On the Politics in Spires blog, Philip Pettit has published an excellent piece on a republican perspective on democracy, freedom and the markets. In his article, there’s one point that’s particularly notable in my opinion: He argues that the markets should not be taken as an independent entity, but are a socio-political construct, determined not only by the actions of individual market participants, but by the social structure.
“[W]e can avoid being seduced into the libertarian view — now, alas, almost an orthodoxy — that the market is a relatively autonomous sphere which depends only contingently on the framework of custom and law, and on the role of the state in supporting that framework. The role of the state in relation to the market — the role of the community, operating through the state — is constitutive and not just regulative, enabling and not just constraining. And it is extensive in even a greater measure than my five sets of rules suggest, since it also includes providing for the infrastructure of education, communication, transport and insurance that any contemporary economy requires.”
I think that this is an essential point to make: Any riches, and any losses in property are the consequence of a particular status quo and the current social order, as determined by the rules and regulations in a society. Let me elaborate:
When you manage to make large profits, then this is because of the system that you are building on. Public schools, roads, higher education, etc, have all contributed to your wealth, and have allowed you to prosper. You are being provided with a set of opportunities that not everybody has access to. Of course your individual contribution matters as well, and determines whether you are using the opportunities that you are provided with efficiently and ultimately successfully. But to the same extent the current social order provides some with opportunities to act upon, it constrains other’s choices, and restricts their relative liberty. This is of particular importance in the context of a functioning democracy, where everyone is meant to have equal access to the political decision making process. To the extent that property can buy access to regulations that affect you, or protects you from the legal system when you have committed a crime, it distorts this very democratic process: No longer can everybody be considered to be an equal participant in the decision-making process, or equal before the law. Because these imbalances are the consequence of the political system, they are not warranted by individual choices. Therefore, any political system that wants to be considered “fair” needs to address these imbalances, for example through regulation and taxation. These individual measures in turn need to be fair and balance, and must not affect individuals unduly. Some may indeed be considered unfair, but this will need to be determined by debate, and there is no a priori reason to reject this notion.
1 As in the politically-philosophical theory’s definition of Republicanism, not the US party’s, of course.