Callinicos, A. 2000 Equality (Cambridge: Polity Press) Chapters 1 y 4.

Chapter 3

Inequality
A world of inequality
Rich beyond the wildest imaginings of earlier generations, the world enters the
twenty-first century heaving with poverty and inequality. The United Nations
Development Programme (UNDP) produces an annual Human Development Report
largely devoted to the melancholy task of documenting the steady growth in global social
and economic inequality. According to the 1999 report, the ratio of the income of the
richest fifth of the world's population to that of the poorest fifth had risen from 30 to 1 in
1960 to 60 to 1 in 1990. By 1997 the ratio had risen to 74 to 1.N
In its most headline grabbing aspect, the Human Development Report plots the
progress of the super-rich. Between 1994 and 1998 the richest 200 people in the world
more than doubled their net worth, from $440 to $1,042 billion: the latter sum. was
equivalent to the income of 41 per cent of the world's population. During the same
period, the number of people who must live on less than one US dollar a day remained
unchanged at 1.3 billion. Between them, Bill Gates, the Walton family (owners of the
Walmart supermarket chain) and the Sultan of Brunei were worth the combined national
income of the 36 least developed countries in the world .2
Inequality is not simply a literally global problem that divides the rich North from
the poor South. Inequalities within individual countries are also growing. According to
the UNDP, the transition to market capitalism in Eastern Europe and the former Soviet
Union produced 'the fastest rise in inequality ever. Russia now has the greatest inequality
- the income share of the richest 20 per cent is 11 times that of the poorest 20 per cent.'
Between 1987-8 and 1993-5 the Gini coefficient measuring inequality rose in Russia at
an incredible rate from 0.24 to 0.48. In Latin America, despite the sporadic waves of
euphoria that swept financial markets over the region's resumption of economic growth
after the 1980s debt crisis, the Gini coefficient remained stable at 0.58.3
A much more vivid, and more heart-breaking, indication of the realities of global
inequality than all these statistics was provided by the case of Yaguine Koita and Fod
Tounkara. At the beginning of August 1999 these two teenagers from Guinea-Conakry
were found dead of cold and asphyxiation in the undercarriage of an airliner at Brussels
airport. A letter found on their bodies explained their desperate and fatal flight. It read in
part:
... Your Excellencies the members and leaders of Europe,
We have the honorable pleasure and the great confidence to write this letter tospeak to you about the objective of our journey and the suffering of us, the
children and young people of Africa ... It is to your solidarity and your kindness
that we appeal for help in Africa. Help us, we suffer enormously in Africa, help us
we have problems and some lack of rights for children ... Thus, if you see that we

have sacrificed ourselves and risked our lives, it is because people suffer too
much in Africa and because we need you to fight against poverty and war in
Africa. Nevertheless, we want to study, and we ask you to help us study to
become like you in Africa. Finally, we beg you to forgive us very firmly for
having dared to write this letter to such great personages as yourselves, to whom
we owe much respect ... 4
The great personages of Europe paused briefly to shed a tear for the boys before
returning to their usual business of denying refugees and 'economic migrants' access to
their countries.
Poverty and inequality in the advanced economies
The gap between rich and poor has been growing in the advanced economies
themselves. Out of nineteen OECD countries, only one saw inequalities in earnings and
income fall during the 1980s and early 1990s.5 In the United States, it has often been
neo-conservative commentators who have been quickest to note the trend. At the end of
the 1980s, the Republican political analyst Kevin. Phillips documented the systematic
efforts of Ronald Reagan's two administrations to redistribute wealth and income from
the poor to the rich. Calling the 1980s a new Gilded Era, he contended: No parallel
upsurge of riches had been seen since the late nineteenth century, the era of Vanderbilts,
Morgans and Rockefellers.6
A decade later, the Washington-based strategy consultant Edward Luttwak traced
the further development of this process, which he saw as a consequence of the
development of a new, uncontrolled 'turbo-capitalism':
The United States is on its way to acquiring the income distribution characteristics
of a Third World country, with a truly very rich top 1 per cent, and a significant
minority (roughly 12 per cent) which remains below the official poverty line even
though fully employed, forty hours a week, fifty weeks a year. In New York State,
whose economy is very dynamic and especially turbo-capitalist - it contains Wall
Street, after all - income distribution has predictably become even more unequal
than in the United States as a whole. In 1996 the average income of the richest
one-fifth of all households was almost twenty times higher at $132,390 than that
of the poorest fifth at $6,787. Only in Washington DC was the ratio even more
extreme at 28.2, while the averages for the United States as a whole were
$117,499 and $9,254, a ratio of 12.7. In New York State, moreover, the average
income of the top-earning fifth of all households increased by 46 per cent between
1978 and 1996, while that: of the poorest fifth of all households declined by 36
per cent.7
Britain - the major economy to have followed the US most closely in its trajectory
towards deregulated freemarket capitalism during the 1980s and 1990s - displayed a
similar pattern. The New Labour government elected in May 1997 is - as we shall see in
subsequent chapters - at best equivocal in its pursuit of greater equality, but research into
the causes of and remedies for poverty and inequality has flourished under the patronage

of the ambitious Chancellor of the Exchequer, Gordon Brown. According to this research,
inequality in the distribution of income, measured by the Gini coefficient, rose by a third
between 1977 and 1996-7- This reflected, inter alia, a growing earnings gap - for men,
earnings in the top decile of the workforce rose twice as fast as those in the bottom decile,
for women four times as fast - and a rise in the proportion of workless households from 9
per cent in 1979 to 20 per cent in 1995-6.8
The detailed studies on which these conclusions were based tend to challenge the
idea put forward by neo-liberal apologist for the, policies of the Reagan-Thatcher era that
increased income inequalities are compensated for by growing job-market mobility,
allowing talented and thrusting individuals to climb the economic ladder:
The pattern of year-to-year mobility . . . can be summarized in terms of what I
label the 'rubber-band' model of income dynamics. One may think of each
person's income fluctuating around a relatively fixed 'longer-term average'. This
value is a tether on the income scale to which people are attached by a rubber
band. They may move away from the tether from one year to the next, but not too
far because of the band holding them. And they tend to rebound back towards and
around the tether over a period of several years.9
The studies also contradict the view taken by defenders of the Anglo-American
variant of liberal capitalism that the relatively high proportion of low-paid jobs in the US
and Britain offer their incumbents both secure employment and the prospect of economic
advancement:
There is strong evidence of a cycle of low pay and no pay. The low-paid are more
likely to be out of work in the future; those out of work are more likely to be
low-paid on re-entry; and are even more likely to be so if they had been low-paid
prior to being out of work.
The hypothesis that low-paid jobs act as stepping-stones to higher paid
jobs is not supported by the data. The evidence presented here suggests that
low-paid jobs are more likely to act as blind alleys than as stepping-stones to
positions higher up the pay distribution.10
Blind alleys in which the low-paid are trapped, rubber bands tethering us to our
places in the income structure: these metaphors; hardly offer reassuring images of the
'labour flexibility' which even centre-left politicians claim among the chief merits of the
Anglo-Saxon laissez-faire economies. A third Treasury-commissioned paper summarizes
the evidence for wage mobility in Britain somewhat more formally:
the picture that is sometimes painted of a mobile society is far from the truth. In
fact, the evidence shows a high degree of immobility with- little long-range wage
movements. In addition to this there is evidence showing that earnings mobility
has fallen since the late 1970s. Given that we have also seen a sharp, rise in cross
sectional wage inequality [i.e. the overall distribution of earnings as opposed to
individuals' movement from one place in this distribution to another] over this
time period, this tells us that not only has the gap between rich and poor risen but

the ability of the- low-paid to close this gap has fallen considerably. Far from
offsetting the increase in cross section wage inequality, changes in mobility
appears [sic] to have exacerbated this rise.11
What is revealed in these studies is an embedded structure of inequality:
Although children frequently do end up in a different economic position to their
parents, for most people the movement is short-range. This is particularly true of
children from advantaged backgrounds. Children with advantaged parents are
very likely to end up advantaged themselves... around 80 per cent of boys whose
fathers were in the top quarter of the earnings distribution end up in the top half of
the earnings distribution. But the chances of ending up in the top half of the
earnings distribution are much lower for boys whose fathers were in the poorest
quarter. Just over a third of the boys with parents in the bottom quarter manage to
move up to the top half of the earnings distribution. The pattern of mobility is not
significantly different for girls.12
Studies such as the ones just cited quite legitimately tend to concentrate on
poverty and inequality as problems afflicting the worst-off minority of the population.
But broader discussions often proceed on the assumption that the growth in inequality
documented above is one that pits an affluent majority against an impoverished minority,
the latter frequently stereotyped as an 'underclass' trapped in a whole complex of deviant
behaviors. Even egalitarian philosophers often appear to share this belief. For example,
Thomas Nagel writes: 'As things are, democracy is the enemy of comprehensive equality,
once the poor cease to be a majority.13 Essentially the same view is at the heart of the
'Third Way' political strategy pursued by Bill Clinton in the United States and by
social-democratic leaders such as Tony Blair and Gerhard Schrder in the European
Union: since the poor constitute only a minority of the electorate, the centre left must
avoid redistributive policies that might antagonize the affluent majority.
What is surprising about this very widely held belief is that those who accept it
rarely seem to engage with the very considerable evidence contradicting it. The problem
is partly a conceptual one. The concepts of equality and inequality are plainly relational:
one can only establish the degree to which either obtains by comparing different
individuals' access to the relevant advantages (the correct basis on which to make such
interpersonal comparisons is one of the main themes of chapter 3 below). 14 But even
some egalitarians are unwilling to conceive poverty also in relational terms. Thus G.A.
Cohen writes: By plausible absolute standards, most people in the past were poor, and
the target for redistribution could then be a rich minority. Now, by the same absolute
standards, the standards in the light of which it is pertinently pointed out that 62 per cent
of UK households have videos, only a minority are poor.15
But this seems much too quick. One can certainly identify a set of biologically
determined basic subsistence needs the failure to meet which represents a benchmark of
absolute poverty. But the criteria for meeting the basic needs are likely to change
according to the standard prevailing in the society in question. For example, few would
accept that what a medieval peasant would regard as adequate housing can count as
meeting the basic need for shelter at the beginning of the twenty-first century: the fact

that a huge segment of the world's population are forced to live in shacks and hovels that
might once have seemed acceptable is now treated as evidence of the extent of poverty
today.
Moreover, there are also needs that do not reflect the transhistorical invariants of
human existence but whose fulfilment may be a necessary condition of living an adequate
life in a given society. To lack access to a telephone, television, or safe and efficient
transport is to be fundamentally disadvantaged in contemporary urban civilization.
Technological change may make much more complex consumer durables a crucial
resource for living an adequate life. Amid all the hype surrounding the internet and the
world-wide web, the UNDP points out that in 1998 a tiny - generally affluent, educated
and male - 2.4 per cent of the world's population used the internet. 16 How long before
lack of access to a personal computer with a modem becomes the basis of a new form of
disadvantage?
These considerations suggest that poverty, like equality itself, should be
conceptualized in relational terms. Such indeed is in many cases already the practice. For
example, in official British statistics the poor are defined as those living on a household
income below 50 per cent of the national average (after housing costs). In 1996/7, 14
million people, nearly a quarter of the population of the United Kingdom, fell under this
definition of poverty, compared to only 4 million in 1979.17
This growth in the numbers of the poor contrasts with rising average incomes. In
1999, average earnings for fulltime British workers reached 20,265, a figure that
certainly seems to support the image of a 'contented' majority-18 Averages are however,
often misleading: in an economy where the income of the better off has been increasing
much faster than that of the worse off, average earnings may rise without the relative
position of the majority necessarily improving. In 1994/5 63 per cent of the UK
population received a net household disposable income that was below the average: yet
again this represented a rise Compared to 1979, when 59 per cent of the population were
on below-average incomes.19
These figures suggest only a deterioration in the relative position of the majority,
in Britain at least. A sufficiently robust rise in absolute living standards could still leave
this majority enjoying considerably greater material comforts than they did a generation
ago - and indeed such is the picture evoked by surveys that document the steady rise in
household ownership of a wide variety of consumer durables many of which (such as
video recorders and personal computers) did not exist thirty or forty years ago. A rising
tide lifts all boats, as John F. Kennedy once put it.
Yet, despite this profusion of new products for the mass market, the greatest
capitalist economy of them all, the United States-, presents a very different case, one
where living standards have come under constant downward pressure over the past
generation. This fact -which has, astonishingly, gone largely ignored in both political and
theoretical debates - has nevertheless been thoroughly documented and analyzed by
commentators and researchers of different political persuasions. Thus the
neo-conservative Luttwak writes:
Measured in constant 1982 dollars, the average earnings of all 'non-supervisory'
American employees working in all industries and all services, other than
agriculture or government, peaked in 1978 at $8.40 an hour, only to decline to

$7.78 in 1980, $7.77 in 1985 and $7.52 in 1990, finally increasing during the
post-1993 boom, but even then only by very little and very slowly, from $7.50 in
1996 to $7.66 in 1997. 20
The Marxist historian Robert Brenner presents a similar picture in his
monumental study of post-war capitalism:
Between 1979 and 1990, real hourly compensation in the [US] private business
economy grew at an average rate of 0. 1 per cent. The trend in these years for
hourly real wages and salaries (excluding benefits) was far worse, falling at an
average rate of 1 per cent. At no time previously in the twentieth century had real
wage growth been anywhere so low for anywhere so long.21
So too does the economic journalist Jeffrey Madrick from a left-liberal
perspective:
As a result of these factors, the average real income of families was only a few
percentage points higher in 1993 than in 1.973, and that largely because so many
more spouses were working. There have been shorter periods when wages have
fallen sharply, but as far as we can tell, there has been no other twenty-year period
since 1820 when average real wages fell, with the possible exception of the years
just before and after the Civil War.22
Madrick goes on to document the consequences of what Brenner describes as this
'repression of wages ' - a longer working year, up by a week and a half since 1973, for
fulltime male employees; the largest increase in the proportion of working spouses in the
poorest households, suggesting that many women entered the labour market not in search
of 'empowerment' but driven by financial hardship; a decline in home ownership among
the young; a fall also in the number of cars purchased per worker as Detroit shifted
towards producing luxury vehicles such as light trucks for the affluent middle class;
shrinking proportions of employees covered by private pension and health insurance
schemes. 'In general,' he concludes, 'America is evolving into a two-tier society, and. the
upper tier is shrinking.23
Remarkably then, in an era proclaimed as marking the definitive triumph of
liberal capitalism over the systemic challenge represented by socialism and communism,
the working majority in the most powerful economy in the world experienced, perhaps
for the first time, something resembling what Marx called 'absolute impoverishment'.
Elsewhere in the advanced societies the picture is less stark. Nevertheless, the same
processes are at work, as the relentless drive to reduce costs in the face of international
competition places the jobs, wages and. conditions of the bulk of the working population
under constant pressure.
One leading social-democratic economist, Will Hutton, has summed up the
consequences of this process in Britain during the Tory years: 'more than half the people,
who are eligible to work are living either on poverty incomes or in conditions of
permanent stress and insecurity'. He divides the working population into three groups.
The first 30 per cent are the disadvantaged, - the unemployed, those on government:

schemes and the like. The second 30 per cent are made up of the marginalized and the
insecure. This category is defined not so much. by incomes as by its relation to the labour
market.' Those falling under it: 'work at jobs that are insecure, poorly protected and carry
few benefits. This category more than any other is at the receiving end of the changes
blowing around Britain's offices and factories; it includes the growing number of
part-timers and casual workers.' Finally, there are 'the privileged - the just over 40 per
cent whose market power has grown since 1979.24
The picture Hutton paints is, if anything, too optimistic since he includes in the
category of 'the privileged' those full-time employees who have held their positions for
more than two years: many of these have come under intense pressure as a result of the
sustained efforts to restructure both public and private bureaucracies along more
profitable lines. Indeed, the sociologist Pierre Bourdieu argues that various developments
- among them, chronic mass unemployment, the growth in contract labour and flexible
production, and 'the deterritorialization of the enterprise' now freed from any specific
attachment to region or nation - mean that 'insecurity [prcarit] is everywhere today':
'Objective insecurity supports a generalized subjective insecurity which today affects, at
the heart of an advanced economy, the majority of the workers and even those who are
not or not yet directly hit.' Indeed, this is part of 'a mode of domination of a new type,
based on the institution of a generalized and permanent condition of insecurity aiming to
compel the workers to submission, to, the acceptance of exploitation'.25
Does inequality matter?
With these remarks of Bourdieu's we plainly move beyond the facts of inequality
today to our moral and political response to them. For some these facts require the kind
of interpretation present in Nagel's observation that [w]e live in a world of spiritually
sickening economic and social inequality, a world whose progress toward the
acknowledgement of common standards of toleration individual liberty and human
development has been depressingly slow and unsteady. 26
But, of course, many would reject such an interpretation. For the neo-liberal
defenders of unrestrained capitalism, the inequalities found in the advanced countries at
least are largely the consequence of individuals' free choices over the use of their talents
and resources in a market economy. As has been most forcefully argued by Robert
Nozick in Anarchy, State, and Utopia, the resulting differences in wealth and income do
not constitute an injustice requiring political action to remedy it. Neoliberals tend to
interpret the residual inequalities that they do not believe can be explained in these terms
as the perverse effects of statist attempts to interfere in the workings of the market. For
some, among them adherents to the New Right as well as supporters of more traditional
conservative views, the persistent inequality between black and white that so scars
American society in particular is to be explained by genetic differences which, they
claim, underlie African-Americans' poor performance in intelligence tests.
It is hardly surprising that the political right should seek either to explain away or even to
defend social inequality. But an impatience with the ideal of equality is to be found even
among those who identify with the contemporary centre left. For example, David
Goodhart, editor - of the crashingly dull British monthly Prospect, recently declared:

The old fixation with the 'gap' [between rich and poor] is the problem. A third way
theory of fairness should state that the gap does not mater -or at least that it matters less
than the life-chances of the people at the bottom. If these are rising steadily then it does
not matter that the rich are getting even richer . . . 'Gap' thinking is also based on a
defunct zero-sum idea of wealth creation. In a 19th century mining village it was clear
that the mine owner's wealth in a sense caused the poverty of the miners. Other than the
odd sweat-shop, that is not the case today. The poverty of the poor does not create the
richness of the rich and vice versa. Bill Gates has not amassed a fortune of $150 billion
by exploiting the poor of Seattle.27
The evidence presented in the previous section should be sufficient to put in
question Goodhart's complacent belief that 'the life-chances of the people at the bottom',
or indeed of the majority, 'are rising steadily'. His remarks about Bill Gates are indicative
of the reverential attitude that supporters of the Third Way adopt towards the superrich.
This represents something of a cultural shift certainly on the British left, if one recalls
Denis Healey's promise in 1973, when unveiling to a delighted Labour Party conference
the tax changes that he implemented after becoming Labour Chancellor of the Exchequer
the following year: 'There are going to be howls of anguish from the eighty thousand
people who are rich enough to pay over seventy five per cent on the last slice of their
income.28 By contrast, in a recent joint policy statement Tony Blair and Gerhard Schrder
announced: 'we want a society which celebrates successfl entrepreneurs just as it does
artists and footballers'.29 Whether this ambition is consistent with the egalitarian
professions both leaders also make s something we will explore in the rest of this book.
In any case, the ideal of equality is too deeply embedded in the political culture of
the Westem liberal democracies to be simply dismissed as 'defunct'. In a striking and
widely discussed essay, the Italian political philosopher Norberto Bobbio recently
challenged the idea that the collapse of the Communist bloc had rendered the distinction
between left and right obsolete. Drawing on both historical and conceptual
considerations, he argued that the criterion most frequently used to distinguish between
the left and the right is the attitude of real people in society to the ideal of equality'.
Pointing to the facts of global inequality, Bobbio declared:
Faced with this reality there is a very clear distinction between the right and the
left, for which the ideal of equality has aIways been the pole star that: guides it. One only
has to shift one's attention from the social questions within individual states which gave
rise to socialism in the last century to the intemational social question in order to realize
that the left has not only not completed its task, it has hardly commenced it.30
Bobbio seems to me fundamentally right.31 If the left is not committed to equality,
then it cannot be said to exist in any meaningful sense. But neither the existence nor the
nature of this commitment can be taken for granted. Goodhart's clumsy attack on 'gap
thinking' did at least have the merit of drawing attention to the confusion in contemporary
thinking about equality. Rarely has this confusion been better exemplified than in Tony
Blair's announcement: 'The class war is over. But the struggle for true equality has just
begun.32

This little book is intended to reinforce Bobbio's argument in three ways. In the
first place, in the following chapter, I consider the historical meaning of the modem ideal
of equality, tracing its origins in the great bourgeois revolutions of the seventeenth and
eighteenth centuries and its development in socialist thought. Secondly, it is a remarkable
fact that, in the past generation, while social and economic inequalities have been
growing dramatically, the English-speaking world has produced a group of philosophers
committed, despite their other differences, to articulating a rigorous and defensive
egalitarian conception of social justice. Their founding text is, of course, john Rawls's
great book A Theory of Justice, first published in 1971, but, among others, Ronald
Dworkin, Amartya Sen, T.M. Scanlon, G.A. Cohen, Brian Barry, Thomas Nagel, Richard
Arneson and John Roemer have contributed to an extraordinarily rich and sophisticated
debate.
Probably the best description of this philosophical current is 'egalitarian
liberalism'.33 'Liberalism' is understood here in the North American sense: like social
democrats, egalitarian liberals favour state intervention in and regulation of the market
(but not its abolition) in the interests of social justice. The subtlety and depth of these
philosophers' efforts to clarify and defend the concept of equality have been in more or
less inverse proportion to their influence on public policy.34 One aim of this book is bring
their work to bear on current political debates: this I seek to do in chapter 3, which is
devoted to a discussion of some of the leading themes of egalitarian liberalism. Thirdly,
in the concluding chapter 1 retum to the state of the contemporary world, considering
some of the causal connections between the inequalities documented above and the
economic structures of capitalism: understanding these connections, as I try to show, is a
necessary condition of devising any political strategy capable of translating the
philosophical theory of egalitarian justice into reality.
Jacques Bidet has recently lamented the 'schizophrenia' in which contemporary
critical thought seems to oscillate between a recourse to the sociologies of suspicion to
which Marx opened the way, when it wants to think the world as it is, and a fascination
with contractualism, with the doctrine of the rule of law [L' Etat de droit], the rights of
man and of the citizen, when it is trying to formulate a social project [un projet de
socite].35
I would not for a moment claim to have overcome here this schizophrenia
between Marx and Rawls, between critical social theory and normative political
philosophy. Nevertheless, it does seem to me essential when considering the question of
equality and inequality to engage in both - that is, to offer both philosophical arguments
and socio-economic analysis. Arguably, this requirement is a crucial feature of A Theory
of Justice itself. Brian Barry writes:
If Rawls had achieved nothing else, he would have been important for having
taken seriously the
idea that the subject of justice is what he calls 'the basic structure
of society'- _Where we talk about the basic structure of society we are concemed with the
way in which institutions work systematically so as to advantage some and disadvantage
others. Rawls's incorporation of this idea of a social structure into his theory represents
the comffig of age of liberal political philosophy. For the first time, a major figure in the
broadly individualistic tradition has taken account of the legacy of Marx and Weber by
recognizing explicitly that societies have pattems of inequaliry that persist over time

and systematic ways of allocating people to positions within their hierarchies of power,
status and money.36
This implication of Rawls's theoretical enterprise has not, however, been much
reflected in the intellectual practice of either political philosophers or social theorists hence the oscillation of which Bidet complains. In this book, however, I seek to engage
with both philosophical concepts and socio-economic structures. In doing so, I
concentrate to a large extent on Britain, and therefore inevitably touch on the debates
provoked by the New Labour 'project'. This may seem to involve the error, wittily
denounced by Gore Vidal during the 1997 general election, of paying excessive attention
to the affairs of a mere province of the American empire. Nevertheless, Britain under
New Labour has come to play a certain exemplary role. It is true that the basic idea of the
Third Way as a strategy for the 'centre left' (an expression whose popularity is itself a sign
of the influence of American 'New Democrats', for whom the word 'socialism' is
unmentionable) was coined by Bill Clinton and his advisors in the run-up to the 1992
presidential election. The contemporary United States is frequently cited as a model by
New Labour.
But, after a White House seminar devoted to the Third Way drew, along with
Clinton and Blair, the German Chancellor, and the prime ministers of Italy and the
Netherlands, one of New Labour's most assiduous media courtiers announced that 'the
Third Way project ... is extraordinarily successful. It began as a British-American
ideological venture; now European and other leaders are turning to it for inspiration,
because they think it may have something that helps them to understand a shifting,
shrinking world. There may be some virtue, then, in considering the egalitarian claims of
the Tlird Way where it is pursued with all the formidable powers of a British government
with a large parliamentary majority. 'De te fabula narratur!' - 'the story is told of you', to
quote Marx's warning to, the world that it too would suffer the travails of industrial
capitalism first experienced by Britain.38
Finally, I should perhaps say a word about the position from which this book is
written. My own intellectual and political starting point is the classical Marxist tradition.
For reasons that I touch in chapters 2 and 3, Marx and his successors were at best:
ambivalent about equality conceived as an ethical ideal. One of the attractions of
egalitarian liberalism is that it offers intellectual resources with which to he1p remedy the
resulting gaps in the Marxist tradition. 39 Nevertheless, this book is emphatically not an
attempt to develop a Marxist theory of egalitarian justice. Rather, my concem is to
consider the best contemporary philosophical work on equality, and to show that taking
its political implications seriously would require a dramatic transformation of the present
social and economic order. If there is anything distinctively Marxist about this book ' it
lies in the contradiction it seeks to expose berween the normative claims of egalitarian
liberalism, which does not directly challenge capitalist institutions, and the continued
existence of these institutions.40

10

Chapter 4

Equality and Capitalism

Equality without tears
It should be clear that the theories of egalitarian justice discussed in the previous
chapter imply a considerable redistribution of society's resources. John Roemer recently
estimated that to achieve 'deep' equality of opporrunity with respect to education in the
United States, the objective of ensuring that children in whatever circumstances who
expend the same effort will have the same adult eaming capacity, would require spending
$900 on every white student and $2,900 on every black student.1
Yet redistribution has dropped off the policy agenda, even in the case of
governments ostensibly committed to equality. Some historically-minded commentators
have compared the version of the Third Way practised by Tony Blair with the New
Liberalism' which emerged in Britain around 1900, and which inspired the policies of the
great Liberal administrations of Campbell-Bannerman and Asquith between 1905 and
1915. Thus Alan Ryan writes: 'The third way first showed up in British Policies
ninety-five years ago. At that point it was, and in so far as it is coherent it remains, the
ideology of the New Liberalism ... The truth is that the third- way is neither New Labour,
as its admirers say, nor warmed over Thatcherism, as its detractors say, but a reversion to
a very old idea.2
The comparison is no doubt an attractive one to Blair himself. He has frequently
deplored the division in British progressive' forces brought about by the formation of the
Labour Party and stressed the inspiration he finds in such great Liberal figures as
Gladstone, Asquith and Keynes. The Labour Party, then, is led by someone who doesn't
believe in its existence (perhaps not such a paradoxical situation when one considers the
frequency with which religious doubts are avowed these days by members of the clergy).
But Blair might find the reality of the New Liberalism a bit too radical for his liking.
The historical conjuncture in which it emerged was one where it was widely
agreed in the British political elite that two challenges confronted the established order.
One was the extemal threat presented to British industrial and naval supremacy by such
rising powers as Germany and the United States; the other was the prospect of domestic
social conflict raised by the emergence of an increasingly powerful and assertive labour
movement. Many Liberal and Unionist politicians agreed that the situation required
considerable additional government expenditure on the navy (notably the Dreadnought
programme) and a programme of major social reforms to alleviate working-class
discontent and improve the physical quality of a human 'stock' that the Boer War revealed
to have often been greatly diminished by poverty.
They differed, however, on how to finance the expenditure. Unionists such as
joseph Chamberlain argued that protective tariffs would have the double advantage of
raising the necessary moneys and protecting British industries from foreign. conipetition.
New Liberals remained commited to free trade, but were willing to depart from laissez
faire to the extent of supporting extensive state intervention in the economy and
redistributive taxation. The latter would not only finance higher government expenditure,

11

but also help to strengthen a broad 'progressive' coalition embracing both the Liberals and
a growing but still politically subordinate labour movement. Such was the logic of Lloyd
George's famous 1909 Budget, which sought to pay for the recent introduction of
non-contributory old-age pensions and for the Dreadnoughts by shifting the tax burden on
to the rich through higher income tax and death duties and a new duty on the value of
land. The furious Unionist reaction greatly embittered party conflict, particularly after the
changing parliamentary balance brought the Irish question back to the centre of politics in
the years immediately before the outbreak of the First World War.3
The economic and social policy of the New Liberalism was thus a classic instance
of what it has become habitual for New Labour dismissively to stereotype as 'tax-andspend'. Lloyd George saw his 1909 Budget as merely the beginning of a state-directed
programme of agrarian reform that was designed to break the power of the landed
aristocracy and would be financed by taxing landlords' rents. 4 Blair's own attitude to
redistribution is nicely captured by an anecdote from the 1997 election campaign, told by
a journalist close to his court: Tarly on in the campaign, I was foolhardy enough to ask
Mr Blair if there might be some small role for wealth distribution in the politics of the
centre left. It would have beensafer to venture he regularly beat his wife.5
If Blair can claim a Liberal ancestry, it is less Gladstone in his old age, reviled by
the aristocracy as a traitor to his class, or the young, Radical Lloyd George, than the more
right-wing Liberal Imperialists such as Asquith and Sir Edward Grey, who supported the
Boer War and took Britain into the First World War. During the 1999 Balkan War,
Richard Gott denounced the belligerent stance adopted by Blair and his supporters as 'a
throwback to the colonialism of the last century, when the imperial powers, intervened at
will in the affairs of independent states and Peoples'. 6 The ambitious 'doctrine of
international community' unveiled by Blair at the height of the war, claiming the NATO
powers' right to mount 'humanitarian interventions' wherever they see fit, indeed
legitirnizes the assertion of Westem military might to maintain the existing, manifestly
unjust global distribution of resources.7
Gordon Brown, a much more traditional Labourist politician than Blair, has been
more consistent in his use of egalitarian language, though the word 'redistribution' seems
to have been banned in New Labour discourse. The journalist Samuel Brittan, one of the
inventors of monetarism, has sympathetically described Bruwn's policy as Chancellor of
the Exchequer as `redistributive market liberalism" -with only a light touch on
redistribution'.8 While Brown has pursued an orthodox neo-liberal macroeconomic policy,
notably by giving the Bank of England independent control over interest rates and by
reducing overall public expenditure in real terms, he has simultaneously practised what
David Piachaud calls 'redistribution by stealth'. This has involved higher benefits and new
tax credits directed at poorer househo1ds with children, financed, in the case of the
withdrawal of the children's tax credit for higher-rate income tax-payers, by higher
marginal tax rates for those on middle incomes.9
Brown's broad approach to equality is an instance of what Stuart White has named
'endowment egalitarianism'. This involves equalizing 'the background distribution of
productive endowments so that market interactions lead to a greater initial equaliry of
income, lessening the need for subsequent redistribution'. 10 The New Labour version of
this approach. involves, however, equalizing access to only one productive endowment skills - through improved education and training. Thus while still in opposition Brown

12

called for a new economic egalitarianism which starts from the recognition that it is
indeed people's potential - and thus the value of their labour - that is the driving force of
the modern economy, and that the modern economy succeeds or fails through enhancing
the skills of everyone. Instead of labour for the benefit of the few, the challenge is to
rebuild our economy to ensure labour can use capital for the benefit of all.11
Brown underlines that improving skills is an alternative to any more extensive
redistribution of productive resources: 'where the success and failure of an economy
depend on access to knowledge more than access to capital, individual liberation arises
from the enhancement of the value of labour rather than the abolition of private capital'. 12
This approach corresponds broadly to Joel Rogers' and Wolfgang Streeck's argument that
the left requires a postkeynesian policy of 'effective supply', in which the state seeks to
provide the collective goods - notably education and training - on which they claim
competitiveness in the era of 'flexible accumulation' depends.13
In office Brown has pursued this 'new economic egalitarianism' under the slogan
of 'Work as the Route to Opportunity'- New tax credits have been introduced to guarantee
poor households with children a higher minimum income; the rates at which benefits and
credits are withdrawn from those in work have been graduated to give more poor people
an incentive to move into paid employment; resources are being devoted to what a
Treasury paper calls '[h]elping people from Welfare to Work with the New Deal
programme to provide new work opportunities for people who have become detached
from the labour market'; and 'the Government is working to tack1e inequality of
opportunity at its roots' by raising education standards.14
While not perhaps quite meriting some of the plaudits directed at it by journalists
eager to ingratiate themselves with New Labour, there is no doubt that Brown's strategy is
a seriously intended and systematically conceived attempt to reduce inequality and
poverty in British sociery. It is, however, misconceived, internally incoherent and
therefore incapable of achieving its stated objectives.
The central contradiction lies in Brown's attempt to combine neo-liberalism and
egalitarianism. The Treasury paper cited above stresses the importance of '[a]
macroeconomic frarnework which promotes a platform. for longterm sustained growth.
This will he1p prevent the large swings in output which destroy jobs and create pools of
long-term unemployment which have a scarring effect on people's subsequent
employment opportunities.'15 As Chancellor, Brown constantly repeats the mantra that
'prudent' monetary and fiscal policies are necessary to avoid the 'boom and bust' cycle
that he associates with the previous Conservative administration.
There is a superficial paradox here, namely that Brown holds the politicians of the
Thatcher era responsible for economie instability while appropriating the neo-liberal
orthodoxy which they were the first British government: of the post-war era to seek
systematically to apply. But the deeper contradiction lies in his belief (which dissolves
this apparent paradox) that neo-liberal macro-economic policies, correaly applied (as, he
claims, they were not by the Tories), will, in effect, abolish the business cycle and thereby
contribute towards eliminating the mass unemployment that Brown correctly holds to be
one of the main sources of poverty and inequality.
This belief implies the relatively crude version of neoclassical orthodoxy that
holds that economic crises and mass unemployment are caused by imperfections of the
market mechanism. This version is associated in particular with the doctrine of the

13

natural rate of unemployment, demolished by Keynes in the 1930s but rehabilitated by

Milton Friedrnan and his fellow monetarists in the 1970s. On this view, the rate of
unemployment tends to a certan level reflecting factors determining the supply and
demand of labour in the real econorny. Any attempt by the govemment to push
unemployment below this rate - for example, by seeking to increase effective demand will simply increase the rate of inflation; hence the natural rate is often called the
Non-Accelerating Inflation Rate of Unemployment (NAIRU). To reduce the natural rate
of unemployment requires 'supply-side' measures that give employers a greater incentive
to hire workers.16
Some indication of the kind of measures involved is provided by an unusually by
an unusually internal Bank of England memorandum written in july 1930, as the Great
Depression forced up Britain's already high levels of unemployment:
Of the remedies proposed, the Bank prefer (1)Reduction of real wages in the sheltered industries [i.e. those not exposed to
intemational competition], and if this is insufficient, in the unsheitered as well.
(2)Reduction of real social service benefits to a point where fear of unemployment
is increased and the mobility of labour stimulated.
(3)Redistribution of taxation to bear less heavily on profits and more heavily on
sheltered classes of all kinds, and redistribution of social service charges so that
they will not be a tax on employment.
(4)Rationalization.
(5) A Calvinist outlook17
This generous spirt of pre-Keynesian economic liberalism still informs
contemporary neo-liberalism, even if the latter's public language is usually less brutal.
Bastions of laissez-faire such as the European Central Bank argue that the chronic mass
unemployment afflicting the advanced economies is largely 'structural': that is, it is
caused by supply-side defects, chief among which are over-rigid labour markets,
over-mighty trade unions and over-generous welfare provision. Contemporary
social-democratic leaders increasingly endorse this diagnosis. In a recent policy
statement, Tony Blair and Gerhard Schrder declare: 'In much of Europe unemployment
is far too high - and a large amount of it is structural.' They go on to call for 'a new
supply-side agenda for the left'.18
Apart from lower corporate taxation, this agenda calls for a fruitful combination
of micro-econornic flexibility and macro-economic stability'. In particular, '[r]igidity and
over-regulation hamper our success in the knowledgebased service econorny of the future
... We need to become more flexible, not less.' At the same time, Blair and Schrder
protest: 'Modem social democrats are not laissez- faire neo-liberals. Flexible markets
must be combined with a newly defined role for an active state. The top priority must be
investment in human and social capital.' 19 Once again it is the enhancement of
individuals'. endowments of skills through education and training that is held to
differentiate the Third Way from neo-liberalism.
Despite this strategy's emphasis on allowing individuals to fulfil their potential, it
has a concealed authoritarian dimension. Consider the world prescribed by the neoliberal
orthodoxy outlined above. The pursuit of macroeconomic stability through sound fiscal
14

and monetary policy is expected by this orthodoxy to remove the causes of cyclical
unemployment, by eliminating (or greatly alleviating) the cycle of boom and slump.
Meanwhile, labour - market flexibility - largely established in the United States and
Britain, both Thatcherites and supporters of the Third Way agree - will do away with
structural unemployment. Finally, programmes such as Labour's New Deal will prepare
the long-terin unemployed for re-entry into- or first experience of - the labour market.
In such a world, anyone who is still without: a job, must have freely chosen this
condition. The Utopia implied by neo-classical models of perfect competition will have
been established: all unemployment will be voluntary. The closer we approach this happy
state of affairs, the more appropriate it will presumably be to force on to the labourmarket
those recalcitrants who persist in remaining jobless. There, is, therefore, a rather sinister
ring to Blair`s and Schrder's 'active supply-side labour market policysecking, inter alia,
to "[i]ntroduce targeted programmes for the long-term unemployed and other
disadvantaged groups to give them the opportunity to reintegrate into the labour market
on the principle of rights and responsibilities going together", and 'assess all benefit
recipients, including people of working age in the receipt of disability benefits, for their
potential to earn, and reform. state employment services to assist those capable of work to
find appropriate work'.20
'Assisting' people into work may turn out to mean driving them there -perhaps, as
has happened in the United States under the 1996 -welfare 'reform' endorsed by Clinton
as part of his strategy of triangulation (i.e. adopting the policy agenda of the Republican
right), by withdrawing their benefits altogether. The threat is almost explicit in the
Blair-Schrder document: "New policies to offer unemployed people jobs and training
are a social democratic priority -but we also expect everyone to take up the opportimity
offered."21
We can see the same logic at work in a recent speech of Brown's, where he
affirmed New Labour's commitment to full employment only to reinterpret this goal as
temployment: opportunities for all.22 Once again, the implication is that it is incumbent
on individuals to take up these opportunities. When Brown announced in November 1999
that the New Deal welfare-to-work programme would be extended to unemployed people
aged 25 or over (originally it was restricted to those between 18 and 24), the Financial
Times - conimented: "Clearly Tony Blair's goveminent is moving determinedly towards a
system of workfare - one that: makes benefits conditional on willingness to work."23
Once this logic is understood, what is often thought to be a contradiction in Third
Way politics dissolves. Commentators, contrast Blair's embrace of economic liberalism
with the moral authoritarianism he often displays with respect to such issues as law and
order and family values. This combination of stances is unpalatable both for more
traditional Croslandite social democrats, who tend to favour leaving individuals free to
conduct their personal lives within the limits set by public policy committed to reducing
inequality, and for those neo-liberals who hold that free-market economics is part of a
more general libertarian approach to life.
But there is no contradiction in New Labour thinking here. If orthodox
macro-economic policy and flexible markets are undergirded by policies designed to
enhance the market capacity of the disadvantaged, any remaining unemployment must
flow from the faults of the individuals concerned. Whether these faults are seen as
consequences of personal moral failings or a more general 'culture of poverty' that:

15

encourages dysfunctional behaviour, it is but a short step from accepting this diagnosis to
supporting a public policy aimed at, through a mixture of sanctions and incentives,
re-educating the individuals concerned and breaking down their resistance to
participating in the world of work. In this sense, the accusation that Third Way policies
tend to reinvent the Victorian concept of the undeserving poor is valid.
Three further features of this whole pattem of thought are worth noting. The first
is the emphasis on paid employment as the road to salvation, or, as Brown would put it,
'the Route to Opportunity'. Any particular instance of disadvantage - being a lone parent,
suffering from disability and so on - is to be remedied by getting the person concerned a
job. This strategy can be justified by the evidence, noted in chapter 1, that poverty and
inequality in societies such as Britain and the United States are closely related to
unemployment and low-paid work. But it does not follow from such a causal explanation
that the remedy lies in trying to shoe horn everyone into jobs.
Most obviously, very large sections of the poor - notably many disabled people
and the old - cannot realistically be expected to enter (or re-enter) the labour market. In
circumstances where social policy requires that welfare recipients be assessed 'for their
potential to, earn', the effect may be to, reduce those with no such potential to, permanent
second-class status. Treating work as the primary means for reducing inequality can thus
operate as a mechanism of exclusion. The effects may not be merely symbolic. Piachaud
notes the redistribution of state benefits in Britain under New Labour to the disadvantage
of the childless unemployed:
As for non-retired households without children, the poorest tenth of these are
mostly out of employrnent and receivethree-fifths of their income from social security
benefits.
Some of these may escape poverry as a result of welfare-to work policies. For
those who remain on social security, the present policy of freezing these benefits in real
terms will mean this group will fall further behind and their poverty will increase. The
effect of this over five years is estimated to be an increase in poverty of 200,000
househo1ds containing over 300,000 people .24
Secondly, the first step on the road to salvation is education. Indeed, the Treasury
paper cited above implies that the 'roots' of 'inequality of opportunity' lie in poor
education. In this respect, New Labour remains at one with Old Labour. As we saw in
chapter 2, both. Tawney and -Crosland laid particular emphasis on attacking inequalities
in education. In the case of New Labour, the stress is less on inequality as such (the
hostility that traditional social democrats displayed towards the public schools has
entirely vanished) or even on higher spending on education, but on making better use of
existing resources by bullying or bribing teachers to meet nationally enforced norms of
efficiency. While this obnoxious policy is largely inherited from the Blair government's
Tory predecessors, its justification has changed. The Thatcherite objectives of getting
value for taxpayers' money and suppressing progressive teaching methods remain, but the
overarching aim is now to provide individuals with the skills needed to participate in the
labour market. In its particulars as well as its general design, the Third Way is a strange
mixture of conservative measures alloyed by social-democratic aspirations.
This approach, is vulnerable to the fundamental objection to all social-democratic
strategies that: seek to reduce inequality by widening access to education, namely that
educational performance does not produce but rather reflects the broader pattem of social

16

and economic disadvantage. According to the Blair govemment's own research, if one
father's earnings are double the level of another, his son's maths test score is on average
five percentile points higher than the other's and 2.7 percentile Points higher up the
reading test distribution for a daughter the gain is five percentile points up the distribution
of both maths and reading tests scores.25
These regularities suggest that efforts to improve the education system are likely
to be ineffective unless they are linked to a transformation of the basic structures of
inequality. The New Labour approach is also vulnerable because of its presumption that
the surest long-term strategy for reducing unemployrnent and thereby increasing
opportunity is to provide individuals with the appropriate education and training. As Blair
and Schrder put it, 'lifetime access to education and training and lifelong utilization of
their opportunities represent the most important security available in the modem world'. 26
This is what Robert Kuttner calls 'a human capital cure'.27 It is dependent on the clairn,
repeatedly made by Brown, that in the information-hungry economies of contemporary
advanced capitalism, competitiveness is increasingly a function of the quality of the
human capital available: that is, on the knowIedge and skills of the workforce.
Whatever the relationship between competitiveness and human capital, the
implied claim that greater access to education will of itself reduce unemployrnent is not
supported by the evidence. Take the case of the United States, increasing held up as a
model by European advocates of the Tlird Way. Edward Luttwak has made, from a
neo-conservative perspective, a compelling case against the claim that the decline in the
workforce of such manufacturing 'Old Titans' of American capitalism as General Motors
is being compensated for by the rise of the 'New Titans' of the information-techriology
industry. As Luttwak notes, in 1995 the New Titans of information technology einployed
a total of 128,420 workers, less than a fifth. of General Motors' workforce of 721,000.
Microsoft employed a mete 15,500:
If the US econorny consisted only of Old Titans with a very large but
diminishing number of employees, and of New Titans that employ very few,
unemployment would be rising to phenomenal levels. Of course, this is not so because of
the vast and diverse array of services, everything from local,
State
and
Federal
government to dry-cleaners, with the huge and growing health-care industry in berween.
Within it, there are the retail and fast-food giants, ...which have added greatly to
the number of their employees. But there is a catch: they offer-neither the superlative jobs
that abound in the information technology sector, nor the plain but well-paid industrial
jobs of the Old Titans. In large-scale retailing and in the fast-food chains, many
employees work at the minimum wage, many others earn not much more, and only a few
at the top are very well paid.28
This pattem reflects the fact that, as Luttwak puts it,
[t]he New Titans can and do prosper by supplying only the world's elites and near
elites - the buyers and users of computers, software and peripheral ancillaries - with veryhigh-margin products in relatively small volumes ... What this means from a larger
perspective is that: informationtechnology is not a job-creator in the way electric motors
(the last big leap) certainly were, displacing some manual workers along with steam
engines, while giving birth to several new industries that offered much employment and
still do. Instead, as chance would have it, information technology is a job 'sink' as

17

physicists would say: it destroys clerical and, increasingly, administrative jobs by the
million.29
If this analysis is correct, low-paid jobs are unlikely to offer many of their
occupants the opportunity, thanks to education and training, to climb up the occupational
ladder. Low pay will remain what the studies cited in chapter 1 suggest it is now - a blind
alley from which the working poor cannot escape. The Blair-Schrder document tacit1y
concedes this: 'The labour market needs a low-wage sector in order to make low-skill
jobs available. The tax and benefits system can replenish low incomes from employment
and at the same time save on support payments for the unemployed. 30 The income
guarantees offered by Brown to families with children, by increasing the incentive to
accept low-paid jobs, effectively subsidize employers offering such jobs. Whatever the
benefits of paid employrnent, it is not clear how this policy genuinely widens
opportunities.
Thirdly, the New Labour strategy presumes that it is possible to increase equality
without any significant redistribution of wealth and income. Such is the implication of
Blair's announcement: 'The class war is over. But the struggle for true equality has only
just begun.' Behind it lies the claim I have just considered that, by enabling individuals to
realize their potential through greater access to education and training, government can at
the same time enhance economic competitiveness. And so, 'after a century of antagonism,
economic efficieney and social justice are finally working in partnership' 31 But even if the
claims for improving human capital were true, is it really plausible that all the vast and
entrenched inequalities surveyed in chapter 1 - including, let us recall, those on a global
scale - could be seriously reduced without any noticeable redistribution? Only the naive
or the selfdeceiving could believe that it is.32
Self-deception is indeed a noteworthy characteristic of the more committed
egalitarians in New Labour's ranks. Brown is sufficiently in touch with his Old Labour
roots occasionally to denounce 'privilege and greed'. Thus not long ago, in a more than
usually boastful speech, he looked forward euphorically to a second term of office: 'it will
be the British people, that will be able to say, in the words of Roosevelt, in our first term,
these forces of reaction and privilege met their match; in their second term they found
their master'.33
Who does he think he's kidding? Brown is a leading member of a goverment that
has dedicated itself to avoiding giving offence to the rich and privileged. Ministers from
Blair down have sought their company, celebrated them publicly and solicited their
inancial --contributions. Promises made in opposition to the trade unions concerning such
issues as the minimura wage, union rights and working hours have been watered down in
the face of big-business opposition. When the Trade and Industry Secretary, Stephen
Byers, announced 'a crackdown on excessive boardroom pay, the Financial Times
cynically commented: 'In the event, there was litle behind the rhetoric, which explained
the sighs of relief from the City audience.' 34 If New Labour does obtain a second term, the
'forces of reaction and privileg' will be able to rest easy in the knowledge that they are the
Masters.
These contortions reflect the fact that Blair and Brown believe that they can
achieve equaliry without tears without, that is, significant social conflict. But this is the
merest delusion. So profound are social and economic inequalities, so unjust (in the terms
discussed in the previous chapter) is the current distribution of resources, that the

18

situation can begin to be remedied only by dramatic transfers from the rich to the poor.
This may be an uncomfortable truth, and many may conclide that redistribution on this
scale is politically impossible. But those who choose, for whatever reason, to, settle for
second or third best are not entitled to the comforting illusion that what they have opted
for amounts to social justice.
On the capitalist roller-coaster
Beyond these specific difficulties, the fundamental contradiction of the Third
Way, conceived as a social-democratic strategy, lies in its attempt to combine egalitarian
aims with a neo-liberal economic policy. Can social inequality be significantly reduced in
an econorny that conforms to the Anglo-American model of deregulated, laissez- faire
capitalism? Among the many reasons supporting the conclusion that it cannot, two in
particular stand out.
First, social and economic inequalities have widened dramatically over the past
two decades, at precisely the time when neo-liberal policies have become dominant in
Westein counsels. The fact that in the advanced countries this process has gone furthest in
the two countries - the United States and Britain - where the return to laissez faire has
been most pronounced suggests that this is no mere coincidence. Indeed, the basic thrust
of fiscal policy in the Reagan-Thatcher era - cuts in income and corporate taxation that
benefit the rich and the better-off, greater reliance on regressive indirect taxes that hit the
worse off relatively hard, reductions in social expenditure that hurt the poor - could have
no other effect, than to widen inequalities.
The New Labour government in Britain has persisted with Thatcherite fiscal
policy, presiding over a fall in the share of national income taken by public expenditure to
its lowest level since the 1960s, while holding out the promise of yet more tax cuts. Quite
aside from the defects surveyed in the previous section, the kind of measures advocated
by suporters of the Third Way to reduce the gap between rich and poor are likely to be
ineffective when thrown into the balance against the consequences of this approach.
Secondly, the rational kernel in the version of equality of opportunity espoused
especially by Gordon Brow is its recognition of the connectioris between unemployment,
low pay and poverty. But the neo-liberal era has been one of slow growth in output and
therefore high levels of unemployment. As Angus Maddison puts it in his study of the
long-term development of modem Capitalism, 'there was a golden age of gready
accelerated growth in the quarter-century from the Second World War, and a very
substantial deterioration after 1973, though performance in this last phase has been better
tlian in any earlier period since the golden age'. The annual average rate of growth of real
gross domestic preiduct (GDP) in the sixteen main market capitalist economies was 2.4
per cent in 1820-70, 2.5 per cent in 1870-1913, 2.0 per cent in 19 13 -50, 4.9 per cent in
1950-73 and 2.6 per cent in 1973-89.35
Since the Period 1913-50 includes the Great Depression of the 1930s, by far the
most serious economic crisis in die history of capitalism, when output fell by nearly 30
per cent in the US and, Germany, what we have seen since 1973 is a fall in the average
growth rate back, to nineteenth-century levels. Maddison's figures only go up to 1989,
but the 1990s have seen no real break in this pattern. At the end of 1996 the Financial
Times reported OECD projecticins that: 'annual average growth for the EU and the US

19

for most of the 1990s will be only 1,9 per cent (compared to 1.6 per cent in Japan)'. The
paper compared this dreary performance with average growth in the 1960s and early
1970s - an average of 4.8 per cent in Europe, 4.3 per cent in the US and 9.4 per cent in
Japan'.36 Towards the end of the decade, the American economy picked up speed, growing
at an average rate of nearly 4 per cent in 1996-9, but this is unlikely to change the overall
picture for the advanced countries, given that continental Europe stagnated for much of
the 1990s, while Japan grappled with the worst defiationary crisis experienced by any
major econorny since the 1930s. In the year 2000, 35 million people are expected to be
unemployed in the OECD bloc of rich countries.37
It is, when one thinks about it, a remarkable tribute to the role of institutional
power in securing the acceptance of ideas - and to the effrontery of the free-marketeers that neo-liberalism should have triumphed over Keynesan economics and. been
entrenched as economic orthodoxy during an era when the average growth rate nearly
halved. But then intellectual modesty has not been one of neoliberals' most obvious
characteristics. Perhaps the most striking case is that of Russia, where the application of
free-market 'shock therapy' in the 1990s led to an economic catastrophe greater than
anything seen even in the Great Depression, wider socio-economic inequalities, and the
wholesale transfer of the most profitable public assets to a handful of private
entrepreneurs largely recruited from the old nomenklatura. Yet the Russian government's
Western academic advisers, such as Jeffrey Sachs and Richard Layard (co-author of a
book published in 1996 called The Coming Russian Boom), show no sign of contrition.
One wonders what would be the effect if the kind of performance indicators imposed on
British higher education during the Thatcher era were applied to such advice.38
This is not to hold neo-liberalism responsible for the economic slowdown after 1973.
Its intellectual and political rehabilitation was a reaction to this slowdown and to the
failure of Keynesian measures to overcome it. All the same, there is a strong case for
saying that this return to laissez-faire has made the situation worse. Take the case of the
chronically high levels of unemployment in the European Union. The orthodox line,
endorsed by Blair and Schrder, that these are a consequence of labur-market rigidities
produced by over-regulation and strong trade unions (on the Continent at least), has
recently been challenged by an OECD study that found no strong connection between
employment protection legislation and the level of unemployment.39
An alternative explanation of mass unemployrnent lies in the hard-wiring of
neo-liberal policies into the EU, first by the convergence conditions for economic and
monetary union laid down in the Maastricht Treaty, and then by the establishment, under
the same treaty, of arl independent and unelected European Central Bank with sole
control of monetary policy since the euro was launched at the beginning of 1999. 40 One
provocative relent study goes even further, arguing that Europe's high linemployment
levels compared to the United States reflect the fact that American public policy is in
some respects more egalitarian and certainly more actively committed to job creation
than that of a EU now under largely socialdemocratic management.41
More fundamentally, the simple truth is that capitalism doesn't work in the way in
which neo-classical orthodoxy claims that it does. It just is not the case that a market
economy, if left to its own devices, will attain a fullemployment equilibrium. As Hayek,
the most astute modem defender of the free market, acknowledged in his theoretical
writings, capitalism is an inherently unstable economic system that unavoidably moves

20

through a cycle of boom and slump. There are many reasons why this is so: let me just
mention two of die most important ones.42
The first we can associate with Keynes, since one of the main themes of the
General Theory is the constitutive instability of financial markets. The same theme has
been stressed by contemporary left-Keynesian writers such as Will Hutton and Larry
Elliott in Britain.43 Struggling to predict an inherently uncertain future and thereby to
find, the most profitable moment to buy or sell assets, investers on financial markets are
liable to collective movements driven by greed and fear that can have devastating effects
on the productive economy. Neo-liberal policies of deregulation - strongly promoted by
successive US administrations since the 1970s - and the revolution in information
technology have interacted with longer-term economic trends greatly to increase the
volume and international mobility of the money capital invested on financial markets.
The result has been the great surges of speculative Westem investment that: have first
uplifted a succession of 'emerging market' economies - Mexico in the early 1990s, East
Asia and Russia in the latter half of the same decade - and then, when euphoria tumed
suddenly to panic, dashed them down as capital fled as quickly as it had entered in the
first place.44
The human consequences of these huge flows of money in and out of particular
economies have been severe. In Indonesia, real salaries dropped by 30 per cent in 1998,
and the incidence of poverty rose to between 14 and 20 per cent (compared to 11 per cent
two years before). Household income in South Korea was 20 per cent lower in the third
quarter of 1998 than a year previously. In the Philippines, real per capita income fell by
12 per cent in 1998.45
The severe financial panic that set in after the Russian crash in August 1998, and
that: led briefly in the early autumn to a flight for cash as confidence in the credit system
vanished, strengthened a growing chorus of voices critical of the 'Washington consensus'
-the US Treasury- International Monetary Fund axis promoting the global adoption of
neo-liberal policies in the 1980s and 1990s. The idea of capital controls, designed to
allow governments to regulate inflows and oufflows of speculative money, became
fashionable, particularly after the Malaysian prime minister, Mahatir Mohamed, used
them with apparent success to alleviate the impact of the Asian crisis. Even the World
Bank and the IMF performed U-turns and endorsed the use of capital controls.46
In practice, the limits of laissez~faire have been demonstrated by the determined
intervention of the governments of the Group of Seven (G7) leading industrial countries
to end each panic. IMF rescue packages were constructed for Mexico, South Korea,
Indonesia and Brazil with the dual aim of reassuring financial markets by lending the
affected countries the money to repay their Western creditors and requiring the recipients
to adopt neo-liberal 'reform' packages that would open them up to further foreing
investment. Even more spectacularly, in September 1998 the US Federal Reserve Board
led fifteen major investment banks in bailing out the hedge fund Long Term Capital
Management (LTCM), which had been bankrupted by the shock-waves of the Russian
crash. LTCM's speculations in financial derivatives left it at the peak with an incredible
$900 billion market exposure supported by orily $4.8 billion in capital. 47 So the fund had
to be rescued, lest its collapse send already panicky financial markets into free fall.
Such interventions by the G7 and the Fed achieved their aim of reassuring the
markets, but at the cost of increasing 'moral hazard'. In other words, their effect is to

21

convince investors that they will be protected against the consequences of their
speculations and thus to encourage them to take even greater risk, whit yet more
damaging results, in the future. As one financial journalist put it, '[t]he extent of moral
hazard is impossible to measure. But with each new financial crisis, and each bailout,
whether by the Intemational Monetary Fund, individual central banks or governments,
the in-built bias towards excessive risk-taking is reinforced.'48
In the aftermath of the 1998 panic there was much talk of the need for reforms in
the global 'financial architecture'. But one of the most intelligent and incisive
cornmentators on the world econorny, the Financial Times columnist Martin Wolf,
suggested that the practical impact would be slight:
The world's financial powers will neither prevent crises nor be able to cure them
painlessly. They lack the interest, the will, and, given the politics, the means to do so ...
The conclusions of this painful episode are three: the new world of capital market
openness is extremely vulnerable to crisis; the world can do little limit the pain of the
afflicted; and it is up to emerging market economies to understand the risks they run and
decide how best to deal with them. The world can do something to help reduce the
chances of crises; it can help reduce the subsequent pain. But it is the people of the
emerging market economies who experience the pain and their governments that bear the
chief responsibility for minimizing it.49
These conclusions may be if anything insufficiently bleak in suggesting that the
advanced economies are largely insulated from the consequences of financial crises.
Arguably the most important form of moral hazard created by the Federal Reserve Board
and other central banks when they rescued LTCM and cut interest rates in the autumn of
1998 was on Wall Street. The reassurance offered by this intervention encouraged share
prices to rise to ever more stratospheric levels, taking them even more out of line with
company earnings than they already were. While the rate of inflation was subdued, the
price of financial assets soared. The resulting 'wealth effect' encouralged middle-class
American households, enriched by the boom, to run down their savings even more and to
lash out on consumer goods, and thereby allowed the US to act as 'consumer of last
resort' for the world economy, partially compensating for the depressing impact of the
Asian crisis. But, by inflating the stock-market bubble to even greater dimensions, the
Fed's intervention may mean that when Wall Strect finally falls, the effects on America
and the world will be severe.50
The second reason for believing that capitalism is inherently unstable is offered
by Marx. He argued that the sources of economic crises lie deeper than what he called the
credit system (though he wrote in Capital, Volume III, a pioncering analysis of financial
crises). On his account, the tendency towards boom and slump arises from capitalist
relations of production themselves. Competition among rival capitals leads to investment
in plant and equipment rising faster than the workforce from whose labour profits are
extracted. The result is a fall in the general rate of profit unless various counteracting
influences (of which the most important is economic crisis itself) push it back up. This
tendency of the rate of profit to fall, Marx claimed, underlies the cyclical movement of
the capitalist economy to move benveen boom and slump.51
This theory has provoked enormous controversy since it was first published just
over a century ago. Nevertheless, there is considerable evidence that the period of

22

instability and slow growth from which the global economy has suffered since the early
1970s involves a deep-seated crisis of profitability in the advanced world. Robert
Brenner's major study of post-war capitalism offers a detailed demonstration of this
proposidon, though it posits different mechanisnis as responsible for the fall in the rate of
profit from those invoked by Marx:
Between 1970 and 1990, die manufacturing rate of profit for the G-7 econornies
taken together was, on average, about 40 per cent lower than that between 1950 and
1970 ... the radical decline in the profit rate has been the basic cause of the parallel, major
decline in the rate of growth of investment, and with it the rate of glowth of output,
especially in manufacturing, over the same period. The sharp decline in the rate of growth
of investment - along with that of output itself -is ... the primary source of the decline in
the growth of productivity, as weil as a major determinant of the increase in
unemployment. The reductions -in-die rate of Profit and of growth of producitivity are at
the root of the sharp slowdown in the growth of real wages.52
If this diagnosis is correct, then many' of the Phenomena held to represent the
health of capitalism over the past decade - for example, corporate dovnisizing, the
increasing intensity of international competition, the tetidency of multinational
corporations to site more of their operations abroad, the febrile behaviour of the financial
markets are in fact symptonis of, and responses to, the low profitability of productive
investnent in the advanced economies. The pressure on living standards documented in
chapter 1 - most notably the fall in real average hourly earnings of American
noli-supervisory workers - also becomes intefligible as part of a process of corporate
restructuring designeed to restore the rate of prrjfit to its post-war peak. How far this
process has gone in the US is a matter of controversy even among Marxist economists:
my own opinion is that the boom that developed in the late 1990s was a relatively
superficially based phenomenon rather than a sign that the long-term crisis of
Profitability had been overcome.53 Whether or not this judgement is correct, historical
experience suggests that any such resolution is likely to be temporary. The world in the
twerityfirst century will find itself on the sarce rollercoaster of boom and slump, that it
has ridden for the past 200 years.
Equality versus the market
The upshot of the preceding section is that capitalism as an economic system is
chronically liable to profound and disruptive collapses in output and employment- The
human consequences are severe. According to die United Nations Development
Programme,
[P]ast crises show that while economies regain output growth and
macro-economic balances -inflation, exchange rates, balance of payments - fairly
quickly, it takes longer for employment and wages to recover. An analysis of more
than 300 economic crises in more than 80 countries since 1973 shows that output
growth recovered to pre-crisis levels in one year on average. But real wage
growth took about four years to recover, and employment growth five years.

23

Income distribution worsened on average for three years, improving over

pre-crisis levels by the fifth year.54
The last sentence quoted paints perhaps too rosy a picture, since, as the Human
Development- Repeort itself shows, the general trend is towards growing inequalities ef
wealth and income. In the light of these considerattions, the idea, central to New Labour
strategy, that an egalitarian social policy can somehow be pursued in the context of the
kind of deregulated capitalism to be found in Britain and the US is simply Utopian. Nor
is it obvious t:hat some more humane version of capitalism can be found that will provide
a more favourable environment for egalitarians.
After the collapse of the Eastern bloc discredited the idea of a socialist altemative
to the existing system, the belief gained ground in social-democratic circles that world
history would now take the form of a struggie berween rival models of capitalism. In
particular, 'Rhineland capitalism', with its generous social provision, regulated. markets
and institutionalized bargaining between state, capital and labour, offered a more
attractive model for the centre left than Anglo-American laissez-faire. The idea of
'stakeholder capitalism', drasving its inspiration from Germany and Japan, was briefly
floated in New Labour circles in the mid-1990s before being squashed as too radical by
Blair and Brown-But the problem with, this approach lies deeper than the conservatism of
the Labour leadership. Actually existing stakeholder capitalism has been in serious
trouble since the early 1990s. Japan's and Germany's economic performance over the past
decade has been considerably worse than that of the US. In both countries the political
and business classes are deeply divided in the face of powerful pressures to restructure
their economies along more Anglo-Saxon lines. It is doubtful whether 'Rhineland
capitalism.' any longer represents a stable and coherent alternative to neoliberalism.55
The difficulty of pursuing egalitarian aims in a capitalist context is, however,
much more far-reaching than the question of the viability of particular economic models.
Any serious attempt to achieve greater equality is likely significantly to disrupt the
functioning of capitalism as an economic system. Take, for example, the quite widely
canvassed proposal that, in place of existing welfare systems, every adult citizen should
receive a basic income from the state. This is often seen as a way of overcoming the
irrational consequences of the interactions of the tax system and means-tested benefits,
which leave the poor in a poverty trap where they have little or no incentive to accept
paid employment. But Brian Barry argues that the introduction of a basic income would
serve wider egalitarian objectives: for example, helping to pave the way for market
socialism.56
Philippe Van Parijs and Robert Van Der Veen go even further, arguing that 'if
communism is to be approached within a capitallst context, it must be by way of raising
as much as possible the guaranteed income in the form of a universal grant'. 57 They
propose paying everyone a basic income of half per capita GDP, with adjustments to take
account of such variables as age and degree of handicap. This 'Capitalist Road to
Communism' (where the latter is understood in Marx's sense, as opposed to the caricature
once known as 'existing socialism') would involve 'redistribution . . ., roughly, from those
who perform paid work to those who do not' - a proposal justified by the claim that 'under
advanced welfare-state capitalism, access to (paid) labour has become a privilege'.58

24

This assertion reflects the belief widespread among left-of-centre intellectuals in

northem Europe that wagelabour is becoming a relatively marginal social experience. As
a general proposition this is mistaken. Despite chronically high levels of unemployment
in the advanced economies over the past generation, only a relatively small, minority of
the economically active population is jobless (Van Parijs's and Van Der Veen's claim that
'in Westem Europe, the employed population contributes less, than half of the total adult
population' must depend for its truth on the dubious device of including old-age
pensioners in the latter figure).59
In the United States working hours rose by nearly 4 per cent between 1980 and
1997, while elsewhere' in the ndustrialized world working hours remained stable or
declined slightly.60 The idea that paid work is vanishing derives any plausibility it may
have from the experience in northem Europe in the same period of slow growth and high
unemployment, rendered tolerable by relatively generous welfare provision and a
relatively large drop in working hours. This state of affairs is now coming under
increased pressure as both the European Central Bank and big business demand
reductions in social expenditure and labour-market deregulation.
But the real problem with the basic income proposal lies elsewhere, in the
resistance it would evoke from capitalists. Van Parijs and Van Der Veen dismiss this
objection: 'Given the considerable leeway provided by massive unemployment, it is hard
to believe- ...that the replacement of the current social security net in advanced welfare
states would dramatically damage profits (all things considered) and drive freely moving
capitalists away.61 This is, to say the least, a remarkably nalve attitude in the light of the
long experience of socialdemocratic governments 'blown off-course' (to use Harold
Wilson's famous phrase) by the large-scale flight of capital: the most recent example is
the Mitterrand administration in France, forced in 1981-3 to abandon its programme of
Keynesian macro-economic policies and extensive nationalization by the collapse of the
franc on the foreign exchanges.
Since then the markets have shown theinselves extremely sensitive to any move
by a govemment in a 'tax-and-spend' direction. In March 1999 Oskar Lafontaine, the first
committed Keynesian to serve as the finance minister of a leading economy for many
years, was driven to resign from the new Red-Green government in Germany as the result
of a concerted campaign by leadiing industrialists. His chief crime was to propose a
relatively limited shift in the tax burden from wage-eamers to companies. In response,
some of the largest German corporations threatened to move their operations abroad. The
Financial Times baldly summarized the effect of this blackmail: 'Following their angory
revolt over higher taxes, the leaders of German industry have claimed their scalp.62
Barry envisages that the provision of a subsistence-level basic income would
require a flat tax on all incomes of fifty per cent (which would, of course, be made
higher on larger incomes)63 If such a proposal were seriously canvassed by a major
party with a serious prospect of holding office anywhere in the advanced world, the
reaction of the privileged would be extravagantly ferocious.
It is important to understand that the burden of this criticism is not that the
basic-income proposal is unrealistic. As I argue at greater length in the next section, too
narrow a measure of 'feasibility' would strangle at birth the practical search for a more
equal society. My claim is rather one of incompatibility: a basic income is inconsistent
with a functioning capitalist economy. Part of the point of the universal grants proposed

25

by both. Barry and Van Parijs and Van Der Veen is to provide an acceptable altemative to
paid employment. But this would drastically undermine the incentive to strike a labour
contract on terms favourable to capital.
One of the driving forces behind neo-liberal efforts to reduce public expenditure
and 'reform' the welfare state has been the belief that, as a result of the Long Boom,
social-security benefits were eroding the incentive to perform wage-labour, particularly at
low levels of pay. The aim has been, in the words of the pre-war Bank of England
memorandum cited earlier in this chapter, to cut benefits 'to a point where fear of
unemployment is increased and the mobility of labour stimulated'. A subsistence-level
basic income would more than reverse the effects of these reductions. That is a good
reason for supporting such a proposal, but it nevertheless conflicts with the conditions
under which a viable capitalist econorny could be reproduced. In that sense, the
resistance that capitalists would undoubtedly mount to any serious attempt to introduce a
basic income would be rationally based. The thought, in other words, is not simply that
such an attempt would evoke damaging opposition from, business interests, but that this
opposition would reflect an accurate insight into the preconditions of profitable capitalist
enterprise.
Supporters of basic income are thus left with a dilemma. Either the grant is set at
so modest a level that it acts like the minimum income guarantee introduced by Gordon
Brown - as a subsidy to employers paying low wages or, if it is fixed anywhere near
subsistence, it will distupt the functioning of the capitalist economy and evoke fierce
opposition from business interests that will itself have a destabilizing impact. Barry
proposes introducing basicincome gradually, but - in all likelihood long before it neared
subsistence level - the point would be reached where the latter alternative carne into play.
The correct response to this dilenima is not to reject the basic income proposal, which has
undoubted attractions, but to recognize that it: can succeed only as part of a wider move
towards socialism in which, critically,- control over productive resources is taken froni
the hands of the capitalists and collectively exercised by those whom Marx called the
'associated producers'.64
The case of basic income illustrates a more general point. Any attempt to move
significantly in the direction of greater equality implies making drastic inroads in the
workings of the market that would seriously interfere with the conditions of capitalist
reproducton. Social-democratic: attempts to rein in the operations of the market while
offering scope for egalitarian policies thus suffer from difficulties of principle. Lionel
Jospin, leader of the French Socialist Party, has sought to differentiate himself from the
Blair-Clinton Third Way, declaring: 'I am. for the market economy as opposed to the
market society.65 Shortly after taking office as Prime Minister in june 1997, jospin said:
'If market forces are allowed to let rip, it will spell the end of civilization in westem
Europe.66 But, how to rein in market forces without producing the kind of disruptive
polarization I have discussed above? In practice, jospin has pursued policies not that:
different from Blair's, privatizing on a far greater scale than his right-wing predecessors
and allowing the election promise of a 35-hour week to be watered down beyond
recognition, though (a shrewder politician) he has kept his supporters happy with
left-wing rhetoric.67
In other words, social democrats continue to face the more general version of the
dilemnia stated above, one that: has dogged them for the past century. In government,

26

either they can avoid confrontation with capital and manage the market as best they can,
in which case they must abandon their egalitarian aspirations, or, if they stick to their
guns, they can succeed orily if they take control of productive resources away from the
minority who currently control them. The economic and political hazards of the latter
course are enormous, but it is hard to see how anyone senously interested in a significant
increase in equality can deny its necessity.
I have so far justified this on instrumental grounds, but we should recall that a
basic thrust of the egalitarian liberal arguments reviewed in chapter 3 was that access to,
among other things, productive resources should be equalized. It is one of the great merits
of Rawls and Dworkin in particular to have placed this issue, so to speak, on the
philosophical agenda (though they leave open when this equality requires collective
ownership Of the means of production).68 The narrow version Of 'endowment
egalitarianism' prevalent in New Labour circles has reduced the redistribution entailed to
improving the availability and quality of education and training, but the principled
argument should direct our attention to the requirement of equal access to the means of
production themselves. The chief weakness of egalitarian liberalism is that it fails to
recognize that achieving this equality, and indeed the other equalities canvassed by its
proponents, is inconsistent with the maintenance of capitalist relations of production.
The test of reality
Any version of egalitarianism must confront the charge that its implementation
either is impossible or would produce such negative consequences as to make it:
undesirable. One standard objection to the radical forms of egalitarian justice discussed in
chapter 3 is that the redistribution they require would severely undermine economic
efficiency. Deprived of the incentives provided by income inequality, economic actors
would produce less, and the resulting falls in productivity and output would reduce the
incomes of all, including that of the disadvantaged whom the redistribution was intended
chiefly to benefit. Rawls's difference principle seeks to address this objection by
authorizing inequalities that benefit the worst off.
A socialist version of egalitarianism is likely to face even stronger objections to
its feasibility. The convulsions at the end of the 1980s, which destroyed what I prefer to
call the Stalinist societies in eastem Europe and the Soviet Union, undermined whatever
credibility the idea of socialist planning still had left. G.A. Cohen, founder of Analytical
Marxism and a leading egalitarian political phijosopher, writes: 'The socialist aspiration
was to extend community to the whole of economic life. We now know that we do not
know how to do that, and many think that we now know that it s impossible to do that.' 69
He is therefore ready to settle for market socialism, but very inuch as second best, since,
'while market socialism may remove the income injustice caused by the differential
ownership of capital, it preserves the income injustice caused by differential endowments
of personal capacity', and continues to rely on 'some mixture of greed and fear' to
motivate economic actors.70
Even market socialism would, by taking control of productive resources away
from private capital, represent a very substantial change. The critical question has always
been whether the combination of genuinely collective ownership of the means of
production and reliance on the market mechanism to allocate resources between sectors

27

and enterprises constitutes a reproducible economic system over any period of time - I
doubt strongly that it is. The broader issue of.the economic feasibility of socialism is an
enormous question that I cannot begin properly to address here. Suffice it to say that I
believe that egalitarians such as Cohen are too hasty in dismissing socialist planning on
the basis of the Soviet experience.
However we choose to characterize the social character of 'existing socialism' (in
my view it was a version of capitalism rather any kind of post-capitalist society), the form
of planning it: employed required the total concentration of power at the centre. In
principle at least, information flowed upwards from ministries and enterprises to the
planners, and decisions in reverse order, from the top downwards. This structure made a
certain crude sense as a means of securing for military-related heavy industries priority in
resource allocation - the real motive for the system - but, as free-market critics from
Mises and Hayek onsvards argued, it produced hypertrophy and paralysis at the centre
and widespread evasion and inefficiency in the enterprises. This system of 'planning' (if it
deserves the word, since it was so driven by exogenous pressures from the global
structure of military competition) plainly fafied. It does not follow, however, that other
versions of planning must do so. -Yet, through some bizarre ideological mechanism,
every conceivable alternative to the market has been discredited by the collapse of
Stalinism. Plainly this has much to do with the historical context of that collapse, and
most particularly what it is now convenient to call globalization - the marked trend for
production, trade and finance to burst beyond national confines. This internationalization
of capital goes a long way towards explaining why the Soviet Union fell apart when it
did: brutally successful in mobilizing and centralizing resources on a national scale, the
Stalinist system was wholly incapable of seizing the new competitive advantages offered
by global economic integration.
The demise of 'existing socialism' is thus the most dramatic demonstration of the
incompatibility of nationally organized capitalism with the new world economy. The
further inference, made even by the more left-wing egalitarian philosophers such as
Cohen, that this expenence demonstrates the necessary superiority of the market over
other forms of economic co-ordination does not seem warranted by the evidence. The
choice between, on the one hand, market capitalism, particularly in its AngloAmerican
variant, and, on the other hand, defunct Stalinism is a hopelessly impoverished one. Yet it
is the sole one offered by mainstream political discourse - if only as a way of affirming,
yet again, the superiority of liberal-capitalism. Now that the immediate reverberations of
the upheavals of 1989 and 1991 have worked thernselves out, and as the defects of
capitalism once more make themselves felt, it is surely time to give serious consideration
to models of democratic socialist planning. It does not seem beyond the powers of human
ingenuity to devise a much more decentralized system of planning in which information
and decisions flow horizontally among different groups of producers and consumers
rather than vertically between centre and productive units. Pat Devine's model .of
'negotiated co-ordination' illustrates how such a system might work. One of its merits is
that it would require the extensive democratization of economic and social life - a
development that would in any case be desirable on other grounds.71
There is thus no reason why socialist planning should not be consistent with an economy
capable of reproduction over time. But socialism, like any radical egalitarianism, must
confront the objection that, even if in principle economically feasible, it cannot be

28

realized because of the conflict it implies with entrenched human motivations. This view
is expressed, from an egalitarian liberal perspective, by Thomas Nagel. He sees this as an
instance of the struggle within the individual between, on the one hand, '[t]he impersonal
standpoint [that] in each of us produces... a powerful demand for universal impartiality
and equality', and, on the other hand, 'the personal standpoint [that] gives rise to
individualistic motives and requirements which present obstacles to the pursuit and
realization of such ideals'.72
More specifically, Nagel suggests: 'My suspicion is that a politically secure
combination of equality with lberty and dernocracy would require a far greater
transformation of human nature than there is reason either to expect or to require.'
Moreover: Tconornic life cannot be disentangled from private choice and personal
motivations, without disastrous consequences. And the operation of such motives in the
economy seems bound to frustrate the pursuit of a comprehensive egalitarian ideal
however great may be the political will to achieve it. This is the familiar problem of
incentives.' Consequently, we should settle for what's feasible, the establishment of a
'social minimum, financed by progressive taxation that leaves major inequalities in
place .73
Nagels position is, as he points out, 'the point of view behind contemporary social
dernocracy'.74 Perhaps the greatest merit of his argument is that it reveals this point of
view's dependence on the traditional conservative view that egalitarian social change is
rendered null by human nature. Indeed, it is hard not to see Nagels counterposition of the
impersonal and personal perspectives as a modern philosophical restatement of the
ancient Christian-Platonic conception of the person as a complex entity composed of
antagonistic higher and lower selves.75
Of course, to give an argument a dubious genealogy is not, thereby to dispose of
it. Disputes over human nature are notoriously hard to resolve, in large part because
normative and factual considerations are usually hopelessly entangled. Nevertheless, it is
worth reminding ourselves of the standard socialist objection to appeals to human nature
in order to trump calls for egalitarian change, namely that such appeals tend to confuse
the local and the contingent with the universal and the natural. Cohen in effect offers a
version of this objection when he argues that incentive strucrures that favour the better
off maximize productivity and output only given the constraints set by inegalitarian
attitudes and structures.76
In other words, relative to the context defined by these attitudes and structures,
offering incentives to the better off may indeed produce optimal results. But this says
nothing about how individuals will behave in a different social context. In a suitably
altered social structure, where different beliefs about individuals' relations to each other
prevail, motivations other than the expectation of material reward may suffice. One
example is what Cohen calls the community motivation -'I produce because I desire to
serve my fellow human beings while being served by them', where I expect my service to
be at least roughly reciprocated, but do not (as in the case-of market motivation) produce
because I desire to be served in turn.77
One obstacle in seeing our way round the expectations produced by inegalitarian
structures and attitudes is the effect of what Marx named fetishism. These historically
specific structures and attitudes and the ways of behaving they produce have come to
seem natural and therefore unalterable. Whatever the negative features of the Keynesian

29

era, it did involve a considerable widening of the arcas of social and economic life that
were seen as being amenable to conscious control and even transformation. The neoliberal reaction of the past generation represents a dramatic narrowing of the scope for
autonomous human intervention. Once again the market mechanism has been
hypostatized into a natural force unresponsive to human wishes.
Fetishism reduces the set of what is thought to be possible, and therefore makes it
harder to mobilize substantial numbers of people to support greater equality. It does not
follow that this obstacle cannot be overcome. The situation would indeed be difficult if
egalitarians such as Nagel and even Cohen were right in believing that the majority of
citizens, in the advanced economies at least, were affluent, contented and therefore
indifferent to the plight of an irnpovershed minority. But this belief is false, as I tried to
show in chapter 1. Even where real pay has not actually fallen (as it did in the United
States between the early 1970s and the late 1990s), those wage-eamers belonging to what
in America is known by the delightfully oxymoronic expression the 'working middle
class' are caught up in a structure of insecurity where - largely because of the economic
tendencies discussed earlier in this chapter - their jobs, eamings, conditions and longterm
future are under constant threat from waves of restructuring and downsizing afflicting
public and private sectors alike.
It follows that the interests of the working majority can be mobilized in support of
a strategy of social transformation. This possibility is obscured by the impact of the
neoliberal offensive of the 1980s in defeating organized labour and leaving it: seriously
weakened. Particularly in the US and Britain, where the New Right were most successful,
the result has been a climate of political despair and social atomization: it, is hardly
surprising that the-spurious solution of the Tbird Way has flourished in these
circumstances.
But in continental Europe, where: the workers' movement did not suffer defeats
on the scale of the British miners' strike of 1984-5, the 1990s saw both an intensification
of social conflict and a revival of left-wing politics. This process has gone furthest in
France, where the public sector strikes of November-December 1995 represented a
tuming-point that pushed society significantly to the left. 78 The same pattem can be seen
elsewhere in Europe, as is illustrated by the intense controversy provoked by Schrder's
decision, after ousting his left-wing opponent Lafontaine, to sign. up to the Third Way by
issuing a joint policy document with Blair (see above) and announcing a programme of
public spending cuts.
Pace the theorists of globalization, it is still possible to construct collective agents
on the basis of the kind of mixture of shared interests and ideals that has historically
inspired the labour movement. The great demonstration that disrupted the meeting of the
World Trade Organization in Seattle on 30 November 1999 offered a glimpse of what this
agent might be like, as trade unionists and non-govemmental organizations concerned
with the environment and Third World poverty carne together to contest the neo-liberal
agenda shared by the world's political and economic elites. Michael Moore vividly
evoked the character of the demonstration:
It was a massively representative body of Americans (and Canadians and Brits
and French, etc.) Teamsters and turtle-lovers, grandparents and Gap clerks, the
homeless and computer geeks, high school students and Alaskans, nuns and

30

Jimmy Hoffa, Jr, airplane mechanics and caffeinated slaves from Microsoft. A few
were professional protestors, but the majority looked as if it was their first
exercise in a constirutionally protected redress of grievances. 'There were no
leaders', no 'movement', no idea of what to do except stop the World Trade
Organization from holding its secret meeting ... Mark it down, this last great
important date of the 20th century - 30 November 1999 The Battle of Seattle, the
day the people got tired of having to work for a second job while fighting off the
collection agents and decided that it was time the pie was shared with the people
who baked it.79
Despite such hopeful portents, the scale of the social transformation that is
required is enormous, particularly when we take into account the structurally entrenched
equalities that exist on a worid scale. A book of this nature cannot offer any sort of
detalled prescription. It is, however, worth stressing that the point: of advocating equality
along the lines canvassed in chapter 3 is not to ensure that everyone receives exactly the
same amount of the currency of egalitarian justice. Shaw made the point well: 'All social
reforms stop short, not at absolute logical completeness or arithmetical exactness, but at
the point at which they have done their work sufficiently. 80 What is required is a
substantial move towards securing equal access to advantage. No one should be under the
illusion that even steps in this direction that fell well short of fully achieving this
objective would not evoke intense resistance from those who benefit from the unjust
social structures that prevail today. To demand equality is to propose revolution.
The greatest obstacle to change is not, however, the revolt it would evoke from
the privileged, but the belief that it is impossible. Confronted with a threatening
economic environment, and with the traditional altematives to capitalism in disarray, it is
very easy for individuals to despair. It seems to me part of the duty of those seriously
committed to egalitarian ideals to refuse to surrender to this mood. This does not imply
embracing facile optimism that ignores the real constraints on change. But this sentiment
hardly seems the main danger at present. It is far more tempting to confuse the feasible
with the very limited range of options offered by existing socio-economic structures.
Doing so, however, would be more than to commit an intellectual mistake. Given the
scale of suffering and inequality on a world scale, it would be to acquiesce in evil.
Cohen, in the critique of left-liberal justifications of mcentives that I have already
cited, compares the better off who predict that they will produce less, making the poor
suffer, unless they continue to be specially rewarded with a kidnapper who predicts that
the child he has taken will suffer unless her parents come up with the ransom money. His
point in doing so is to demonstrate the moral incoherence of such assertions when they
are made by the person who has the power to make the prediction come true. They are
symptomatic of the absence of what Cohen calls a 'justificatory community' between
kidnapper and parents, rich and poor.81
But there is a larger truth in this comparison. As a matter of fact, most of us live in
the shadow of the blackmail of capital. A small group of corporate rich move their money
from country to country in the search of the highest return. They are able, with a large
degree of success, to demand that public policy is tailored to suit their needs.
Governments that threaten their interests are punished by capital flight and investment
strikes. The rare offending politician is subjected to media ridicule and driven from

31

office. But the bulk of the political elite is happy to flit like moths in the glow with which
a money-worshipping culture surrounds the rich. Empty chatter about 'communitarianism'
co-exists with the absence of anything resembling a genuine community.
It is time - more than time - to call the blackmailers' bluff. Their success depends
on the strange climate combining complacency and pessimism, conservatismand fear that
has come to pervade Westem societies over the past two decades. Challenging this
climate requires courage, imagination and will power inspired by the injustice that
surrounds us. Beneath the surface of our supposedly contented societies, these qualities
are present in abundance. Once mobilized, they can turn the world upside down.

32

NOTES

United Nations Development Programme (hereinafter UNDP), Human Development Report 1999
(New York, 1999), p.3.
1

Ibid., pp. 37, 38, and Guardian, 12 and 14 July 1999.

UNDP, Human Development Report 1999, pp. 36, 39. The Gini coefficient is used by economists to
measure the degree of inequality: the closer it is to 1 - 00, the higher the level of inequality; the closer it
is to zero, the greater the equality.
3

Libration, 5 August 1999.

UNDP, Human Development Report 1999, pp. 37, 39.

K. Phillips, The Politics of Rich and Poor (New York, 199 l), P. 10.

E. Luttwak, Turbo-Capitalism (London, 1999), p. 67.

HM Treasury, Tack1ing Poverty and Extending Opportunity, March 1999, p. 17.

S.P.- Jenkins, Income Dynamics in Britain 1991-6', in Persistent Poverty and Lifetime Inequality: The
Evidence, CASEreport 5/HM Treasury Occasional Paper No. 10, March 1999, p. 4.
9

10

M.B. Stewart, 'Low Pay, No Pay Dynamics', ibid., p. 76.

11

R. Dickens, 'Wage Mobility in Great Britain', ibid., p. 80.

12

Tackling Poverty and Extending Opportunity, p., 3 1.

T. Nagel, Equality and Partiality (New York, 199 l), p. 9v. G.A. Cohen's arguments for the
obsolescence of Marxist class theory in Self-Ownership, Freedom, and Equality (Cambridge, 1995),
esp. Introduction and ch. 6, rely on the same assumption without explicitly defending it.
13

14

See also E.0. Wright, 'Inequality', in id., Interrogating Inequality (London, 1994).

15

G.A. Cohen, 'Back to Socialist Basics', in J. Franklin, ed., Equality (London, 1997), p. 41.

16

UNDP, Human Development Report 1999, pp. 61-6.

17

D. Piachaud, Wealth by Stealth, Guardian, 1September 1999.

18

Financial Times, 5 July 1999.

19

J. Pullinger, ed., Social Trends 28 (London, 1998), p. 100 and Figure 5.17.

20

Luttwak, Turbo- Capitalism, pp. 95-6.

21

R. Brenner, 'Uneven Development and the Long Down-turn', New Left Review, 229 (1998), pp. 191-2.

22

J. Madrick, The End of Affluence (New York, 1997), pp. 16-17.

23

Ibid., pp. 139-42 (quotation from p. 142).

24

W. Hutton, The Stare Were In,(London, 1995), pp. 109, 108.

25

P. Bourdieu, Contre- feux (Paris, 1998), pp. 95, 96-7, 99.

26

Nagel, Equality and Partiality, p. 5.

D. Goodhart, 'Don't Mind the Gap', Prospect, August/September 1999, p. 12. But compare Michael
Prowse's much more thoughtful piece, 'Mind the Gap', Prospect, January 2000.
27

Quoted, D. Healey, The Time of My Life (London, 1990), p. 369. Healey denies, however, that he said
he planned to 'squeeze the rich till the pips squeak'.
28

'Europe: The Third Way/Die Neue Mitte - Tony Blair and Gerhard Schrder, 8 june
1999,www.labour.org.uk, P. 5.
29

30

N. Bobbio, Left and Right (Cambridge, 1996), pp. 60, 82.

Though I do not accept his argument in its totality. Thus Bobbio claims that cutting across the
distinction between left and right is one that unites extreme left and right against moderate left and
right in, respectively, opposition to and support for democracy and freedom: see ibid., pp. 20ff. This
begs important questions raised by Bobbio's earlier writings on socialism: for a contrasting view of the
relationship between socialism and different forms of democracy, see A. Callinicos, The Revenge of
History. (Cambridge, 1991), ch. 4.
31

32

T. Blair, Speech to the Labour Party Conference, 28 September 1999, www.lab.org.uk, p. 4.

Rawls himself says his 'two principles (of justice express an egalitarian form of liberalism', Political
Liberalism, (expanded edn, New York, 1996), p. 6. See also R. Dworkin (1978) 'Liberalism', reprinted
in M. Sandel, ed., Liberalism and its Critics (Oxford, 1984).
33

For a discussion and proposed explanation of this contrast, see S. Scheffier, 'Responsibility, Reactive
Attitudes,and Liberalism in Philosophy and Politics', Philosophy & Public Affaires, 21 (1992).
34

35

J. Bidet, Theorie gnrale (Paris, 1999), p. 9.

36

B. Barry, Justice as Impartiality (Oxford, 1995), p. 214.

38

K. Marx, Capital, I (Harmondsworth, 1976), p. 90.

Indeed, two of the theorists listed above as egalitarian liberals -Cohen and Roemer - have a Marxist
background. 'they are leading representatives of the current known as Analytical Marxism. I am fairly
sceptical about this group's claim to be renewing the Marxist tradition, but this does not diminish the
interest of Cohens and Roemer's contributions -as normative political philosophers.
39

To this extent Andrew Gamble is right to say that 'Marxism does not represent the negation of
liberalism so much as the attempt to fulfil it': 'Why Bother with Marxism?', in A. Gamble et al., eds,
Marxism and Social Science (Houndmills, 1999), p. 4.
40

1NOTAS
1

J. Roemer, Equality of Opportunity (Cambridge, MA, 1998), pp. 74-83.

A. Ryan, 'Britain: Recycling the Third Way', Dissent, Spring 1999, p. 77. See also W.G. Runciman,
'Diary, London Review of Books, 10 December 1998, p. 33.
2

For two classic accounts, see G. Dangerfield, The Strange Death of Liberal England (London, 1935),
and R.C.K. Ensor, England 1870- 1914 (Oxford, 1936), chs XII and XIII. Peter Clarke has written
several more emollient, but still illuminating studies of the New Liberalism, notably Lancashire and
the New Liberalism (Cambridge, 1971) and Liberals and Social Democrats (Cambridge, 1978).
3

D. Cannadine, The Decline and Fall of the British Aristocracy (London, 1990), pp. 69-70.

P. Stephens, Who Gives a Damn for the Blessed Poor?', Financial Times, 9 April 1997.

R. Gott, `The Drive to Intervene', Guardian, 20 May1999.

See A. Callinicos, 'Barbarity and Hypocrisy: The Ideology of Humanitarian Intervention', in T. Ali,
zd., Masters of the Universe? (London, 2000).
7

S. Brittan, 'A Good "Liberal" Budget', Financial Times, 19 March 1998. ,

D. Piachaud, Wealth by Stealth', Guardian, Society supplement, 1 September 1999.

10

S. White, 'What Do Egalitarians Want? in J. Franklin, Equality (London, 1997), pp. 70-1.

G. Brown, 'The Politics of Potential: A New Agenda for Labour', in D. Eliband, ed., Reinventing the
Left (Cambridge, 1994), p. 114.
11

12

Ibid., p. 116.

J. Rogers and W. Streeck, 'Productive Solidarities', in Miliband, ed.., Reinventing the Left. For a
critical assess-' ment of New Labour economic thinking, see N. Thompson, 'Supply Side Socialism',
New Left Review, 216 (1996).
13

14

HM Treasury, Tack Eng Poverty and Extending Opportunity, March 1999, pp. 23, 35.

15

Ibid., p. 23.

Brown's acceptance of the analytical core of monetarism, including the doctrine of the natural rate of
unemployment (though not all its policy prescriptions), is spelled out in his Mais lecture, 'The
Conditions of Full Employment', 19 October 1999, www.hm-treasury.gov.uk.
16

17

Quoted in P. Clarke, The Keynesian Revolution in theMaking, 1924- 1936 (Oxford, 1988), p. 136.

'Europe: The 'Third Way/Die Neue Mitte - Tony Blair and Gerhard Schrder', 6 june 1999,
www.labour.org.uk, p.6.
18

19

Ibd., p. 8.

20

Ibid., p. 12.

21

Ibid., p. 11.

G. Brown, Speech to the Labour Party Conference, 27 Sep. 1999, www.lab.org.uk, p. 7 (emphasis
added).
22

23

Financial Times, 10 November 1999.

24

Piachaud, 'Wealth by Stealth'.

25

Tack1ing Poverty and Extending Opportunity, p. 32.

26

'Europe: The Third Way/Die Neue Mitte', p. 9.

27

R. Kuttner, 'Don't Forget the Demand Side', in Miliband, ed., Reinventing the Left, p. 146.

28

E. Luttwak, Turbo-Capitalism (London, 1999), pp. 79>80-1.

29

Ibid.3 pp. 82, 83.

30

'Europe: The Third Way/Die Neue Mitte', pp. 12-13.

31

T. Blair, 'Speech to the Labour Party Conference', 28 September 1999, www.lab.org.uk, pp. 4, 8.

It is entirely typical of this ideological climate that the Commission on Social justice should concede
that 'one person's reward can be another person's loss' and, sliding quickly past the case of 'vast rewards
for captains of industry', cite in illustration of this truth the high wageclaims that it supposes caused the
stagflation of the 1970s: The justice Gap (London, 1993), p. 14. The thought that the captains of
industry might bear some responsibility for inequality and poverty cannot be voiced in the
contemporary Labour Party.
32

Brown, 'Speech to the Labour Party Conference', pp. 6, 7. Roosevelt's second term (1937-4 1) in fact
saw the New Deal run aground. In particular, the administration's switch, under conservative pressure,
from deficit finance to a balanced budget helped to abort the recovery from the Great Depression and
precipitate the 1937-8 recession, '[t]he steepest economic descent in the history of the United States',
according to Charles Kindleberger, The World in Depression 1929-1939 (Harmondsworth, 1987), p.
271. For an interesting contemporary analysis, see J. Strachey, A Programme for Progress (London,
1940), Part
II.
33

34

Financial Times, 20 July 1999.

35

A. Maddison, Dynamic Forces in Capitalist Development (Oxford, 1991), p. 48 and Table 3.2, p. 50.

36

Financial Times, 21 December 1996.

37

OECD Employment Outlook, June 1999.

On Russia's experience of neo-liberalism, see M. Haynes and P. Glatter, 'The Russian Catastrophe',
International Socialism, 2.81 (1998), and P. Gowan, The Global Gamble (London, 1999), ch. 9.
38

39

OECD Employment Out1ook, June 1999.

40

See J. Grahl, After Maastricht (London, 1997).

J.K. Galbraith et al., Inequality and Unemployment in Europe: The American Cure', New Left Review,
237 (1999).
41

I am indebted for the general formulation that follows to some remarks of Perry Anderson's: see 'The
German Question', London Review of Books, 7 January 1999, p. 16.
42

W. Hutton, The State We're In (London, 1995), and L.Elliott and D. Atkinson, The Age of Insecurity
(London, 1998)
43

For analyses of the East Asian and Russian crashes, see A. Callinicos, 'World Capitalism at the
Abyss', International Socialism, 2.81 (1998), and Gowan, Global Gamble, ch. 6. A useful theoretical
analysis is provided by M. Itoh and C. Lapavitsas, Political Economy of Money and Finance
(London, 1999).
44

45

Financial Times, 21 June 1999.

Stratfor, World Bank Reverses Position on Financial Controls and on Malaysia', Global Intelligence
Update: Weekly Analysis, 20 September 1999, www.stratfor.com.
46

47

Guardian, 10 October 1998.

48

J. Plender, 'Taming Wild Money', Financial Times, 20 October 1998.

49

M. Wolf, 'No Magic Potion', Financial Times, 12 May 1999.

See, for example, M. Wolf, 'Watch Out for the Fireworks', Financial Times, 27 January 1999. The
highly unstable set of financial imbalances sustaining the American boom is carefully analyzed in two
Phillips & Drew research papers by Bill Martin and Wynne Godley, 'America and the World Economy'
(December 1998) and 'America's New Era' (October 1999).
50

For a brief exposition of Marx's crisis theory, see A. Callinicos, The Revolutionary Ideas of Karl
Marx (London, 1983), ch. 6. Useful signposts in the vast literature on this subject include C. Harman,
Explaining the Crisis (rev. edn, London, 1999), J. Weeks, Capital and Exploitation (London, 1981),
M.C. Howard and J.E. King, A History of Marxian Economics (2 vols, London, 1989, 1992), and S.
Clarke, Marxs Theory of Crisis (London, 1994).
51

R- Brenner, 'Uneven Development and the Long Downturn: The Advanced Capitalist Economies
from Boom to Stagnation, 1950-1998', New Left Review, 229 (1998), p. 7. Another recent major study
that focuses on the behaviour of the rate of profit is G. Dumnil and D. Lvy, La Dynamique du capital
(Paris, 1996). For a critical assessment of Brenner's article, see A. Callinicos, 'Capitalism, Competition,
and Profits', Historical Materialism, 4 (1999).
52

53

Callinicos, 'Capitalism at the Abyss', pp. 21-4.

United Nations Development Programme, Human Development Report 1999 (New York, 1999), p.
40.
54

M. Albert, Capitalism against Capitalism (London, 1993) offers the most general statement of the
stakeholder case, though it has, of course, informed Hutton's writings. For a critique, see A. Callinicos,
'Betrayal and Discontent: New Labour under Blair', International Socialism, 2.72 (1996), pp. 5-13.
55

56

B. Barry, 'The Attractions of Basic Income', in J. Franklin, ed., Equality (London, 1997).

R. Van Parijs and R. Van Der Veen, 'A Capitalist Road to Communism', in P. Van Parijs, Marxism
Recyded (Cambridge, 1993), p. 163.
57

58

Id., 'Universal Grants versus Socialism', in Van Parijs, Marxism Recycled, pp. 178, 179.

59

Ibid., p. 206 n. 4.

Financial Times, 6 September 1999. There is an excellent critique of the thesis of the end of work in
M. Husson, 'Fin du travail ou rduction de sa dure?', Actuel Marx, 26(1999).
60

61

Van Parijs and Van Der Veen, 'Universal Grants versus

62

Financial Times, 13 March 1999.

63

Barry, 'The Attractions of Basic Income', p. 163.

Socialism', p. 189.

See E.O. Wright, 'Why Something like Socialism is Necessary for the Transition to Something like
Communism', in id., Interrogating Inequality (London, 1994).
64

65

Libration, 3 October 1998.

66

Financial Times, 7 June 1997.

67

J. Wolfreys, 'Class Struggles in France', International Socialism, 84 (1999).

See, for example, J. Rawls, A Theory of justice (rev. edn, Oxford, 1999), pp. xiv-xvi, and R. Dworkin,
'Liberalism', in M. Sandel, ed., Liberalism and Its Critics (Oxford, 1984), pp.68-9.
68

69

G.A. Cohen, 'Back to Socialist Basics', in Franklin, ed.,

Equality, p. 37.

70

Id., Self- Ownership, Freedom, and Equality (Cambridge, 1995), pp. 259, 262.

P. Devine, Democracy and Economic Planning (Cambridge, 1988). For a somewhat broader
discussion of the issues raised in this and preceding paragraphs, see A. Callinicos, The Revenge of
History (Cambridge, 199 l).
71

72

T. Nagel, Equality and Partiality (New York, 199 l), p. 4.

73

Ibid., pp. 90, 91, 124.

Ibid., p. 125

74

The philosophical underpinnings of Nagels position will be found in The View from Nowhere (New
York, 1986).
75

G.A. Cohen, Incentives, Inequality, and Community', in G.B. Peterson, ed., The Tanner Lectures on
Human Values, XIR (Salt Lake City, 1992), pp. 269-70. See chapter 3 above.
76

Cohen, Se1f- Ownership, Freedom, and Equality, p. 262. See also id., 'Back to Socialist Basics', pp.
35-7.
77

See Wolfreys, 'Class Struggles in France', and S. Broud et al., Le Mouvement socal en France
(Paris, 1998). For a discussion of some of the intellectual consequences, see A. Callinicos, 'Social
Theory Put to the Test of Politics: Pierre Bourdieu and Anthony Giddens', New Left Review,
236
(1999), pp. 85-102.
78

79

Michael Moores Newsletter, 7 December 1999, www.michaelmoore.com.

80

G.B. Shaw, The Intelligent Womans Guide to Socialism and Capitalism (London, 1928), p. 385.

81

Cohen, Incentives, Inequality, and Community', e.g. pp.307-10.