Monday, April 21, 2008

Principles for egalatarian redistribution of wealth


Inequalities of wealth and access to resources are increasing daily on our world.

At the turn of the millennium, 790 million people did not have food security. By and large most of these people were living in the Global South, the so-called “Third World”.

“ South Asia contained 283.9 million hungry people, East and Southeast Asia 241.6 million, Sub-Saharan Africa 179.6 million, Latin America 53.4 million AND the Near East and North Africa 32.9 million. Over 20,000 people a day are dying from the effects of hunger.” John Madeley, Hungry for Trade- p26.

Three years later, this situation has worsened. The Food and Agricultural Organisation (FAO) of the United Nations published the “State of Food Insecurity in the World 2003” report in December last year, to measure “progress towards the World Food Summit and Millennium Development Goals”. It estimates that today around 842 million people are suffering chronic hunger.

FAO director-general Jacques Diouf writes in the report, "Why have we allowed hundreds of millions of people to go hungry in a world that produces more than enough food for every woman, man and child? Bluntly stated, the problem is not so much a lack of food as a lack of political will."

(The FAO report is available at )

In the Developed OECD countries, 15% of adults are lacking functional literacy skills (1994 –98), with 130 million people in income poverty. 8 million undernourished people with a further 1.5 million people living with HIV/AIDS (2000)

Source: Globalise Resistance website (

The gulf between rich and poor in Ireland has actually increased during the Celtic Tiger boom. The recent Budget 2003 sees a continuation of neo-liberal policies that reward stud farm owners with 15 million Euro and multinationals with grants and the lowest corporate tax rate in Europe, whilst Exchequer funding for the Forum for People with Disabilities has been slashed a further 19%, following a major cut of 44% in last years estimates. Focus Ireland, an organisation for the homeless, estimated that there were over 8,000 people homeless in the City of Dublin- yet instead of using our resources to abolish homelessness once and for all (which would be arguably cheaper than the Luas), the recent Budget 2003 changes the rules for supplementary rent allowance, not allowing people to get help with their rent for six months. Threshold, the housing organization, estimates that 60,000 more households will be driven into extreme poverty by cuts in rent allowance and social welfare.

(Source for figures: Editorial-Budget Cuts, Socialist Worker Dec 9th, Vol. 2 no 212)

For egalitarians, the need to address these huge material inequalities demands the formulation of theories concerning not only how these injustices are generated, but also a strategy for how we may distribute resources more fairly to benefit more people.

There are several different philosophical schools we must first examine.

Modern political discourse concerning the values of liberty and equality can be said to have begun with the Great French and American revolutions of the late eighteenth century, which overturned the old feudal orders in favour of what can now be called liberal democracy. In liberal democracy, formal political equality was guaranteed by a declaration of rights, where “Men are born and remain free and equal in rights. Social distinctions may be founded only upon the general good”. In addition, “Law is the expression of the general will. Every citizen has a right to participate personally, or through his representative, in its foundation. It must be the same for all, whether it protects or punishes. All citizens, being equal in the eyes of the law, are equally eligible to all dignities and to all public positions and occupations, according to their abilities, and without distinction except that of their virtues and talents”. (The Declaration of the Rights of man and of the Citizen, 1789)

This formal political equality replaced the previous divine right of kings, where political power was inherited from noble birth, and the economy was organised in a feudal pyramid based around the ownership of land. The American and French revolutions freed the emerging capitalist class from these bonds, allowing them to freely develop the modern capitalist economy. Their reforms became the basis for modern liberal democracies: "Each to count for one, and none for more than one" (Jeremy Bentham).

A new philosophy of political economy emerged. Led by thinkers such as Adam Smith, David Ricardo and Jeremy Bentham, they argued that modern individuals were rational economic beings who would make choices based on maximising their welfare or satisfaction. The purpose of the modern capitalist economy was to facilitate the greatest amount of economic satisfaction, or utility, for the widest amount of people as possible. This school is known as Utilitarianism.


During the Enlightenment, several philosophers tried to describe how best the new liberal democracy could best guarantee the rights and welfare of its citizenry, such as Locke’s “Second Treatise of Government” and Rosseau’s “The Social Contract”. One of the most eloquent writers of this Contractarian school was the Harvard professor John Rawls, whose publication in 1971 of “A Theory of Justice” provided liberal egalitarianism with one of its touchstone texts. “A Theory of Justice” sketches a hypothetical contract by imagining a world where individuals must rationally choose how to order society. Here Rawls introduces some important ideas and principles.

The first is how these individuals make the choice to order this society- the so-called “Original Position”: a hypothetical situation outside of history that Rawls uses to explore how we would rationally plan a society. Rawls introduces what he calls the Veil of Ignorance- the individuals have no information about their own or each other’s “conception of the good”, social situation and talents and abilities.

“No one knows his place in society, his class position or social status, nor does he know his fortune in the distribution of natural assets and abilities, his intelligence and strength and the like. Nor, again, does anyone know his conception of the good, the particulars of his rational plan of life, or even the special features of his psychology such as his aversion to risk or liability to pessimism or optimism. More than this, I assume the parties do not know the particulars of their own society.”

Rawls, Theory of Justice, Oxford University Press 1971, p137

Under this veil of ignorance, we are unaware whether we will be a man or a woman, a boss or a worker, black or white, intelligent or strong. As such, Rawls foresees that rationally, we would thus try to ensure that whatever our subsequent identity, we are guaranteed equal rights within this new society. Equal opportunity to resources should be a rational choice we would make if we did not know our background otherwise.

Rawls defines this as “justice as fairness”. This leads him to state what he calls the Two Principles of Justice.

'1. Each person has an equal right to a fully adequate scheme of equal basic liberties which is compatible with a similar scheme of liberties for all.

2. Social and economic inequalities are to satisfy two conditions. First, they must be attached to offices and positions open to all under conditions of fair equality of opportunity; and second [the difference principle] they must be to the greatest benefit of the least advantaged members of society.'

Rawls, Theory of Justice, p302

The first principle, in modern democratic discourse, is rarely contested. People of many different philosophical or political ideologies would all agree with equal political rights and formal basic liberties for citizens, be they socialist, liberal, conservative or libertarian. It is within the second principle, especially around its second part, the so called “Difference principle”, that Rawls sets the debate on fire.

Rawls here actually makes a case for why social and economic inequalities are philosophically justifiable in a liberal democracy. The first part of the second principle describes how competition between individuals should be fair, seeing decisions being made within this new society by a meritocracy of the talented. This is obviously an improvement from the days of feudalism, where power and wealth was monopolised by the nobility at the expense of wider society. There is an objection against any system that 'permits the distribution of wealth and income to be determined by the natural distribution of abilities and talents... distributive shares [in such a system] are decided by the outcome of the natural lottery; and this outcome is arbitrary [therefore objectionable] from a moral perspective. There is no more reason to permit the distribution of income and wealth to be settled by the distribution of natural assets than by historical and social fortune' (A Theory of Justice, p.74).

However, it can be argued that here Rawls see competition rather than co operation between individuals as the motor for the new society. This is an ideological assumption coming from the Utilitarian tradition, than has been challenged by more radical egalitarians from the socialist or anarchist traditions.

The second part again makes an assumption that social or economic inequalities can sometimes be justified if they are to “the greatest benefit” of “the least advantaged members of society”. Here Rawls is criticised both from the left and the right.

From the right, Rawls is attacked from what can be called the Libertarian school, especially by the author of Anarchy, State and Utopia, Robert Nozick. He argues that provided we acquire and transfer our assets without the use of coercion, justice requires that we are entitled to choose freely what to do with our assets. A just distribution is whatever results from free-market exchanges. Thus, right wing libertarians oppose the welfare state as a form of coercive theft, where the natural talents of the wealthy are forced to share their resources with those who are weaker, poorer or less intelligent than them. The libertarians argue that the state has no business taxing people who have “earned” their wealth- it should be allowed to raise revenue to provide a strong police force to guarantee protection (presumably the rich) and little more. Thus, Rawls philosophical assumption that inequalities are only justified if they benefit the poor is seen as a moral defence of the welfare state, which the libertarians seek to dismantle.

From the left, the difference principle can be criticised because its model of economic redistribution is indistinguishable from what the Neoliberal economic school refer to as “Trickle-down economics”. Led by Milton Friedman and the Chicago school in the 1970s, finding political expression in the experience of Reagonomics in the USA and Thatcherism in the UK in the 1980s, it now straddles the world under the term “Globalisation”. Central to its economic arguments are that inequalities of wealth and resources are justified if they help to develop the economy, providing more jobs for the poor- encapsulated in the cliché “a rising tide lifts all boats”. However, the experience of Reagonomics and Thatcherism has been that income gaps between rich and poor have actually dramatically increased- according to the United Nations Human Development Report of 1999, “the ratio of the income of the richest fifth of the world’s population to the poorest fifth had risen from 30 to 1 in 1960 to 60 in 1 by 1990. By 1997 the ratio had risen to 74 in 1.” (

Rawls elaborates his defence of the market as a method of distribution by arguing that it provides incentives for people to better themselves.

“Now those starting out as members of the entrepreneurial class in a property-owning democracy, say, have a better prospect than those who begin in the class of unskilled labourers.....The inequality in expectation is permissible only if lowering it would make the working class worse off. Supposedly....the greater expectations allowed to entrepreneurs encourages them to do things which raise the long-term prospects of the labouring class. Their better prospects act as incentives so that the economic process is more efficient, innovation proceeds at a faster pace, and so on. Eventually the resulting material benefits spread throughout the system and to the least advantaged. I shall not consider how far these things are true. The point is that something of this kind must be argued if these inequalities are to be just by the difference principle.”
Rawls, A Theory of Justice, section 13. (p78)

It is important to remember that here Rawls argues for the existence of economic inequalities only if they generate more wealth for those at the bottom. A Theory of Justice was written in 1971, in the middle of the Cold War, where Stalinist State-Capitalism held sway over billions of people in the USSR, China and the Eastern Bloc. Comparatively, it could be argued that workers in the West had a better standard of living (and of individual liberties) than their comrades in the “classless, socialist” East. Despite the greater inequality in the West, if it benefited those “worst off”, it was philosophically justified.

Imagine society A where all citizens have ten units of satisfaction. This would be theoretically the utopian egalitarian state. Now compare it with society B, where 90% of citizens have 12 units of satisfaction, with a 10% minority above them with 20 units. With Rawls difference principle, we would opt for society B, as the worse off improve their utility by 2 units. “All social primary goods - liberty and opportunity, income and wealth, and the bases of self-respect - are to be distributed equally unless an unequal distribution of any or all of these goods is to the advantage of the least favoured.”
Rawls, A Theory of Justice, p302-3.


Here we must examine theories of how wealth is created under capitalism. For Rawls, the source of efficiency, innovation and incentive in a society are the “property owning entrepreneurial class”. Businessmen and corporations are the “wealth creators”.

However, an alternative view exists which sees that what Rawls calls the “labouring class” is the source of all wealth and commodities produced in capitalism. This was accepted by John Locke, David Ricardo and Adam Smith. Smith argued that

“the real price of everything, what it really costs the men who want to acquire it, is the toil and trouble of acquiring it…It is not by gold and silver, but by labour, that all the wealth of the world was originally purchased, and its value to those who possess it and who want to exchange it for some other object, is precisely equal to the quantity of labour which it enables them to purchase or command”- From the Wealth of Nations, quoted in Chris Harman, Economics of the Madhouse, Bookmarks, 1995, p20.

Decades before Marx developed the labour theory of value in Das Kapital, Adam Smith conceded the fact that capitalists, rather than creating wealth, actually took their profits from wealth created by labour. Profit was the unpaid surplus the working class created.

“In the original state of things, which precedes both the appropriation of land and the accumulation of stock, the whole product of labour belonged to the labourer. But as soon as the land becomes private property, the landowner demands a share of the produce…

The produce of all labour is liable to a like deduction of profit… In all manufactures, the greater part of the workmen stand in need of a master to advance them the materials of their work… He shares in the product of their labour”.

Quoted by Chris Harman, Economics of the Madhouse, p23.

Thus, it can be argued from the left that the Difference principle is an attempted justification of this exploitation of the majority of people in society who are compelled by economic necessity to work, by a small minority of landlords, corporations, speculators and capitalists. Rather than help reduce inequalities, these economic agents perpetuate it, basing their economies not on equality but exploitation and profits, not people.

Thus, for radical egalitarians, the need to democratise the very economy itself becomes a prerequisite, a fundamental principle in how to organise society and redistribute the resources created collectively. The redistributive principle of the socialist movement can be summed up in Marx’s maxim “From each according to their ability, to each according to their need”.

In the Communist Manifesto, Marx and Engels see the development of capitalism as a progressive step in history, overthrowing the superstitions of the old feudal order with the white heat of science and industry.

The bourgeoisie cannot exist without constantly revolutionising the instruments of production…All fixed, fast frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away…

Events like the English, American and French Revolutions overthrew the age old rule of kings, and began freeing the productive forces of the urban bourgeoisie to develop both industries and empires, thus creating a new imperialist global economy.

However, the new industrialised society creates its own oppressed class, the proletariat or urban working class. The proletariat is exploited by being forced to sell its labour at a price lower than its true value- the surplus value is taken by the capitalist and becomes the chief source of the new system’s ultimate goal- profits. However, the exploitation of this new class differs in that they are exploited collectively, in massive factories, industries and workplaces. This creates the possibilities for workers to begin organising collectively in combinations or unions, pointing the way to a future collective, egalitarian society where wealth can be democratically owned and shared for the common good.

The proletariat goes through various stages of development. With its birth begins its struggle with the bourgeoisie. At first the contest is carried on by individual labourers, then by the working people of a factory, then by the operatives of one trade, in one locality, against the individual bourgeois who directly employs them…

But with the development of industry, the proletariat increase not only in number, it becomes concentrated in greater masses, its strength grows and it feels it more.

When Marx was writing, the global working class was equivalent to that of the workers in modern South Korea. Today, the vast majority of the world’s population (and poor) are urban workers.

Marx was not a determinist- there will be no natural evolution from the barbaric system of capitalist exploitation based on war, imperialism, racism and sexism to a new collective world unless people consciously organise to bring it about. He argued for socialism from below- the liberation of the workers was not to be done by anyone but themselves- “Philosophers have only interpreted the world” he once said, “The point is to change it.”

The second part of the Manifesto goes on to look at the basics of the economic workings of the capitalist system, which are explored in detail in his masterwork, Das Kapital. The theory of surplus value as the basis of wealth and profits is put forward- wage labour and private property (the undemocratic ownership of industry by a minority of capitalists) is how this is attained.

The French Utopian Socialist, Proudhon, before Marx, had declared that “Private property is theft”. Marx distinguishes here the difference between the personal objects most working people buy throughout their life with their wages, to which they are entitled, and the ownership of huge industries, corporations and economic sectors by individuals or private cabals.

Communism deprives no one of the power to appropriate the products of society: all that it does is deprive one of the power to subjugate the labours of others by means of such appropriation…

The working class, through revolution, will put property and wealth under democratic control, for the use and service of all. Here, Marx addresses those critics who attack the socialists-

You are horrified at our intending to do away with private property. But in your existing society, private property is already done away with for nine-tenths of the population; its existence for the few is solely due to its non-existence in the hands of those nine-tenths.

Thus, for Marxists, the principle of democratic control of the economy and the resources produced by collective labour is irreconcilable with private ownership of the means of production. How this democratic control of economics is to be achieved is widely debated- some socialists argue for gradual reforms, Partnership, a Third Way or market socialism, others argue for worker’s councils, a fighting trade union movement and revolution.

CONCLUSION: From a Theory of Justice to a Global Justice Movement

The debates between the various egalitarian theorists, from Rawls to Marx are reflected in the diversity of political and social movements that make up the movement for global justice, and the discussions between leading theorists reflect this diversity. Emerging from the demonstrations against the WTO in Seattle, November 2003, the new movement has seen many new books published on the principles around which it would redistribute the world’s wealth more equitably. It is not possible here to discuss the full spectrum of their ideas here- I would like to focus briefly on the book “Parecon” by left libertarian Michael Albert from New York, and “An Anti Capitalist Manifesto” by Professor Alex Callinicos of York University.

The Global Justice movement is often defined in terms of what it is against- anti-war, anti-capitalist, anti globalisation. Now it has reached its fourth birthday and matured somewhat, a recent rash of books has attempted to put forward both theory and a programme of how radical egalitarians should re organise the global economy in the interests of justice.

Michael Albert calls this participative economics or Parecon for short. The Parecon Manifesto is available on the website, and has triggered much debate between other strands in the movement at the anti capitalist website

Albert identifies how in a participative economy, workers and consumers councils would democratically decide how resources were allocated-

“Workers and consumers need a place to express and pursue their preferences. Historically these have been organisations where workers congregate. In workplaces we call them workers councils. Regarding consumption, we call them consumers’ councils. Councils form whenever people rise up to try to take control of their economic lives…it has occurred virtually every time in history, most recently in Argentina. Councils are organs of direct organisation by those working and consuming...”

Albert sees these workers councils as a way of breaking down the artificial divide between formal political rights and liberties and how decisions are made in economic life.

“Councils become the seat of decision-making power and exist at many levels, including individual workers and consumers, subunits such as work groups and work teams, and supra units such as divisions and workplaces and whole industries, as well as neighbourhoods, counties, and whole states.

People in councils are the economy’s decision-makers. Votes could be majority rule, three quarters, two-thirds, consensus, or other possibilities. They are taken at different levels, with fewer or more participants, and different procedures, depending on the particular implications of the decisions in question… There is no a priori single correct choice. There is, however, a right norm to try to efficiently and sensibly implement: decision-making input should be in proportion as one is affected by decisions.”

Albert argues that in a Parecon, remuneration will be on the basis of the amount of work done. Allocation of resources and wealth will not be on the basis of private property or power

“We work. This entitles us to a share of the product of work. But this new vision says that we ought to receive for our labours an amount in tune with how hard we have worked, with how long we have worked, and with what sacrifices we have endured at our work. We shouldn’t get more income by virtue of being more productive due to having better tools, more skills, or greater inborn talent, much less by virtue of having more power or owning more property. We should be entitled to more consumption only by virtue of expending more of our effort or otherwise enduring more sacrifice. This is morally appropriate and it also provides proper incentives due to rewarding only what we can affect, and not what we can’t.”

Albert argues both against the market and central planning as distributive methods in an egalitarian society. Here he represents the anarchist critique that any centrally planned economic alternative to capitalism will replicate the failed bureaucracies of the Soviet Union or Eastern Europe. In contrast, Alex Callinicos defends the idea that we can plan how to use our resources, not just locally, but nationally and globally.

“There are various models of a democratically planned economy. Here resources are allocated on the basis of a democratic process that involves horizontal relations among networks of producers and consumers – a radically different form of economic co-ordination from either capitalism (where allocation is the outcome of competition) or a Stalinist command economy (where resources are allocated dictatorially). One of these models is Parecon, developed by Michael Albert. Another, somewhat more centralised model is Pat Devine’s ‘negotiated co-ordination’, first outlined in his book Democracy and Economic Planning (1988). The relative merits of these and other models are a matter for discussion. Nevertheless, their existence indicates that serious and concrete thinking is going on about what a systemic alternative to capitalism would look like. A democratically planned economy conceived along these lines represents, in my view, the best way of realising the values to which the movement is committed.” Alex Callinicos, An Anti Capitalist Manifesto, Polity 2003, p147

Callinicos identifies four major principles or values of the modern anti capitalist movement, principles useful to liberal and radical egalitarians alike. They are (1) Justice, (2) Efficiency (3) Democracy and (4) Sustainability.

The overproduction of capitalism results in huge crisis whilst millions starve. Callinicos argues that a democratically planned economy would be more efficient than the market because it would produce what people actually wanted- e.g. houses for the homeless. Capitalism is not efficient because it squanders resources on arms and overproduction, allowing 20,000 to die of hunger every day. Similarly, capitalism is not using natural resources in a sustainable way- unless we rapidly change our relationship with the environment, we will deplete many finite resources, and pollute the rest. The need to extend democracy into economic life is one way to achieve justice, and it is here the modern movement pays its respect to the legacy of Rawl’s work-

“We have a much clearer understanding of what justice involves, thanks to the work over the past generation of egalitarian liberal philosophers such as John Rawls, Ronald Dworkin and Amartya Sen...they have formulated principles on justice that implicitly challenge the logic of the capitalist system…the idea that individuals should be provided with the resources they require to secure equal access to the advantages they need in order to live the life they have reason to value” Callinicos, An Anti Capitalist Manifesto , p108.


John Rawls, A Theory of Justice, Oxford University Press 1971

John Madeley, Hungry for Trade, Zed Books London, 2000

Alex Callinicos, Equality, Polity 2000

Alex Callinicos, An Anti Capitalist Manifesto, Polity 2003

Karl Marx et F.Engels, The Communist Manifesto, Progress 1972
Chris Harman, Economics of the Madhouse, Bookmarks 1995

United Nations Development Report:

Food and Agricultural Organisation:

Participative economics: and