Addressing the rise of inequalities: How relevant is Rawls's critique of welfare state capitalism?

Abstract

Recent studies by economists such as Piketty (2013, 2019) and Atkinson (2015) have contested the well-established view that post-war redistribution policies have been successful in the long term at slowing down the rise of structural inequalities. In reality, the claim goes, they have dealt mostly with reducing inequalities of income through redistribution and have left inequalities of wealth and capital ownership uncontrolled. These, according to their studies, have now risen in the developed world and reached levels more typical of 19th Century Europe.

To make matters worse, perceptions of and attitudes towards fighting inequalities as unjust that Rawls saw as based on a wide consensus of citizens' “considered judgments” (Rawls, 1999, p. 17), have changed, leading to them being accepted as the justified and even necessary price to pay for economic growth and as a reward for merit. Economic arguments based on the need for incentives for raising productivity and the “trickle-down effect” have become widely accepted as if the price of economic efficiency should be disconnected from the demands of equity. Meritocracy has provided ethical arguments too. As John Roemer says, “today the most important problem for the social sciences of inequality is understanding how electorates have come to acquiesce to policies which increase inequality… and to try revealing the logic of the micro mechanisms that lead to this acquiescence… to challenge the view that interfering with the incentives the market provides necessarily reduces economic welfare” (Roemer, 2011, p. 301).

Such recent developments, as some critics have argued (Forrester, 2019, pp. 278–279), suggest that Rawls's A Theory of Justice, published in 1971, before the watershed of neoliberal welfare policies, should be considered as a product of its time and as still thinking about justice within the context of the post-war market economy of rising demand and economic growth, supported by state interventions. But post-1980s, another ideology has been dominant. “Small government” and limited state intervention are the new norms, even on the Left with the Third Way in Britain, and redistribution is being reconsidered¹ as often too costly and conducing to the rise of a work-shy population, even if the 2020–2022 COVID-19 pandemic has considerably watered down these criticisms.

In this article, I examine Rawls's “political” critique of WSC and of its inability to fight structural injustices together with his proposal for POD as a realistic prospect and a credible alternative to WSC. Section 2 describes the rise of inequalities of wealth and power as a source of structural injustices, and Rawls's insight as to why WSC is unable to fight them. Section 3 presents Rawls's alternative proposal of POD with its two ambitions, to protect, but also to emancipate citizens and guarantee their full rights. Section 4 asks whether POD can fully articulate these two aims and answer Sen's criticism (Sen, 1999) that this is still a “resourcist” solution that fails to fully emancipate citizens. Section 5 tentatively suggests that the justification for POD must rest on a new paradigm that redefines the nature of the Self in developmental terms (Audard, 2019), both capable and vulnerable over time (Nussbaum, 2006). The fight against inequalities of wealth through POD can then be justified as it aims at increasing agency and social mobility for all, not simply consumption and utility maximization, and, most importantly, as a basis for democratic citizenship and the full value of political liberties (Thomas, 2017b; White, 2015; White, 2016).

This section provides a brief overview of the new historical conditions faced by welfare state capitalism and of Rawls's political critique of its failures.

Now, the question is whether POD is really the radical answer to the rise of unjust and extreme inequalities of wealth and political power that Rawls suggests.

In this concluding section, I would like to tentatively show how POD and capital ownership are justified within a new moral paradigm. I will take as my lead what Rawls himself says, that we need here new “fundamental intuitive ideas of person and society” (Rawls, 2001, p. 132) to fully understand the concept of POD and its relationship to a just welfare state, where the principles of justice might get realized. One such intuitive idea is that inequalities have damaging consequences for the development of a whole life, a consideration which is ignored, as I have shown, by WSC, its social interventions and corrective or remedial measures. In contrast, because justice as fairness focuses on inequalities in citizens' life-prospects over a complete life, POD as a “pre-distributive” scheme should be able to cast light on and fight better the sources of inequalities.

A conception of the self as a developing being and of this process as a social process through time and cooperation with others, opens the way for a different view of the just welfare state, one that is active ex ante against inherited inequalities and empowering and even “emancipating” individuals during their whole life, not simply remedying accidents and hardships ex post (Fleurbaey, 2018, p. 166). It is clear, then, that Rawls goes beyond the social democratic model of the past thanks to his emphasis on ex ante injustices and inherited inequality of wealth, political power, and status, as the main sources of structural injustices. He can then envisage a beyond of capitalism, a dissemination of power and a future for citizens as stakeholders in their society (Ackerman, 1999), capable of making decisions for themselves, and secure enough to take risks, a new form of economic democracy. The fight against inequalities of wealth through POD aims at increasing agency and social mobility for all, not simply consumption and utility maximization. Social justice itself should, then, be understood differently in view of this reinterpretation of “the self as a progressive and developing being” (Mill, 1859, ch. 3). In particular, the demand for freedom and responsibility for one's own ends should come to the forefront of social justice, avoiding as much as possible the “undue reliance on assistance.” Only a concerted effort of predistribution of the ownership of wealth and capital can overcome structural inequalities and give reality to the principle of equal opportunities for all.

No conflict of interests noted.