1. THOMAS'S THREE THESES

Thomas begins by arguing that our political values are best articulated by a hybrid ‘liberal-republican’ (19) theory of justice. John Rawls's political liberalism provides most of the content of this hybrid view with Thomas even endorsing Rawls's principles of justice (31–6). However, Thomas argues that, if we interpret Rawls's theory as part of the social contract tradition, then it suffers from the problem of assuming the existence of the free and equal citizens that it requires to be applicable and viable (7–9). For Thomas, this deficiency is best overcome by supplementing political liberalism with a republican theory of freedom as non-domination. Thomas argues that this notion of freedom is compatible with structuring background institutions so as to promote the sort of citizenship that is needed for a stable overlapping consensus on Rawls's principles of justice. Moreover, he claims this approach can avoid the charge of perfectionism provided civic virtues are treated by institutional structures as ‘option values’, i.e. ‘values that do not have to be promoted, but neither are they cost free’ (xvi).

At the same time, Thomas argues that the resources of political liberalism allow us to address the following problem in republican theory: on the republican view, laws do not limit citizens' freedom (i.e. dominate them) provided those laws promote their ‘real interests’, but the republican then defines citizens' ‘real interests’ as those that would be agreed upon in a real-world situation where no one is dominated. Thomas suggests that the republican can avoid this circularity by instead claiming that citizens' ‘real interests’ are those that would be agreed in a situation that is fair in the Rawlsian sense that it models the two highest order interests that constitute the ideal of a free and equal citizen latent in our public political culture (17–18). From this, Thomas concludes that a liberal-republican hybrid is superior to either theory alone. I shall refer to this as Thomas's Complementarity Thesis.

Thomas's second main thesis is that his liberal-republicanism offers us three ways to advance a particular type of political economy: the egalitarian property-owning democracy (POD) recommended by Nobel prize-winning economist James Meade (Reference Meade1964) and subsequently adopted by Rawls (Reference Rawls1971, Reference Rawls2001). Meade's POD is a society in which there is widespread private ownership of capital, including human capital. Specifically, ‘the breaking down of accumulated monopoly holding of capital . . . is accompanied by the building up of capital-holding by individuals and a society-wide unit trust scheme to make such holdings universal overall’ (153). This is achieved by ‘a free and high quality public education system, progressive wealth tax as well as income tax, sovereign wealth funds, high levels of estate tax, the taxing of capital gains and capital gifts, and incentives for small savers’ (168). For Thomas, a distinguishing feature of this form of political economy is that it adopts a primarily predistributive, rather than redistributive, egalitarian strategy. Put simply, it looks to structure markets so that their patterned outcomes are fair and the role of ex post progressive taxation is therefore reduced (though not eliminated) (162).

Thomas argues that each of Rawls's principles of justice offers a distinct justification of this egalitarian form of POD. First, once we adopt a liberal-republican interpretation of Rawls's demand for the fair value of the political liberties, it becomes clear that attempts to realize this principle by insulating politics from the influence of wealth must be supplemented by broadly egalitarian capital ownership (105–11). Second, Rawls's demand for fair equality of opportunity can only be satisfied by a society that ensures universal access to capital, and in particular human capital (116–20). Third, egalitarian capital ownership is a necessary background condition for Rawls's Difference Principle to be implemented in a feasible (80) and defensible (83–94) manner, and this principle is justified on independent grounds due to its educative role as a public expression of solidarity (42–4, 139–43). I shall refer to this set of arguments as Thomas's Overdetermination Thesis.

Thomas's third main thesis is that liberal-republicanism justifies an egalitarian POD and only an egalitarian POD. In support of this, Thomas first defends Rawls's stark contrast between a POD and welfare-state capitalism and his claim that the latter is structurally incompatible with each of his principles of justice from a number of recent criticisms. In short, following Rawls and Samuel Freeman (Reference Freeman2013: 18), Thomas takes welfare-state capitalism to be best understood as expressing an unattractive restricted utilitarian conception of justice rather than Rawls's principles of justice (187–8). Thomas also defends Rawls from John Tomasi's (Reference Tomasi2012) criticism that, when suitably revised, his principles of justice are best realized by a classical liberal POD. Thomas argues that Tomasi's revised principles of justice are perfectionist (289–91), but, even if we were to accept them, a classical liberal POD would be unable to stably realize them because it would permit inequalities that would exacerbate the ‘drift to oligarchy’, with the likely result that the basic liberties of the worst-off would be rendered ineffective (304).

Where the views of Rawls and Thomas diverge is with regard to their evaluation of the system of market socialism. Rawls argued that either a liberal market socialism or a POD could realize his principles of justice (Reference Rawls2001: 138–9). Against this, Thomas endorses N. Scott Arnold's (Reference Arnold1994) view that, if market socialism is understood as a system that mandates democratic firms, then it is unjust because it encourages two forms of exploitation that are less likely to occur under either capitalism or a POD: the exploitation of workers by other workers, and the exploitation of capital owners by capital controllers (217). Nevertheless, Thomas still views democratic firms as playing a significant role in the diverse economy of a just society. His point of divergence from Rawls and others is simply that they must emerge from the individual economic choices of citizens in an egalitarian POD, rather than being legally mandated (219–20). From this Thomas concludes that an egalitarian POD is the only just social system. Following Nicholas Vrousalis (Forthcoming), I shall refer to this as Thomas's Uniqueness Thesis.

2. A DILEMMA FACING THE UNIQUENESS THESIS

I find Thomas's Complementarity Thesis broadly persuasive. I also find at least one strand of his Overdetermination Thesis convincing (the argument from the fair value of the political liberties; 95–116). My main concern therefore pertains to Thomas's Uniqueness Thesis, which I see as being vulnerable to a dilemma due to an equivocation in the conception of reciprocity that Thomas relies on when discussing the two most attractive alternatives to an egalitarian POD: welfare-state capitalism and market socialism.

Throughout the book Thomas claims to rely on Stuart White's notion of reciprocity, which is that:

White refers to this as an egalitarian, or ‘fair dues’, conception of reciprocity and contrasts it with an alternative ‘strict-proportionality’ conception which states that ‘one may take out only what one puts in or, relative to others, only in strict proportion to the value of what one puts in’ (White Reference White2003: 49).

One of Thomas's main defences against those who argue that Rawls's principles of justice require the institutions of the modern welfare state, albeit supplemented by some POD policies, is that, insofar as these theorists conceive of welfare state institutions as social insurance mechanisms that aspire to meet a ‘premiums in/payments out principle’ (193), their arguments rely on something like a strict-proportionality conception of reciprocity, which is indefensible within a broadly Rawlsian approach (194). Thomas relies on this argument (among others) to conclude that a wholesale alternative to welfare-state capitalism is required: an egalitarian POD.

However, interestingly, Thomas views an alternative conception of welfare state institutions as ‘collective stakeholding schemes’ that pool risks across citizens as a vital element of an egalitarian POD (203–5, 213). Thomas argues that, when welfare state institutions are understood in this way, they express the appropriate fair dues conception of reciprocity. Moreover, for Thomas, welfare state institutions should be understood in this way when, and only when, they are accompanied by the full panoply of Meade's POD policies. This is because a POD's ‘macro-level restructuring of the relationship between capital and labour. . .changes the nature of collective stakeholding schemes’ (213).

So Thomas's arguments against welfare-state capitalism depend, at a crucial point, on a rejection of a strict-proportionality conception of reciprocity in favour of White's fair dues conception. However, as we will now see, Thomas's arguments against mandatory market socialism depend on the opposite: a rejection of a fair dues conception of reciprocity in favour of a strict-proportionality conception.

Thomas's discussion of market socialism focuses primarily on the system proposed by David Schweikart under which the state owns all capital and worker-managed firms pay a capital usage fee to lease portions of it from public banks. The workers in each firm are then collectively entitled to any profit which they are to distribute according to democratically determined pay rates (Schweikart Reference Schweikart2002) (224–5).

In order to argue that this form of mandatory market socialism encourages forms of exploitation that are less likely to occur under either capitalism or a POD, Thomas relies on N. Scott Arnold's (Reference Arnold1994) conception of exploitation, which he describes as follows:

On this basis, Thomas endorses Arnold's argument that mandatory market socialism allows workers to exploit workers because the less productive in each firm will exploit the more productive when pay rates are decided collectively (227). Moreover, he claims that this exploitation will be worse than under capitalism or a POD because workers will not so easily be able to exercise their right of exit due to the less dynamic employment market under market socialism (227). Thomas also endorses Arnold's argument that, under mandatory market socialism, the lessees of capital (the workers) will exploit the lessor of capital (the general taxpayer) because the workers in each firm will have an economic interest in maximizing their short-run incomes and will therefore have ‘a vested interest in short-term underpayment of the full value of the capital usage fee’ (230). Conversely, Thomas agrees with Arnold that the ultimate decision makers in the non-democratic firms typical of capitalism and a POD cannot exploit the capital owners because they are the capital owners (232).

Why should the type of exploitation that Thomas identifies in these cases matter from the perspective of a liberal-republican theory of justice? Thomas offers the following answer: ‘such cases involve a failure of reciprocity’ (30, see also 224). The problem for Thomas is that this is only straightforwardly true if we endorse a strict-proportionality conception of reciprocity. To see why, note that Arnold's arguments convincingly demonstrate only that mandatory market socialism is likely to include institutions that violate the principle that ‘one may take out only what one puts in or, relative to others, only in strict proportion to the value of what one puts in’ – i.e. strict-proportionality reciprocity. But it is not clear that the deviations from this standard we should expect under mandatory market socialism will violate White's less demanding fair dues conception of reciprocity. For instance, Thomas argues that wage-setting in democratic firms is likely to violate reciprocity because less productive workers will receive a slightly larger share of the profits than their contributive activities produced, and more productive workers will receive a slightly smaller share of the profits than their contributive activities produced. But, insofar as differences between worker's productive capacities will remain, to some degree, the result of ‘brute luck’ even in a realistic utopia, it is not at all clear that this mildly egalitarian predistribution of wages within the firm violates, rather than expresses, a fair dues conception of reciprocity.

Perhaps sensing this problem, at one point Thomas briefly endorses Arnold's further argument that the deviations from reciprocity we should expect in a democratic firm's wage-setting will not be mildly egalitarian because ‘there is no reason why adept exploiters could not become very rich at the expense of their co-workers, customers, and the general taxpayer’ (244). In my view, if this is going to play such a crucial role in Thomas's argument, it is incumbent on him to explain how this might occur given that the workers in each democratic firm will be aware that any measures that risk disincentivizing or alienating their most talented colleagues would present a significant risk to their own livelihoods.

Pending such an explanation, Thomas faces a dilemma: if he settles on either a strict-proportionality or a fair dues conception of reciprocity, then one of the main institutional alternatives to an egalitarian POD will avoid his criticisms and therefore his Uniqueness Thesis will fall.

I agree with Thomas's avowed view that a fair dues conception of reciprocity is best suited to his liberal-republicanism, hence I would resolve the above dilemma in favour of mandatory market socialism. However, unlike Thomas, I do not think this solution entails a wholesale rejection of welfare-state capitalism. This only follows if one accepts, as Thomas does, Rawls and Freeman's holist, moralized method of defining both hypothetical and existing types of social systems (187–8). Put bluntly, this approach assumes that any given social system, and each part of that system, should be understood as conforming to a conception of justice. So, for Thomas, given that welfare-state capitalism as a whole does not plausibly realize a liberal-republican conception of justice, all of its parts must be incompatible with liberal-republicanism and should therefore be rejected. Against this, I am more sympathetic to an alternative methodology outlined most persuasively by Paul Weithman (Reference Weithman2013), which assumes that different sub-parts of existing social systems can express different and perhaps contradictory political values and principles. This allows for the possibility of affirming a just institutional scheme that combines features from different existing and hypothetical social systems. I do not find Thomas's criticisms of this alternative approach persuasive and, at certain points, I was left unsure whether he is really willing to endorse a thoroughgoing restricted utilitarian understanding of existing welfare-state capitalist societies (202, 205). As such, I reject Thomas's hard distinction between an egalitarian POD and a welfare-state/POD hybrid and continue to view the latter as a contender for the crown of justice.