of the last Gilded Age than of the mid-twentieth century, we might recall that many of those who confronted the contradictions of wealth and democracy in that earlier time identified their problems and goals as international, and their movements and strategies, therefore, as internationalist.[13]

It would be an overreaction, though, to surrender the field of domestic politics.  Here, as in other respects, we are unavoidably in a posture of experimentation.  The long-neglected question is what kind of democratic relation to economic life is possible.  Precisely because of the neglect, the novelty (or at least renewed sense of urgency) of the issue is the greater, and all responses are partly on unfamiliar ground.

Conclusion:
Inequality, as Jeffrey Winters reminds us, is very old – indeed, so far, perennial.  Democracy is rather arrestingly new, mass democracy especially so.  Manhood suffrage is 100-150 years old even in the “mature” democracies.  Women’s suffrage is a product of the twentieth century.  In the United States, effective enfranchisement of African-American and Latino citizens dates to the passage of the Voting Rights Act of 1965, and policies such as denying former felons the vote continue to qualify the right.  Allowing for the economic catastrophe and political turmoil of the Great Depression and the ideological bloodshed of World War Two, it may be that close to half of the human experience of widespread and stable mass democracy occurred in the halcyon years when economic inequality seemed to be in abeyance, and even economic scarcity seemed on the path to being overcome.  Thinking about wealth and democracy has been informed by the optimistic premises of that time, in what it has not said as well as in what it has.

I have noted that the twentieth century’s experience of “actually existing democracy” coincided with sharp theoretical skepticism toward the idea that a majoritarian representative system could credibly be claimed to embody collective self-government.  This might have been more troubling had it not been for optimism that inequality and scarcity, those recurrent sources of conflict, were now subject to rational and humane administration.  The social-democratic accommodation between democracy and capitalism seemed a good-enough arrangement as long as it was stable.  To the extent that inequality and scarcity could be mastered, a pluralist, administered democracy promised to be self-rule enough.

The question to ask today at the intersection of wealth and democracy is not simply whether wealth might be mastered again, so that it would let democracy proceed in peace.  The more basic question is whether growing social wealth could become a means to an enriched democratic future.  Taking that question seriously would mean reclaiming the mid-century goal of a world after scarcity, with widely-shared prosperity spurring proliferating self-development and experiments in living.  The thought contained in that older goal was that twentieth-century democracy was becoming a post-materialist form of life: individuality was more central than collective self-rule to this conception of democracy, but, in a world that seemed to have stabilized in a tolerable form, that was good enough.  [Today the dominant expressions of individuality have come apart from democracy and lodged, instead, in neoliberal, non-democratic celebrations of economic power: either the world-making creativity of the entrepreneur or the self-development and humanitarianism of the rentier.[14]  The first is the denuded economic Nietzscheanism of Schumpeter, dressed up in the style of Silicon Valley.  The second is mid-century Great Society humanism without the society, a life of leisure, reflection, and intrinsically valuable activity for those who happen to have the resources (often enough inherited) to pursue them.]

Fred Hirsch’s analysis of positional goods gives powerful reason to believe that the end of scarcity will not come through the raw accumulation of total social wealth.  Positional goods will continue to make rich people (objectively rich on the spectrum of historical human experience) feel not-nearly-rich-enough.  This dynamic only becomes more intense with the marketization of essential resources for social reproduction, especially education, health care, and child care: as pressure from growing overall material wealth increases the relative cost of these labor-intensive goods, the prospect of being unable to afford them (at least in decent quantity or quality, which are of course socially relative standards) will haunt economic life, making the threat of relative scarcity acute.

Hirsch’s analysis suggests, then, that making wealth more socially beneficial will require revitalized governance.  There would have to be a meaningful commitment to social provision of the goods that are necessary to social reproduction and also vulnerable to intensified relative scarcity, such as health care, education, and child care.  There would also have to be significant social limitation of inequality.  This would mean limits on the accumulation of great fortunes, such as those of George Soros, Bill Gates, and Sheldon Adelson, who can effect their own foreign policies; but it would also mean constraints on the difference in resources and social capacity that divide roughly the “fifteen percent” of well-educated professionals and mid-level executives from the “eighty percent” that includes more or less everyone else except the actually rich.  Under the present dispensation, the attack on privilege too often means breaking down the residual structures of security that defined the mid-century social vision, and throwing, for instance, the tenured and professionally certified onto an unregulated market.  This leveling-down of traditional social protections and stabilizing institutions is a signature neoliberal move.  It only intensifies susceptibility to the dynamics that Hirsch diagnoses.  A more apt response would be to level up social provision and other forms of security, reducing the effect of relative scarcity, while limiting raw economic inequality to ease the pressure for differentiation in the availability and quality of these goods.

At the time of writing, it is an increasingly common perception that economic inequality must be brought under control for democracy to realize, or recover, its potential.  As we have seen, this claim depends on one’s conception of democracy; but it is highly plausible for any conception of democracy that aims at meaningful version of collective self-rule, rather than simple elite rotation.  The argument developed here suggests something further: that robust democracy is necessary if wealth is to realize its potential for social benefit.  Indeed, democracy must be able to intervene in the definition, creation, distribution, and use of wealth precisely to make the benefits of wealth real.  A political scheme of social provision, and political limitations on the scope of inequality, are the most plausible means to prevent growing wealth from undercutting its own benefits.  This idea is not extremist: it simply states the logic of the mid-century social-democratic accommodation that established a measure of security and a pattern of widely shared economic growth.  It does, however, insist on the priority of that political logic.  The free play of the market will not deliver the goods that market-led growth in wealth is conventionally celebrated for producing.  Only democracy can do that.  In this sense, wealth needs democracy if it is to fulfill its humanitarian promise.  The irony is that, ill-handled, wealth can also overwhelm democracy and undercut its own humane potential.

Of course, these abstractions are only ways of naming human powers.  We – a we that does not really exist yet, as a political matter – are the only ones who can make a better world from the braided elements of economic and political life.  Both domains are, at the moment, potent, unequal, and opaque.  For decades, respectable thought has regarded them with an understandable but also unsustainable blend of cynicism and complacency.  Now they need to become more equal and more lucid, before their power is exhausted or fatally misused.
           
           
           



[1] Grewal, The Laws of Capitalism, HLR
[2] Keynes, Economic Possibilities for Our Grandchildren
[3] TJ 224-27, 226.
[4] Id. at 226.
[5] Rawls returned to the topic of the fair value of the political liberties in Political Liberalism (1993, 356-63), where he also sounded a note of concern about trends to inequality: “[T]he invisible hand guides things in the wrong direction and favors an oligopolistic configuration of accumulations that succeeds in maintaining unjustified inequalities and restrictions on fair opportunity” (267).  
[6] Id. at 226-27.
[7] Great Society speech
[8] Grewal & Purdy “Introduction” to Law & Contemporary Problems issue on Neoliberalism and articles therein.
[9] Streeck, Buying Time
[10] Cite to this language.  I am indebted to Tim Shenk for the observation about the spontaneity of planning.
[11] Some language from recent money-in-politics cases, especially Citizens United.
[12] Pages from Piketty.  The phrases in quotes are mine, not his.
[13] HLR Piketty review
[14] Tomasi, etc., on the first; E. Posner on Piketty on the second.