Our age is plagued by stagnequality; simultaneous stagnation and rising inequality. But fear not; in their truly thought-expanding book, Radical Markets, Eric A. Posner and E. Glen Weyl seek to solve this problem. Doubling as an alternative societal vision and way out of stagnequality, Posner and Weyl ask us to imagine a society in which everything is for sale and where ‘anyone who bids a higher price than the going price for an entity would take possession of it’ (xvii) – a world of radical markets, indeed. Where many see the market as the problem, Posner and Weyl employ it as the solution.

Market principles, in Posner and Weyl’s imagined society, are expanded to many currently unmarketized areas, including public and political decisions, and strengthened and purified in areas currently governed by markets. Laws and technological advancements are in place which ensure the efficient and smooth running of the system. The revenue from these sales is paid back to citizens equally as a ‘social dividend’, akin to a universal basic income, or used to fund public projects. In the process of laying out their ideas, Posner and Weyl rebel against a number of liberal egalitarian cornerstones, such as private property and one person–one vote, opening up interesting discussions at the foundational level of social theorizing. Their rebellion would undercut the greatest source of economic inequality: capital ownership. It would also take many decisions out of the hands of politicians and bureaucrats and broaden the political choice of citizens, improving efficiency, limiting corruption and strengthening direct democratic control. A radical market society, then, besides offering a solution to stagnequality, comes with a number of beneficial side-effects.

To expand briefly on the context into which Posner and Weyl seek to market-radicalize, let me turn to their diagnosis of the conditions of stagnequality. First of all, the share of income generated by wages has fallen, while capital gains have increased. Similarly, and relatedly, an increasing share of profits is being absorbed by ‘market power’ – that is, the ability of large corporations to use their monopoly-like status to set prices above what it would be under perfect competition, fuelling both inequality and inefficiency. The profits from this dominance, furthermore, go disproportionately to those that are already extremely wealthy. At the same time, growth is stagnating across the globe. At the root of this problem, Posner and Weyl argue, lie the underuse of labour (in terms of rising unemployment) and the misallocation of capital (which is not being put to its most efficient use). These processes, further, lead to political and social polarization and the current institutional setup is unable to defuse this tension.

For an example of how capital is often misallocated in the current system, consider the difficulties involved in buying land for big construction projects, where because every single landowner must agree to sell, she has an effective monopoly over her particular plot of land. Individual landowners have an incentive to hold out for a high price if they learn that such big projects are underway. Their monopolistic powers exist because of the uniqueness of many capital assets (in this example, land). Such power makes it less likely that capital is in the hands of those who would make the most efficient use of it, undermining allocative efficiency. The current system of private property, by allowing for such market power, stands in the way of ensuring the most productive use of capital. One previous attempt to solve this allocative problem was central planning and state ownership. But this neglects another important value, which private property ensures, investment efficiency; that people are more likely and willing to invest time and resources in things they own.

As a solution, which accommodates both values, Posner and Weyl suggest introducing a tax on wealth (or capital); the common ownership self-assessed tax (COST). The tax is paid by everyone who possesses capital. It is set as a percentage of their self-assessed value thereof. The higher you value your capital, the higher the tax you have to pay. The tax is accompanied by a removal of the right not to sell. So, under COST, imagine that Karen has a house, the value of which she has set herself. Now, if someone bids Karen’s self-assessed price on her house, Karen must sell. This system deliberately dilutes two of the central elements of private property; the right to use and the right to exclude, transferring them partly ‘from the possessor to the public at large’ (61). First, the benefits that Karen gets from using her house are transferred to the public through the COST. Second, Karen’s right to exclude is determined by the price she places on the property – and if someone pays that price, the possessor has no right to exclude them from taking possession thereof.

Moving from this specific example to the broader society, how would COST work? ‘Every individual and business would have to list each of their possessions in a public register hosted on an online application and enter valuations for each item – or accept default valuations based on the original purchase price or on a database of prices of used goods … – and would pay an annual tax based on the time-average price they listed over the course of the year. These lessees could change their valuations at any time’ (63).

An immediate worry, of course, is the insecurity and instability that would come with not knowing what assets you have access to in the immediate future. Posner and Weyl suggest a number of embellishments to alleviate this problem, the most important being that sellers would have a reasonable period to surrender these assets and such periods might be extended (e.g. in the case of a house). More generally, implementing COST requires implementing a number of further distinctions, policies and technologies.

COST, if applied broadly, would increase social wealth by ‘trillions of dollars’ (73) through radically improving allocative efficiency. Further, it would raise significant revenue for redistribution and funding of public goods, which could replace current inefficient taxes. Enough would still be left, Posner and Weyl estimate, to institutionalize a system of universal basic income of more than 400 dollars per person per month (in the current US economy).

The idea of diluting property rights is a welcome break with the crippling system of capital that creates and reinforces the great inequalities of our age. Posner and Weyl make a compelling case for how COST can improve efficiency without furthering inequality. But there are other values at stake in the issue, concerning which their case seems less strong. Economic theory usually assumes that people make choices in the market impersonally, to fulfil their preferences, rather than out of commitment to or interest in others (Anderson Reference Anderson2001: 22; Satz Reference Satz2010: 24). But people might not be, and often are not, only self-regarding in their preferences about objects, nor are objects merely valuable because of their use. And while it might be fair to tax people for the value gained from using property, as Posner and Weyl suggest, it is less clear that these other sources of value are fair objects for taxation.

First, consider the value of privacy. Greatly expanding the reach of the market would potentially make it impossible to keep personal items from being sold. This is most obvious in the case of, say, my diary. But many things are and could be imbued with privacy; the way I use my land, or my property might very well change if there was always the risk that someone would buy it. I could, of course, hope that no one is interested in buying them. As the authors remind us, items which have personal value, rather than general value would likely have a very low tax rate. But if I cannot be sure that no one will buy my diary or my property; if I cannot be sure that the things on which I make private impressions and reflections are also mine tomorrow, would that not change my relation to them, jeopardizing privacy in the process?

Second and relatedly, humans cherish certain items beyond their use value: family heirlooms, land or buildings (Anderson Reference Anderson1990: 181). If someone were to lose the right not to sell such items, she would lose an important way of relating to and conceiving of objects and other people through objects; the house their mother lived in, the company their aunt started, etc. Consider, relatedly, intellectual or creative ownership. Imagine that I paint a piece of art to hang above my couch and imagine (to everyone’s – and especially my own – surprise) that it was quite magnificent. Or, how about an unfinished book of a famous author? Would people need to pay potentially high taxes to keep others from buying it?

Finally, consider a potential problem of harassment. Under COST, a wealthy, maliciously inclined tormenter might force their victim to move constantly by continuously buying their house, they might buy all their cherished heirlooms out of spite, or their diary in order to expose their secrets. Or, more disturbingly still, what prevents a radical group of majority members from systematically harassing an ethnic minority by buying up their assets, de facto displacing and destabilizing them? And the very threat of such harassment suffices to drive up prices (and thereby the tax one needs to pay), indicating again that the self-assessed price would often be based on a much broader set of values than mere use – and unreasonably so.

Posner and Weyl seek to avoid the issues mentioned above by allowing that a small number of personal items may be excluded from COST (76). But I think there is a more general problem: a general under-appreciation of the extent to which people value things for reasons other than their use – i.e. for their contribution to privacy, personal relations, creativity, or, less legitimately, for whether they can be used to harass others. Karen might value a painting because her friend painted it (and because it is beautiful), while Louise might value it merely because it is beautiful. Karen wants a nice house to live in, Louise might want to harass Karen by buying her house wherever she moves. It is not obvious that Karen should be taxed at the price she wants to pay to avoid selling in either of these cases. These different sources of value should impact the COST scheme.

The radicalizing ideas, however, are not limited to property rights. Building on the diagnosis of stagnequality and their radical solution, Posner and Weyl suggest a number of more specific proposals to combat area-specific power inequalities and inefficiencies. First, expanding their radical marketization to the political sphere, Posner and Weyl take a swing at the classical one-person-one-vote system of democracy. Their main issue is with the fact that normal democratic voting systems do not track the strength of people’s preferences. Voting systems let you cast only one vote regardless of whether you care passionately about the issue at hand or almost not at all. Because of this, political decisions are not adequately efficient at tracking people’s preferences. To solve this problem, Posner and Weyl suggest the introduction of a more market-like system, Quadratic Voting, which allows citizens to save up vote ‘tokens’ and cast them according to the strength of their preferences with one important caveat – the power of their saved-up tokens is squared (so, while one vote token buys one vote, you need four tokens for two votes, nine tokens for three votes, etc.).

Second, while not much more could be gained through the further removal of barriers to free movement of goods between countries, this does not mean that there is no scope for radicalizing markets here. Great gains in efficiency could be attained through increases in the free movement of labour – in other words, through increased migration. The problem is that migration mainly (and sometimes even only) benefits employers and migrants and not domestic workers, whose jobs are threatened by increased migration and whose welfare state benefits are put under pressure by an increase in potential recipients. Posner and Weyl’s suggestion is to create a democratic visa sponsorship scheme (VIP) through which individuals in host countries can sponsor migrants coming to work. A domestic citizen sponsors a migrant by agreeing to pay their transport and to pay them a certain monthly salary while they are in the receiving country. Whatever income migrants generate above this salary, the host can pocket. In this way, Posner and Weyl seek to create incentives for ordinary people to encourage and, even, personally sponsor immigration.

Posner and Weyl often bolster the case for their proposals by highlighting their feasibility – they are policies that rely on similar mechanics as already existing policies and/or could be implemented without overcoming too many and too great obstacles (70–72, 158–160, 196–199, 267, 285–286). But consider again the COST system, in which the right to sell is relinquished and all capital is for sale. The obstacles to institutionalizing this proposal come in, at least, three separate forms. First, the successful implementation of the COST system requires the development of the required institutional, legal and technological infrastructure. Second, institutionalizing COST will require obtaining the public backing and political will to do so. Finally, implementing COST in the short- to medium-term would greatly destabilize people’s current holdings and expectations. This makes the proposal unfeasible (or undesirable) in a third sense. I have already touched upon this issue; institutionalizing COST entails compromising other important values. In this case, stability.

None of these obstacles are insurmountable but they are radically different – institutional, motivational and normative – and the feasibility of surmounting them depends on fundamentally distinct social phenomena. This complexity is obscured by Posner and Weyl’s somewhat superficial treatment of the obstacles that stand between our world and their radical society, in which obstacles are not distinguished carefully enough according to their particular nature. Because of this simplistic approach to feasibility, it is also not clear why their proposals should be preferred to more desirable policies. Consider, for example, their democratic visa sponsorship scheme, VIP, intended to increase migration. VIP is explicitly chosen because it is more feasible than, for example, open borders or free migration (which is ‘impractical’, 142).

It is not clear why we should aim for VIP rather than free migration just because it is more feasible. If free migration is more desirable – if it ensures greater global equality of opportunity, for example – than Posner and Weyl’s visa scheme, it might very well be a better policy aim, even if it is less feasible. It matters whether policies are feasible, but when deciding what to aim for, it is only one among several factors that must be weighed (Lawford-Smith Reference Lawford-Smith2013: 245; McTernan Reference McTernan2019). Posner and Weyl’s superficial treatment of feasibility makes it difficult to establish not only how feasible their proposals are, but also whether we should aim to implement these rather than other, less feasible, but more desirable, policies.Footnote ¹

These considerations about feasibility and desirability connect to a larger issue with Posner and Weyl’s project. Namely, that the nature of their project and the status of their proposals is unclear. Are these policies that would make our world better than it currently is in some ways? Is the claim merely, for example, that implementing Quadratic Voting would improve our current political system? Or are their ideas meant to be better than other proposals on offer at solving the issues of our day? Is Quadratic Voting meant as a better policy for improving democracy than, say, campaign finance reform or increased deliberation? Furthermore, it remains hazy whether Posner and Weyl’s radicalization of markets is meant as part of an ‘end-state’ vision of the ideal society, or as a set of ‘transitional’ proposals meant to get us closer to an ideal (Valentini Reference Valentini2012). Not knowing whether they are meant as ends, means or mere improvements, it is difficult to know which standards to apply when evaluating the desirability of the proposals.

Despite these philosophical reservations, Radical Markets is worth reading both for its genuinely innovative suggestions and its well-researched accounts of the development of economic ideas. More than anything, the book forces the reader to reconsider a number of otherwise unquestioned views about markets, democracy, property rights and the internet. Considering the book as a sketch of a social ideal or as a set of feasible and desirable policy proposals, I am less convinced.