*Free Market Fairness*

In Free Market Fairness, political philosopher John Tomasi sets forth a new research program in normative political theory that he calls “market democracy.” Market democracy triangulates orthodox libertarianism and social-democratic, egalitarian liberalism and, Tomasi hopes, provides a principled moral grounding for a moderate classical liberalism that has room for both a modest welfare state and a vigorous, competitive, free-market economy. Tomasi’s book is innovative — and, I should note, more readable than most contemporary political philosophy. The arguments he develops here pose important challenges to both “left” (social democrats) and “right” (traditional libertarians), and so it should be widely read.

The book is most effective in making the case that “justice as fairness” and a robust concern for basic economic liberties are not necessarily contradictory. At the same time, the book’s sketch of market democracy–and more specifically, “free market fairness,” the justificatory edifice for market democracy that Tomasi endorses–leaves many details unexplored and is unlikely on its own to persuade traditional libertarians and Rawlsian/egalitarian liberals to abandon their long-held commitments. Tomasi views the book’s purpose as an ice-breaker, opening up new waters for exploration, and it should be read in that light, not as a comprehensive treatise.

I. Approach

Tomasi directs most of his arguments toward left-liberals, not libertarians. He aims to persuade them of two things: a) that some economic liberties are fundamental rights that every just society must guarantee to all; b) that at the level of ideal theory, market democratic regimes (he identifies two ideal types, “democratic limited government” and “democratic laissez faire”) are on a level with Rawls’ egalitarian regimes (“liberal socialism” and “property-owning democracy”) when it comes to their capacity to realize legitimate, egalitarian social goals, such as the maximization of the wealth of the representative poorest worker. Tomasi does not claim anything so facile as, “The free market is the best way to realize Rawlsian objectives.” Rather, Tomasi argues that Rawlsian objectives are flawed insofar as they ignore fundamental rights to own property and engage in exchange that are critical to authorship of one’s own life plan. Further, once we have sussed out the true requirements of justice as fairness, we find that free-market regimes can be designed plausibly so as to aim at meeting those requirements.

Tomasi also claims not to be merely splitting the difference between orthodox libertarianism a la Nozick or Rothbard and Rawlsian egalitarian liberalism (xix). On the question of methodology, Tomasi comes down firmly on the side of Rawls. He favors a deliberative and constructivist approach that tries to establish rules for society, viewed holistically, over the foundationalist, methodologically individualist approach found in thinkers like Locke and Rothbard. However, as we shall see, Free Market Fairness does take a middle ground on the question of which economic liberties count as fundamental, and it is on this pillar that everything else in the theory depends: why social justice matters, and why only nonsocialist regimes can count as just.

II. Contra Libertarianism

As already mentioned, Tomasi does not have a great deal to say to traditional libertarians. He tells them that they have lost the intellectual battle, and that their days are numbered (163). He suggests that their views are extreme and self-evidently wrong (xxvi-xxvii). And while he does have a whole chapter (“Social Justicitis”) on why libertarians should care about social justice, the chapter really argues that the justification of markets depends in part on how they affect the life prospects of the poor, which does not establish his case for a more parsimonious list of economic liberties than that which libertarians have long accepted.

For traditional libertarians, there is a yawning gap between the criteria that justify market mechanisms and the criteria that justify rules of justice. While the benefit of the poor may be an important, even critical factor in justifying market exchange, for traditional libertarians that benefit does not justify, say, property rights. If facts were otherwise such that markets did not benefit the poor, we could be justified in opposing markets but not in denying property rights, libertarians claim. Libertarians may believe in strong moral obligations to benefit the poor yet reject an enforceable duty of justice to assist the poor that falls upon society as a whole. Tomasi does not give libertarians a reason to accept the latter sort of duty.

I admit to occasional irritation at the way Tomasi describes libertarianism. Tomasi’s view is that economic liberties should be treated on par with political and civil liberties (xvi, 90). However, he claims that some libertarians believe

that economic rights are more basic than other rights. At the limit, civil and political rights are not merely less weighty than property rights. Property rights, on this view, are moral absolutes. The stronger interpretation would require the enforcement of almost any contract citizens enter into–for example, contracts for voluntary slavery or the transfer of vital bodily organs. [emphasis original]

In reading this passage, I struggled to think of economic liberties that libertarians accept and that conflict with political or civil liberties. If they do not conflict, what is the point of the “more basic”/”equally basic” distinction? The only example Tomasi gives is this:

Property rights, while basic, are not moral absolutes. The right to free speech does not empower theater-goers to shout “Fire!”, just as economic rights of capitalism do not allow for completely unregulated economic action. (xvii)

But of course the duty not to shout “fire!” in a crowded theater is a case of rights to bodily integrity and property “trumping” an alleged, free-floating right of free speech! So if anything, it would be a good example to refute the view that free-floating civil liberties trump economic liberties. Although Tomasi frequently uses the “absolutist” charge to club libertarians (e.g., 90-91), I looked in vain for a single example of a (valid) civil liberty that conflicted with a (valid) economic liberty, in such a way that this distinction on which he hangs so much matters. Voluntary slavery will not do. Plenty of libertarians reject such contracts for reasons that have nothing to do with the trumping of economic liberties by something else, and only a particular gloss on “self-ownership” generates a right to enter into them. (For that matter, many libertarians do not see “self-ownership” as foundational, even though Tomasi frequently equates libertarianism with self-ownership views.)

Ultimately, Tomasi’s case against libertarianism seems to rest on intuition. It just can’t be right that there is no general, enforceable duty of justice to assist the poor. Even here, though, he gives short shrift to how most libertarians, even of the self-ownership sort, have conceded limits to private appropriation (from Locke’s and Nozick’s Provisos to more thoroughgoing duties to aid found in Simmons, Steiner, and others).

III. Contra Socialism & Social Democracy

Tomasi’s arguments why Rawlsians and other egalitarian liberals should accept a limited set of economic liberties (beyond just a right to personal, not productive property that they already recognize) are more persuasive. He quite reasonably points out that these rights matter to people, and that many people are skeptical of strongly redistributive taxation even when they do not expect to suffer from it (62). Of course, we cannot conduct moral theory by poll. But the point is that for many ordinary people, the rights to own your business, to negotiate freely over the conditions of one’s own labor, or to plan for one’s future by saving, investing, and enjoying the proceeds of those investments are critical to their self-respect and conception of an autonomously directed life (what Tomasi calls “self-authorship”).

Socialism is unjust because it denies individuals the right to own productive property, in effect prohibiting them from starting their own businesses or investing for their own futures. While this “sounds right” to me, a possible objection from a left-liberal might run something like this. Everyone has an interest in freedom of speech, freedom of religion, an equal right to participate in politics, some personal property, and so on. However, not everyone wants to own or invest in business. Therefore, the right to own productive property is less fundamental than these other rights.

Tomasi heads off this possible objection by defending, more broadly, “the liberty to employ one’s body and time in productive activity that one has chosen or accepted, and under arrangements that one has chosen or accepted” (77). That is a quotation from Nickel, commenting on Rawls. But as stated, it sounds like a broad right to negotiate the conditions of one’s labor or to practice a trade without a permission slip from the state. “After all, one is defined by one’s workplace experience not simply by what profession one pursues. One is also defined by where one chooses to work, by the terms that one seeks and accepts for one’s work, by the number of hours that one devotes to one’s work, and much more besides” (77, emphasis original).

Tomasi defends the right to own productive property as an essential precondition of the moral independence of citizens from the state (78). With collective property, ordinary people must depend on their co-workers or the state. They cannot pursue an independent line contrary to the demands of the majority, because doing so could mean losing one’s employment or status within the organization. Secondarily, private ownership of the means of production allow investors and entrepreneurs to experiment and to broaden their intellectual and “evaluative” horizons (79).

IV. Market Democracy and Free Market Fairness

“Market democracy” is a research program synthesizing equality and economic (and civil and political) liberty.

“Regarding justice in holdings, therefore, market democracy affirms the core ideal of social justice as developed by thinkers such as Rawls. A set of institutional arrangements is just only if, after securing basic rights and liberties, any inequalities that emerge from the activities of citizens turn out to be advantageous even to those who have the smallest bundle of goods.

“This is the ideal of reciprocity, or what Rawls formulates as his ‘difference principle.’ […]

“Like views in the classical liberal tradition, however, market democracy affirms the economic liberties of capitalism as basic rights. These include weighty rights of working, transacting, holding, and using.” (89-90)

To the extent that libertarian economic liberties sanction conditions that inhibit citizens’ exercise of “their moral powers of citizenship” (90), market democracy deviates from libertarianism. For instance, choosing to work in an unsafe workplace might not be permissible (91). Market democracy can also endorse a social minimum funded by taxation (92). In short, market democracy as a research program can endorse a range of regimes that provide conditions sufficient for citizens’ responsible self-authorship. Government infringements on economic liberties, including taxation, face a moral burden of proof, one that may, however, be met.

Two ideal types of regimes that Tomasi discusses are “democratic laissez-faire” and “democratic limited government.” Democratic laissez-faire features a strictly minimal legal system, with fully private, competitive systems of education and health care, regulation limited to protecting public health and punishing fraud and violence, and low or no taxes. In other words, it looks a great deal like the “minimal state” of someone like Nozick, but the key point for Tomasi is that it is justified on the grounds of social justice, that it tends over the long run to advance the welfare of the least well-off. Democratic limited government advances a larger role for the state. Education and health care for the poor could be comprehensively publicly funded but “voucherized.” There could be an antidiscrimination law in employment. There could be a tax-funded safety net and worker safety regulations. And so on (116-118).

Because market democracy is a research program, not a theory, it also has room for different concepts of social justice and justificatory strategies. Tomasi believes that Rawls’ “justice as fairness” conception is the correct one (hence “free market fairness”) but invites future research into alternative conceptions of social justice that classical liberals can endorse. Therefore, Tomasi endorses something like Rawls’ two principles of justice: a basic equal liberty principle and the difference principle, conjoined with an equal opportunity requirement. However, Tomasi interprets the principles slightly differently and incorporates economic liberties into the first principle.

For instance, Tomasi holds that the difference principle on a market-democratic interpretation straightforwardly justifies social institutions insofar as they maximize the personal wealth of the representative least well-off worker. He argues against Rawls’ preference for limiting wealth, if necessary, to give workers more opportunities to participate in the management of their workplaces, on the grounds that most workers will care little about participating in lots of committee meetings, compared to obtaining financial resources to pursue their private ends. Moreover, Tomasi argues that the proper scope for judging alternative social institutions is long-term, rather than static “time slices.” Thus, a robustly capitalistic society might have more inequality than a social-democratic one at any given point in time, but if it has even a slightly higher rate of growth, then in the long term even the poorest in the capitalist society will be better off than the poorest in the social-democratic one, a point Tomasi credits to Jason Brennan.

In summary, free market fairness is “on all fours” with social-democratic conceptions of fairness when it comes to how its institutions are designed to satisfy the difference principle. In practice, social democracy may or may not be superior to free market fairness in maximizing the welfare of the least well-off. But this is an empirical question separate from questions of ideal theory. What matters is that the robustly capitalistic regimes of democratic limited government and democratic laissez faire can plausibly be argued to satisfy the two principles of justice. Thus, they belong to the set of regimes that can satisfy the fundamental moral theory.

V. Evaluation

What should we think of market democracy and free market fairness? On the one hand, the notion that social institutions must satisfy a basic condition of reciprocity is appealing. It’s hard to imagine that there is anyone who has read Rawls who has not found something morally attractive in the notion that society is a cooperative endeavor from which all must benefit.

At the same time, there is something profoundly unintuitive about the constructivist approach to justice. We are to imagine that rules of justice are obligations on society as a whole and not on any individual actor, except that individuals must support just societies when they can. This approach clashes with commonsense morality’s emphasis on the responsibility of the individual. In commonsense morality, duties of justice are a subset of moral duties, and these attach to individual actors. Only by extension can societies be labeled “just” or “unjust.” Put another way, in commonsense morality an unjust society is one in which individuals systematically commit injustices (and get away with it).

That is not the Rawlsian approach to justice, nor Tomasi’s. Indeed, it is inherent to the constructivist approach that we must evaluate institutions for their justice. But the most powerfully intuitive component of libertarian theory has always been the notion that agents of the state enjoy the same rights and duties as everyone else. For traditional libertarians, the state is justified only if it enjoys the actual consent of the governed (with some technical exceptions). Political society ought to be an actually cooperative, consensual enterprise, not just hypothetically consensual among “reasonable” people motivated by justice. The potential for paternalism in hypothetical contractarianism is clear (“your lack of consent is unreasonable”).

Constructivists assume that the state is nonconsensual. Yet it is justified in exercising special rights (e.g., enforcing the difference principle) somehow. In ordinary morality, nonstate actors are justified in resisting unjust actions. But for constructivists, it is not clear what makes an action unjust. If the state fails to enforce the difference principle to the letter, for instance, would it be justifiable for a Robin Hood figure to fill in the gap? Presumably not. But in ordinary morality, an unjust deprivation of one’s rightful property may be forcibly resisted. Is that the case in justice as fairness? Can the question even be given any definite answer?

And what would justice as fairness (or market democracy) say about actually consensual regimes that violate some basic principle of justice? For instance, homeowners’ associations often allow weighted voting, in which property owners cast ballots that are worth the relative dollar values of their properties. Does this violate the basic, equal, political liberty principle, which for all justice as fairness theorists (including Tomasi) is sacrosanct (247-254)? If not, why not? These homeowners’ associations can be quite large and approximate local governments in some places. (Summerlin, Nevada is an entirely private city formed of such associations.) It seems clear that these weighted-voting systems can be essential to the functioning of homeowners’ associations, because the larger properties have the strongest interest in maintaining property values and adopting rules for that purpose. Prohibiting unequal political liberties in these regimes could make many people worse off without making anyone better off.

For libertarians, consensual communities are the moral gold standard. For market democracy, however, political consent is not required for state legitimacy, and indeed it seems morally irrelevant. Consent matters when fundamental rights are at stake, but deciding not to join a political community is not a fundamental right for Tomasi. Indeed, paradoxically, the enforcement of fundamental rights could require the institution of arrangements to which no one would want to consent.

For these reasons, I see the constructivist approach to justice as a dead end. Instead, I would argue, we should be trying to derive duties of justice from commonsense moral concepts in a thoroughly individualist fashion (moral rights and duties attaching to individuals, not societies). We should not be trying to make the world “fair” at all costs. It would be nice if the world were fair, but justice is not creating the kingdom of fairness on earth.

Despite these sorts of disagreements from a libertarian, which are perhaps predictable and non-noteworthy, Free Market Fairness does succeed in carving out a new space in the political-philosophical terrain. Not only is it an innovative piece of political theory, it is readable and accessible to the layperson. Tomasi’s challenge will be important for both libertarians and Rawlsians to take up.

4 thoughts on “*Free Market Fairness*

  1. Jason, one bone I would pick here would be with your assimilation of constructivism in ethics (or in political philosophy) with Rawlsianism. There is nothing about constructivism which entails that the state is nonconsensual. It is perfectly possible to have (and indeed I think it’s likely) that you could have a view on which constructivism is the right approach to understanding the nature or origins of principles of justice, but on which the principles look quite different than Rawls’. Indeed, if Kant is the first constructivist (as some think), then that will be the case, because Kant’s political theory doesn’t look like Rawls’ at all.

    1. That’s a significant bone! You’re right; I overreached there. I don’t read Kant as a constructivist, but I understand why some people do.

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