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CAPITALISM IN THE CLASSICAL AND HIGH LIBERAL TRADITIONS*

Published online by Cambridge University Press:  31 May 2011

Samuel Freeman
Samuel Freeman
Affiliation:
Philosophy and Law, University of Pennsylvania
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Abstract

Liberalism generally holds that legitimate political power is limited and is to be impartially exercised, only for the public good. Liberals accordingly assign political priority to maintaining certain basic liberties and equality of opportunities; they advocate an essential role for markets in economic activity, and they recognize government's crucial role in correcting market breakdowns and providing public goods. Classical liberalism and what I call “the high liberal tradition” are two main branches of liberalism. Classical liberalism evolved from the works of Adam Smith and the classical utilitarian economists; its major 20th century representatives include Friedrich Hayek and Milton Friedman. The high liberal tradition developed from John Stuart Mill's works, and its major philosophical representatives in the 20th century are John Dewey and, later, John Rawls. This paper discusses the main distinguishing features of the classical and the high liberal traditions and their respective positions regarding capitalism as an economic and social system. Classical liberals, unlike high liberals, regard economic liberties and rights of private property in productive resources to be nearly as important as basic liberties. They conceive of equality of opportunity in more formal terms, and regard capitalist markets and the price system as essential not only to the allocation of production resources, but also as the fundamental criterion for the just distribution of income, wealth, and economic powers. High liberals, by contrast, regard the economic liberties as subordinate to the exercise of personal and civic liberties. They are prepared to regulate and restrict economic liberties to achieve greater equality of opportunities, reduce inequalities of economic powers, and promote a broader conception of the public good. And while high liberals endorse markets and the price system as essential to allocation of productive resources, they do not regard markets as the fundamental criterion for assessing just distributions of income, wealth, and economic powers and positions of responsibility. The paper concludes with some reflections upon the essential role that dissimilar conceptions of persons and society play in grounding the different positions on economic justice that classical and high liberals advocate.

Type
Research Article
Information
Social Philosophy and Policy , Volume 28 , Issue 2 , July 2011 , pp. 19 - 55
Copyright
Copyright © Social Philosophy and Policy Foundation 2011

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References

1 Following Joseph Schumpeter, I associate classical liberalism with the economic liberalism of the classical economists, starting with Adam Smith in the eighteenth century, and David Ricardo, Thomas Malthus, and other classical economists (including J. B. Say in France) in the nineteenth century (with the exclusion of John Stuart Mill, for reasons to be discussed). Classical liberalism in the nineteenth century was associated with the doctrine of laissez-faire, “the theory that the best way of promoting economic development and general welfare is to remove fetters from the private enterprise economy and to leave it alone.” Schumpeter, Joseph A., History of Economic Analysis (Oxford: Oxford University Press, 1954), 395Google Scholar. Friedrich Hayek and Milton Friedman are major twentieth-century representatives of classical liberalism, along with James Buchanan and the “Virginia School” of public choice theory, Gary Becker and other members of the “Chicago School,” Ludwig von Mises of the Austrian School of economics, David Gauthier among philosophers, and Richard Posner and Richard Epstein among legal scholars. While each of these thinkers may not strictly endorse each and every one of the features of liberalism I discuss that distinguish it from libertarianism, each does subscribe to a predominant majority of them. Some thinkers (Loren Lomasky perhaps) may not fit neatly into either category, and would reject my distinction between classical liberalism and libertarianism. For a more extensive discussion of the primary differences between liberalism and libertarianism, see my essay “Illiberal Libertarians: Why Libertarianism Is Not a Liberal View,” Philosophy and Public Affairs 30, no. 2 (Spring 2001): 105–51CrossRefGoogle Scholar.

2 By “libertarianism” I mean primarily the doctrine argued for by Robert Nozick, and also accounts by Jan Narveson, Murray Rothbard, John Hospers, Eric Mack, and others (including perhaps Ayn Rand). There is also a school of thought known as “left-libertarianism.” This position resembles libertarianism primarily in recognizing self-ownership and absolute freedom of contract. Otherwise, it bears little resemblance to traditional libertarianism, since it envisions qualified property rights along with extensive government redistribution to enforce egalitarian measures that (for example) neutralize the consequences of luck. See Vallentyne, Peter and Steiner, Hillel, eds., Left-Libertarianism and Its Critics (New York: Palgrave, 2000)Google Scholar.

3 Michael Munger suggests that many classical liberals incline toward relying on restrictive covenants and the law of nuisances rather than municipal zoning laws. Still, unlike libertarians, classical liberals are willing to use zoning and eminent domain powers when restrictive covenants are ineffective or not available.

4 For example, Hayek, Friedrich, in The Constitution of Liberty (Chicago: University of Chicago Press, 1960)Google Scholar, discusses, among other legitimate government measures affecting economic liberty: the legitimacy of prohibitions on contracts in restraint of trade (ibid., 230); regulation or prohibition of certain monopolies (265); regulations governing techniques in production (224–25); safety regulations in building codes (225); and certain restrictions on land use (229). Regarding property, he writes: “[T]he recognition of the right of private property does not determine what exactly should be the content of this right in order that the market mechanism will work as effectively and beneficially as possible” (ibid., 229; emphasis added). Moreover, on freedom of economic contract, he writes: “The old formulae of laissez-faire or non-intervention do not provide us with an adequate criterion for distinguishing between what is and what is not admissible in a free system. There is ample room for experimentation and improvement within that permanent legal framework which makes it possible for a free society to operate most efficiently” (ibid., 231; emphasis added).

5 Even major proponents of classical liberalism within the tradition of Austrian economics, such as Hayek or von Mises—while they may not put as much direct emphasis on economic efficiency and may emphasize instead the informational virtues of free markets (but why is this important if not for reasons of efficiency?)—should not find my characterization of capitalism at odds with their understanding. When Hayek rejects “utilitarianism,” he in effect rejects rational planning and direct appeals to the principle of utility in regulating markets or assessing the distribution of income and wealth. Hayek, Friedrich, Law, Legislation, and Liberty, Volume II: The Mirage of Social Justice (Chicago: University of Chicago Press, 1976), 22Google Scholar. Still, like David Hume, Hayek's arguments for the rules of justice and of capitalism are generally based in consequentialist considerations regarding their beneficial effects. As John Gray contends, Hayek ultimately relied upon indirect utilitarian arguments as the justification of his account of the rules of justice and capitalism. Gray, John, Hayek on Liberty (Oxford: Basil Blackwell, 1984), 59–60Google Scholar.

Moreover, as Alan Kors points out in his essay in this volume, Ludwig von Mises's argument for economic freedom also relies upon instrumental appeals to utility and economic efficiency. Von Mises writes: “We liberals do not assert that God or Nature meant all men to be free … What we maintain is that only a system based on freedom for all workers warrants the greatest productivity of human labor and is therefore in the interest of all the inhabitants of the earth…. This is the fruit of free labor. It is able to create more wealth for everyone…” von Mises, Ludwig, Liberalism in the Classical Tradition (Indianapolis, IN: Liberty Fund, 2005), chapter I, sec. 2Google Scholar.

6 John Locke is generally regarded as the first great liberal. While Locke endorses each of the other features of liberalism I discuss, missing from his writings is a developed idea of the role of free markets in achieving economic efficiency. The idea was not sufficiently developed at the time he lived in the seventeenth century. Libertarians rely upon a Lockean account of natural property, but their account of absolute property rights is not Locke's view since, like liberals generally, he had no reservations about taxation and governmental regulation of property for important public purposes.

7 Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations (Indianapolis, IN: Liberty Fund, 1981), Book IV, chap. 9, pp. 687–88Google Scholar; see generally Book V, chap. 1, part III, pp. 723–816, “Of the Expence of Publick Works and Publick Institutions.” Milton Friedman quotes approvingly and discusses the passage in the text, in , Milton and Friedman, Rose, Free to Choose (New York: Harcourt, Brace and Janovich, 1979), 19–25Google Scholar, adding a fourth duty of government, “to protect members of the community who cannot be regarded as ‘responsible’ individuals” (ibid., 24).

8 Smith, Wealth of Nations, Book V, chap. 1, pp. 814–15.

9 Locke, John, Second Treatise on Government, sec. 3, ed. Laslett, Peter (Cambridge: Cambridge University Press, 1988), p. 268Google Scholar.

10 I do not claim that all classical liberals are utilitarians, but only that in the eighteenth and nineteenth centuries the two schemes of thought developed in tandem and mutually influenced one another. Of course, the idea of natural rights associated with John Locke played a significant role in the development of liberalism, and Adam Smith appealed to natural rights, in spite of his utilitarianism and Hume's rejection of natural rights. Still Smith, like Locke, endorsed a robust idea of the public or common good, and saw property rights as subject to requirements of the public good. The idea endorsed by contemporary libertarians, that property rights and economic liberties are absolute and are not to be regulated according to the public good, seems to be a nineteenth-century development. On my interpretation, libertarians' rejection of the idea of the public or common good, like their rejection of the public nature of political power, marks a significant departure from classical liberalism.

11 Some contemporary welfarists (or “philosophical utilitarians” in T. M. Scanlon's sense) such as David Gauthier argue for capitalism and classical liberalism on Hobbesian contractarian grounds, but the argument is still driven mainly by considerations of economic efficiency. See Gauthier, David, Morals by Agreement (Oxford: Oxford University Press, 1986)Google Scholar.

12 See Hume, David, An Enquiry Concerning the Principles of Morals, 2d ed. (Oxford: Clarendon Press, 1970), sec. 3, “On Justice,” pp. 193–94Google Scholar.

13 On classical liberal support for “poor relief,” see Hayek, The Constitution of Liberty, 285–86. He provides historical background in Law, Legislation, and Liberty, Volume II, 190 n. 8, quoting such classical liberals as N. W. Senior and Moritz Mohl (writing in 1848). It is noteworthy that Adam Smith accepted the English Poor Laws, which, as he says, date back at least to the Elizabethan era (i.e., to the Parliamentary Acts of 1597–98 and 1601). Smith objected to the requirement that each local government is responsible for raising funds to pay for the support of their own poor, since this requirement discouraged the free movement of labor—therewith providing an argument for the centralization of governments' duty to maintain disabled, incompetent, and destitute people. See Smith, Wealth of Nations, 152–57. The Poor Law Reforms of 1834 finally centralized poor relief, but—in part due to the influence of Bentham, Malthus, and Ricardo—made poor relief normally available only in the now infamous work houses. Mill approves of “public charity” on classical liberal grounds, namely, that private charity is not adequate, and that leaving the poor to private charity encourages them to commit crimes. See Mill, John Stuart, Principles of Political Economy (Indianapolis, IN: Liberty Fund, 2006), Book V, chap. 11, sec. 13, pp. 960–62Google Scholar. Mill's departures from classical liberalism rest not in his views regarding poor relief, but in his conception of taxation (of estates especially), qualified property rights, remuneration of labor, and the organization of industry into workers' associations. See discussions in the text below.

On the continent, there is adequate philosophical precedent in central European liberalism for governmental provisions for the poor. Immanuel Kant in the eighteenth century saw it to be the duty of governments to “require the wealthy to provide the means of sustenance to those who are unable to provide the most necessary needs of nature for themselves.” See Kant, , The Metaphysical Elements of Justice, trans. Ladd, John (Indianapolis, IN: Bobbs-Merrill, 1965), 93Google Scholar.

14 See Hayek, The Constitution of Liberty, 292.

15 Friedman, Milton, Capitalism and Freedom, (Chicago: University of Chicago Press, 1962), 191Google Scholar. Friedman's proposal for a negative income tax to replace in-kind welfare benefits follows on pp. 191–95.

16 Hayek, Friedrich, Law, Legislation, and Liberty, Volume III: The Political Order of a Free People (Chicago: University of Chicago Press, 1979), 55Google Scholar. See also Hayek, The Constitution of Liberty, chapter 19, “Social Security.” The problem with the modern welfare state, Hayek contends, is that “the doctrine of the safety net, to catch those who fall, has been made meaningless by the doctrine of fair shares for those of us who are quite able to stand” (ibid., 285, quoting The Economist).

17 Libertarians differ from classical liberals in that they do not recognize (among other things) government's authority to regulate contracts to maintain the fluidity of markets, or to restrict property rights for the public good, or to tax people to pay for public goods or poor relief.

18 See Green, T. H., Lectures on the Principles of Political Obligation (Cambridge: Cambridge University Press, 1986)Google Scholar. For a discussion of Green's “new liberalism,” see Brink, David, Perfectionism and the Common Good: Themes in the Philosophy of T. H. Green (Oxford: Oxford University Press, 2003), esp. pp. 77–88CrossRefGoogle Scholar. For references to Dewey's works, see notes 24 and 72 below.

19 Rawls's first principle of justice, the principle of equal basic liberties, states: “Each person is to have an equal right to the most extensive total system of equal basic liberties compatible with a similar system of liberty for all.” Rawls, John, A Theory of Justice, rev. ed. (Cambridge, MA: Harvard University Press, 1999), 266Google Scholar. In later work, Rawls substituted the phrase “a fully adequate scheme” for “the most extensive total system.” See Rawls, John, Political Liberalism (New York: Columbia University Press, 1993), 291Google Scholar. The basic liberties that Mill and Rawls jointly recognize include liberty of conscience, freedom of thought and expression, freedom of the person and of occupation (or as Mill says, “freedom of tastes and pursuits”), and freedom of association. Rawls also includes among the equal basic liberties political rights of participation, and the rights and liberties covered by the rule of law.

20 As opposed to classical liberals and the political practice of the time which denied voting rights to those who did not meet property qualifications (as well as to women), Mill argued that those with more education, not with more property, are in a better position to deliberate impartially and decide what measures best promote the public good (which Mill understood in quasi-utilitarian terms). See Mill, John Stuart, On Representative Government, chap. VIII, “Of the Extension of the Suffrage,” in Mill, On Liberty and Other Essays, ed. Gray, John (Oxford: Oxford University Press, 1991), 334–41Google Scholar. The only exception to a universal franchise that he endorsed is the exclusion of recipients of poor relief. Ibid., 333.

21 Rawls, A Theory of Justice, sec. 82.

22 See Rawls, A Theory of Justice, 194–97; see also Dworkin, Ronald, Is Democracy Possible Here? (Princeton, NJ: Princeton University Press, 2009), 128–29Google Scholar.

23 For example, recently the U.S. Supreme Court in a 5-4 decision struck down a long-standing prohibition on corporate and union payment for broadcasts of campaign-related materials supporting or opposing specific candidates, on the grounds that it restricted corporations' rights to free expression and political influence. See Citizens United v. Federal Elections Committee, 558 U.S. 50 (2010)Google Scholar.

24 Dewey's main works on liberalism and political philosophy are Individualism: Old and New (1930); Liberalism and Social Action (1935); and Freedom and Culture (1939). For an instructive account of Dewey's liberalism, see Ryan, Alan, John Dewey and the High Tide of American Liberalism (New York: W. W. Norton, 1995), esp. chaps. 3 and 8Google Scholar.

25 Mill, Principles of Political Economy, Book II, chap. i, sec. 3, p. 209. Jerry Gaus and Ellen Paul remind me that Mill's attitudes toward laissez-faire evolved through the several editions of Principles. Mill writes: “Laisser-faire, in short, should be the general practice: every departure from it, unless required by some great good, is a certain evil” (ibid., Book V, chap. xi, sec. 7, p. 945. But the next nine sections discuss “Large exceptions to laisser-faire,” including “Cases in which the consumer is an incompetent judge of the commodity.” Here Mill argues, among other things, for public support for elementary schools, making schooling free to children of the poor (ibid., 950). Moreover, in his discussion of “socialism,” Mill says that impoverished workers have no choice of whom to work for or on what terms, and that freedom of contract is an absurdity, given the disparity of bargaining power that exists between owners and wage workers. If all that Mill means above by “laisser-faire” is a presumption in favor of markets in production, then Rawls accepts it in this limited sense. Historically, however, the term implies much more than this, including minimizing government economic regulation and the endorsement of near-absolute freedom of contract and nearly unqualified property rights in land and means of production, which Mill and Rawls clearly reject.

26 Thus, Mill says in Principles of Political Economy, Book V, chap. 11, sec. 3, p. 940, that in a democratic age, “There never was more necessity for surrounding individual independence of thought, speech and conduct, with the most powerful defenses, in order to maintain that originality of mind and individuality of character, which are the only source of any real progress.”

27 Rawls, A Theory of Justice, 53, 54. This inclusion of a right to hold personal property among the basic liberties in the first (1971) edition of A Theory of Justice (p. 61) led some critics to contend that a capitalist conception of robust property rights is protected by Rawls's first principle. They argued (on the assumption that a right to personal property must include nearly unqualified laissez-faire rights of use and transfer) that there is little space left for redistribution under Rawls's difference principle once Rawls assumes that a right to hold property is a basic liberty. In the 1999 revised edition of A Theory of Justice (p. 54), Rawls added the sentence quoted above in the text, which makes clear that this interpretation is a misunderstanding. Later, on the basis of his second principle of justice (discussed here), Rawls explicitly rejects laissez-faire conceptions of property, and contends that rights and other incidents of property are to be determined by the difference principle.

28 Rawls, John, Justice as Fairness: A Restatement (Cambridge, MA: Harvard University Press, 2001), 42–43Google Scholar.

29 Mill, Principles of Political Economy, Book II, chap. i, sec. 3, p. 207.

30 Ibid., 231–32.

31 Ibid., 232.

32 Ibid., 230.

33 Ibid., 223, 225.

34 Rawls explicitly excludes rights of acquisition and bequest from the basic right to hold personal property (Justice as Fairness, 114). The nature and extent of these rights instead are to be settled by the difference principle. Regarding rights of bequest, he says: “An estate need not be subject to tax, nor need the total given by bequest be limited. Rather the principle of progressive taxation is applied at the receiver's end…. The aim is to encourage a wide and far more equal dispersion of real property and productive assets.” Rawls adds that the aim is also “to prevent accumulations of wealth that are judged to be inimical to background justice, for example, to the fair value of the political liberties and to fair equality of opportunity.” Rawls, Justice as Fairness, 160–61.

35 Hume, David, Treatise on Human Nature (Oxford: Oxford University Press, 1960), 527, 491Google Scholar.

36 Friedman, Capitalism and Freedom, 26.

37 Ibid., 162 (emphasis added).

38 Ibid., 26.

39 Mill, Principles of Political Economy, Book II, chap. i, sec. 1, p. 199. See Alan Kors's discussion (elsewhere in this volume) of this aspect of Mill's position. Robbins, Lionel, in his 1979–81 lectures A History of Economic Thought, ed. Medema, Stephen and Samuels, Warren (Princeton, NJ: Princeton University Press, 1998), 224Google Scholar, says: “I ran into my friend Friedrich Hayek in the summer, and he was saying that he thought that Mill had done great harm by his distinction between the laws of production and distribution.”

40 Rawls, , A Theory of Justice, 273 (p. 241 of the 1999 revised edition)Google Scholar. Rawls indicates that he draws on the work of J. E. Meade for this distinction.

41 Rawls's more specific point here is that even a socialist society with public ownership of the means of production can use prices to allocate factors of production. This is what he calls “market socialism” or “liberal socialism.”

42 This is normally, but not always, the case, since markets often generate “irrational exuberance” causing speculative “bubbles” which eventually burst (e.g., the recent overbidding and oversupply in the housing market).

43 Mill says of wealth and productive output: “The things once there, mankind, individually or collectively, can do with them as they like. They can place them at the disposal of whomever they please, and on whatever terms. Further, in the social state … any disposal whatever of those can only take place by the consent of society, or rather of those who dispose of its active force.” Mill, Principles of Political Economy, Book II, chap. I, sec. 1, p. 199–200.

44 Friedman, Capitalism and Freedom, 162. The following argument in the text relies on an argument in my essay “Equality of Resources, Market Luck, and the Justification of Market Distributions,” Boston University Law Review 90, no. 2 (April 2010): 921–48Google Scholar.

45 Robert Nozick relies on marginal productivity theory for a similar argument: “People transfer their holdings or labor in free markets…. If marginal productivity theory is reasonably adequate, people will be receiving, in these voluntary transfers of holdings, roughly their marginal products. Nozick, Robert, Anarchy, State, and Utopia (New York: Basic Books, 1974), 187–88Google Scholar (emphasis added); see also ibid., 301–2, 304–5. In Nozick's utopia, “[E]ach person receives his marginal contribution to the world” (ibid., 302). Similarly, David Gauthier maintains: “In the free exchanges of the market each may expect a return equal in value to her contribution. Thus the income each receives … is equal to the contribution she makes, or the marginal difference she adds to the value of the total product. See Gauthier, David, Morals by Agreement (Oxford: Oxford University Press, 1986), 92–93Google Scholar. “The equation of income with marginal contribution ensures just this impartiality…. [E]ach benefits from, and only from, the contribution she makes.” Ibid., 97.

46 Of course, owners often manage or otherwise work in their own firms (particularly in smaller businesses); but then they no longer act purely in their capacity as owners, but are contributing their labor to production.

47 On the distinction between brute facts and institutional facts such as private property and money, and the constitution of institutional facts out of individuals' beliefs and other attitudes and their collective intentions and activities, see Searle, John, The Construction of Social Reality (New York: Free Press, 1995), chaps. 2–3Google Scholar.

48 Mill, Principles of Political Economy, Book II, chap. ii, sec. 1, pp. 215–16.

49 Marx, in effect, remarks on this conflation of different senses of “contribution” in a well-known passage on the “Trinity Formula,” in Capital, Book III. See Karl Marx: Selected Writings, ed. McClellan, David (Oxford: Oxford University Press, 1977), 500Google Scholar.

50 For example, a property-owning democracy, which Rawls contrasts with welfare-state capitalism, structures institutions to encourage workers' private ownership and control of their industries. See Rawls, Justice as Fairness, 135–40. Martin Weitzman advocates replacing the wage relationship with a system that ties workers' compensation to an index of a firm's performance, such as a share of revenue and profits. See Weitzman, Martin, The Share Economy (Cambridge, MA: Harvard University Press, 1984)Google Scholar. John Roemer advocates a model of profit-maximizing firms that distribute profits across society; all members of society are given an equal or fair share of corporate stock upon reaching maturity, with a right to dividends depending upon how their firms or mutual funds perform. See Roemer, John, A Future for Socialism (Cambridge, MA: Harvard University Press, 1994)CrossRefGoogle Scholar.

51 Friedman, Capitalism and Freedom, 162.

52 Thus, Robert Nozick devotes a substantial amount of space to discussing the state of nature and a right of initial appropriation of “unowned” things, subject to a “Lockean Proviso.” See Nozick, Anarchy, State, and Utopia, 67–182.

53 Smith, Wealth of Nations, 470.

54 So-called Jim Crow laws arose in the South and elsewhere in the United States after the end of Reconstruction in the 1870s, and continued until the 1950s and 1960s. They mandated, among other restrictions, de jure segregation of most public facilities and accommodations, including schools, public restrooms, buses and trains, and restaurants and hotels. In 1954, the U.S. Supreme Court, in Brown v. Board of Education, declared segregation of public schools unconstitutional. This case was a milestone in the eventual elimination of Jim Crow laws by the Civil Rights Acts of 1957 and 1964 and the Voting Rights Act of 1965. See Woodward, C. Vann's classic history, The Strange Career of Jim Crow (New York: Oxford University Press, 1955)Google Scholar; and Klarman, Michael J.; From Jim Crow to Civil Rights: The Supreme Court and the Struggle for Racial Equality (Oxford: Oxford University Press, 2004)Google Scholar.

55 See Friedman, Capitalism and Freedom, 109–10.

56 Ibid., 113 (emphasis added).

57 This accords with the ruling by the U.S. Supreme Court in Shelley v. Kraemer, 334 U.S. 1 (1948)Google Scholar, which held that private restrictive covenants barring blacks from ownership of real estate are unenforceable since they violate the equal protection clause of the Fourteenth Amendment to the U.S. Constitution. The Court said it is illegal for the government, including the judiciary, to enforce such covenants since the state then plays an integral role in a policy of racial discrimination in violation of the Fourteenth Amendment.

58 Friedman, Capitalism and Freedom, 113.

59 See Mill, The Subjection of Women, in Mill, On Liberty and Other Essays.

60 See Smith, Wealth of Nations, Book V, chap. 1, art. ii, on compulsory education: “For a very small expence the public can facilitate, can encourage, and can even impose upon almost the whole body of the people, the necessity of acquiring these most essential parts of education” (p. 785). Smith says that among the benefits to the state of educating “the inferior ranks of people” is that they are more disposed to work and be orderly and respectful of themselves, others, and their superiors, and less prone to disorder, superstition, and sedition (p. 788).

61 “The education of my child contributes to your welfare by promoting a stable and democratic society.” Friedman, Capitalism and Freedom, 86. Friedman argues for publicly issued vouchers to be used at privately run, for-profit or nonprofit schools (ibid., 89).

62 Nozick, Anarchy, State, and Utopia, 149–50. Hayek more generally condemns the idea of “social justice.” The title of the second volume of his Law, Legislation, and Liberty is The Mirage of Social Justice.

63 Rawls's second principle of justice is set forth above in the second paragraph of Section III.

64 Rawls, A Theory of Justice, sec. 43, see esp. pp. 242–45. On income supplements more generally, see Phelps, Edmund, Rewarding Work (Cambridge, MA: Harvard University Press, 1997; 2d ed., 2007)Google Scholar. Earned-income tax credits in the U.S. are means-tested income supplements paid primarily to low- and moderate-income workers with children (workers earning $48,278, or less if they have fewer than three children). In 2010, the EIC paid $3,050 for one child, $5,036 for two, and a maximum of $5,666. ($457 is paid to workers with no children earning less than $13,460, or $18,440 if married and filing jointly). See Publication 596 EIC at http://www.IRS.gov. Other countries, including Canada and the United Kingdom, have similar programs.

65 Dworkin, Ronald's position on economic justice is set forth in his Sovereign Virtue (Cambridge, MA: Harvard University Press, 2000), esp. chaps. 1, 2, and 7–9Google Scholar; and also in his Justice for Hedgehogs (Cambridge, MA: Harvard University Press, 2011)Google Scholar.

66 Mill writes in Principles of Political Economy, Book II, chap. i, sec. 4, p. 210: “The proportioning of remuneration to work done, is really just, only in so far as the more or less of work is a matter of choice: when it depends on natural difference of strength or capacity, this principle of remuneration is itself an injustice: it is giving to those who have: assigning most to those who are already favored most by nature.”

67 Rawls, Justice as Fairness, 135–40, 158–62, 176–78.

68 Mill says that the wage relationship divides “the producers into two parties with hostile interests, the many who do the work being mere servants under the command of the one who supplies the funds, and having no interest of their own in the enterprise except to earn their wages with as little labour as possible.” Mill, Principles of Political Economy, Book IV, chap. vii, sec. 4, p. 769.

69 Ibid., 769.

70 Ibid., 775.

71 Ibid., 793–94.

72 John Dewey also advocated arrangements that democratize work without socializing the means of production. He wrote: “Democracy is not in reality what it is in name until it is industrial as well as civil and political.” Dewey, John, “The Ethics of Democracy,” in John Dewey, The Early Works, vol. I (Carbondale: Southern Illinois University, 1969), 246Google Scholar. Later in the same work, Dewey writes: “That the economic and industrial life is in itself ethical, that it is to be made contributory to the realization of personality through the formation of a higher and more complete unity among men … such is the meaning of the statement that democracy must become industrial.” Ibid., 248. For a discussion of what he calls Dewey's “guild socialism,” see Ryan, John Dewey and the High Tide of American Liberalism, 111–17 and 309–27.

73 Rawls, Justice as Fairness, 176, 178.

74 Rawls, A Theory of Justice, rev. ed., 257.

75 See ibid., 386–88, on the primary social good of self-respect; ibid., 477–78, on self-respect and equal citizenship; and Rawls, Justice as Fairness, 114, on property rights, personal independence, and self-respect.

76 As discussed earlier in note 5.

77 Mill, On Liberty, 63 (chap. 3, sec. 2). Mill continues: “It [individuality] is not only a co-ordinate element with all that is designated by the terms civilization, instruction, education, culture, but is itself a necessary part and condition of all those things.” Ibid.

78 Ibid., 70 (chap. 3, sec. 9).

79 Ibid., 15 (chap. 1, sec. 11).

80 Mill, Principles of Political Economy, Book IV, chap. vii, sec. 1, p. 758: “I do not recognize as either just or salutary, a state of society in which there is any class which is not ‘labouring’; any human being, exempt from bearing their share of the necessary labours of human life, except those unable to labour, or who have fairly earned rest by previous toil.”

81 Ibid., 767.

82 Ibid., 763.

83 Rawls, Justice as Fairness, 114.

84 Thus, libertarians such as Nozick might regard persons in the first instance as self-owners with absolute rights in their persons as well as their possessions, and society as a free association of such owners whose relations are contractually specified. The question then becomes, what capacities and features of persons justify our seeing ourselves and our relations primarily in this way?