What Kind of Equality?

Imagine that Jane sets aside some of every paycheck so she can buy a house while her coworker James spends the same amount on expensive scotch. Eventually Jane will be a homeowner. Perhaps the value of the house will increase over time, and she’ll eventually be able to sell it for more than she paid. James, meanwhile, has nothing to show for his decisions but happy memories and a liver that’s a little worse for wear. Is this inequality somehow objectionable or unjust?

The philosopher Robert Nozick made a sophisticated version of this anti-egalitarian argument in Anarchy, State, and Utopia (1974), where he famously wrote that “liberty disrupts patterns.” Nozick’s point was that if pairs of individuals like James and Jane are free to engage in what he calls “capitalistic acts between consenting adults” — spending their money as they choose — the result won’t resemble perfect equality or any other distributional pattern that could be dreamed up by philosophers. We should respect economic freedom, Nozick thinks, even if the result is a great deal of inequality.

There are at least two reasons arguments like this shouldn’t bother socialists. First, you can think that a society’s resources should be distributed reasonably equally without demanding exactly-as-many-blueberries-in-every-muffin equality. In 2020, for example, the average CEO earned three hundred fifty times more than the average worker. You can think that’s far more inequality than justice allows without insisting that every single person have the same amount in their bank account.

If the “pattern” we care about is that no one makes an absurd three hundred fifty times more than another person, in theory we don’t even have to impede people’s ability to engage in “capitalistic acts.” We can just intervene every once in a while — say, every April 15 — to redistribute some of the wealth of people at the top to people at the bottom. Libertarians can claim that this is a violation of economic “liberty” because we’re “stealing” from the rich, but as I’ve argued elsewhere, there’s no reason to take that claim seriously.

Secondly, while everyone from socialists to New Deal liberals can agree that income disparities of 350:1 are obscene, from a socialist perspective the most important kind of economic equality isn’t inequality in income per se but inequality in economic power. Under capitalism, people buy and sell not just possessions but ownership (or ownership shares) of businesses. That means society is divided into a class of owners and a class of workers, and there’s a staggering imbalance of power between them.

The obscene level of income inequality within capitalist firms flows from this basic inequality of power. Instead of everyone at a company democratically deciding how to divide up the revenue generated by their collective effort, someone like Jeff Bezos can unilaterally decide to keep enough of Amazon’s profits that he can literally buy his own spaceship. This is what socialists mean when we talk about “exploitation” — the share of collectively produced revenue that an owner gets not because he has some compelling claim that he can convince workers to accept, but simply because he has the power to take it from them.

The Mondragon Example

Even under capitalism, workers can introduce a degree of democracy into their workplace by organizing a union. That’s a long step in the right direction. But workers still have less control over their bosses’ decisions than parliaments did over the actions of kings in some versions of feudalism.

Compare that to the most successful worker-run business in the world: Spain’s Mondragon, a federation of cooperatives with tens of thousands of members. No worker-member at Mondragon makes more than about six and a half times the salary of the lowest-paid member. If the Spanish economy was dominated by cooperatives — so Mondragon didn’t have to compete for managerial and technical talent with regular capitalist corporations — those wage gaps would likely be smaller.

Yet it’s telling that the gap at Mondragon is so tiny compared to the capitalist norm. You don’t end up with some people making hundreds of times what others do when everyone gets to vote on pay scales. It might be possible to convince your fellow workers that you should get a little extra if you take on more stress or responsibility, or you have to do particularly dirty or dangerous tasks. But good luck persuading them that you need to earn so much that you can buy your own spaceship.

The Business Veto

Equality of power at the workplace is also a precondition for equality of power in society as a whole. I said earlier that, “in theory,” the worst inequalities of capitalism can be fixed at a political level without changing the economic system. That’s true to a point — but only to a point, given that inequalities in economic power always translate into inequalities in political power.

If you own a factory that employs half the workers in your congressional district, you get one vote at election time just like your employees — but if you call your congressman’s office there’s a very good chance that you’ll be connected to the congressman himself. A line worker at your factory would be lucky to get an extended conversation with an intern. Even in capitalist countries with strict campaign finance laws, politicians have every reason to placate owners. After all, capitalists have a trump card in their back pocket: they can exercise their “business veto” over policies they dislike by shutting down and relocating elsewhere.

The only “veto” power that workers enjoy is the power of exit — and sooner or later they have to reenter the economy in some other equally hierarchical workplace where they may have many of the same complaints. Oh, and don’t exercise that power of exit too often or consider your options for too long or those gaps in your employment history will be a problem at your next job interview!

Beyond this kind of workplace inequality having numerous bad effects — from unsafe workplaces to outsourcing to the hollowing out of political democracy — extreme imbalances of power are unacceptable in themselves. To be sure, every complex undertaking involving large-scale human cooperation requires some degree of operational hierarchy.

Without particular people being empowered to make particular decisions on a day-to-day basis without having to consult everyone on every detail, very little will get done. If the people giving orders aren’t democratically accountable to the people taking them, however, you end up with some human beings being dependent on the whims of others in a way that’s innately degrading.

Socialism and Equality

As the late Marxist sociologist Erik Olin Wright points out in his book How to Be an Anti-capitalist in the Twenty-First Century, your right as an individual to do what you want in contexts where no one else is harmed by your decisions is tightly connected to everyone’s right to have a say in decisions that impact all of us. Both are aspects of the single value he calls “self-determination.”

If I want to sit around getting high and watching Harold and Kumar movies in the privacy of my home, it shouldn’t matter that you think this is a bad use of my time because we’re equals and you shouldn’t have the power to make decisions for me. But if I’m your boss and I want to upend your life by shutting down the grocery store where you and dozens of other people work, I shouldn’t be able to make that call for exactly the same reason.

In a fully socialist system, all firms would either be worker-owned, publicly owned, or some combination of the two. I’m under no illusions that such a society would be a pristine utopia where everyone had exactly as much as everyone else. Some people would enjoy successes and advantages in one part of their lives or another that others lacked. Interpersonal conflicts, resentments, and jealousy would all persist. So would political conflicts over a thousand issues that wouldn’t wither away just because society wasn’t divided into economic classes.

But whatever conflicts we were having, we could have them as equals. And that’s everything.