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So, is capitalism justified? Of course not—but it can be. Of course not, because although optimal capitalism can reasonably be expected to be superior, in terms of real-freedom-for-all, to optimal socialism, most variants of capitalism cannot, and many of them are blatantly far worse than optimal socialism would be. But capitalism can be justified, providing its tremendous productive potential is appropriately constrained and used in the service of real- freedom-for-all. However, some of what has just been said in the previous section contains worrying suggestions about what this is likely to lead to in the sort of world-wide market economy in which we now live. To spell this out, let us consider the right-wing use to which John Rawls's theory of justice is beginning to be put, as an ideological justification, not of further progress beyond advanced welfare state capitalism, but of a dramatic regression below it. What is the reasoning? Rawls proposes, roughly, that one should maximin socio-economic advantages subject to the respect of fundamental liberties. On what scale? Not on a world scale, but (at most) at the level of each particular well-ordered society. 65 In the sort of world sketched above, each country's independent pursuit of justice so conceived will tend to degenerate into a mad rush for competitiveness, as even the maintenance of current types and levels of welfare state provisions is threatened by an ever-fiercer competition for scarce factors of production and market shares. Rawls’s justice as fairness, the concern for the fate of the worst off subject to the respect of fundamental liberties, would then justify ever-growing levels of inequality on the plausible factual assumption that, in this context, attempting to reduce them in order to improve the situation of the least-advantaged would have a long- term negative impact on the latter. This is the contemporary version of Anatole France's (1907: 83 –4) Penguins Island argument: what the public interest demands, said the spokesman of the island's wealthy farmers to the assembled people, ‘is that little should be asked from those who possess a lot; for otherwise the rich would be less rich and the poor would be poorer. The poor live off the wealth of the rich; this is why this wealth is sacred. Don’t touch it, it would be gratuitous wickedness. Taking from the rich would not do you much good, for there are not many of them; and instead it would deprive you of all resources by thrusting the country into poverty.’66 True, real-libertarianism differs from justice as fairness. But the formal-freedom-constrained leximinning of opportunities is sufficiently close to the fundamental-liberties-constrained maximinning of socio-economic advantages for it to raise strictly analogous worries. Far from replacing the welfare state's stingy and imprisoning means-tested benefits by a generous and liberating citizens' income, one will have the greatest difficulty in maintaining even only the targeted transfers required by undominated diversity. As the world market strengthens its grip, one seems to be facing ever-worse prospects for making any moral progress as measured by real-libertarian standards and heading instead for an ethical disaster as our species is whirled into the next millennium by anonymous forces totally insensitive to the imperatives of justice. Can this scenario be avoided? Can real-libertarianism be prevented from degenerating, along with Penguins Island Rawlsianism, into an ethical justification of the demise of the welfare state? I believe it can, providing it is supplemented by some combination of two strategies.

First, we must fully recognize the crucially important difference between a universal local leximin (or maximin) and a global one, between a leximin that applies to each country of the world taken separately and one that applies to the world as a whole. And having recognized the difference between the two interpretations, we must unambiguously opt for the latter. When speaking of real-freedom-for-all we must mean it: for all. In other words, we must pursue the objective of introducing substantial redistributive mechanisms on a world scale, indeed ultimately an individual basic income at the highest sustainable level for each human being. If only for pedestrian technical reasons —the unavailability of suitable computerized payment systems except in a small number of countries—this ideal is, of course, still far off the political agenda. 67 But it should not be dismissed too lightly as a wild utopia. Not only will disillusionment with both conventional aid and neo-liberal development policies slowly drive those who mean business about helping the poorest of the planet to consider policy packages that include the direct, permanent, and unconditional transfer of purchasing power. But several powerful trends converge to create pressures that could only be alleviated through substantial transnational redistribution. The nations of the world cannot but increasingly realize that they are subjected to the vagaries of the same markets, both for the factors they need to buy and for the products they need to sell. Moreover, they cannot but realize ever more vividly that they are polluting the same air and the same water and that their territories are vulnerable to immigration by the same world population. World pollution will not be kept at a tolerable level without systematic redistribution from the high polluters to the low polluters. Nor will one be able to contain the cost of defending the borders of the affluent world against the influx of economic refugees—and the cost of digesting the fraction that got through into the domestic population—without transnational redistributive policies that significantly and permanently reduce the pressure to migrate.

As mentioned in the introduction, past politics of representation with regard to poverty measures often played out over interpretations of colonialism or occupation. More recently, the politics of representation have been mainly concerned with struggles over controlling the narrative about the most recent phase of global capitalism, variously referred to as ‘neoliberal’ or euphemistically as ‘globalisation’. How are we to interpret and remember the legacy of this phase? Has it been progressive or regressive? These politics of representation need to be foregrounded by the historical context of recent debates about poverty. Much of the contemporary focus on poverty was spurred by concerns over the development collapses of the 1980 s and 1990 s – the so-called ‘lost decade’ of Latin America and the two ‘lost decades’ of sub-Saharan Africa. These concerns obviously built on their antecedents in the 1960 s and 1970 s, such as the increasing critiques of ‘growth without development’ or ‘gr

owth without equity,’ and the increasing emphasis of basic needs and redistribution in the global development agendas of that earlier period. These critiques emerged in tandem with more radical approaches to understand the persistence of poverty and marginalisation despite growth, such as by Latin American scholars of dependency. The severity of the international debt crisis in the early 1980 s and the radical rightward shift in economic ideology that informed crisis responses nonetheless made the previous contentions appear as a golden age in retrospect. Various international organisations tried to raise mainstream awareness about the enormous social costs of the stabilisation and adjustment programmes that followed in the wake of debt crises in the early 1980 s throughout most of Latin America, Africa and much of the Middle East. The emphasis shifted from ‘development with equity’ to ‘adjustment with equity’, or as coined by UNICEF at the time, ‘adjustment with a human face’ (Cornia et al. 1987 ). This momentum was carried into the first Human Development Reports (HDRs) of the UNDP in the early 1990 s, which gave a more human counterweight to the World Development Reports (WDRs) by the World Bank that were pushing the structural adjustment agenda. As noted by Saith ( 2006 ), the first HDRs were much more at odds with the World Bank than later in the decade, when their positions became more aligned (with the UNDP moving more towards the World Bank than the Bank moved towards the UNDP). As neoliberalism became triumphant in the early 1990 s with the end of the Cold War and then morphed into various post-versions later in the 1990 s when things became somewhat less triumphant, debate settled around the question of whether or not neoliberal reforms were making poor people better or worse off – ‘neoliberal’ in this sense referring specifically to policies of liberalisation, deregulation and privatisation (see the note at the end of Chapter 2 ). This was stoked by the fact that the case for these reforms was often framed in terms of the interests of the poor (e.g., WB 1990 ). This was also characteristic of the rise of New Labour in the UK or or the New Democrats in the US, exemplified by Tony Blair. He was often known to speak in the name of the poor, arguing that inequality is not a problem so long as poverty is falling (which of course is a tricky position to take when poverty is measured relatively, as it is in Europe). 1 Similar arguments were made by the likes of Dollar and Kraay ( 2002 ) that growth is good for the poor, assuming of course that neoliberal policies are good for growth and constitute ‘good policy’, which is an ambiguity that these studies generally take for granted. This was also the period when the World Bank was going through its image reform under the presidency of James Wolfensohn, especially following the East Asian crisis of 1997 – 1998 and the antiglobalisation protest movements, such as in Seattle in 1999 , which gave prominence to the politics of representation. Control over the narrative of poverty and its reduction was tightened following the kerfuffle around the resignation of Joseph Stiglitz as Chief Economist of the Bank in 2000 , and then the debacle of the 2000 / 2001 WDR on ‘attacking poverty’, which saw the resignation of Ravi Kanbur as director and lead author of the WDR. These struggles spilled over into the erstwhile Millennium Deve­ lopment Goals (MDGs). The quandary of these goals was that formal clarification had been articulated about the policy means that should be used to achieve the targets of multidimensional poverty reduction despite the ample indicators provided to identify when these targets would be achieved. 2 Many obviously came to fill the void of policy guidelines, more or less reproducing the political and ideological spectrum of policy positions that pre-dated the MDGs. However, the MDGs arguably facilitated a de-politicisation of these policy debates and thereby gave the upper hand to the more orthodox positions within the spectrum.

On the other side, reform liberals and defenders of welfare state redistributive programs can and have also drawn upon the utilitarian standard of the greatest good for the greatest number to justify their policies and proposals. In fact, some of the seminal figures who originated the school of “welfare economics” in the nineteenth century saw their principles of political economy as a subset of utilitarian moral philosophy. To put it into its simplest form, the utilitarian case for welfare state programs that provide income support for the economically worse off and seek to lessen economic inequality in general take their leave from the simple commonsense proposition that the marginal utility of an additional dollar is greater for a pauper than for a millionaire. Think of it this way: Who would derive greater benefit and pleasure from an extra $10,000 in their bank account: you or Bill Gates? Seems pretty clear that it would be you. We’ve all seen audiences at the show The Price Is Right whipped into a veritable frenzy by the prospect of winning a twenty-thousand-dollar Chevrolet, while Donald Trump, who never ceases reminding us he is “really rich,” could hardly care less if someone gave him that same car. Studies have also found that people tend to become steadily happier as their income rises to around $70,000 annually, while increases in income above that point have less effect upon how happy people are. So if you put these observations together with the practical utilitarian imperative to seek “the greatest good for the greatest number,” the logical conclusion would point toward robust programs of income support for people’s basic needs and for crucial goods such as education and health care, financed by a progressive tax system. Those seeking support for the empirical proposition that welfare states perform better in terms of meeting the utilitarian goal of “the greatest happiness,” moreover, point to the results of studies that seek to determine the happiness level of people in different countries around the world. An international team of economists, neuro scientists, and statisticians sponsored by the United Nations, for example, published their third World Happiness Report in 2015. In the Ranking of Happiness based upon their findings, the top ten countries were Switzerland, Iceland, Denmark, Norway, Canada, Finland, Netherlands, Sweden, New Zealand, and Australia. (The United States was fifteenth.) 23 As commenters on the Huffington Post story about this report were quick to notice, the highest-ranked countries were almost uniformly places with robust welfare state programs. (One wrote: “Them bloody socialists. LOL.” Another wrote: “They all have universal health care, some have free college educations, some have paid maternity and paternity leave. What’s not to be happy about?”) 24

In this chapter, we sought to contribute to the literature on fiscal federalism focused specifically on cases of multinational (quasi-) federations. To do so, we first discussed the different concepts central to our argument. This then led us to defend the position according to which, in such (quasi-)federations, the stability of the constitutional pact depends on a dual equilibrium between a de jure and a de facto dimension. We then considered and compared the Canadian and Spanish redistribution systems to examine whether they create the necessary conditions for attaining and sustaining such a dual equilibrium. Finally, we proposed normative principles that should guide the construction and structure of an egalitarian fiscal equalization system, assuming it aims to provide and sustain a context of justice and fairness. The fiscal redistribution system of a multinational (quasi-)federation is a mechanism of fundamental importance. If it succeeds at creating an egalitarian fiscal equalization system, it is very likely to not only reduce economic inequalities between sub-state units, but, first and foremost, to create a context in which the partners of the political association are understood to be “equal in status,” which may lead to a reinforcement of the state’s stability and overall governance. Therefore, the fiscal redistribution system represents an essential constitutional pillar that any multinational (quasi-)federation ought to establish – just like recognition, linguistic rights, jurisdiction over immigration, internal and external self-determination rights, etc. – if it is to live by the core values and normative principles that drive multinational federalism.

One part of the case for reform liberals’ goals and policies, then, is the insistence that if a democratic society is to be a just society it cannot be content to let the free market provide the final word when it comes to the distribution of wealth and income. Instead, they contend, some redistribution is morally appropriate, perhaps even morally obligatory, in order to redress the significant role of what Cahn called “morally capricious inequalities” in creating the disparities of wealth and income generated by the dynamics of the marketplace. How then should a society motivated by a sense of (in)justice go about dealing with the moral and practical challenges presented by the arbitrary inequalities and the nonproportionate relationship between merit and reward within them? What is the appropriate standard of redress? And how might it be institutionalized? The standard perhaps offered most often is to provide “equal opportunity” to all members of the society. In fact, that standard is endorsed to some extent by laissez-faire and reform liberals alike. But important ambiguities attend the notion of equal opportunity, and the two camps tend to understand its meaning in importantly different ways. Market-oriented liberals largely identify equal opportunity with institutional nondiscrimination. And that principle, they believe, is embodied in three ways— all of which are found in free-market democracies. First, there is the legal nondiscrimination embodied in the precepts of “rule of law,” especially in the requirements of “equal protection” that were crucial to classic accounts of liberal legitimacy and that are in this country enshrined in our constitution. Second is the political nondiscrimination institutionalized in universal suffrage and the equal weight accorded to every vote. Third is the nondiscriminatory force of the free market, which renders its judgments and offers its rewards on the basis of individuals’ economic worth or merits, without regard to any ascriptive social status (such as feudal ranks and privileges) or regard to anyone’s race, color, gender, or creed. 5 So, say free-market liberals, the kind of society that we champion— a combination of popular sovereignty, equality before the law, and a free- market economy— represents and embodies the proper understanding of what “equal opportunity” is all about. Reform liberals certainly agree that one-person/one-vote democracy and equal protection of the law are crucial to affording all citizens the opportunity to succeed. And they also recognize and value the ways that free markets may penalize discriminatory practices: as the saying goes, “The only color that matters in the marketplace is green.” But they find quite unconvincing the claim that nondiscrimination alone can either count as or be capable of producing genuinely equal opportunity. For even with all these important and admirable constraints on discrimination in place, it could still be the case that vast numbers of young people would arrive at their point of entry into the competitive marketplace quite unprepared. With a childhood of dependency upon impoverished adults, and absent some communal resources to draw upon, they might well enter into adulthood poorly educated, undersocialized, and even physically and mentally stunted from malnourishment. In that event, it would be a mockery for a society to congratulate itself for providing equal opportunity. So to provide some redress for arbitrary inequalities, which are as Cahn observed presumptively unjust, any society that aspires to be fair and just, reform liberals argue, must take some affirmative steps toward achieving greater equality of real opportunity. And these steps logically would include providing all our children with access to a good education (something that my state of North Carolina has in fact enshrined in its constitution, where the relevant provision reads: “The General Assembly shall provide by taxation and otherwise for a general and uniform system of free public schools . . . wherein equal opportunities shall be provided for all students”), protection against malnutrition, and access to health care. 6 Providing people with genuine opportunity also may go beyond ensuring that all children receive the education and health care needed to have a chance to succeed in life. In a racially, ethnically, and religiously pluralistic society, equal opportunity may require placing some constraints on marketplace behaviors in the form of antidiscrimination laws. No one, of course, can be prevented— for both practical and moral reasons— from patronizing establishments of their own choosing. So if I want, for reasons of personal comfort or prejudice, to buy from people who look and act and believe like me, I should be allowed to do that. But if a company operates a business open to the public, or is a large-scale employer, or is a provider of large-scale rental housing, a society dedicated to basic principles of justice and to equal protection of the law can require of it some showing that it is not engaged in systematic discrimination against certain groups within society. Although reform liberals are not the only ones who have supported the concrete embodiment of this logic in the enactment of equal-opportunity legislation in public accommodations, employment, and housing, they have been the principal proponents of these laws. And many laissez-faire liberals have opposed these government regulations on the grounds that even large corporate businesses are private actors whose property rights entitle them to discriminate if they want to. 7

The prevalence of left-wing governments is thus linked to more inclusive policies only for the Nordic and Continental models. This is reflected in the level of inequality, measured here by the Gini index of household disposable income after taxes and transfers (Figure 7.8).16 Inclusive growth countries are grouped in the left-hand quadrant, characterised by low inequality and a high incidence of left-wing parties in government positions. Overall, the non-inclusive growth countries are on the opposite side, with low incidence of left-wing parties in government and high inequality, with the exception of Ireland. The non-inclusive low-growth countries, on the other hand, show higher levels of inequality with the same overall presence of the left in government. The prevalence over the period 1980–2015 of left-wing parties in government in non-inclusive low-growth models thus seems to contradict the hypothesis that a greater left-wing presence would be associated with greater redistributive measures and higher levels of equality. On the other hand, the downsizing of the influence of the left in the Nordic countries does not seem to have had a proportional influence on expenditure levels and welfare characteristics. Obviously, in order to analyse the different outcomes of similar amounts of presence of left-wing political forces, other variables need to be taken into account. These may concern the state of the economy in terms of available resources that may or may not favour redistributive interventions (see Chapter 2). Here we shall refer in particular to the parties’ margins of action. It can first be assumed that the historical legacies of different development paths influenced more recent changes (Mahoney & Thelen, 2015). As we have seen in the previous section, the strength of the left in government is exercised with different results depending on whether it appeared in the phase of the great post-war development and welfare construction, as for the Nordic and continental countries, or rather in the subsequent phase, more difficult overall due to economic growth and the problems of reorganising welfare with respect to its growing costs. If we situate the transition between the 1970s and the 1980s as the beginning of the transition to post-Fordism, in the model of inclusive egalitarian growth the left-wing parties have a stronger prominence in configuring the original traits of the development paths and the related social protection approaches matured, precisely, above all in the years of the so-called “Glorious Thirty Years”. We can therefore glimpse a variable that we could consider “pathdependency” in welfare systems, which conditions the possibilities of manoeuvre of left and centre-left parties with the same presence in government, and that influences the development paths seen in recent decades, the focus of our research. The original institutional framework can be conditioned in different forms. Among these, particular attention will be given in the following part of our historical-comparative study to the interests that are constituted in relation to certain choices in the original construction of welfare, and therefore to the costs that may involve decisions involving more or less radical change in relation to the resulting social stratification. A final key to interpretation concerns the areas of competition between parties and coalition spaces within the left, associated with the level of fragmentation of consensus. We have therefore tried to measure the degree of division of the left by calculating the weight of the main parties of the “reformist” left (excluding communists and post-communists) in relation to the overall consensus obtained by left-wing parties (electoral strength), in each country and for all electoral rounds from 1960 to 2015, in order to maintain uniformity in the analysis carried out so far.17 The data point to a general downward trend in the electoral strength of the left as a whole. This trend would be even more pronounced if we had used more recent, post-2015 data. But here we are interested in trying to measure the degree of division as a long-term structural phenomenon. As can be seen from Figure 7.9, the non-inclusive growth countries show lower values of consensus fragmentation in both periods considered, a result that can be related to the effects of the majoritarian electoral system. For the countries with inclusive egalitarian growth, in the period 1960–1979, while the average support obtained by left-wing parties was 47.1%, there was relatively low internal fragmentation, with the main reformist party obtaining almost 80% of the votes. This does not change in the subsequent period, even though there was a significant reduction in the overall support of the left (from 47.1% to 41.3%). In the countries with dualistic inclusive growth, fragmentation appears even lower and decreases between the two periods (between 1980 and 2015 the main party obtained on average almost 90% of the votes), but one must also consider the overall lower electoral strength of the left and the decrease in the two periods considered. In contrast, the non-inclusive low-growth countries have the highest fragmentation of all the other models. The main reformist party reached on average about 60% of the votes on the left (40.3%) in the constitutive phase of welfare (1960–1979). In the subsequent period, the average figure rose to around 70%, in the context of a 5 percentage point growth in the leftwing vote. The division of left-wing forces in the various phases is therefore an element to be considered carefully when assessing the impact of the left-wing’s strength on the welfare model. Particular attention should be given to this factor, especially in relation to the constitutive phase of welfare systems which, as we have seen, also exerted an influence that in terms of path-dependency should not be disregarded. A more united and stronger left certainly contributed, together with the presence of minor parties – first agrarian and then liberal – to building the “red-green” coalition that laid the foundations for the extended and universalistic welfare, financed by general taxation, which characterises the Nordic countries. It was on this basis that the most egalitarian response to the challenges of post-Fordism evolved.

A basic income, in other words, is an income paid by the government to each full member of society (1) even if she is not willing to work, (2) irrespective of her being rich or poor, (3) whoever she lives with, and (4) no matter which part of the country she lives in. The choice of the expression is meant to convey the idea that, owing to its unconditional nature, we here have something on which a person can safely count, a material foundation on which a life can firmly rest, and to which any other income, whether in cash or in kind, from work or savings, from the market or the State, can legitimately be added. On the other hand, there is nothing in the definition of basic income, as it is here understood, to connect it to some notion of basic needs. A basic income, as defined, can fall short of or exceed what is regarded as necessary to a decent existence.3 2.2 Unconditionality and Real Freedom In this light, it is tempting to rephrase the radical suggestion made earlier by stating simply that what a real-libertarian should endorse is the formal-freedom-respecting institutional framework that yields the highest basic income.4 Before being able to assert this equivalence with any confidence, however, we must check whether a concern with real- freedom-for-all can justify all four of the unconditionalities that define a basic income. So far, only the first of these—the absence of a constraint on the use of one's time in the form of a restriction of the benefit to those willing to accept employment or training—has been explicitly linked to the concern with real-freedom-for-all. What about the other three? What is involved in the second one—the absence of a means test—is essentially the choice between an (ex ante) basic income and an (ex post) negative income-tax scheme. At first sight, both approaches may seem equivalent from a real- libertarian standpoint, since exactly the same distributions of post-tax-and-transfer income can in principle be achieved with a basic income scheme and a negative income tax. Or, if there is a difference, it should be to the advantage of the latter, since what it does is simply to avoid the heavy to-and-fro that results from paying a basic income to those with a substantial income and then taxing it back, and this should make a negative income-tax scheme cheaper to run.(The Appendix to this chapter depicts graphically the difference between the two types of scheme, and the difference between both and existing guaranteed income schemes.) And yet, the absence of a means test gives basic income a decisive advantage in terms of leximin real freedom, for three distinct reasons. First, it is obvious enough, given the time-lag unavoidably involved in any income assessment for tax purposes, that a negative income-tax scheme can only hope to compete with a basic income scheme in terms of leximin real freedom if it is supplemented by a system of advance payments that will at least give people the real freedom not to starve while waiting for the tax administration to calculate their entitlements. But sheer ignorance or confusion is bound to prevent some people from getting access to advance payments they could have claimed. The higher rate of take up that is therefore bound to be associated with a basic income scheme is a difference that matters supremely when prior importance is being given to the real freedom of the least really free. Secondly, in the case of a negative income tax, the relevant feature of the budget-set takes the form of a contingent promise of corrective transfers rather than of a sum of money on which one can fully bank simply because it is tangibly there. This fact is bound to hamper the confidence needed to actually to make use of the options contained in the (abstractly identical) budget-set. One aspect of this difference relates directly to an important dimension of the ‘unemployment trap’ to which social workers are usually far more sensitive than economists. What deters people in the poverty trap from looking for a job or taking one is arguably less that they would not have a higher income, or a significantly higher income, at work than out of work, but even more the liquidity gap and the uncertainty involved in renouncing a safe and regular benefit as a result of taking up a job which they may soon prove unable to keep or to bear. 5 Finally, in an era of computerized transfer payments and pay-as-you-earn tax collection, and assuming that there is no need for control on some other grounds (to check work-proneness or household situation, for example), the administrative costs involved in the advance payment scheme that must be coupled to a negative income-tax system make the latter more expensive to run for any given level of income guarantee, and they therefore absorb resources that could otherwise be used to swell this level. Even on its own, this consideration would suffice, given present tax and transfer technologies, to justify the choice for the universal over the means-tested variant of an otherwise unconditional income. 6

*Second half of the card is also good for universal solves better than means tested for a BI

What, then, is the best institutional expression of the ideal captured by the slogan ‘real-freedom-for-all’? One is really free, as opposed to just formally free, to the extent that one possesses the means, not just the right, to do whatever one might want to do. When arguing against this conception of freedom, Hayek and Buchanan, as we have seen (§ 1.7), were more specific: if one abandons their own, narrower, definition of freedom, one is bound to slip into equating the latter with wealth or the budget-set. This prompts the suggestion that real-freedom-for-all requires us to leximin people's purchasing power, subject of course to respecting everyone's formal freedom. Put bluntly, our ideal requires us to raise the lowest incomes as much as is compatible with a ban on forced labour. But let us be very careful here. The real freedom we need to be concerned with is not just the real freedom to choose among the various bundles of goods one might wish to consume. It is the real freedom to choose among the various lives one might wish to lead. Stressing this distinction does not deprive income, or the budget-set, of its importance. But it makes it crucially important that the income should be given unconditionally to each citizen, no strings attached, that is, without any constraint other than her budget on not only what she may buy, but also on how she may use her time. Hence the following, far more radical suggestion. If we are serious about pursuing real-freedom-for-all —and if we are willing to abstract for the moment both from dynamic considerations and from interpersonal differences in abilities—what we have to go for is the highest unconditional income for all consistent with security and self-ownership. This is a radical suggestion indeed, not only relative to the libertarians' and their close kin's desperate groping for a narrow concept of freedom, but also relative to the standard social-democratic stance, so concerned with the real freedom to consume as abundantly as one might wish that they lose sight of the real freedom to live as unconventionally as one might fancy. In other quarters, the suggestion may be found more congenial. For example, it can be viewed as reflecting in the most straightforward fashion a key component of the old critique of capitalism by ‘scientific’ and ‘utopian’ socialism alike: the revolt against proletarian subjection to the wage relationship, and hence to the capitalists' rule. And it is also in tune with the more recent ‘green’ and ‘alternative’ movements' emphasis on quality of life, self-realization, and the preservation of inter-personal relations free of monetary considerations, in contrast to the satisfaction of material desires thanks to a career geared to making as much money as possible. It only encompasses these concerns, however, to the extent compatible with a liberal or anti-perfectionistic standpoint (see § 1.8). What the suggested institutional set-up is intended to do is not to discourage as much as possible waged labour or a career-dominated existence, but to do as much as can be done in order to provide everyone with a genuine opportunity to make different choices.

In light of all these virtues of a free-market system, and with due cognizance of the evidence gleaned from the performance of various modern economies around the world, it seems almost undeniable that the starting point and fundamental institution of a successful advanced economy should be the capitalist marketplace. No form of a centrally controlled command economy is capable of matching the results of a free-market system when it comes to productivity, efficiency, economic innovation, and personal freedom. That said, it seems equally clear that collective action through government agency is an essential complement to the free-market system. Laissez-faire partisans want to insist that the only problem with a completely laissez-faire society is that it has never been tried. But there are in fact very good reasons that no democratic society has ever chosen to leave free markets totally unconstrained and supplemented. So let us now turn our attention to identifying the most important of these good reasons. They fall broadly under three basic headings. First, government actions are necessary to correct or manage the failure of the real world to provide the necessary enabling conditions of properly functioning markets. Second, governments need to prevent or buffer certain economically and socially destructive consequences that can be created by unconstrained market dynamics. And third, democratic governments need to act on behalf of important public goods that markets are incapable of providing.

A strong and robust free marketplace provides democratic societies with many important benefits. Some of these benefits are economic: free markets play a crucial and irreplaceable role in making democracies prosperous. Some of these benefits are political: free markets protect us against certain forms of political domination and authoritarianism. And some of these benefits are moral: free markets motivate and reward people who contribute to their society’s welfare. A good way to appreciate the social benefits of markets is to consider the difficulties manifest in societies that try to abandon them in favor of a command economy— that is, an economic system in which a society’s productive efforts and resource allocations are determined and mandated by a governing authority. Karl Marx’s core argument was that free-market capitalism was an effective way to turn an agrarian feudal society into an industrial liberal society but that it suffered from internal structural flaws (or “contradictions”) that made it incapable of managing a successful advanced economy. In retrospect, however, the actual historical trajectory of the world’s largest and most important officially Marxist countries, the Soviet Union and China, suggests that he got it backwards. Over the first two or three decades following the terrible destruction of the Second World War, the Soviet Union proved that a highly authoritarian regime with a government-controlled command economy could successfully build the necessary infrastructure for an industrial society. By dragooning industrial armies, as it were, and extracting necessary capital from forced labor, the Soviet Union built huge dams, electrified almost the entire country, created agricultural communes, and built many factories. The collective farm system never worked well: the standing joke was that Soviet agriculture— according to the regime— had suffered decades of unusually bad weather. But rapid industrialization had in fact been achieved. In fact, during the sixties and seventies authorities in the United States looked on with real concern and trepidation as the economic growth rate of the Soviet Union continually exceeded our own. In the late seventies and eighties, however, the Soviet Union economy seemed to hit a wall; and by the late eighties and nineties its apparent inability to deal with the demands of running an advanced consumer economy contributed greatly to the dissolution of the Soviet Union regime.

Now I want to convince the reader that the fullest implementation of the principles of Natural Capitalism can be sustainable; more than sustainable, it could greatly assist with the restoration of natural capital and do so without abandoning Capitalism as such. I will do this by comparing an implementation of the model directly with our definition of sustainability from Chapter 2. The specific implementation I have in mind takes us back to the example of Interface from our discussion of the first principle. We have already seen how, in designing their new factory in China, Interface availed themselves of the opportunity to rethink design from a whole system perspective and, together with embracing the latest and best existing technologies, were able to realize significant savings in terms of inputs (on the order of 90–95%) while simultaneously reducing waste outputs to near zero. I want to pick up the story with subsequent developments at Interface. It is a truly remarkable story of corporate commitment to sustainability. To fully appreciate the significance of this, let’s first contextualize the problem by understanding a few basics about floor coverings in a commercial setting. Consider a law firm occupying, say, four floors in a high-rise building. The floor coverings are looking old and worn, which doesn’t take long in the high-traffic areas, perhaps four years or less. Now consider what’s required to update these. Proceeding one floor at a time, we must first relocate all the employees, perhaps in the same building if another floor is available for short-term lease or maybe elsewhere if not. These days it may be possible to assign at least some of them to work from home. IT people will be needed to coordinate reconnection of the workers wherever they end up, and document storage facilities may be required to handle sensitive and private legal documents that must remain secure yet accessible. Then a cartage company has to 58 Sustainability and Natural Capitalism come in and disassemble and remove all the furniture, perhaps to reassemble it in a temporary location, or perhaps to store it until the present location is ready to be reassembled. Then the old flooring is torn up and carted off to landfill. The surface is cleaned and prepared, and finally the new flooring is laid down. The workspace is reassembled, reconnectted, the workers moved back in, and it’s on to the next floor. The disruption and the lost productivity can’t be exaggerated.

A strong and robust free marketplace provides democratic societies with many important benefits. Some of these benefits are economic: free markets play a crucial and irreplaceable role in making democracies prosperous. Some of these benefits are political: free markets protect us against certain forms of political domination and authoritarianism. And some of these benefits are moral: free markets motivate and reward people who contribute to their society’s welfare. A good way to appreciate the social benefits of markets is to consider the difficulties manifest in societies that try to abandon them in favor of a command economy— that is, an economic system in which a society’s productive efforts and resource allocations are determined and mandated by a governing authority. Karl Marx’s core argument was that free-market capitalism was an effective way to turn an agrarian feudal society into an industrial liberal society but that it suffered from internal structural flaws (or “contradictions”) that made it incapable of managing a successful advanced economy. In retrospect, however, the actual historical trajectory of the world’s largest and most important officially Marxist countries, the Soviet Union and China, suggests that he got it backwards.

It remains to be seen what form the economics profession’s new intellectual discoveries will take and what regulations we will need to apply them. What is clear is that the strain humanity has imposed on the environment means growth as we currently know it cannot be sustained. But that does not mean we have to learn to live with lower growth. In fact, I believe future growth will be faster than we have seen thus far. The lower-growth camp’s mistake stems from a common misunderstanding of GDP or national income. A higher GDP is often taken to indicate more wasteful consumption and consumerism of the kind we are indulging in now. But that need not – and now must not – be the case. The consumption of more art, music, and learning, as well as better health and greater longevity, are all components of GDP, and are, or can be, environmentally friendly. Reforming our regulatory system can foster rapid GDP growth – but with the content of GDP changing dramatically, and with a disproportionate amount of human labor directed to creative activities. The nature of reform for the new world is a big topic, but policymakers will need to focus on curricula that nurture creativity, because routine work will increasingly be automated; shift consumption away from environmentally wasteful goods; and redistribute wealth radically to lessen inequalities.

Capitalism has evolved before, and if it is to continue into the longer-term future, it can evolve again. In recent years, various ideas and proposals have emerged that aim to rewrite capitalism's social contract. What they have in common is the idea that businesses need more varied measures of success than simply profit and growth. In business, there's "conscious capitalism", inspired by the practices of so-called "ethical" brands. In policy, there's "inclusive capitalism", advocated by both the Bank of England and The Vatican, which advocates harnessing "capitalism for good". And in sustainability, there's the idea of "doughnut economics", a theory proposed by economist and author Kate Raworth, which suggests that it's possible to thrive economically as a society while also staying within social and planetary boundaries. Then there's the "Five Capitals" model articulated by Jonathan Porritt, the author of Capitalism As If The World Matters. Porritt calls for the integration of five pillars of human capital – natural, human, social, manufactured, and financial capital – into existing economic models. One tangible example of where companies are beginning to embrace the Five Capitals is the B-Corporation movement. Certified companies sign up to a legal obligation to consider "the impact of their decisions on their workers, customers, suppliers, community, and the environment". Their ranks now include major corporations such as Danone, Patagonia, and Ben & Jerry's (which is owned by Unilever). This approach has become increasingly mainstream, reflected in a 2019 statement released by over 180 corporate CEOs redefining "the purpose of a corporation". For the first time, CEOs representing Wal-Mart, Apple, JP Morgan Chase, Pepsi, and others acknowledged that they must redefine the role of business in relation to society and the environment. Their statement proposes that companies must do more than deliver profits to their shareholders. In addition, they must invest in their employees and contribute to the improvement of the human, natural and social elements of capital that Porritt refers to in his model, rather than the sole focus on financial capital. In a recent interview with Yahoo Finance on the future of capitalism, the executive chairman of Best Buy, Hubert Joly, said that "what has happened is that for 30 years, from the 1980s to 10 years ago, we’ve had this singular focus on profits that has been excessive and has caused a lot of these issues. We need to unwind a bit of these 30 years. If we have a refoundation of business, it can be a refoundation of capitalism as well... I think this can be done, this has to be done." More than three decades ago, the United Nations Brundtland Commission wrote in "Our Common Future" that there was ample evidence that social and environmental impacts are relevant and need to be incorporated into development models. It is now obvious that these issues must also be considered within the social contract underpinning capitalism, so that it is more inclusive, holistic and integrated with basic human values. Ultimately, it is worth remembering that citizens in a capitalist, liberal democracy are not powerless. Collectively, they can support companies aligned with their beliefs, and continuously demand new laws and policies which transform the competitive landscape of corporations so that they might improve their practices. When Adam Smith was observing nascent industrial capitalism in 1776, he could not foresee just how much it would transform our societies today. So it follows that we might be similarly blind to what capitalism could look like in another two centuries.

Nearly 250 years ago, the economist and philosopher Adam Smith wrote The Wealth of Nations, in which he described the birth of a new form of human activity: industrial capitalism. It would lead to the accumulation of wealth beyond anything that he and his contemporaries could have imagined. Capitalism has fuelled the industrial, technological and green revolutions, reshaped the natural world and transformed the role of the state in relation to society. It has lifted innumerable people out of poverty over the last two centuries, significantly increased standards of living, and resulted in innovations that have radically improved human well-being, as well as making it possible to go to the Moon and read this article on the internet. However, the story is not universally positive. In recent years, capitalism's shortcomings have become ever-more apparent. Prioritising short-term profits for individuals has sometimes meant that the long-term well-being of society and the environment has lost out – especially as the world has faced the Covid-19 pandemic and climate change. And as political unrest and polarisation around the world have shown, there are growing signs of discontent with the status quo. In one 2020 survey by the marketing and public relations firm Edelman, 57% of people worldwide said that "capitalism as it exists today does more harm than good in the world". Indeed, if you judge by measures such as inequality and environmental damage, "the performance of Western capitalism in recent decades has been deeply problematic", the economists Michael Jacobs and Mariana Mazzucato wrote recently in the book Rethinking Capitalism. However, that does not mean there are no solutions. "Western capitalism is not irretrievably bound to fail; but it does need to be rethought," argue Jacobs and Mazzucato. So, will capitalism as we know it continue in its current form – or might it have another future ahead? Capitalism has spawned thousands of books and millions of words, and so it would be impossible to explore all its facets. That said, we can start to understand where capitalism could be headed in the future by exploring where it began. This tells us that capitalism hasn't always worked the way it does today – particularly in the West. Between the 9th and 15th Centuries, autocratic monarchies and ecclesiastical hierarchies dominated Western society. These systems began to fall away as people increasingly asserted their right to individual liberty. This push for a greater focus on the individual favoured capitalism as an economic system because of the flexibility it allowed for private property rights, personal choice, entrepreneurship and innovation. It also favoured democracy as a governing system for its focus on individual political freedom. The shift toward greater individual liberty changed the social contract. Previously, many resources were provided by those in power (land, food and protection) in exchange for significant contributions from citizens (for instance, from slave labour to hard labour with little pay, high taxes and unquestioning loyalty). With capitalism, people expected less from governing authorities, in exchange for greater civil liberties, including individual, political and economic freedom. But capitalism would evolve significantly over the following centuries – and particularly so during the second half of the 20th Century. After World War Two, the Mont Pelerin Society, an economic policy think tank, was founded with the goal of addressing the challenges confronting the West. Its specific focus was on defending the political values of an open society, rule of law, freedom of expression and free market economic policies – central tenents of classical liberalism. Its ideas eventually gave rise to "supply-side economics". This was the belief that lower taxes and minimal regulation of the free market would lead to the most economic growth – and, therefore, better lives for all. In the 1980s, coupled with the emergence of political neoliberalism, supply-side economics became a priority for the US and many European governments. This newer strain of capitalism has led to increased economic growth worldwide, while lifting a substantive number of people out of absolute poverty.

However, no other economic system has been found that can rival its efficiency and productivity in decisions and activities that are legitimately private, personal, or individual in nature. Societies that have tried communism, socialism, and religious theocracies have never been able to meet the physical and material needs of their people. They are ultimately rejected by their people because they are not economically sustainable. Most individual economic decisions do not deprive anyone of their basic social rights or violate any moral imperative. These decisions legitimately belong in the individual, private economy, where there is no logical alternative to capitalism. Capitalism, with all of its inherent risks, is still humanity’s best hope for sustainability. Fortunately, sustainable capitalism does not require some radical, new-age value system; it only requires that we return to the foundational principles of classical capitalism and grass-roots democracy. We already have the necessary political and institutional structures in place to create a sustainable economy. We have the means of ensuring the renewal and regeneration of ecological and social capital needed to sustain the development of economic capital because we have a constitution that could be amended to ensure the rights of all people, including both current and future generations, to a healthy and productive natural environment.

For a sustainable future, we need to make the most of companies’ innovations and growth potential. Traditionally, the value of a company has been judged primarily by its market capitalization: the profit generated is the basis of the valuation. Companies must indeed achieve profits to ensure their own sustainability. Still, companies exist to provide social value, such as by creating and delivering products or services people need or desire. In doing so, they contribute to improving people’s lives, increasing people’s happiness, and solving social issues. If companies optimize only their shareholders’ value and not the value of their multi-stakeholders, society cannot be sustainable. Last year, the sum of the market capitalization of the five U.S. tech giants exceeded that of all the 2,170 companies on the First Section of the Tokyo Stock Exchange combined. However, I do not believe that those five companies provide more value than the 2,170. For example, SOMPO’s nursing care business serves 80,000 senior citizens. If our nursing care business, which replaces part of the public health care system, generates no profit, can it be said that this business has no value? Determining the value of a company should include a metric of the worth it provides to society, not just its financial profit. To develop a new measure of corporate value, companies, governments, and citizens need to collaborate to set shared goals for the common good of society. How can we optimize people’s happiness, and how do we balance it across various measures, such as money and quality of life? Multi-stakeholders should discuss and decide this together. Then, each of us must play a role in realizing our agreed-upon goals. Businesses must return to what is truly important. Companies need to achieve organizational ambidexterity; committing to creating social value in the long term based on their purpose while generating profits in the short term.

Modern theories that make up the paradigm of sustainable development, and the best practices derived from them, are based on the consistency of individual and public needs, factors of economic growth and ecosystem conservation. The trend of green economy expansion is moving from a challenge facing modern society to the dominant area of scientific thinking, which is increasingly focused on solving the problems of reducing the anthropogenic impact on the environment, primarily on the climate. At the same time, the level of scientific and technological progress, and the quality of life that modern civilization has reached, require the preservation and increase in the specific consumption of various resources in the long term. Therefore, green economy technologies that ensure the transition to sustainable development are initially focused on the optimal and integrated use of non-renewable resources and the maximum involvement of renewable resources in the production of goods specific for a post-industrial era [1]. Based on this, the evolution of sustainable development methodology should be carried out in the system of innovative development of industrial technologies and their adaptation to the latest trends in energy and urbanism, ecology, finance and investment. At the same time, sustainable development is associated with increasing the responsibility of business, governments and the entire society, around the world, for achieving a balance between current and future needs for subsoils, energy, traditional and new materials, and transport. Such responsibility equalizes environmental and social problems (poverty and malnutrition, inequalities in access to wealth and income distribution), which often have common roots. This, in turn, highlights the importance of interdisciplinary and multilateral research on sustainable development issues, the results of which can answer questions about green economy perspectives. 

The demand for “jobs for all” was, in some form or another, a cornerstone of the Left’s political agenda in the 1930s and ’40s. Unfortunately, in the postwar decades and beyond the demand to end unemployment altogether was repeatedly thwarted or shelved. And with the decline of the Left’s political fortunes the imaginative vision of an economy free from joblessness faded from memory for nearly a half century. Yet today, thanks to Bernie Sanders, the call for a right to a job is once again gaining momentum. Naturally, the contemporary demand for a job guarantee has been dismissed by the business press as “absurd” and unworkable.1 Meanwhile, liberal outfits have urged caution and restraint.2 This sort of hostility is to be expected; after all, a federal job guarantee would cost in excess of $500 billion, and the political ideas that inform such a program have not been up for serious debate since the 1970s.3 To boot, a federal job guarantee would undermine the logic of a ruthless labor market, challenge management’s absolute power over employees and vastly improves workers’ leverage on the job. Elites are justifiably worried, defensive and lashing out. What is less expected, however, has been the skepticism of the job guarantee idea expressed by some on the political Left. Some claim the program wouldn’t challenge the form of the wage relation itself, or that it would be logistically impossible to administer; that its realization would result in nightmarish work camps or that it would end up looking like Clintonian workfare on steroids. Much of this skepticism comes from those who advocate for, and often prefer, basic income as a solution to the challenges of the contemporary labor market. Ironically, what the business press gets exactly right about a job guarantee is what most skeptics get wrong. Tightening the labor market would ratchet up pressure on private employers to raise wages and massively increase the size of the federally employed workforce. Employment assurance programs have historically evoked elite pearl-clutching precisely because they are among the few political demands that put workers in a position real power. Criticism of a job guarantee, then, reflects a misunderstanding of the political logic of working-class demands, the power that a job guarantee affords workers and finally the central and enduring role of wage labor in socialist strategy. The Political Prehistory of the Job Guarantee New Deal programs like the Civilian Conservation Corps, the Tennessee Valley Authority and the Works Progress Administration were the first successful American experiments in state-led civilian employment assurance. Of course, these initiatives were designed as relief projects, born of a deep crisis in the state and economy, and their implementation was possible because of the profound weakness of the domestic capitalist class during the Depression. Nonetheless, just as these “relief” programs took hold the labor left tried to deepen President Franklin Roosevelt’s employment initiatives. To transform them from temporary and partial to permanent social programs. Walter Reuther, as early as 1940, advocated for an ill-fated plan to have the federal government transform manufacturing plants for war needs. And while the ‘Reuther Plan’ was sold to policymakers as a wartime necessity, the CIO’s goal was to restructure economic relations, hire workers en masse and insist on the federal government’s heavy intervention in the economy. Similar ideas informed the expansive reports of Roosevelt’s National Resources Planning Board (NRPB). In 1943 the NRPB released—to wide circulation—two reports intended to shape the future of postwar planning: Security, Work, and Relief Policies and After the War—Full Employment. Both reports advocated for expansive and generous social programs to complement extensive jobs programs administered through a proposed Federal Work Agency in order to employ “all who are willing and able to work.” And in his 1944 State of the Union Address, Roosevelt himself called for the recognition of “the right to a useful and remunerative job.” The cumulative fruit of all these plans was James Murray’s Full-Employment Bill of 1945. The bill is arguably the first American attempt at a job guarantee. It would have guaranteed state-led full-employment as a legal right. In particular, it called for a yearly employment budget based on estimates of “the number of jobs needed during the ensuing fiscal year or years to assure continuing full employment” and would have specified that if the private sector was unable to meet that number the federal government would step in. Unfortunately, by this time the capitalist class was recovering from the economic crisis of the 1930s and the war. The business community was reorganizing politically and while the strength of the newly organized industrial working class was unprecedented, it was met by an unparalleled organizing drive among business elites.4 As Micha? Kalecki observed over three-quarters of a century ago, elite resistance to employment assurance is due to fear that “under a regime of permanent full employment, the ‘sack’ would cease to play its role as a disciplinary measure.” Accordingly, across industry, workforce and region, business leaders worried that under full employment “[t]he social position of the boss would be undermined and the self-assurance and class-consciousness of the working class would grow.”5 In other words, by substantially tightening the labor market workers could be emboldened to strike for higher wages and shorter hours all while capitalists would be compelled to either raise wages or risk losing profits to work stoppages and labor market competition from state industries. The United States Chamber of Commerce, the National Association of Manufacturers, and the American Farm Bureau Federation all understood this and acted accordingly. Business leaders organized civil society, the courts and Congress in a campaign to sink what they saw as a major threat to their interests (a threat, perhaps, second only to that of socialized medicine). The ruling class won and the pursuit of full employment in the 1940s was sunk.6 By the 1960s a renewed interest in the problems of poverty raised the demand for jobs once again. So great was the demand for a solution to the unemployment problem that it was expressed in what was arguably the principal political demonstration of the decade: the 1963 March on Washington for Jobs and Freedom. Yet the ambitious employment assurance programs demanded by the likes of A. Philip Randolph and Bayard Rustin in their Freedom Budget were once again derailed. This time, in addition to intransigent business opposition, the labor left had a new competitor for the political limelight: liberal advocates of the anti-poverty agenda. These advocates insisted that programs like Community Action would alleviate the crushing effects of poverty, without causing a major intrusion of the federal government into the affairs of private enterprise, and, if successful, these efforts could even ignite a potential new basis for emancipatory politics. Anti-poverty programs were perfectly compatible with the full-employment ideal, they argued, and robust anti-poverty programs could only help pave the way to a politics of full employment. In reality, the Ford Foundation and the nascent layer of Kennedy-era Ivy-educated postwar intellectuals designed ameliorative anti-poverty programs that would be modest enough to attract business support (or at least neutralize their opposition). They built an anti-poverty policy that was perfectly compatible with a new model of commercial Keynesianism. Instead of anti-poverty as a road to employment assurance, liberal elites saw anti-poverty advocacy as an alternative to the demand for jobs and wage hikes. The Left, for their part, failed to see how an anti-poverty political agenda put them in a back-seat position. The endemically poor, while no less morally deserving of social solidarity than the more economically stable working class, are not easy to organize, and their demands can be mediated through church leaders, nonprofits, and community organizations. Rhetorically, a language of “shoring up the bottom” did little to advance an egalitarian agenda focused on challenging the immense power at the top of society. Instead of “us against them,” anti-poverty moralism relied on a narrative that painted liberal crusaders as heroes of the poor. The War on Poverty became less a means for working-class political power and social solidarity and more a politics of state-administered charity. Unions saw little upside to an anti-poverty agenda that failed to provide wage gains for the vast majority of craft, trade, and industrial jobs. The popular counterbalance needed to implement a robust anti-poverty agenda never cohered. Anti-poverty demands were isolated from a mass base, primarily supported by the middle-class liberal Left, a band of intellectuals, and foundation giants. It’s not surprising then that the resultant programs of the War on Poverty reflected an elite policy consensus. The major anti-poverty programs targeted the poor with the aim of changing the cultural characteristics of workers, rather than the structure of the economy. And even those programs aimed at the labor force at large—in particular the Manpower Development and Training Act of 1962—quickly transformed into targeted, localized initiatives. President Lyndon Johnson worked closely with business executives to build the National Alliance of Businessmen where executives were given the opportunity to burnish their liberal bonafides while being assured by the government that the anti-poverty initiatives posed no threat to their profits. Tragically, liberal anti-poverty advocates found themselves in a cross-class coalition and the labor left found itself politically enfeebled and isolated in the pursuit of a more robust agenda. With the added power of the business community liberals sacrificed the jobs agenda. By the end of the decade the vision of “jobs for all” in the United States was again shelved. In the 1970s the employment demand again gained prominence. With unemployment hovering at a staggering 10 percent, employment policy was politically unavoidable. As such, it is perhaps not surprising that the first efforts to reintroduce employment assurance did not come from the Left but instead through a bipartisan effort. In 1973 the Comprehensive Employment and Training Act (CETA) was passed by Congress and signed into law by Richard Nixon. CETA was a pale imitation of a public works program. The business community was relatively undisturbed by its passage, assured again that the program would not be inflationary but instead hire only unemployed workers with the intent to retrain them and send them back into the private sector. In a sense, CETA was more a subsidy to business than an employment assurance program for workers. Through a commitment to “job training” CETA alleviated the need for businesses themselves to train new employees, and by limiting eligibility to the unemployed the program did not succeed in raising the wage floor. Worse, because CETA was crafted explicitly as a decentralized and anti-federal solution to the jobs crisis it was beset with problems from the beginning. The lack of centralized control opened the door for local mismanagement and political clientelism. But more importantly, the failure of the program to provide permanent and purposeful work led many to see the program as a symbol of government’s inability to solve the employment crisis. Temporary, countercyclical jobs were effective at reducing unemployment during recessions, and probably somewhat effective at spurring demand, but politically the countercyclical solution was a tough sell. By the late ’70s CETA was proving inadequate, and even as the campaign for the Humphrey-Hawkins Act kept the question of jobs in the public eye, liberals like President Jimmy Carter were pressured by anxious business leaders to shrink an already inadequate program. Revisions made only the poor eligible for CETA jobs, and by 1978 CETA represented little more than the War on Poverty-era policies of the 1960s. The passage of the largely symbolic Humphrey-Hawkins Full Employment Act the next year did little to counter the declining fortunes of progressive employment policy. The Act, insofar as it was ever taken seriously, limited public employment only to low-skill and low-wage positions so as not to compete with private enterprise. And by the late 1970s the business partners of Great Society liberalism proved fickle. With the election of President Ronald Reagan, the business community abandoned even rhetorical commitment to a jobs agenda. In the post-war era employment assurance was raised and defeated by a combination of labor weakness, business strength, and liberal triangulation. Liberals in particular played the dangerous role of proposing half-measures and alternative policies that succeeded in drawing attention and resources away from adequate employment policies while orchestrating cross-class political coalitions with business leaders. The repeated attempts by liberals to pull in business as a key partner resulted in either policy weakness or political failure. Avoiding the same fate today will not be easy. Just as in the mid-century, contemporary alternatives to a jobs agenda, most notably the demand for a basic income, are often precisely the kinds of demands that would invite liberals to side with major foundations and corporate sponsors. But despite similarities in the political field, today’s job guarantee proposals do look quite different from their mid-century predecessors. What Is a Jobs Guarantee Today? The contemporary interest in a job guarantee, the idea that the state can and should directly employ workers, is certainly a welcome development. However, there has been some debate about whether the phrase “job guarantee” refers to a stable programmatic demand or something more nebulous. Matt Bruenig criticizes the idea for its lack of clarity.7 He claims that “the flowering of dozens of mutually incompatible proposals that all go under the name ‘job guarantee’” suggests that the proposal is more of a rhetorical move than a policy proposal.8 Bruenig is of course right to notice that there have been multiple policies floating around that go by the name of “job guarantee,” but this only indicates interest and affection for the slogan, not some weakness inherent in the motivating ideas. My own feeling is that the interpretation of any policy by the press, the public and political leaders is more important than the myriad micro-policy mechanisms of any given white-paper. It follows then that defining the phrase “job guarantee” is the business of political campaigners, leaders and advocates, not policy writers alone.9 A survey of contemporary proposals suggests that a “job guarantee” refers to a set of policies that, when combined, are meant to remedy both structural and cyclical unemployment through direct state-led employment. Good proposals do this by combining massive public infrastructure projects—thus creating expanded permanent or semi-permanent public sector employment—with a more flexible solution for cyclical downturns (in Bruenig’s terms, “make-work” jobs). In other words, a robust job guarantee combines the “employer of last resort” (ELR) principle (where the state swells to absorb unemployed workers in periods of recession and contracts during periods of recovery and stability) with an old-fashioned public works program. Good proposals also set a wage floor that is well above the current minimum wage and stem the possibility of downward pressure on wages through prevailing-wage clauses and limitations on redundant jobs. Such a policy also requires the establishment of employment offices and complementary active labor-market policies (to fit job-seekers to jobs). The combination of the ELR model with a public works program is important if a job guarantee is going to succeed politically and be effective once implemented. The major political weakness of CETA was the liability introduced by so-called “make-work” jobs, which came to be seen as a symbol of liberal government profligacy. But when we combine countercyclical job creation with a major public works program the political implications could be positive. The program could demonstrate that jobs generated by the government are not just meant to absorb surplus labor but they also perform an independent function valuable to the whole society—like building infrastructure, telecommunications, public transit. If implemented, the ramifications of a program like this would be massive. Without exaggeration, a job guarantee of the type described here would partially socialize the labor market. And there is, as yet, no surer way to move us closer to the achievement of a social right to employment. Economically, the job guarantee would—by providing income to those who currently have none—greatly raise purchasing power and aggregate demand. This would itself be an engine of economic growth. Yet its economic effects could be even greater if planners use the program as a means of reorganizing the industrial structure of the United States. Massive public investments in manufacturing and heavy industry in particular would not only provide permanent or semi-permanent sites of employment, they would also help considerably raise wages across the labor market. Indeed, there is something special about the “secondary sector” as it relates to wages. It’s not a coincidence that maintaining high levels of wage growth depends on significant investments in manufacturing.10 This is largely because, unlike the agricultural and service sectors, manufacturers create durable forward and backward linkages in the economy and, in advanced economies, produce high-value-added goods in firms with large profit margins.11 And while the private sector is unwilling to invest in manufacturing, there is no reason the public sector cannot do so and to great effect. First Jobs Then (Maybe) Basic Income Of course, some leftwing skeptics are not in principle against the policy but argue against prioritizing the job guarantee. One version of this critique is to suggest that we can and should have it all: a robust welfare state, a full-employment economy, and a basic income. Pitting any social policy against another is then seen as counterproductive, as David Calnitsky puts it: Framing the question in narrowly economistic terms, however, posits a false choice between decommodifying labor power and decommodifying services—as if both cannot be pursued at once. In a rich, productive society we ought to be able to afford both a basic income and high-quality public goods.12 Sure, we ought to be able to afford all sorts of social policies, and popular mobilization ought to be able to make progress on securing a broad spectrum of public goods. What a world we would live in if we secured a basic income, a job guarantee, and the decommodification of health care, education and transit, et cetera. Such a society might even qualify as democratic socialist. Regrettably, focusing largely on the ends of social policies leads Calnitsky (and others) to presume away the messy business of politics.13 He says of both basic income and employment assurance “[w]ere popular forces powerful enough to make progress on one, they very well might be powerful enough to make progress on the other” (“Debating Basic Income”). This is wishful thinking. The “let’s have it all approach” leaps from the obvious truism that we can and should have it all to an assumption that the social forces necessary to attain this basket of public goods are readily available. As we’ve seen above the jobs demand has been routinely derailed by liberals who insist on pursuing anti-poverty policies, balanced budgets and retraining programs (not to mention the immense and overwhelming power of the world’s premier capitalist class). As Alex Gourveitch and Lucas Stancyzk point out, the success of a demand like a meaningful universal basic income—and really any liberatory working-class demand—relies not on the perfection of the policy, or the good intentions of political militants, but on the strength of a workers’ movement equipped with the political and shop-floor power to force concessions from the state and the ruling class.14 We ought to have it all but we need to rebuild dynamic mass organizations of the working class if we want to win anything. Today socialists have precious few resources and our political organizations have tenuous connections (at best) to the working-class majority. Out of necessity, as Nye Bevan put it, “the language of priorities is the religion of Socialism.”15 The operating question, then, is not “why not both?” but “which comes first?” Political priorities cannot be determined by asking whether and to what extent an array of policies are sufficiently socialist in the abstract. Nor do I think they can be determined by speculating which policy would best serve socialist ends once implemented. Any number of policies might meet these criteria. Focusing only on the ends of social policy neglects an analysis of the political terrain at large. Instead of treating public policy as an endless menu of desirable outcomes or succumbing to the utopian injunction to “have it all,” we should prioritize demands that put workers and their organizations in the driver’s seat not only in their implementation but also through the campaign for their actualization and implementation. This orientation differs from the way that Calnitsky, and others, formulate political priorities. In his response to critics Calnitsky argues “policies that are achievable in the world today may confer power onto people, which facilitates the realization of further policies that again empower them to demand even more” (“Debating Basic Income”). Who could disagree with this? I doubt Gourevitch and Stanczyk would. I know I do not. But this is not really what is up for debate. Again, any given set of policies could theoretically confer power onto people and potentially unlock the virtuous reformist cycle that Calnitsky envisions if—and only if—they are effectively implemented. Therefore, choosing political priorities is how we move from matters of principle to matters of strategy, or how we move from the scientific analysis of policy to the art of politics. For my own part, an analysis of the ends of social policies only informs part of such a strategic assessment. To get the whole picture we must also envision what the political struggle for the fruition of any policy looks like, we need to analyze what kind of agitational campaign would be necessary and what constituency would be needed to realize such reforms. When we do this we can see which policy demands have legs among a working-class base—that is which engender a potentially explosive class mobilization—and which tend to invite the attention and affection of foundation giants and big business.16 Unfortunately, basic income demands—no matter how emancipatory on paper— seem unlikely to engender a majoritarian coalition or working-class political independence. Basic income attracts some of the worst bedfellows socialists could imagine—Jeff Bezos, Bill Gates and other tech and finance billionaires. As a result the political struggle for basic income immediately invites divergent interests and serious political contradictions. Already, we see how entrepreneurial politicians like Andrew Yang have championed basic income as a solution to the jobs crisis. Yang, for his part, couches his rhetoric in strongly anti-statist, pro-market and pro-business terms. While he borrows from Calnitsky, arguing that his “Freedom Dividend”—a paltry $1000 per month—“increases bargaining power for workers,” he also insists that a basic income is simply good for business, claiming that “UBI encourages people to find work,” “UBI reduces bureaucracy” and “UBI increases entrepreneurship.”17 It’s important also to note that Yang, despite his vaguely workerist rhetoric, does not support Medicare for All or many of the other social programs advocated by Sanders. I don’t suspect this is a coincidence; for many, the basic income solution is not meant to supplement universal social programs but to supplant them. Indeed, Yang himself has boasted of how his plan would help cheapen the overall costs of welfare state administration by defunding more generous social provisions to stabilize the cash transfer scheme. As basic income becomes more and more the preferred solution of millionaire reformers it should be clear that it represents a path least threatening to capital. What’s more, the presence of elite advocates is only compounded by the labor movement’s decline and the hollowing out of historic working-class political institutions—a weak and embattled labor movement could hardly counterbalance Silicon Valley. Advocating for basic income without a robust labor movement consigns the already weak workers’ movement to the role of junior partners. The technically perfect basic income won’t make it much beyond the magazines of the socialist left. The Right to Employment or The Workhouse Still, for other critics the problem of a job guarantee is less a question of strategy and more a question of outcomes. Skeptics worry that the realization of a job guarantee could result in a program that resembles the eighteenth-century English workhouse. Of course, this exaggerated concern is hardly defensible, not least because the Dickensian workhouse was a policy intended to deal with a labor shortage, it was never meant as a solution to unemployment. Other critics, like Bruenig, conflate a job guarantee—the social right to a job should you want one—with a work requirement. Bruenig, and Jonathan Chait, also, compare the potential program with Clintonite workfare.18 Skeptics’ concerns are valid if the job guarantee is narrowly defined solely as a countercyclical employment policy. That is, if policy-makers designed a program built exclusively to hire workers in periods of recession (and some have done just this) the program would likely be a flop. But if a job guarantee means a traditional public works program combined with the countercyclical solution then the workfare and workhouse comparisons make little sense analytically (unless critics consider most public sector workers part of a dismal forced-labor regime). In fact, the most successful predecessors to a program like this—the Tennessee Valley Authority, the Works Progress Administration and the Civilian Conservation Corps—were hardly the grey work camps of critics’ dystopian imagination. The guiding principle behind a job guarantee, the affirmation of the social right to employment, does not and would not, impose work on anyone. Just as the guarantee of any particular right almost never means the compulsion to exercise it. The goal of employment assurance is, as ever, to end involuntary unemployment. People unable to perform paid work should still be eligible for unemployment benefits, and they would not be expected to work against their will or ability. And of course, no left-wing advocate for employment assurance (and there really are no other advocates for it) would argue for a program that would force people into soul-crushing jobs. But there is a stronger point to be made here. Not only is the vision of the workhouse rejected by job guarantee advocates, I don’t think capitalists even find this vision particularly desirable in the long term. Consider that even if a job guarantee resulted in nightmarish working conditions, such conditions have a low likelihood of persisting because a tight labor market with a state guarantee of employment would necessarily lead to greater structural leverage for workers. Workers under a system where employment is guaranteed would have the same “exit option” praised by basic income advocates: they could walk off the job knowing that another job is secure. But they would also have the option to strike. Of course, such options are only political potentials but I think it safe to bet that under the tight labor markets wrought by such an aggressive employment policy workers would be more emboldened to strike. Further, the workforce itself would grow. Under conditions of state-led employment assurance a twin phenomenon occurs: the wage floor rises and the overall labor force participation rate increases. The simple explanation for why Nordic countries are able to raise wages while expanding their workforce is that active labor market policies and public employment—especially in the care of children and the elderly—allow women and other traditionally disadvantaged workers to enter the job market while sectoral bargaining puts upward pressure on wages across the workforce. (This in turn explains how the labor force participation rate, the rate of wage growth and the levels of social equality for women in these countries far outpace the outcomes of the “free” labor market in the United States.) The knock-on effects of a job guarantee also bolster the mobilization capacity of the working class by providing new avenues for organizing drives. An invigorated public sector would make mass unionization a possibility again. And given that public-sector unionization and public-sector worker militancy have been less vulnerable to deterioration than their private sector counterparts it’s reasonable to assume that a union drive among millions of new federally employed workers would have legs. If we understand neoliberalism to mean, as Adolph Reed Jr. and Mark Dudzic usefully defined it, “capitalism that has effectively eliminated working-class opposition,” then our political aims should be to increase the social leverage and class self-assurance and consciousness needed to rebuild that opposition.19 Without the assurance of a perennially tight labor market and with the looming threat of automation many workers rightfully fear that they are disposable. A late-career pink slip could mean you will never work again. A job guarantee could alleviate that crushing fear. It could help facilitate the growth of wages, labor force participation and workplace militancy—the policy could literally grow the working class in size and strength. Compare this to the potential institutionalization of unwaged earners through a stand-alone basic income scheme. Basic income proponents praise the potential freedom afforded by a no-strings-attached income guarantee. But with a growing low-wage service sector, high rates of secular under- and unemployment and, in the United States, a uniquely weak union movement, it’s unclear how low-waged and unwaged basic income earners would have anything close to the social leverage that workers have through the power of the strike. This is one reason I think some of the super-elite tech and finance gurus are enamored of the basic income solution. While the precaritization of wage work and the growth of the gig economy is often overstated, it seems obvious that a non-waged cash benefit would only help fortify that sector and weaken the potential for collective action among those trapped in low-wage gig jobs or long-term unemployment. How would the unwaged basic income earner flex her muscles? How could a stand-alone basic-income provide the kind of economic environment conducive to workplace organizing? Socialist skeptics of a job guarantee tend to minimize the central position that wage labor plays in capitalism and the potential social power that workers have by virtue of their structural position—indeed some tend to downplay the meaning and significance of work altogether.

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Gendered Division of Labor Let us consider now the impact of UBI on gender justice (see also Katada 2012; Robeyns 2000; 2001; 2008). In this section, I will confine myself to considering only the gendered division of labor in the household. Consider four distributive options as responses to gendered housework: 1) wages for housework; 2) capitalist welfare state; 3) equality of opportunity; and 4) universal basic income. Let us address them as distributive “ideal-types”, in order to assess their possible impacts on the division of labor. 1) Wages for houseworkers. A classic distributive response to the gendered division of labor is to give wages for housework (Federici 1975; Fortunati 1981). The proposal was first suggested by the Italian feminist Silvia Federici, giving rise to a social movement in the 70s. While today the proposal is no longer accepted by most feminist movements, the critical efforts as part of the proposal have left us with useful critical resources, acknowledged as such by many contemporary scholars today (see Weeks 2011). This line of thought, in fact, has contributed to the birth of “social reproduction theory”, which seeks to conceptualize the sphere of life traditionally conceived as lying outside of the official economy, consisting of care and housework, as producing value itself, even though within the ‘unofficial economy’ of the household (Federici 1975; Bhattacharya 2017)63. Despite the critical relevance of the proposal in that historical period, which usefully contributed to raising awareness of the problem in the public arena, it would not by itself stop the contributive subordination of women, being a merely distributive remedy to the gendered division of housework. Rather, it would perpetuate their contributive segregation because it would continue to cast housework as a ‘woman’s problem’, without making changes to the gendered division of labor – which would likely be made worse. 2) Welfare state. As effectively highlighted by Nancy Fraser (2016), with the advent of the “second shift” of women and two-earner households, the conflict between work in the official economy and reproductive labor has been exacerbated. Lack of investment in public and support services have combined with the massive recruitment of women into the labor force to externalize carework to nannies and caregivers. The resulting situation is “a new, dualized organization of social reproduction, commodified for those who can pay for it and privatized for those who cannot, as some in the second category provide carework in return for (low) wages for those in the first” (Fraser 2016a). If they want to maintain the double-earners model, without confining women to the household or asking them to work part-time, families are thus forced to outsource housework to other women, thereby displacing the problem on a global scale within the so-called “global chains of care” (Hochschild 2000; see also Yeates 2004; 2005; 2009; Casalini 2012). Shallee Colen (1986) has called this phenomenon “stratified reproduction”. On the whole, the welfare state model tends to rely upon the provision of informal carework, without guaranteeing equal access to private caregiving, while at the same time disinvesting 63 These theories are grounded in a reconceptualization of Marx’s notion of “exploitation” that could include spheres outside of the industrial unit, by analogy with the expropriation of resources under colonialism. See for example Fraser 2016b. 116 from public provisions. It does not help make the gendered division of labor fairer, but rather indirectly exacerbates it. 3) Equality of opportunity. What would the principle of “equal opportunity” mean for women with kids who take most responsibility for carework? In Rawls’ account, “fair equality of opportunity” is mostly aimed at preventing social class from being an impediment. It relies on the distribution of money and human capital (education). But money and education would not, by themselves, lighten women’s burdens or necessarily result in a situation where carework is more fairly shared. The gendered division of labor does not concern only people in poverty, for by its nature it fundamentally exceeds the economic dimension. At most, wealthy families can afford to outsource carework to other women, who are often migrants coming from the Global South. The “care drain” solution would reproduce the “global chains of care” (Hochschild 2000) and “stratified reproduction” (Colen 1986) would merely displace the problem. In Roemer’s account, “equality of opportunity” means that all should receive a valuable education and have access to social dividends (i.e. equal shares of profits). In neither case would the labor burdens of women (which Arlie Hochschild has called “the extra month per year” that women devote to carework) be lightened or shared in a fairer way. There is no necessary connection between money redistribution, equal opportunities through education, and the way in which we share tasks. As for free occupational choice, once they have kids, women with care responsibilities cannot simply choose to “quit their job” as mothers. Thus they would be likely to have less choice then men in the labor market. Outside of the household, responsibilities for carework would significantly restrict their options. They would be more likely to take part-time jobs, for instance. This is, once again, unless they externalize carework, which clearly has costs, both affective and economic. Free occupational choice means that no one should be forced into an occupation against their will. But casting the normative perspective on work no further than to the act of “free choice” and abstracting away from the constraints that are actually responsible for reducing the options of such choice, does not help to put us in a position of contributing to society as peers. Consider, for instance, that women taking most charge of carework do declare in interviews that they would like to get more help from their husbands (when applicable), but in most cases this rarely happens. Thus, even if they “freely choose” their work because no legal or formal constraint is at play, they nonetheless must choose between maintaining their relationships with their disengaged partners, or these responsibilities will be fairly shared at the cost of conflict or even divorce (see the illuminating work of Arlie Hochschild 2012b). The normative scope of freedom of choice is too narrow; it does not sufficiently affect by itself the contributive subordination of women. 4) Universal basic income. As for UBI’s “exit choice”, one may ask: can women simply “exit” from carework? This appears to be almost a nonsensical idea. However, the unconditional character of UBI would widen their options by providing a form of material security that would encourage flexibility and wider choice. Indeed, UBI may also lessen women’s dependency on intermittent public help and on their partners (the “male breadwinner”); moreover, by unconditionally providing women with a secure source of income, it could indirectly facilitate some processes of emancipation from gender segregated labor in the market. Given the universal character of UBI, no doubt it is far preferable to the idea of wages for housework and to the welfare state, 117 insofar as it avoids fostering status segregation. But UBI does not by itself suffice to make the division of labor fairer. While intervening on class subordination, it doesn’t address irreducible inequalities and heteronomies rooted in the division of labor. For childrearing and housework, there would still be the problem of who should perform them. According to some authors, UBI would have some effects on unpaid family work in that it would help to give it recognition (Walter 1989; Withorn 1990). However, it may well have the opposite result: that housework becomes even less visible and thus less recognized. By providing equal amounts of money to all, institutions may think of themselves as being “absolved” from the responsibility of providing concrete help through public investments. If there is no specific concern for women’s carework and thus it is far from clear how the contributions of women would be recognized. Other authors believe that UBI would help women to achieve greater equality in the labor market by enhancing their bargaining power and making it more sustainable to work part-time, also leading men to share in domestic work (Standing 1992); other authors believe that UBI would have a highly positive impact on women’s autonomy (Walter 1989). However, these are mere conjectures that, in the absence of empirical research, cannot be validated. What we can say is that nothing in UBI as such entails that men will share in domestic work (supposing the heterosexual family as a model for all families, which should not be assumed64) – this seems to be quite an arbitrary presumption. Indeed, UBI may entail a quite opposite effect, leading institutions and collectivities to disengage from investing in public provisions for carework, and thereby exacerbating existing inequalities. My claim is that injustice in labor cannot be met by distribution alone; it requires a response which rethinks our contributive patterns (see also Schouten 2016). In this case, for example, an egalitarian remedy would be to equally share housework with other members of the family and, more broadly, include institutions and the collective in the responsibility for socially necessary reproductive labor. Understood this way, gender would be a category characterized by multifaceted injustice: not merely class and status injustice, but also more specifically contributive injustice. Feminist contemporary reflections have addressed this kind of labor injustice by using terms like “social-reproductive injustice” or “family justice”. In my view, this should be considered as a particular, status-based case of a larger form of injustice: contributive injustice, which reserves certain kinds of tasks and work for some people, while exempting others65. 3.3.3. Conclusion Both heteromation and the gendered division of labor are cases of contributive inequality. Of course, they are different problems, in that heteromation concerns the tasks that companies outsource to crowdworkers in order to fill in the gaps of technological work, whereas carework concerns the socially necessary tasks performed in the household that society tends to reserve for women. In both cases, the contributive pattern is an unequal one, since crowdworkers and women are not allowed to contribute to social cooperation as peers. In this framework, distributive justice – in the form of UBI – may certainly alleviate in some form the material constraints that exacerbate contributive issues, but it would not make, as such, 64 Significantly, recent research has shown that same-sex couples with children tend to have similar problems of unequal division of labor in the household as heterosexual ones (see for example Cain Miller 2018). 65 On the idea of exploitation of women based on gendered housework, see Delphy 1992; 2003. 118 the division of labor fairer. The limitations of the derivative and external justice theses are still there