THE REAL UTOPIAS SERIES

Associations and Democracy
(1992; publication 1995)

Equal Shares
(1994, publication 1996)

Recasting Egalitarianism
(1998; publication 1999)

Deepening Democracy
(2000; publication 2003)

Redesigning Redistribution
(2002; publication forthcoming)

Using Pensions for Social Control of Capitalist Investment
(2004; publication forthcoming)

Institutions for Gender Egalitarianism
(2006)

The market -- defined roughly as uncoerced exchanges between people of goods and services -- is one of the many possible ways of organizing the allocation of things people want in a society and coordinating the complex decisions and practices that constitute an economy. No one believes that markets should be the only way goods and services are distributed. Even the most ardent free market libertarian believes in the necessity of some taxation for supporting the "night watchman state" and the appropriateness of parents coercing their children to perform household chores. And, equally, virtually no one today believes that a complex economy can function without some presence of markets. No serious thinker on the Left still upholds the vision of comprehensive centralized planning as a viable institutional design to replace capitalism. The issue, then, is how market exchanges are to be articulated with other institutional mechanisms, not whether an economically developed society can work effectively with only markets or with no markets. 

While there may be near universal acknowlegment of the need for markets, the Right and Left remain divided in their basic belief about how markets and nonmarket institutions should be linked to advance certain core values. The Right is highly skeptical of nonmarket institutions of economic regulation and allocation, and while acknowledging their necessity, has wanted to hedge them in, restrict them to the minimal possible domaines out of fear that nonmarket mechanisms are like Frankenstein -- once created they tend to run amok and be uncontrollable. Accordingly the Right sees the alleged virtues of the market -- especially enhanced individual freedom and economic efficiency -- as constantly threatened by the excessive encroachments of the state. The Left, in contrast, has generally been skeptical of the moral and economic virtues of markets, and while acknowledging the practical necessity of markets, wants to hem them in within effective political and normative limits on the grounds that markets are corrosive of other values and will constantly generate pressures to expand. The danger that such interference by the democratic affirmative state will become oppressive is seen as much less serious than the danger of weakly regulated markets generating socially explosive inequalities, perpetuating oppressive conditions of daily life for many, and fostering a moral callousness that is profoundly destructive of basic human values.

 
At the moment, the Rightwing perspective on markets is certainly dominant ideologically. Many on the Left have significantly softened their traditional hostility to market institutions, acknowledging that strong market mechanisms are important for certain kinds of efficiency considerations and that excessive restrictions on voluntary exchanges can produce all sorts of undesirable consequences. While many people may continue to worry about the consequences of unfettered markets, there is much less confidence on the Left today about how to properly design such fetters so as to reap the virtues of markets while avoiding their negative consequences. 

The papers in this special issue of Politics & Society explore a range of issues on this ideological terrain sparked by provocative proposal by Samuel Bowles and Herbert Gintis for an efficiency-enhancing, egalitarian market economy. They argue that if institutions are properly designed, markets can actually enhance the achievement of certain core vlaues on the Left, especially equality, while at the same time preserving (and maybe even enhancing) various forms of efficiency. With such "new rules for markets, states and communities," they argue, left wing consequences can be built into institutions traditionally defended by the right. This proposal is more than a reluctant acknowledgement that for pragmatic reasons the Left has to tolerate a certain aspects of market relations; it is an leftwing affirmation of the positive virtues of markets under suitably designed rules of the game.

At the core of this proposal is a simple idea. The twin goals of enhanced and sustainable equality -- a value stresseed by the Left -- and economic efficiency -- a value emphasized by the Right -- can both be met if the basic assets which underlie various kinds of transactions are redistributed in a particular way. Specifically, Bowles and Gintis argue that equality and efficiency can both be advanced if assets are broadly redstributed from principals to agents. Here is the basic argument:

One of the commonly alleged virtues of markets is that markets hold people who make consequential decisions accountable for their actions. This personal accountability is responsible for much of the vaunted efficiency of markets, for it creates incentive structures in which people have an interest in avoiding waste and in correcting mistakes when they occur. Much of what is called "market failures" in the standard economics literature can be considered situations in which such accountability breaks down. Above all, when there is a conflict of interest between "principals" and "agents" it can often happen that agents can make consequential decisions which are deficient from the point of view of principals, but the principal has no effective way of holding the agent accountable, at least not without expending considerable resources in monitoring and sanctioning the actions of the agent.

Bowles and Gintis propose that if the assets used in economic transactions are properly distributed, then many of these accountability-linked market failures can be avoided. Specifically, if assets are redistributed from principals to agents so that the agents directly experience the consequences of their actions, then such efficiency-enhancing accountability will be strengthened. Such redistribution will also further the goals of the left by generating a much more egalitarian distribution of all sorts of valuable assets in the population. The result will be what might be termed a radically egalitarian market economy in which the affirmative state plays a significant role in maintaining the egalitarian character of the asset distributions, but the actual use of those assets takes place within relatively unfettered markets relations.

 
The opening essay in this issue of  Politics & Society lays out the underlying logic of this proposal in some detail. This is followed by a series of papers which respond to various aspects of the model. Some of these essays are highly critical of the proposal on both normative and institutional grounds. Other contributors agree broadly with the idea of an asset redistributive market economy and explore various additional ramifications of the Bowles and Gintis proposal. Some of the contributions revolve around philosophical issues about the nature of the proposals. Others deal with hard core economics questions about the details of the model and its elaboration. And still others focus more on empirical matters linked to the problem of assets, equality and efficiency. Taken together, this collection provides a context for a serious discussion of the problem of designing economic institutions in ways which capture the virtues of markets while neutralizing at least some of their destructive consequences.

This set of essays grew out of a conference in the Real Utopias Project held at the Havens Center at the University of Wisconsin, Madison, in November of 1995. The Real Utopias Project is an effort to bring together two kinds of discussions which are often quite separate: philosophical discussions about the core values underlying various kinds of emancipatory visions, and social scientific discussions of feasible institutional design. The hope is to give analytical clarity to the problem of how emancipatory ideals could be embodied within realizable institutional arrangements. The conference on the Bowles and Gintis proposal for an asset-redistributive market economy was the fourth conference within this project.