Red Ruminations on Freedom and Equality

Dispensing with capitalist "liberty" and achieving more equal outcomes

Classical liberals consider themselves the best defenders of freedom and equality. They frown upon any interference with our person or property, and support equal opportunity in life's many contests.

In their mind the right to private property and any resulting revenue stream is of course the most sacred "liberty". They also believe that success in the scramble for wealth and position should depend on luck and merit, unrestricted by irrelevant considerations such as race, sex, shoe size or whatever.

Taxation is considered tantamount to theft while expropriating the assets of capitalists - the means of production - is seen as an attack on the very foundations of liberty. However, at the risk of spoiling the party, I can imagine two possible scenarios where this expropriation would not really deprive them of anything and they would have no grounds for complaint.

In the first scenario, there is a massive economic crisis much like the 1930s and the capitalists are in no financial position to operate their businesses. Suppliers will not provide inputs on credit and there is no one buying their products. To top it off their assets have lost all or most of their market value. The government steps in and takes over the stocks and other financial assets from their owners and uses access to these to get the economy moving again.

In the second scenario, the workers (wage and salary earners) decide they are no longer prepared to work for the capitalists. So in order to keep the economy running they have no alternative except to take over the means of production and operate them themselves.

In both cases the capitalists are not really being deprived of anything. The means of production are not a direct source of enjoyment and they cannot provide any revenue if the economy is clogged up or workers refuse to work under capitalist ownership.

At the same time the capitalists will have to "voluntarily" abandon their extravagant lifestyle because they will no longer have the funds to sustain it. Mansions, private jets and yachts have very high running costs.

In the case where we refuse to work for the capitalists, we are no doubt in the middle of a political revolution. So, how the expropriation is carried out in practice may be somewhat more finessed. In particular, capitalists who behave themselves may be compensated for doing so, and it may be best to try to retain the more entrepreneurial and active ones early in the transition process if they are willing to cooperate.

So that's capitalist freedom dealt with. What about "equality"? The classical liberals say they are big fans of equal opportunity but not of equal outcomes.

More equal outcomes require taxing the rich to give to the poor. This is considered not only theft but a disincentive to work that can only lead to a shrinking economic pie.

Equal opportunity, however, gets an approving nod. We are all better off if the talented and hardworking are given a chance to do their best and be rewarded accordingly. Laws or customs should not introduce irrelevant considerations such as race, sex or religion. Although if you mention the advantage of having wealthy parents the conversation can turn awkward.

A revolutionary regime working towards a classless society would of course be very much into evening out outcomes. Just removing the prospect of being a wealthy capitalist would be a big start of course. The really high salaries would also be eliminated. Although, it will be necessary to bribe some of the people you temporarily cannot do without from the old society.

Pay differentials would be progressively reduced. In a society that has achieved a certain level of "affluence", there is no insurmountable reason why it could not fairly readily get to a stage where no one's living standards are much higher than the average. This would apply even to the top leadership, removing any material basis for turning themselves into a new bourgeoisie.

Success will depend on how readily we transform our motivations for working. You can only get rid of the bossy division of labor and big wage differences if we become able and willing to work well in their absence.

You can expect people's motivations for work to change if they see that the economy is focused on meeting everyone’s common needs, that their work environment is becoming less and less toxic, that they are able to develop their abilities and do interesting stuff, that they are not going to end up on the work scrap heap, and that work and its duration is not allowed to interfere too much with other aspects of their lives.

Achieving all this will require a revolutionary movement with the critical mass and smarts to deal with fear of the unfamiliar and the fact that quite a few people have something invested in existing unequal arrangements.