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October 2, 2012

The Market Democracy Project

Robert Herritt on Free Market Fairness by John Tomasi

John Tomasi. Free Market Fairness. Princeton University Press. 368 Pages. $35.00

One could hardly imagine John Tomasi’s Free Market Fairness coming along at a more opportune time. Stump-speech rhetoric seems to have turned its attention (at least nominally) towards the concept of fairness. Questions concerning the distribution of income, although always present somewhere in America’s political conversation, have a starring role this election season. The proper role of government is up for debate again.

But that Tomasi offers a clear-headed exploration of these and other issues during a moment of noticeable obtuseness and obfuscation in American politics is an accident of timing, incidental to his larger project, which is both ambitious and deeply needed. (As a matter of disclosure, I was a student of Tomasi’s.)

Tomasi’s goal is to remake the “conceptual landscape of liberal thought,” the tradition of political philosophy of which Locke, Mill, Rawls, and Hayek were all canonical practitioners. The landscape he’s referring to has been fixed for some time with libertarians and classical liberals situated on the right, sticking up for economic liberties and a formal notion of equality and often shunning lofty distributional schemes, and what Tomasi and others have called “high liberals” staking out a spot on the left, putting social justice concerns front and center and never being shy about using the state’s power to realize a substantive ideal of distributive justice.

It’s fair to say that most of the central disagreements that play out in the realm of liberal political theory and philosophy concern this division. And, as the two sides continue to push against one another, the prospects for progress seem bleaker by the day.

As Tomasi describes this cold war of rival liberalisms, it’s “economic freedom or social justice. Everyone has to choose. On the political level, as on the conceptual one, there exists no common ground. Thus the contestants enter battle knowing that, when the dust settles, one side will win and the other will lose.”

Tomasi admits from the outset that he has firmly fixed sympathies for libertarians and classical liberals. The author is at the same time eager to give credit to influential thinkers on the left for the theoretical headway they have made. But libertarians would benefit from getting over their particularly virulent case of what Tomasi calls “social justicitis,” and taking to heart some of the innovations and insights from high liberal thought. And as for the high liberals, that tradition’s disregard for economic liberties, Tomasi believes, isn’t just unnecessary, given their moral commitments, but actually undermines their project. Property rights, Tomasi wants to tell high liberals, are rights too — same as all the others.

Tomasi admits from the outset that he has firmly fixed sympathies for libertarians and classical liberals. The author is at the same time eager to give credit to influential thinkers on the left for the theoretical headway they have made.

There’s a tempting way to reconcile these two opposing schools, and one which Tomasi deserves credit for passing up. It’s the fusionist tack, sometimes promoted by defenders of market-based policies, that says left liberals have their philosophy right but their economics wrong. Yes, some libertarians might say to the left, “You should be concerned for the well-being of the poorest people; you’re dead right that every citizen ought to have a fair shot at being prosperous and gaining access to affordable medical care; it’s unacceptable that so many lack a chance at developing the skills or acquiring the knowledge needed to succeed in modern society. If only you came around to the idea that markets can be harnessed to these ends, and that ambitious public sector programs are often a dead end.”

There is a certain parsimony to this “open your heart to Milton Friedman” argumentative strategy. And it has been used compellingly by, for instance, Brink Lindsey in his work on what’s been unfortunately dubbed “liberaltarianism.” This is a move in the right direction. But for Tomasi’s purposes this schematic is unsatisfactory, or at least incomplete.

The problem isn’t that high liberals in today’s philosophy and political science departments are simply confused about public policy. Their disagreements with the right actually stem from much deeper differences in conceptions of what it means to be a person in society — and, for that matter, what society is. A quick seminar on Hayek isn’t going to do the trick.

Free Market Fairness sketches out a new liberal project, one that accepts some of the most persuasive insights from both traditions of liberal thought and finds a new framework in which to arrange them. Tomasi calls it “market democracy.”

The path to market democracy starts with a thoughtful genealogy of the conflict of visions from which it is born. Tomasi traces classical liberalism back to John Locke’s 1689 Second Treatise of Government. “Locke was writing against two strong undercurrents of English social life,” he notes. “First, the lingering social eddies of feudalism . . . second, a stream of worries springing from the recent attempts by a series of English kings to establish themselves as absolute monarchs.”

This history winds its way from Locke, through Scottish Enlightenment thinkers David Hume and Adam Smith, landing finally on the Austrian economist Friedrich Hayek. The strain of liberalism that results is “committed to (1) a thick conception of economic liberty grounded mainly in consequentialist considerations, (2) a formal conception of equality that sees the outcome of free market exchanges as largely definitive of justice, and (3) a limited but important state role in tax-funded education and social service programs.” This is the classical liberalism that many of us know and some of us love.

It’s during this history lesson that Tomasi begins to build his case. One thread that runs throughout high liberalism that he is quick to point out is its disregard for property rights or any formal (as opposed to material) notion of equality. Of all the liberties enjoyed by free citizens, those pertaining to the economic realm — the freedom to control the means of production, say, or to negotiate one’s own employment terms — are the least essential and thus able to be downgraded to some extent (often in the name of justice). This is true of high liberalism from its origins in 18th-century France, from Rousseau to John Stewart Mill and John Maynard Keynes.

Keynes’s timing, Tomasi notes, was impeccable. Just as the crash of 1929 has made people think twice about markets, Keynes’s work shows another way. Breakthroughs in social science would seem to have enabled the government to exert precise control over the economy, realizing a more substantive conception of equality, correcting the failures of the market, and imposing a form of distributional justice. The government, Keynes would have it, can now fix many of society’s ills by spending money. And here’s the kicker: All of this new spending isn’t just the government’s moral obligation; it actually stimulates the economy. It’s a prospect that, not surprisingly, elicited a common response among politicians: Count me in.

Enter John Rawls, easily the most influential political philosopher of the second half of the 20th century, who steps into a high liberal tradition that already has some momentum behind it, and devises an extraordinarily well-argued moral justification for its ideas of distributive justice.

Somewhere along the way in the American academy, high liberalism triumphed. Debates over political philosophy largely became debates about which distributive model is best from a moral point of view. Those who saw the need to respect economic liberties as on par with, say, the right to equality of opportunity, found themselves in the minority. And when it came to advocating for concrete institutional set-ups, social democracy became a house favorite.

Tomasi is here to deliver a message to many of his colleagues in the academy. Tamp down for a moment the conviction that a defense of economic liberties is but a wordy cover for corporate greed. And consider an idea that boasts an impressive pedigree: That much like those other political and civil liberties that many on the left hold dear, economic liberties are basic and necessary to respecting free citizens as the directors of their own lives — a basic precondition of a liberal theory. As Tomasi notes:

A society that denies people the chance to take up questions of long-term financial planning for themselves, or that restricts the ways in which individuals and families can respond to such questions, thereby diminishes the capacity of citizens to become fully responsible and independent agents. So too a society that limits the freedom of individuals to negotiate the specific terms of their employment, or that makes their ownership of productive property subject to calculations about social expediency, no matter how benevolent their intentions in doing so, thereby creates social conditions in which the moral powers of citizens can be exercised and developed in only a stunted way.

A consequentialist argument on the value of economic liberties, that they are part and parcel of the most efficient way to organize economic activity, is not enough. In order to persuade the left liberal that property rights and the like deserve a seat at the table, those rights must be revealed as a necessary condition for citizens to respect themselves and their fellow citizens as “responsible self-authors.”

As for his brothers in arms in the classical liberal camp, Tomasi delivers a healthy dose of Benadryl to help them suppress their allergy to social justice. His strategy here is eminently reasonable, and involves something he calls the distributional adequacy condition, which states that “a defense of any version of liberalism is adequate only if it includes the claim that the institutions being endorsed are deemed likely to bring about some desired distribution of material and social goods.”

Classical liberals may talk tough about the market being the best and sometimes the only way to distribute holdings. But deep down, and whether they advertise the fact or not, classical liberals do harbor concerns about the distributions of goods, and specifically, seem to endorse the condition that “a set of political and economic institutions, in order to be fully justified, must be expected to work to the benefit of the least well-off.”

As Tomasi gives a sampling of some flagship classical liberal thinkers on this point, one starts to realize how uncontroversial his contention is. Locke and Smith, Madison, and, wouldn’t you know, even Ayn Rand can be found expressing the concern that institutions benefit the least well-off.

These appeals to both the left and right are in fact just demolition work, intended to clear some ground on which to start construction of his new liberal edifice. And yet, this stage-setting is the most valuable part of the book. Coaxing liberal thinkers out of their ideological caves is a project that Tomasi, with his decidedly grown-up tone and his deep reverence for the contributions of left liberals (most notably Rawls) to the liberal tradition, carries out well.

The book concludes with Tomasi’s attempt to write the next (or at least a new) chapter in a liberal philosophical tradition that has been divided for at least a century. What he calls market democracy isn’t itself a comprehensive new view, but rather a research project that Tomasi is inviting political theorists and philosophers to contribute to. Market democracy borrows from the left in its emphasis on justification. It demands that institutions be justifiable to all members of society — including the least well-off. But it also takes seriously economic liberty in a way that places it squarely within the classical liberal tradition. “In seeking to benefit the least well-off, we must take care to do so in ways that respect the autonomy and dignity of those citizens,” Tomasi explains. In disregarding economic liberties, this is a requirement that left liberals have failed to fulfill.

Market democracy, it’s important to understand, is merely a “project,” one within which can exist many different market democratic theories. His preferred theory is the one from which his book derives its title: free market fairness. This is an approach that tolerates material inequality in exchange for an institutional system that benefits the poorest among us through an emphasis on economic growth. Tomasi provides only a sketch, checking various boxes and demonstrating how such a theory — through an emphasis on growth and a preference for market-centered policies — can fulfill the many complex requirements of an upstanding liberal theory and address some of the trickier challenges often posed from left and right.

Tomasi’s grand project is unlikely to inspire a new stripe of liberal theorist — one who takes up arms with neither side in the ongoing turf war. It’s more likely that the book’s lasting contribution will be for those who already consider themselves defenders of the free market, but who are selling many of their beliefs short through inadequate defenses that fail to address the left’s legitimate concerns about the poor in a convincing way. For those, Tomasi has shown — not just in terms of policy and economics but, in fact, from the standpoint of moral philosophy — that defenders of limited government and markets have a strong case. More than that, he has provided a philosophical starter kit to help those who defend some form of classical liberalism to participate in the moral discussion of politics at the highest level.


Robert Herritt is a writer in New York City.