Normative Political Economy

Normative Political Economy explores the criteria we use for judging economic
institutions and economic policy. It argues that prevailing criteria lack suffi-
cient depth in their understanding of subjective experience. By uncovering
the meaning of this experience through reference to psychoanalytic theory,
the book changes the way we understand the processes and structures of
‘political economy’.
The currency of David Levine’s argument are fundamental concepts of
universal importance. Topics covered include:

basic needs, equality and justice

freedom, self-integration, and creative living
the role of the state
capitalism and the good society

This book represents essential reading for any student of economics, polit-
ical science or moral philosophy.

David P. Levine is Professor of Economics in the Graduate School of

International Studies at the University of Denver. He is the author of nine
books and numerous articles in the fields of economic theory, political
economy, and applied psychoanalysis. His recent publications include Wealth
and Freedom (1995), Self-Seeking and the Pursuit ofJustice (1997) and Subjectivity
,

in Political Economy (1998) .

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A constructive reassessment
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Normative Political
Economy<br/>
Subjective freedom, the market,
and the state

David P. Levine
First published 2001
by Routledge<br/>
2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN

Simultaneously published in the USA and Canada

by
Routledge<br/>
605 Third Avenue, New York, NY 10017

Routledge is an imprint of the Taylor & Francis Group, an informa business

© 2001 David P. Levine
Typeset in Garamond by
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All rights reserved. No part of this book may be reprinted or
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trademarks, and are used
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without intent to infringe.
British Library Cataloguing in Publication Data<br/>
A catalogue record for this book is available from the British Library

Library of Congress Cataloging in Publication Data

Levine, David P., 1948-
Normative political economy: subjective freedom, the market,
and the state/David P. Levine.
p. cm.

Includes bibliographical references and index.

1. Economics—Psychological aspects. 2. Liberalism.
3. Individualism. 4. Economics—Moral and ethical aspects.
I. Title.
HB74.P8 L477 2000
330—dc21 00-034482

ISBN 13: 978-0-415-23529-7 (hbk)

Contents

Prefacevii

1 1
Introduction

PART I

Foundations11

2 Ends13

3 The quality of subjective experience36

4 Needs and rights51
5 State and society
73

PART II

Applications 87

6 Capitalism and the good society89

7 Income from work and social insurance
107

8 Justice and economic democracy119

9 The economy: national, international, global139

Notes151
References156
Index
159
Preface

In this I explore foundational concerns of normative political economy.

book,
I do so of the conviction that something important is missing in current
out
discussion of the ethical standing of economic institutions. This something
missing is a substantial account for the quality of subjective experience as
the central element in shaping the goals of economic activity and economic
institutions. I take subjectivity to be the central element in any meaningful
discussion of normative issues relevant in the contemporary setting. In that
setting, to meaningful basis for normative judgment requires us
provide a

to understand the of subjectivity, and the prospects for subjectively

nature

meaningful experience.
One can think of subjective experience as a kind of capacity, somewhat
along the lines that Martha Nussbaum and Amartya Sen follow in their
discussions of human capabilities. The specific capacity associated with what
I refer to as subjective experience is the capacity to define meaningful goals,
to take initiative in seeking to realize them, to lead a creative life, and to
find satisfaction in doing so. Institutions can be organized to facilitate or
impede the individual’s effort to develop and express this capacity, to consti-
tute him- or herself as, in the words of Heinz Kohut, a ‘centre of initiative’
in the world.
The emphasison subjective experience leads us inevitably to mental or

psychic life. Yet, for those concerned with the economy, few things seem
less relevant than its psychic dimension. Because of this, the concepts needed
to understand subjective experience have played no part in discussion of

normative issues in political economy. Matters are not helped much by the
prevalence of utilitarian and related choice-theoretic ideas, which explicitly
deny the significance of any aspects of subjectivity that we cannot subsume
into the formal depiction of choice. This makes it all the more important
that we begin the exploration of subjective meaning in an arena where it
has largely been ignored.
The title of this book refers to norms, and it may be useful to explain
briefly my motivation for using this term, especially given the likelihood
that reference to norms will be taken to imply that the ethical standing of
institutions is made contingent or relative in some essential way. I use the
 Preface
term ‘norm’ to make clear that this book considers not economic institu-
tions they are, but as they might be if shaped according to ethically
as

compelling ideals. I do not consider these ideals arbitrary, purely subjective,

or customary. Nor do I consider them derivative of group decision-making,
however democratic that might be. On the contrary, the ideals I consider
here arise only when matters of history, tradition, or embeddedness in a
group no longer command conviction. These ideals and the norms that
embody them arise prior to matters of group decision-making, since they
are needed to judge the normative standing of the group itself and of its

decision-making processes. I take it that references to the modern world,

or to modernity, suggest a situation where group-constituting norms
(whether customary or not) no longer command conviction simply because
they are group-constituting; so something different is required if institu-
tions are to embody ethically meaningful ideals.
This something different is the specific norm that makes ethical living
possible outside the group. To live outside the group is to live as an indi-
vidual. This book, then, is about a world where the only compelling norms
are those that incorporate respect for the individual as the locus of subjec-

tive experience. This individual may seek membership in groups, and derive
substantial satisfaction and meaning in life from them. But, in joining a
group, the individual does not make him- or herself its creature. The norm
that expresses the ethical significance of life prior to, and even outside of,
the group is variously referred to as freedom, self-determination, autonomy,
and creative living.
In the current intellectual climate, a difficulty can arise for those who

appeal to the norm of freedom, and of the creative living connected to it,
for judging economic institutions. This difficulty has to do with the univer-
sality of freedom as a foundation for normative judgment. I argue that
freedom is a universal standard, though not in the sense sometimes attrib-
uted to that term. I consider freedom and the possibility of creative living
it affords neither inevitable nor universal to human experience. I do, however,
consider freedom the realization of a human potential. The realization of
this potential depends on one vital condition, which I refer to as the inte-
gration of subjective experience. The dependence of freedom on integration
makes the norm of freedom also a norm of integration, an integration that
many today consider illusory. I will not respond to those who question the
possibility of self-integration except to note that what makes the norm of
integration seem illusory is the extent to which we have failed to achieve
it. This failure should not, however, be presumed to imply the inherent
incapacity of human beings to integrate their lives around that core expe-
rience I will refer to as being your self.
I take it that integration of subjective experience is the essential element
in the idea of reason. Reason is the process that integrates subjective expe-
rience, and it is the expression in thought of the integration of that
experience. This is not, of course, the reason of formal deductive logic, of
 Preface
consistent choice, or of conscious deliberation more generally, however vital
those may be. Rather, this is the reason of mental processes set loose from
presuppositions about what we must know and what we must do, so that
knowing and doing can be made the expression of a subject who knows
and who acts. Reason understood in this way is a cognitive, emotional, and
intellectual capacity inseparable from what I refer to here as the capacity
for subjective experience. This book is written, then, for those who would
judge institutions by their relationship to freedom and reason and, more
concretely, to the creative living freedom and reason make possible.
The freedom I consider here is not normally realized through the policy
of free trade, although historically it is in some ways linked to that policy.
If free trade means that economic opportunity is not limited by arbitrary
considerations, especially those of rank and status, but open to all, then
free trade is indeed linked to the norm of freedom. But, if free trade means
that the economy cannot be regulated in ways made necessary to protect
and secure the capacity for subjective experience, then it is the enemy of
freedom.
In economics, involvement with the idea of individual freedom has most
often meant a commitment to a particular ideology. This ideology has
various forms, but in all of them, the individual is taken as an irreducible
starting point for normative judgment. What this means is that being an
individual is taken to require no special development and no special condi-
tions aside from those that provide protection from others and from the
state. Individuals are what they are, want what they want, and gain satis-

faction where they find it. My earlier volume on Subjectivity in Political

Economy (Routledge 1998) was in large part devoted to undermining this
idea, and offering at least the rudiments of an alternative. This alternative
takes individuation seriously, understanding it as an achievement that
depends in vital ways on the availability of what Donald Winnicott refers
to as a facilitating environment. In the present volume, I continue to explore
the possibility that we can conceive economic arrangements suitable to self-
determination without denying the substantial demands individuals place
on, and the substantial dependence individuals have on, a larger order
including other individuals, the groups they form, the market, and the
state.

I would like to thank Pam Wolfe and Daniel Whelan for their assistance
in the preparation of the manuscript of this book. Material included in

Chapter 8 was first published in The Review of Political Economy, Vol. 10,
No. 3 (July 1998). The section on greed in Chapter 5 originally appeared
in Psychoanalytic Studies (Spring 2000).
1 Introduction

The retreat from the idea of the economy

Social science has lately gotten itself into a muddle over the question of
the separateness of the economy. Much is made of the inseparability of
economics and politics, of the political dimension of economy and the
economic determinants of politics. Much rhetorical ground has been gained
by facile criticism of the idea that the economy stands apart as something
distinct, an entity sui generis. Yet, however valid some of the claims advanced
by those who think this way, in doing so they lose sight of something vital
about the place of the economy in the larger social order.
The claims advanced by those who seek a merger of economics and politics
often have to do with the interrelation of political and economic process in
the shaping of historically specific events and institutions: the politics of
the debt crisis, the political business cycle, the influence of economic interest
groups on political decisions, and so on. Events and processes such as these
combine economics and politics in sometimes complex ways. Social scien-
tists have taken this fact as a basis on which to advance claims against the
idea of the economy as a separable system.
The attack on the separateness of the economy sometimes employs the
failure of laissez-faire as a critique of economic theory. It sees in that failure
an implied necessity for the merger of economics and politics. An argu-

ment such as this motivates much work in political economy (see Gilpin
1987 ). This attitude toward the relation between politics and economics
reflects the close connection between economic theory and the argument
for the market (and implicitly between the critique of economic theory
and the argument against the market). Economic theory concerns itself with
the ideal image of a self-regulating system of private, legally voluntary,
and unplanned transactions between separate and independent persons.
It explores the possibility and implications of self-regulation, and thus of
an economy made separate in its functioning from decisions of collective

or communal units. The success of economic theory could be measured by

the success of its arguments supporting the viability of the market as a

system of want satisfaction, and the virtues of the kind of satisfaction it
brings about.
 Introduction

The ‘viability’ just introduced refers to the coherence of a system

term

of private decisions made without an overall plan. Will these decisions lead
to successful reproduction of the system of want satisfaction and a reason-

able (if not efficient) employment of means? Will means of production and
means of consumption circulate to those who need them or who can best

make productive use of them? These are difficult questions, which have
been the subject of dispute in economics for over two hundred years.
The dispute does not end, however, with the matter of viability. Even if
viable, the system of want satisfaction must exhibit tangible and compelling

virtues. Economists define these virtues along two related but distinct dimen-
sions: private want satisfaction and the growth of social wealth. Economists
argue that markets are uniquely suited to satisfying the private wants of
individuals, and to bringing about the growth of society’s producing capacity
and overall level of wealth production, to making society wealthy. The clas-
sical economists emphasized this second virtue; the neoclassical economists
have tended to put greater emphasis on the first.
The issue of separability involves not only the economy’s capacity to
satisfy want, but also the nature of the want to be satisfied. Separateness
has implications for the nature of want, and the nature of our wants has
much to do with how we go about satisfying them, and with the success
we are likely to have in doing so. The underlying question raised by the

claims for and against separateness is that of the end to which wanting
leads the individual. Within a (separate) economy, the location and end of
want differ from what they are when the economy is embedded, to use Karl

Polanyi’s term (1957), in non-economic relations.

The attack on the separateness of the economy seeks to move us toward

the idea of an economy embedded in non-economic, especially political,
institutions. This way of thinking subsumes wants under the corporate
purposes of institutions with ends of their own. In other words, embed-
ding makes corporate ends and imperatives dominate over individual want.
When it does so, two possibilities arise for the relation of the member to
the group. Either the member’s wants must be identical to corporate need,
or they remain different, and thus in conflict. Embedding implies either a

conflict between the member’s wants and those of the institution or group,
or the identification of the member’s wants with those institutional or group

ends determined without regard to the individual. This will be my main

thesis. In the following, I elaborate briefly.
When we want something, even for our own use, the ends served by our
wanting may be substantially our own, or substantially those of the group
to which we belong. I may want a car to facilitate travel for private ends
such as recreation; or, I may want a car because it will enable me to work
for a political organization more effectively. I may want to make my business
profitable because doing so will increase my income and standard of living;
or, I may want to make my business more profitable because I identify
myself with it, and think of its success as what I want. Thus, our wanting
 Introduction

may express our subordination the purposes of a collective (greater or

to

smaller), or it may express genuinely individual ends.

Although we may experience the collective ends that we want as our
own, in general they are not. That they are not our own does not make
them unimportant to us. On the contrary, they may be of equal or greater
importance than those ends I have characterized as genuinely ours. The
distinction between ends has to do not with how important they are, but
with what they mean. The degree to which we understand this distinction
has to do with the degree to which we separate ourselves (and thus our
wants) from the group and its collective ends. If we do not separate ourselves,
then we cannot know ends of our own and instead experience group ends
as what we want. When the group prevents this separation (and it has

various means for doing so), it denies the individual or separate self an exis-
tence as a distinguishable element of the mental life of the member.

Separation of the individual from the group, individual self from group
identity, is the other side of the separation of the economy.
Put somewhat differently, the member of the group does not find the
identity residing at the core of his being to be something to claim and
value as his own. It belongs to the group. For the member to have ends
of his own, he must have a sense of self distinct from the identity shared
with others. Ends that are genuinely his own emanate out of this sense
of self. The absence of such ends means the absence of self, and the
absence of self means the absence of ends distinct from those shared
collectively.
To express this condition, I will restrict the term individual to those
who have succeeded, at least to some significant degree, in separating
themselves from the group, and thus articulating ends genuinely their
own. While the individual may also be a member, he has other wants as

well, and he has the capacity to distinguish between the two types of
wants.

Traditionally, the two groups most relevant to the problem outlined above
are the polity and the family. Both polity and family have the capacity to
define corporate ends that make demands on members, and conceivably take
precedence over, or even take the place of, individual want. Both family
and polity have important links to the economy.
The classical school in economics used the term political economy to
refer type of economy, one whose scope could not be contained within
to a
a familyunit. When the family subsumes a large part of the social divi-
sion of labour, that division of labour parallels divisions within the family
(of age, gender, and family position). The allocation of types of work among
members confirms (and thus reinforces) the different positions of the
members within the family. These differences express what it means to
belong to and collectively make up a family. Confirming such differences
confirms the reality of the family, and thus of its claims over the life of
the member. In this sense, when the members are subsumed within the
familial division of labour, they work for the family and not for themselves.
Their ends are to confirm and realize the meaning of family life. What they
want is for the family to thrive.
In a political economy, the situation of the member differs from this.
Within a political economy, the division of labour does not follow the lines
of family division; it cuts differently. The division of labour divides and
connects persons unconnected by the ties of family life, strangers rather
than relatives. This means the separation of the economy from the family
within which it had been embedded.
I choose the term ‘separateness’ to avoid any suggestion that our ability
to consider economic relations sui generis implies that the economy is

somehow an independent system. Separateness need not imply independent

of, or indifferent to. Thus, when we speak of the separateness of persons,
we do not imply the absence of dependence, or the indifference of one

person to another.
At a minimum, separateness implies meaningfully distinct from. When
we separate, we place things apart along some important dimension. Thus,

politics and family life may be mutually dependent, but they are not
the same thing; and understanding how they are different is important.
A family dinner is not equivalent to the act of voting, even if the nature
of family life varies with variation in political arrangements. Nor is the
family dinner a contract or (even implicitly) exchange, although its connec-
tions to forms of exchange are important.
Critics of the idea that we can separate the economy have had little diffi-
culty discovering ways in which our economic lives depend on nature,
politics, culture, family relations, and so on. Similarly, students of family
life and politics can readily demonstrate the operation there of economic
calculation, particularly when they have made the prior assumption that all
human interaction is understandable as the expression of constrained choice.
The clear waters through which economic theory once perceived the oper-
ation of the economy are easily muddied. The price of oil does depend on
the political situation in the Middle East; the demand for houses and cars
does depend on the organization and ends of family life; the location of
investment does depend on political ‘climate’. Economists know all this,
yet some of them persist in the effort to explore the logical properties of
the (market or capitalist) economy considered in the abstract. This abstrac-
tion separates the economy from other dimensions of social life and from
historically contingent circumstance. Such abstraction, the very stuff of
which economics has been made from its inception in the work of the
classical economists and their critic, Karl Marx.

The liberal image of society

I think it reasonable to seek anexplanation for the peculiarities of economic
theory in the larger framework of the liberal image of society. 1 It is within
this image that the separateness of the economy and the abstractness of
economic theory make sense.
The liberal image identifies a core at the centre of its normative judg-
ment of institutions: the idea of the self as a centre of initiative and as the

animating principle of social interaction. This idea involves notions of self-

determination and the separateness of persons, ideas not always well
articulated or understood, yet, nonetheless vital for the liberal account of
social arrangements. Persons with a sense of self want and act. Normatively
compelling institutions sustain the idea that wants stem from the person,
and that persons take initiative in satisfying their wants. The ability to
sustain this idea gives meaning to social order, and makes it whole. In
this sense, the liberal image considers self-determination to be the essence
of social order.
The liberal image ties the separateness of the economy to a particular
construction of human interaction. The key to this construction is disin-
terest. Each individual acting in the pursuit of his or her private ends takes
an interest in others only so far as they might contribute in some way to

the successful attainment of those ends. So long as others contribute in this

way because doing so is also in their interest, we might be tempted to say
that the system is one of voluntary transaction. To draw this conclusion,
however, we must make a special assumption about interest, that it is in
some sense genuinely that of the individual him- or herself.

The classic example of failure of interest along these lines is an interest

driven by desperation. Those who must exchange their labour to secure
their survival have an interest in doing so. If they are the legal owners of
their labouring capacity (they are legally free men or women), then we can
also say that the resulting transaction is legally voluntary. Can we also say
that the ends they achieve through contract are their own, and thus fulfil
the promise of the market to emancipate the individual from the group so
that he or she can pursue the self-interest appropriate to an individual? We
cannot if by individual we mean more than the legal standing associated

with property ownership. Legal standing only expresses and protects a quality
of being, the quality of being a centre of initiative. We cannot, then, so
easily draw conclusions about the voluntary nature of exchange, the exist-
ence of choice, and the triumph of freedom from the legal status of the

participants.
This is the point Marx tries to make in the language of exploitation, a
point he adopts from his classical predecessors, especially Adam Smith.
Marx’s awkward language expresses a conviction that the liberal project is
fundamentally flawed because the separation of the member and his consti-
tution as an individual frees him not from exploitation, but from his true
identity as a part of a community. Here, we will not follow Marx down a
road, which, in the end, leads into an idealized past of immersion into the
group. We do, however, take seriously the problem of identifying a self-
interest that can make choice and freedom meaningful and not merely the
form in which the worker seeks to acquire his subsistence when his tradi-
tional recourse to the community is no longer available.
The normative standing of the separate economy depends essentially on
our ability to identify the self-interest to which I have just referred. The

disinterest that I suggest above characterizes interaction in a separate

economy (which is a market economy) and has a normative significance
when it means that participants have identities of their own to nurture
and express in life and in interaction with others. So far as such an
identity exists, and has normative significance for us, we must design insti-
tutions of want satisfaction so that they enable participants to satisfy needs
derivative of individual rather than group identity. This requires institu-
tions that incorporate interest in the self, and the implied disinterest in
others.
It needs to be emphasized that disinterest in does not mean indifference
to others. To satisfy his or her needs, the individual must contribute some-

thing to satisfying the needs of others, and thus may take a great interest
in them. But, this interest is derivative of, and thus a part of, self-interest,
and not the collective interest implied in adopting a group identity. If
disinterest does not mean a lack of interest in others, neither does it imply
a predatory interest in them. On the contrary, I have chosen the word ‘dis-

interest’ to express the lack of an interest in the other except as a possible

source of things that might offer an opportunity for need satisfaction. A

predatory interest in others, such as the interest we associate with domi-

nation, expresses the opposite of disinterest, and thus raises a special set of
problems. We need to consider how predatory interest, which is a very
acute interest in others, might come to replace disinterest, and what arrange-
ments can protect against the transition to predatory interest, or at least

its expression in relations of oppression and exploitation.

To protect the individual from the predatory interest of others is to
protect individual rights. The idea of right plays a primary part in sepa-
rating the economy, since the separate economy is essentially a system of
property right. Property right, taken in the abstract, may not, however
offer sufficient protection from oppression, and if it does not, right must
do more. In the following, I consider not only the nature of want and
self-interest typical of an individual rather than a member, but the regime
of right that secures individual integrity and the possibility of satisfying
specifically individual want.

Individual want

We can question the quality of satisfaction available to the individual taken

outside the context of group life and of the connectedness felt within the
group. Clearly, this is not the satisfaction of group connection. Does this
mean that satisfaction of individual want offers at best a poor substitute

for connection and belonging and for the feeling of worth that derives from
the moral standing of a community? If individual satisfaction offers only a
poor substitute for group connection, then it offers at best a poor substi-
tute for the substantive ends available in the context of the group. Then,
a normative political economy in which individual satisfaction plays a large

role has little appeal.

Before we embrace this conclusion, it is worthwhile to consider more
closely the satisfaction available to the individual outside the group. The
distinction between the satisfaction of the individual and that of the member
derives from the distinction in the ways of life available to them. This
meaning will, of course, vary with the kind of group. For our purposes, we
are concerned with those groups that define ways of life for their members,

since it is in defining ways of life that the group establishes that connec-
tion to the group is what the member wants.
The group way of life has a moral standing since to live within it and
according to its dictates is to live for the community and not for the self.
The moral standing of the community then becomes the moral value of the
member, whose membership and participation is his or her end, the end
whose achievement yields satisfaction. This moral standing is lost when the
individual puts aside the prior determination of his or her way of life in
favour of the kind of satisfaction available outside the group. For this reason,
the latter will seem, from the standpoint of group culture, to lack moral
standing or any normative significance derivative of connection to a
moral order.
Does individual satisfaction have any value in itself? Does the individual’s
connection to things that offer satisfaction have any greater significance
than that of a poor substitute for his connection with his community? What
becomes available once ways of life are no longer prescribed, once conduct
and relating cease to be matters of the group’s moral significance and the
satisfaction to be had in connection with it? One way to answer these ques-
tions is to consider how the primary significance of the group for the
member lies in its ability to solve the problems of living: why to live, how
to live, and more generally what gives life its meaning. Indeed, I can put

this point even more strongly. The primary significance of the group is
that, in it, no such problems need ever arise, at least in normal times and
for those aspects of conduct and relating that matter most. Satisfaction in
living, what the member wants and what provides satisfaction, is confirma-
tion of the solutions to the problems of living already given and provided
for him.
We can say, then, that, in contrast to the group member, what provides
satisfaction for the individual, what he or she wants, is precisely to discover
solutions to these problems of living that are not already given. The fact
that they are not already given makes them problems, and creates the oppor-
tunity to lead a life devoted to discovering solutions. Further on, I will
(following Donald Winnicott) refer to the way of life organized around
the pursuit of this kind of satisfaction as creative living. I will suggest that
it is satisfaction in creative that the individual wants, and that is
living
expressed concretely in a set that defines a way of life.
of wants
The difference between being in the group and being an individual is,
then, the difference between determinacy and indeterminacy of ways of life.
Where predetermination is the primary virtue of group membership, or of
membership in those groups that define ways of life, indeterminacy is the
primary virtue of individuation. I will not here insist that one or the other
of these virtues has a primary claim, that one is in some sense true and the
other false, though I will suggest a sense in which one is universal and
the other is not. I will suggest how institutions can be organized to realize
or instantiate the virtue of indeterminacy, which is to say of individual

autonomy and creative living. I will also say more about the nature of the
satisfaction available to the individual, of what individuals want, and of
what meaning their wants have for them and for the larger system of inter-
action taken as a whole. When we place a value on individual satisfaction,
we place a value on the institutions and interactions through which that

satisfaction can best be achieved. This value placed on institutions makes

them normatively compelling so far as creative living is the norm.

A note on the idea of an economy

When we speakof economic arrangements and how they can or should be,
we use the term‘economic’ as if there were many possible economies,
different in important respects, yet all in some sense economies. This raises
the question, What do these different arrangements have in common
that justifies our referring to all of them as economies? The usual answer
to this question brings into play the idea of a system of want satisfaction.
An economy is a set of institutions through which the means to satisfy
wants are produced and distributed. Terms such as ‘provisioning’ and

‘material exchange’ attempt to speak of the process of economy in general

terms, which is to say terms that do not already specify the kinds of wants
to be satisfied, or how the means to satisfy them are produced and distrib-
uted. Speaking this way, however appealing it may be, nonetheless causes
problems.
Most notably, these problems have to do with the idea that we can speak
of need as a general matter, without specifying its nature and ends, and
that the need spoken about in this way can be satisfied, if to different
degrees, through various arrangements. Put another way, speaking of
economy in this way assumes that the needs and the institutional arrange-
ments for satisfying them are separable. Yet, it is a main theme of the

following discussion that this is not the case. If arrangements for want satis-
faction are specific to the kinds of want to be satisfied, so that the so-called
‘economic problem’ is not only about how well wants are satisfied, but also
about the nature of want itself, then what does it mean to speak of ‘the
economy’ or ‘economic arrangements’?
 We might do better leave the term ‘economic’ aside in favour of the
to

more concretelanguage that already invokes the specific arrangements and

the specific kind of need for which they are suited. Thus, we will speak in
the following about the link between individual need and the market,
arguing that in satisfying the need peculiar to an individual, the market
must play a significant role. Rather than speaking of economic arrange-

ments, we might speak of the different ways the market is linked to and
limited by non-market institutions. An alternative is to continue to use the
term ‘economic arrangements’ as a general way of speaking about markets,

which is to say a way of speaking about arrangements for satisfying indi-

vidual need that does not yet identify the specific character of those
arrangements. In the following, I will, by and large, restrict the use of the
term ‘economic’ to this sense, so that there will be no presumption or impli-

cation that it is useful to speak of want or of the means for satisfying want
as a general matter.
Part I

Foundations
2 Ends

Introduction

The fundamental problem for normative political economy is to establish a

meaningful foundation for judging economic institutions. Of those available,
the most prominent appeals to a notion of individual satisfaction usually
equated, as a practical matter, with choice. Equating satisfaction with choice
leads naturally into a notion of freedom, one that makes freedom synonymous
with choice (we are, or should be, ‘free to choose’). The entire construct
is, however, poorly grounded since it does not tell us what is meant by
satisfaction. More specifically, it does not tell us what is to be satisfied
or what constitutes the self whose satisfaction has normative significance
(Levine 1998 ).
To avoid this problem, some have attempted to make satisfaction a purely
personal matter. But it is one thing to suggest that what specific goods or
actions yield satisfaction depends on who is to be satisfied, and another to
suggest that the ideal of gaining satisfaction has no intersubjective meaning.
If this were the case, the term could hardly offer any basis for normative
judgment. For satisfaction to provide a basis for normative judgment, we
must be able to say something about what it means to be satisfied that

applies not only to this or that individual, but also to the experience of
being an individual regardless of the particular context. On this matter,
the prevailing ideal has little to offer.
The older political economy did not make individual satisfaction the end
of economic organization, opting instead to focus attention on national
wealth, economic growth, and economic development. While a connection
may exist between economic growth and satisfaction, it was not clearly
established, except insofar as growth was seen as the path out of poverty
(the ‘savage state of man’). Indeed, it is just at this point that the older
political economy seems least convincing. To be sure, it offers a definite
answer to the question, What is the end of economic activity? The end is

wealth. But, what makes wealth an end? And, what is accomplished by the
pursuit of wealth?
In answer to these questions, the classical theory offers us two related
ideas: freedom from want (Smith) and freedom from labour (Marx). While
 Foundations

these answers are compelling up to a point, they also seem to assume what
needs to be established. That is, they take wealth and the pursuit of wealth
to be the solution to, rather than the source of, the problem. Thus, they

assume that without wealth man lives in want, and without wealth man

must labour for his subsistence.

These assumptions are convincing neither on historical nor theoretical

grounds. For the former, we might refer to Marshall Sahlins’ description of
what he terms the ‘primitive affluent society’ (Sahlins 1972 ). The evidence
that he presents strongly contradicts the assumption that outside of
wealthy society man lived in want and was required to work long hours
to satisfy basic need. On the contrary, prior to wealthy society wants were

limited, as was the time devoted to acquiring the things needed to satisfy
them. It is the need for wealth that puts men to work and leaves them
feeling deprived when all they can acquire is the subsistence available
outside wealthy society. If wealth is the end of economic activity, then
it cannot be for the reason offered us by the classical economists. Even if
we accept the link between well-being and satisfaction, we still need to

know what sort of satisfaction can be provided by wealth, which is to say

what we need wealth for, and what kind of satisfaction carries normative
significance.
Amartya Sen has recently argued that the attention devoted to income
and wealth as the primary or exclusive measures of well-being is not justified.
Sen suggests we might do better if we consider what the use of wealth
is meant to accomplish, and take this to be the normative end of economic
institutions. It is not a matter of wealth as such, but of who we can
be and what we can do, and of the role wealth might play in enabling us
to be and to do. We can, then, judge economic arrangements by the set

of ‘beings and doings’ they make possible (Sen 1992 : 39). Judging institutions
this way takes us one step back from amounts of income and wealth
in the direction of ends we might claim have normative significance in
themselves.
In this chapter, I consider these and related ends sometimes used to judge
economic arrangements. Each, I think, has something to offer. At the same
time, something important remains not so much missing altogether as
implicit in the ideals explicitly put forward. I hope to make this clear as
I briefly consider some of the ideals that have been advanced for judging
economic arrangements.

Basic need

For Adam Smith, the growth of the nation’s wealth is a means to assure that
its citizens will not live in poverty. This makes unmet need the basis for
judging institutional arrangements. Our first problem, then, is to specify the
sort of need which, when unmet, implies a normatively significant failure.

This is no easy matter. Is normative failure always implied when a need is

 Ends

not met? An argument along these lines might be made, but it is not the
argument I have suggested comes down to us from the classical economists.
For the latter, only certain needs carry the burden of obligation we associate
with the judgment that institutions ought to assure satisfaction. These are
the needs we judge to be in some way essential or basic.
The idea is well expressed by a Director of the International Labor
Organization as quoted by Sidney Dell: ‘development planning should
include, as an explicit goal, the satisfaction of an absolute level of basic
needs’ (Dell 1979 : 291-2). Similarly, in the words of Frances Stewart:

The failure of the economic and social system to achieve a basic

minimum condition of life for hundreds of millions of people in the
third world has led to widespread recognition of the need to give
primacy to securing universal access to basic social and economic goods
and services.
(1989: 347)

Stewart goes on to suggest that, while there may be some disagreement

about how to define basic needs, ‘there is general agreement about a “core”
which includes food, water, health, education, and shelter’ (348). However
compelling this may seem at first glance, the terms ‘food’, ‘water’, ‘shelter’,
‘health’, and ‘education’, referring as they do to very different objects in
different contexts, tell us little about the needs and how they will be satisfied.
Dell comments that even if we accept the possibility that there is a
universal standard for nutrition, ‘as soon as one includes such items as
shelter and clothing, and even household equipment and furniture, . the
. .

line to be drawn between basic and non-basic needs is bound to be arbitrary'

(293). If we cannot distinguish between basic and non-basic need,
then we must either give up the idea that there are specific needs whose
satisfaction is the end of economic arrangements, or we must make the
satisfaction of any and all want a matter of normative significance.
It interesting that the classical economists
is offered a solution to the

problem of specifying which needs are basic and which are not. This solution
is embedded in their notion of subsistence. In different ways, Smith,
Ricardo, and Marx all argued that, for a given society at a given point in
time, we can identity a basket of goods needed to support human life in
the way human life is understood at that time and in that place. The
contents of this basket vary with customs and norms prevailing in particular
historical settings so that subsistence is only well defined with reference
to contextually specific ways of life.
Subsistence need is customary need. Adhering to custom establishes the
individual as a group member and implies the domination of the group
over the member. Such need is compelling not because we cannot exist

physically if it is unmet, but because we stand to lose our connection to

the group. At stake in subsistence is not so much physical as cultural
survival. Basic, then, means basic to cultural or group existence. Basic need
becomes arbitrary, as Dell observes, only when we move away from the
group and from the cultural specifications that bind the member to it.
Terms such as food and shelter disconnect need from the specific cultural
context emphasized in the classical notion of subsistence. They make an

abstraction not implied in the notion of subsistence, and it is this abstraction

that causes the problems. Yet, at the same time that the basic needs
idea is more abstract than the subsistence idea, it is also more concrete.
Because it does not involve any specification of need within a cultural
context, it sees need as physiological rather than social. By contrast, the
classical subsistence notion does not depend on a physiological conception
of need. 1 Instead, it calls upon the idea of a way of life consistent with
the expectations of participating in, and gaining appropriate recognition
in, a particular social practice as that is defined in a particular cultural-
historical setting.
This connection to social practice and defined social position has an additional
significance, which also has relevance for those concerned with ends.
Subsistence need imposes an obligation. Consider the following description
of access to food in primitive society:

Food is life-giving, urgent, ordinarily symbolic of hearth and home, if

not of mother. By comparison with other stuff, food is more readily or
more necessarily, shared. Direct and equivalent returns for food are
. . .

unseemly in most social settings: they impugn the motives of both the
giver and the recipient.
(Sahlins 1972 : 215)

To refuse someone’s need for food either denies his membership in the
group, or fails to meet an obligation to him as a group member.

The same conclusion arises in the more advanced world of Europe prior
to the rise of capitalism, which R.H. Tawney (1962: 23) describes in the

following way:

Each member has its own function, prayer, or defense, or merchandise,

or tilling the soil. Each must receive the means suited to its station,
and must claim no more. Within classes there must be equality; if one
takes into his hand the living of two, his neighbor will be short. Between
classes there must be inequality; for otherwise a class cannot perform
its function, or– a strange thought to us– enjoy its rights. Peasants
must not encroach on those above them. Lords must not despoil peasants.

Craftsmen and merchants must receive what will maintain them

in their calling, and no more.

In some settings, the rule is sharing and a rough equality. In others, the
rule is a more formal structure of obligation binding together different
ranks of society. In either case, however, we can know what people need
by knowing the society in which they live and, where appropriate, the rank
they occupy. We can know what humans need to be capable of living a
human life, and we can see how those needs place obligations on others.
Here, basic need (understood in the language of subsistence) is (1) well
defined, and (2) carries the moral force of obligation. The idea of basic need
has a special affinity with premodern society precisely because in such society
needs (1) do not change (or do not change very rapidly), and (2) are defined
for and not by the member.
The element of obligation enters as a result of the same connection to
the group that allows us to define subsistence need. In the premodern
setting, we deal with members and not individuals. We deal with structures
of want satisfaction in which the division of labour establishes personal
connections and dependencies. The primary economic unit is the small local
community and not the larger national or international market. Obligation
makes sense in this setting of personal dependence and community membership
in a way it does not in a setting of separate individuals dependent on
an ever-expanding system of exchange.

The qualities of basic need just considered have practical advantages for
those involved with development planning and development organizations.
These advantages make the notion of basic need attractive as a solution
to the problem of identifying the ends of development and measuring

progress toward those ends. Yet, something important is missing. Basic

needs, whether defined in physical or cultural-historical terms, are independent
of individual identity. They are not the needs of individuals, but
of biological organisms or group members. Missing is the element of self-determination
in the activity of defining and satisfying need. What makes
basic need work in a premodern setting makes it fail in the modern world.
Satisfying basic need binds us to the group and makes us members; it does
not establish that separation from the group that makes us autonomous

persons. Basic or subsistence needs are not chosen; they do not separate or
distinguish individuals. By contrast, once needs come to incorporate the
element of freedom, ‘basic needs’ are neither well defined (we cannot know
what a basic need is) nor are they inevitably well satisfied for all members,
even in normal times.

Capabilities
The idea of basic need leaves out of account the element of need arguably
most important if we are to understand the connection between need satisfaction

and the normative goals of a political economy. The missing element

begins to emerge as part of an idea recently advanced by Martha Nussbaum
and Amartya Sen. This is the idea that our end should be arrangements
capable of assuring, so far as possible, that individuals can develop a set of
capabilities that enable them to act in a characteristically human way.
 Nussbaum (1995: 72) suggests we identify the normative end by
answering the question, ‘What are the forms of activity, of doing and being,
that constitute the human form of life?’ From knowledge of these forms of
activity we might derive a set of capabilities that enable creatures to live
such a life. Having these capabilities allows us to be human. If we cannot
develop these capabilities, we cannot live a fully human life. Institutions
should be designed, then, to assure so far as possible the development of
these capabilities as well as the opportunity to exercise them, which is the
activity of a distinctively human creature.
Nussbaum considers these capabilities universal in the following sense.
Human beings living in specific contexts with specific ways of life, values
and so on, always have a conception of what it means to be human, and
thus, of how a line can be drawn separating the human and non-human
worlds. Universality in Nussbaum’s sense follows from the ‘idea that people
in many different societies share a general outline of such a conception’
(1995: 73). This idea is in the nature of a premise, one whose validity we
can no doubt question. The line between the human and non-human can
be drawn more or less sharply, depending on the way a society situates the
human in its natural environment. I am less concerned here with the validity
of the premise, however, than I am with the sort of universality it suggests,
which is universality in the sense of common to different human settings.
To see the implications of this notion of universality more clearly, let me
move on to the specific capabilities Nussbaum identifies as common to

humans whatever their culture, values, and ways of life.

Nussbaum (1995) offers a list of capabilities that together define what
it means to lead a human life. The list includes items close to the notion
of basic need, such as health, nourishment, shelter, and life expectancy. It
also includes items that may or may not connect to the idea of basic need.
Moving well beyond the notion of basic need, Nussbaum includes capacities
such as those that enable individuals to form attachments with things
and persons, to experience love, grief, longing, and gratitude. She includes
education that secures the ability to think, reason, and imagine (assuming
of course that these are capabilities attained through education). She also
considers the capacity to form a conception of the good life, and to engage
in critical reflection in the planning of one’s own life. Nussbaum’s list
includes items normally associated not with human life in the abstract, but
with the kind of human life led by those who have, to some degree at least,
emancipated themselves from the rule of custom and established themselves
as centres of autonomous judgment and self-determination. In contrast

to the notions of subsistence and basic need, the notion of capabilities, as

summarized by Nussbaum, seeks to incorporate the element of freedom into
the kind of need that carries normative significance.
It might be more accurate to say, of course, that making freedom
an element of need is not implied in the capabilities approach, though it

is included in Nussbaum’s list. There is certainly nothing in the notion of

capabilities per se that requires they express the being and doing of a creature
to which we would attribute freedom in some meaningful sense of the
term. Creatures that are not free also have capabilities. Whether they are

human or not may be said to depend on whether they are capable of freedom,
but if that is so, we might expect more from the capabilities approach
specifically about freedom. I will proceed, nonetheless, on the assumption
that implicit, and to some extent explicit, in this approach is the idea that
being human means having the capacity, or the set of capacities, required
to be self-determining and to make self-determination the primary force in

conduct and relating.2 We need, then, to consider freedom as a normative

end, and I now proceed to do so, beginning with the somewhat restrictive
notion of freedom usually associated with the economy.

Freedom

Originally, freedom in economics connotes the liberty of commerce, or free

trade. The term ‘free trade’ refers first to the elimination of barriers to

production and trade associated with premodern social institutions and the
ends appropriate to them. By extension, the term comes also to refer to
the elimination of all public regulation of trade, especially international
trade, other than that associated with protection of property right. Polanyi
(1957) captures this notion of liberty when he speaks of the disembedding
of the economy, more specifically the market, from non-economic social
relations, especially those of the state, but also those of the family or kinship
3
group. Disembedding the market from more traditional forms of dependence
makes it a system of impersonal relations whose end is not the
reproduction of a group, but the satisfaction of individual want. Market
relations do not submerge the member into the group, but reinforce individual
autonomy and the separation of persons. This is because market
relations involve independent property owners acting at their own initiative.
Individual freedom, in the sense of the right to own and dispose of
property, is recognized for all parties. This makes market systems potentially
corrosive of social arrangements resting on status differences and
personal dependence.
Disembedding the market allows property owners to interact with one
another on the basis of purely economic considerations oriented to the
production, circulation, and accumulation of wealth. The ends of social
cohesion built out of social status and group affiliation no longer limit the
property system or impose themselves on it. As Marx and Engels emphasize
in the Communist Manifesto, it is precisely because the free market is
indifferent to the social purposes of cohesion in traditional society that
it is so corrosive of those societies. It is also because the market connects

persons without regard to their status in a traditional hierarchy that it

undermines hierarchy, and with it the organizing structure and intrinsic
significance of the traditional order.
 The ends of social cohesion linked to more traditional social structure
limit who can engage in production and trade, the way production is organized,
including the technology employed, and the price at which the
product sells. ‘At every turn, therefore, there are limits, restrictions, warnings
against allowing economic interests to interfere with serious affairs’
(Tawney 1962 : 32). These older limits on who can trade bring to mind
other limits only recently overcome that, for example, prevented women
from property except through their husbands. Limiting the property
holding
rights of
women secured the traditional family structure and imposed

the demands of that structure on the organization of markets, just as limiting

who could produce and sell, for example shoes or carriages, to guild members
subordinated exchange to the demands of protecting the prerogatives of the
guilds. The idea of the free market also plays its part, then, in undermining
the traditional family structure along with the subordination of women
implied in it.
The disembedding of the economy implied in the policy of free trade
has a broad significance for the norm of freedom we associate with modern
4
society. Modern society establishes freedom of the individual from prior
determination according to social status or social position. The alternative
to this prior determination is that the individual is, in an important sense,

undetermined, or yet to be determined by a process in which he or she

plays a significant part. The freedom associated with this condition is what

Erik Erikson refers to as the ‘freedom of opportunities yet undetermined’

(Erikson 1964 : 161—2), and it will play a large part in the argument I
develop here. To institute freedom understood in this way requires that
social institutions allow and enable individuals to emerge from their embeddedness
in a group organized around the imposition of group-constituting
customs as norms of conduct. It also gives us a first suggestion of what

might be meant by opportunity, for example, ‘equal opportunity’, which

plays such a large role in discussion of the design of appropriate economic
institutions.
In the way of life that emerges with the decline of traditional society,
the individual has a place in the larger world of others, an occupation, a
sense of identity recognizable by others and relevant to them (Erikson 1980 :

Chapter 3 ). This place and identity are not, however, given to the individual
independently of his or her will and self-experience. Rather, the
individual plays an active part in finding, even shaping, a place in the
world.
Institutions of private property and exchange take on significance in relation
to the normative end of freedom so defined. Without markets, it would

not be possible for individuals to pursue the end of realizing those capacities

uniquely theirs in a context of interaction with other persons, and of

the opportunities and constraints those persons represent. Saying this does
not by itself resolve the question of the kind of market appropriate to the

realization of opportunities yet undetermined, therefore of the status of

the ‘free’ market in the narrower sense in which that term is used today.
The significance of freedom in the context of the market, once the traditional
limitations with which the classical economists were concerned have
been by and large removed, becomes an important question.
Given the considerations just advanced, markets cannot be treated as
simply, or even primarily, the means to acquire things whose consumption
may enhance satisfaction, as those influenced by the utilitarian philosophy,
and the choice-theoretic apparatus that philosophy has lately spawned,
imagine they are. Freedom does not derive from increasing or maximizing
satisfaction, unless we mean specifically satisfaction of the need for freedom
itself. We can hardly assume that satisfaction of one person’s need to enslave
others constitutes satisfaction of a need incorporating freedom. If satisfaction
is connected to freedom, then we need to know something about how
the need for freedom becomes a need for things, and, more specifically, for
things acquired through exchange.
When does the satisfaction of need through the use or consumption of
things contribute to our experience of ourselves as free, and when does it
express our predetermination by group-constituting customs or the domination
of others? Put another way, what sorts of needs do free individuals
have? Criteria for normative judgment should incorporate an answer to this
question.
Even if freedom cannot be subsumed under or replaced by the idea of
satisfaction, that does notmake satisfaction unimportant. Rather, it is a
matter of what we mean by satisfaction, of what brings satisfaction, and

of what about ownership and use of property has normative significance.

Answering these questions in a utilitarian or choice-theoretic way is simple
enough, since we need only refer to the individual taken as an irreducible
premise. Concern for freedom, however, takes us further since it requires
that we consider how the ownership and use of things brings (or does not
bring) satisfaction because it does (or does not) incorporate the element of
self-determination.
In political economy, we are not used to thinking this way about satisfactions
and the use of things. The alternatives available to us for thinking
about the use of things (basic need or the notion of choice developed out
of the utilitarian philosophy) lead us away from consideration of the relation
between autonomy, property ownership, and satisfaction in consumption
or use. I have elsewhere explored this problem at length (Levine 1998 see ,

also Hegel 1952; Winfield 1988 ). Here, I will only mention that the subjective
meaning and significance of the use of things is no simple matter, and
may either express individual freedom in the sense suggested above, or it
may not.
What has been said so far applies to the market, and to the free market
understood as the market oriented toward individual want satisfaction. But,
political economy has taken the term ‘free market’ and the concept of
freedom appropriate to it considerably further than this to refer to a market
having nolimits other than those of individual want and available resources.
Doing somisses an important point about the market: that it is a system
of mutual dependence and not merely a means for redistributing things in
relation to individuals.
The market is a system of mutual dependence in two senses. First it is
connected to a structure of production in which each part is dependent not
only on other parts, but on the whole. Second, exchange has significance
for the individual’s need to establish his or her reality as a person (owner
of property recognized in the eyes of others). This holds particularly for
property in labour, exchange of which expresses the labourer’s right and
realizes the labourer’s freedom as owner of his or her labour. In other words,
the market is a system of reciprocal or mutual recognition.
That the market is not simply a sum or aggregate of two-sided trans-
actions, each conceivable in isolation, is important, and not always well
understood in models of the price system popular in economics. The classical
economists had a greater awareness of this reality. 5 If the classical
economists are correct in imagining that the market is a system as a whole,
then the possibility of individual transactions depends on systemic factors
over which individuals have no control. Security of the market, then, depends

on the presence of an agent capable of concerning itself not with the particular

transaction, but with the system as a whole. This agent is the

6
government, state, or public authority. Even a free market in the sense of
one disembedded from ends other than those linked to individual want

cannot stand alone; that is, it cannot be free in the now popular sense of

unregulated.
If the market is a structure or system in this sense, we may wonder how
the needs developed by those participating in it can be thought to contain
the element of freedom I emphasize here. In the classical idea, the individual's
need depends on his or her position in a division of labour. The
baker needs flour to bake bread, not to express an individual identity and
the freedom of self-determination. The emphasis on an already given
division of labour into which the individual must find his or her place fits
well with the idea of subsistence as the needs felt by members rather than
individuals.
Clearly, if the division of labour and the individual’s place in it are both
given, we can hardly consider the needs that arise for the individual as part
of that division of labour the needs of an autonomous agent. So far as the
classical economists construct the problem in this way, and to a significant
extent they do, their construct cannot be of economic arrangements

embodying freedom, whatever the emphasis placed on free trade. For the
market organized in relation to a system of mutual dependence in production
to establish a setting for freedom, two important conditions must be

met. First, the individual’s place in the market must not be predetermined

for him, but a matter of self-determined choice. Second, the structure itself
cannot be altogether given to the individual. Individual decisions based on
individual identity must shape as well as be shaped by the vocations available
in the market. The division of labour cannot be an overwhelming and
inert objective reality for the participant.
An important example of how the division of labour might be shaped
to meet individual need rather than demanding adaptation of individuals

to it involves occupations or occupational settings that endanger the worker’s

physical oremotional well-being. Thus, were individuals able to refuse vocations

that endanger their well-being, their refusal would require adaptation
of the structure as a whole to a situation in which certain kinds of labour
are unavailable. The givenness of the structure also breaks down when individuals

can introduce new vocations, or new variations on existing vocations,

that contribute to reshaping the system of work and the division of labour
it expresses. The freedom to refuse to work and the freedom to work differently
make the division of labour a setting for individual self-determination
that it is not in the classical construction.
In considering the market as something more than merely the sum of
transactions aimed at rearranging things in relation to persons, we need
also to consider how the relations peculiar to it play a part in constituting
the participants as property owning persons. The freedoms we associate with
markets (often summarized under the heading of choice) do not exist outside
of the possibility that individuals can own private property, which includes
the possibility of disposal through exchange, whether regulated by government
or not. Furthermore, the equality peculiar to modern market-centred

society is derivative of the equality of exchange, as Marx emphasizes (albeit

in a disparaging way). This is the equality of property owners taken as

property owners, regardless of the amount and kind of property they own
(assuming, of course, that they own property of some consequence, for
example a labouring capacity that has a significant market value). Thus,
the market incorporates a structure of equality and inequality, where the
two are closely connected, even mutually dependent.
To understand better the normative significance of the market, it will
help to consider further the equality and inequality just mentioned. It is,
after all, the peculiar combination of equality and inequality that marks
the achievements we associate with modern society, and with the economic
system characteristic of it.

Equality
The differences that have significance for premodern society embody both
a need for wealth and a limit to its accumulation. The need for wealth

stems from the necessity of inequality to social cohesion, the limit on wealth

stems from the givenness of the structure of inequality and of the hierarchy
of social position. In those premodern societies sufficiently differentiated to
need wealth as a marker for social hierarchy, wealth sponsors difference.
This makes the amassing of wealth a meaningful activity, but only up to
the point consistent with customary social differentiation. Then, you have
enough wealth when you have enough to establish your position in a well-
defined, and often stable, hierarchy of rank. Before capitalism, the question:
How much wealth is enough? could be answered in principle, for a particular
society at a particular historical moment, even if in some cases the
amassing of wealth threatened to get out of hand. Under capitalism, and
therefore for modern society, this is no longer the case. Now, ‘enough
wealth’ becomes a contradiction in terms.
It would be easy enough to attribute this result to self-interest. If we
assume that humans are ultimately motivated by self-interest, and that self-interest

is served by the accumulation of privately owned wealth, then a

system of economic organization that centres on allowing the free pursuit
of self-interest must be one marked by a tendency toward the growth of
wealth. By curbing self-interest, premodern society places a limit on the
amount of wealth it can attain. By freeing self-interest, modern society
breaks apart that limit. The basic motive exists under both conditions, the
7
only difference is in the constraints it does or does not face.
An alternative line of argument focuses attention on the specific end that
amassing private wealth might accomplish, that is, on the specific interest
it might serve. We need not assume that all self-interest is served by wealth
accumulation. We may wonder instead what end is served in that way and
why that end takes on such importance with the expansion of the market
and the dependence of livelihood on exchange. If we proceed in this way,
we need not make capitalism the only form of economic organization fully

consistent with human nature, but a form of economic organization consistent

with a specific human aspiration. We might then ask how that specific
aspiration informs significant normative goals.
In attempting to identify the specific aspiration bound up with wealth
accumulation, it will help to return to the idea that wealth provides not
the means of subsistence, but the means for establishing difference.
If we connect wealth to the differences between persons rather than
the satisfaction of subsistence need, then the question just raised about the
kind of self-interest gained in its acquisition becomes the following question:
What kind of difference is established through private wealth
accumulation?
Since what distinguishes difference under capitalism is its connection to
self-determination (you are not born to your position, but achieve it), it
follows that the relative positions marked by amounts of wealth are open
to persons independently of birth or other natural condition. In other words,

differences under capitalism arise for persons who are in an important sense
equals, at least equal in their initial access to difference. Then, the differences
under capitalism must be consistent with an underlying equality of
status, expressed in the idea that all persons have equal opportunity or equal
access to positions, and to the income and wealth associated with them.

Such equality is, of course, consistent with outcomes in which different

individuals own vastly unequal amounts of property, and in that sense are
unequal. This combining of equality and inequality is the kind of difference
attained by wealth holders in a modern, capitalistic, society.
Sen uses considerations such as those advanced above to support the claim
that equality is part of the foundation for all normative theories, which
differ not in their judgment of equality’s importance, but in what equality
is important, or as he puts it ‘equality of what’ (Sen 1992 ). Thus, even if
equality of income and wealth is not an ideal, equality of right or of persons
in some other dimension is. Yet, all are not made equally persons, except
in formal sense, merely by endowing them with the same rights. If being
a

a person involves a specific internal capacity, the capacity for autonomous

action, and not simply the (recognized) right to act, then, those with the
8
same rights are certainly not equally persons.
Making equality the common goal of normative theory also tends to make
inequality and difference the same thing. Yet, to be different need not mean
to be unequal. Distinguishing the two can be vital, as is clear when we

consider the ends for which wealth is used. Wealth makes possible two
kinds of difference between wealth owners: those that distinguish different
modes of life by the different things they require, and those that distinguish
rank by amount of wealth owned.
The first difference derives from the notion of the individual. Individuation
means difference, including difference in patterns of consumption and
possibly in the amount of wealth needed. For individuation, subsistence
cannot be adequate. Here again difference depends on wealth, and the accumulation

of a measure of wealth is required for the development of the

differences associated with being a (separate) individual, thus for separating
from the group.
The other difference wealth makes possible is in amount. This is the
difference we associate with individual wealth accumulation taken as an
end, and not a means to acquire enough wealth to be an individual. Thus,
if self-interest is to be an interest in wealth accumulation per se, it must
be an interest in acquiring wealth not for its use, but for its amount. And,
if this is an interest in establishing difference, it is an interest in establishing
a difference in amount of wealth owned.

As Marx points out, this difference in amount of wealth has no limit

(Marx 1977: 253) precisely because it is the quantity of wealth, and not
the usefulness of its elements, that counts. If, then, wealth owners seek
wealth simply in order to have more of it, more than others have for example,
then their wealth-seeking has no limit. This does, indeed, seem to be the
case for some under capitalism. It does not, however, resolve the original

question, but only shifts the ground on which we have asked it. We still
need to know why having more wealth, more wealth than you have had in
the past or more wealth than others have, might be the end of self-interest.
Why is self-interest an interest in establishing a position in a hierarchy of
wealthiness?
 The answer provided by Adam Smith in the Theory of Moral Sentiments
refers to the pursuit of esteem in the eyes of others. If the end of self-interest
is to gain the honour or esteem of others, then rank looms large
in the pursuit of wealth. If amount of wealth determines rank, self-esteem
will depend on wealth accumulation. In this case, the need for
wealth is a need to take on a specific existence in the eyes of others, to be
a ‘somebody’. This being for others, when organized around wealth, undermines

any limit of need, and any possibility that there might be enough
wealth.
Making honour the end of self-interest has the benefit, from the stand-
point of society as a whole, of subordinating the individual to others and
to the group. The more we are motivated by the esteem of others, the more
we are motivated to pursue ends defined in relation to them, and to the

virtues and values stressed by our society, those virtues and values whose
attainment bestows honour. Seeking honour, then, means seeking an explicitly
social identity. It makes us work for others and for the group. Thus
the difference attained by wealth accumulation should be distinguished
from the difference attained by the acquisition of the measure of wealth
needed to be an individual. The former subordinates the individual to the
group, and to group ends (such as the growth of the nation’s wealth), the
latter marks separation of the individual from the group.
The conclusion just drawn may be the opposite from that which we have
come to expect. Wealth accumulation expresses the embedding of the individual

in group life, and the use of wealth for purposes that do not involve
accumulation as an end expresses the disembedding of the individual from
the group. Then, group- or community-oriented ideals are closer in this
respect to those that support the accumulation of capital and its attendant
inequalities than they are to ideals associated with an individual life
organized around the use of a finite amount of wealth for specific purposes.
This conclusion is clear enough in the older political economy of Smith
and Marx, in which goals of economic development and national wealth
play such a large part.
It is not surprising to find the pursuit of wealth treated as a virtue because
it does indeed serve the group by enhancing the wealth of the nation. This
is exactly Smith’s point, which carries weight in those societies devoted to
wealth accumulation. The connection of wealth accumulation to honour also
connects the motivational structure of a modern, capitalist, society to that

of the more traditional society, where honour is the end of social achievement.

The difference is in the specific means for attaining honour, and the
nature of the hierarchy that determines the esteem in which the member
or individual is held. Under capitalism, this hierarchy is, as we have seen,

quantitative and independent of birth, so the motivational structure still

centring on honour incorporates a breakdown in the limits, especially on
amount of wealth, typical of a precapitalist society. Under capitalism, there
is no limit and, thus, never enough wealth.
 The foregoing suggests how we might understand arguments for the use
of markets that appeal to the incentives those markets create for participants.
The idea of incentives makes economic activity adaptive to social goals
defined for the individual, who is treated as a means. Treating the individual
this way has special importance during the process of development to a
wealthy, or, as Smith puts it, ‘civilized’ society. However important incentive
arguments may be to the development process, they are not consistent
with freedom as I use the term here, since they insist that the individual be
subordinated to group ends, however implicit those ends might be, and however
they might be achieved as the unintended consequence of self-seeking.
The coming together of two principles, one traditional, one modern,
pushes aside any limit to wealth in finite want. The first principle is the
use of wealth to establish esteem in the eyes of others; the second is the

principle of equality of persons. The convergence of these principles makes

esteem a matter of amount, of place in a quantitative hierarchy where all

are equal as persons (having the status of property owners and citizens)

though radically unequal in amount of property, and thus in the measure

of personhood through wealth. For there to be enough wealth, the end of
being a person must be separated from that of ranking in the eyes of others.
To gain this end, a radical change must take place in the subjective meaning
we attach to connection with others, one that leaves behind the more traditional
significance of that connection in which the self is held hostage by
the community.
Given the structure of thinking just summarized, the question How much
wealth is enough? has no answer, since no amount can ever be enough.
Thus, for those concerned to achieve greater equality, the problem is shifted
to another ground, from that of demand to that of supply. 9 By restricting
the supply of wealth, we can restrict access to differences expressed in

the ownership and use of wealth. Sometimes it is also assumed that eliminating
the vehicle for expressing differences eliminates the impulse to
establish them as well. This might follow if we consider the latter a purely
social construct, so that the desire for hierarchy goes away when society
disavows it.
Before going further with arguments for greater equality, we need to
understand why equality of income and wealth might or might not realize
meaningful ideals. One answer is that inequality of wealth, or sufficient
inequality of wealth, undermines the equality of persons that becomes
possible once the fixed, predetermined, hierarchy of premodern society is
overthrown. Does quantitative difference in amount of property threaten
our status as equally property owners, or equally citizens? A second answer

focuses attention on the corrosive effect of inequality on social or group

cohesion. In a striking reversal, the status differences that foster cohesion
in premodern settings now undermine it because they weaken convictions
about fairness, or because they weaken a sense of common purpose and,
thus, of belonging in the group or community.
 The problems alluded to above take on a more concrete significance for
those who not only have less than others have, but also have an amount
inadequate to sustain their sense of personhood. In other words, the issues
raised above are not so much about inequality as they are about poverty.
If you do not own property, or do not own enough property, then your
status as a property-owning person cannot be made real in your own eyes

or in those of others. You can hardly, then, imagine a common purpose

with those who own property. Arguing along these lines does not, however,
lead us toward a norm of income or wealth equality, but toward a design
of institutions that would reduce, if not eliminate, the likelihood that individuals
will have inadequate income or wealth to satisfy the needs we
associate with being a person.
We can define adequate income and wealth in a preliminary way by referring
to the norm of freedom discussed in the previous section, and, in

particular, by referring to the idea of opportunities yet undetermined. What

do individuals need if these opportunities are to be available to them? Part
of the answer may have to do with an amount of wealth, but clearly this
is at best part of the answer. The capacity to use wealth in a particular
way, consistent with the ideal of opportunities yet undetermined, is also
10
required.
The argument for equality of opportunity is not in general a strong argument
for equal, or even more equal, income. The problem is that any
stronger argument for equality (of income and wealth) must call into question
the norm of freedom itself. This is, indeed, the case for those arguments
that bring into play the ideal of sameness connected to group identification.
Clearly an ideal of equality derived from that of group identification
is connected to an attack on difference, since allowing differences between
persons in life plans means allowing differences in wealth when different
life plans require different amounts of wealth. Furthermore, assuring equality
of outcome conflicts with the notion of freedom introduced in the previous
section. That notion is linked to the absence of any prior determination,
which cannot be the case where equality of outcome is the goal.
The call for greater equality can invoke an appeal to the ideal of community,
and to the bonds of identification that hold community together. 11
Where these bonds are not those of hierarchy or mutual dependence in a
division of labour (difference), they may be the bonds of identification (sameness).
Then, equality combines premodern and modern ideals, the premodern
ideal of the domination of the group over the individual, and the modern
ideal of equality within the group. The combination of modern and
premodern elements in thinking about equality is nowhere more evident
than in the idea that we should make democracy the primary virtue of an
economic organization. Indeed, the appeal to democracy applies the norm
of equality in a specific way.
Based on the foregoing considerations, we can conclude that the impulse
for equality has two roots and develops in two different directions. One
root is the attack on difference associated with the wish for community in
a modern context where group cohesion cannot be secured through a structure
of status and leadership. The other is the liberation of the individual
from his or her predetermination within a status hierarchy. The former
tends toward ideals that involve equality of outcome, the latter toward those
that involve equality of opportunity.
If we reject the attack on difference, then equality will be subsumed
under freedom, and will not introduce any normative considerations distinct
from those already considered under that heading. The effort to treat equality
as a normative end distinct from freedom (as defined above) leads us in a

troubling direction that involves group identification and the loss of

autonomy. This, then, has implications for justice, to which I now turn.

Justice
Economic justice is sometimes taken to have the same significance as
equality, so that justice is served when we move toward equality of income,
wealth, or opportunity. There is, however, nothing inevitable in this interpretation.
Thus, in a society heavily dependent on hierarchy for social
cohesion, justice would have a very different significance, one connected to
inequality rather than equality. Tawnier describes the premodern social order
as one in which there is equality within and inequality between groups.

Members of each group have duties and rights appropriate to them. Here,
justice does not assure equality, but inequality, though of a specific kind
and within clear limits.
Applying the term'justice' in the premodern setting tends to make justice
seem relative to contingent social norms, as Marx apparently thought it

was. Marx rejects the use of criteria associated with justice to judge social

formations on the grounds that the end of justice is to maintain prevailing

norms, not undermine them by setting them against standards they are not
designed to meet, and would not accept in any case.
The notion that justice re-establishes prevailing norms, whatever those
might be, in the face of individual violations (of the duties and rights associated
with defined social positions) removes any critical edge justice might
have in judging the norms themselves. For justice to have a critical edge
in judging norms, it must have a degree of independence from them. This
means that it must have a degree of independence from the group. If right

conduct means conduct that contributes to group cohesion and secures the
member’s sense of connection with and belonging to the group, then justice
cannot judge group norms. Only if right conduct takes on a different significance
can justice be used to criticize norms.

The ideal of justice can have two related but distinct connotations. It
may refer to the subordination of the member to the group, in which case
justice asserts the necessity of group life and group connection. Alternatively,
justice may refer to individual rights, including rights against the group.
Where justice refers to the domination of the group over the member, it
can do so either by establishing equality of members, or by sponsoring hierarchy.

Equality and hierarchy are alternative modes of group solidarity.

Justice in the context of the group involves itself with solidarity. Where
justice refers to individual rights, it institutes the separation of the individual
from the group.
The system of justice is meant to assure that each receives what is due
him (or her), where what is due depends on the social position the individual
or member occupies. In the absence of a hierarchy of social positions,

what is due each is in some sense the same. Since all are persons, all must
be treated equally as persons. The problem arises in knowing what it means
to be treated (equally) as persons, especially with regard to the outcome of
economic activity. Does it mean that all have the status of property owners?
Does it mean that all have equal amounts of property, or equal opportunity
to acquire and use property? Thus, in considering justice as the ideal

of the economy, we are taken back to our discussion of equality.

Connecting justice to rights connects it to protecting the individual from
oppression. Oppression refers to the violation of the individual’s autonomy,
or, in the language of the next chapter, of his or her subjectivity. Failure
of autonomy makes the individual vulnerable to being made subject to the
decisions and ends of others. Institutions that either promote individual
vulnerability in this sense, or facilitate the exploitation of vulnerability, fail
the test of a justice defined in terms of rights. Just institutions, then, are
institutions that prevent oppression, so far as that is possible. To do so,
they limit personal dependence, and offer institutional support for the disadvantaged
in a form that does not itself violate their integrity.

Limiting personal dependence and providing for the disadvantaged may

be important, even vital, goals of a just economy, but we can wonder if
they suffice to secure justice. Does not justice also require a kind of equality,
as I suggest above? We can link equality to protection from oppression by

linking it to vulnerability. At what point, if any, does inequality of wealth

undermine freedom, making some vulnerable to personal dependence, and
thus the possibility of exploitation?
I think it will prove helpful to consider the answer to this question in
the language of opportunity. If opportunity has a cost, then, at least up to
a point, wealth buys opportunity. This is not only, or primarily, the opportunity

to express subjectivity or freedom in a way of life, but the opportunity

for personal development that translates talents and interests into capacities
that have a value in themselves and as a means to secure income.
Opportunity, if it means not only the absence of discrimination but access
to education and associated conditions for personal development, has a cost

and depends on access to wealth.

Does this mean that equal opportunity implies equal access to wealth?
This would be the case if more wealth always meant more opportunity. If,
however, individual development is a finite process with finite conditions
secured by a finite and definable amount of wealth, equal opportunity does
not mean equal access to wealth, but only access to the amount of wealth
needed to assure the opportunity for personal development. Then, justice
linked to equal opportunity, or fairness, limits the distribution of wealth
but does not preclude inequality.
Justice rooted in the idea of freedom does provide a criterion for judging
institutions independently of group norms. We can ask, then, how justice
will judge the prevailing institutions of market economy as they have
evolved to the present, and how those institutions might be changed to
make them better suited to instituting the freedom of opportunities yet
undetermined. Doing so involves identifying that organization of markets
capable of assuring the autonomy of those able to take advantage of property
right, and an organization of the state that assures it will protect the
vulnerable from personal dependence without becoming itself a locus of
oppression.

The universality of freedom

In judging economic institutions, should we attempt to identify criteria
independent of culture and context, or should we accept the inevitability
that our criteria will be culturally specific, and in this sense particular?
Some of the criteria considered in this chapter make the judgment of institutional
success or failure depend on cultural norms, while others claim

independence of culture and context. Thus, the idea of subsistence explicitly

appeals to cultural and historical factors. By contrast, the idea of basic
need is meant to apply regardless of the cultural setting. Indeed, what
makes need basic is precisely this independence. Like basic need, the idea
of human capabilities also claims to advance universal criteria for judgment.
By contrast, neither equality nor justice seem to fit the criteria of universality.
Equalities of income and status are not typical of social arrangements.
Justice, if it asserts and re-establishes norms that are particular to a given
society, is itself particular to that society. It would be difficult to argue
that the norm of freedom is universal in Nussbaum’s sense of common to
all human cultural experience, though we might find elements of it were
we to search hard enough.

Much depends on the meaning we attribute to the term universal. The

capabilities and basic needs ideas seek specific capabilities and needs (particular)
that are held in common (universal). Universal, then, means common
to diverse cultural settings. But, if a particular capability or need is common
in this sense, it must be so for a reason. That is, it must be common to
diverse settings because it is in some sense universal and not universal
because it is common to diverse settings.
Rather than interpreting universal to mean found in all instances, we
might consider universal to mean unrestricted to a particular application.
Put another way, the universal is the possibility of different particular
content. Food is a universal in this sense, while corn is not. 12 If, for a particular
culture, the term ‘food’ is not distinguished from the terms for particular
substances used as food (corn for example), then the universal is missing,

or not fully developed. Availability of the term ‘food’ allows for the development

of different types of food. It opens up possibilities closed off when

the universal is missing.
This makes the distinction between universal and particular a distinction
between potential and its realization. The focus is, then, not on moving
from the particular to the universal, which tends to make the latter seem
accidental, but on moving from the universal to the particular. Then, the
significance of the particular can be better understood, and what is possible
is not fully limited by what is or has been. How, then, do we know the
universal if not by appealing to the features held in common by its particlar
instantiations? I will consider the answer to this question with special
reference to the ideal of freedom.
Beginning with the idea of a potential, we can consider freedom the
freedom from prior determination by nature or custom. In this, freedom is
universal not to all human experience, but to those ways of life that have
been discovered and invented rather than adapted and repeated. Freedom
is the unrestricted potential to exploit ‘opportunities yet undetermined’,
and it is the particular way of life that results from the exploitation of those
opportunities. For humans, there is nothing historically universal about this
freedom; it is not present for all those who are physically human in all
settings. Nor is it the norm animating all human institutions in all settings.
On the contrary, it is a very limited experience of humans living in a very
special institutional setting. It is with a part of that setting that we are
concerned here.
If the freedom of opportunities yet undetermined is not universal to
human experience in the sense Nussbaum uses the term, does it follow that
the norm of freedom has no special claim to our attention and cannot be
said to dominate the alternatives? Moreover, if the norm of freedom is just
that, a norm, how can we claim that it has a special importance to the
process of development, as the end that animates and gives meaning to
that process?
One way to answer these questions is to consider certain implications of
the present situation. Characteristic of this situation is the breakdown in
the insularity of cultures and of the national and sub-national groups that
embody them. This process by which cultural isolation gives way to what
is sometimes referred to as cultural diversity has been underway for several
centuries. It was the topic of the early sections of the Communist Manifesto,
where Marx and Engels observe the impact of capitalism on traditional
society and the givens of life that make traditional society what it is. In a
world where diversity replaces isolation, comparisons cannot be avoided as
they could in the traditional world. These comparisons establish possibilities,
however theoretical, of living a different sort of life. Even if, as a
practical matter, most of those living in a particular cultural setting cannot
opt out, the possibility of something different can still be imagined,
especially in light of the fact that some do opt out.
The act of imagining something different changes the meaning of what is,
which is to say the meaning of cultural experience and the dominance of
culture over ways of life. To be able to imagine oneself in a different setting
corrodes the claim to universality of the culture within which we live so far
as that culture dictates specific, concretely determined ways of life. The presence

of alternatives turns all putatively universal beliefs, customs, and virtues,

into the expressions of particular experience. This transformation means the
weakening, and ultimately the destruction, of the hold of culture over ways
of life. The commitment of culture to control ways of life– modes of interaction
and attachment; the meaning of human experience; appropriate
beliefs about self, other, and the surrounding world; and so on– must be
undermined when imagining other ways of life becomes a possibility. This
corrosion of the claim to universality leaves us with three options.
First, we can attempt to construct a normative ideal that abandons all
claims to universality, and instead seeks in diversity of particular experience
the grounding for moral judgment. Then, the only universal having
moral significance is the universal of difference, the fact that each cultural
experience is irreducibly particular. Each culture defines its own particular
criteria for moral judgment, but can claim no universality for such judgment
beyond the limits of its particular cultural experience. The difficulty
with this method is that each cultural community, while allowed to claim
hegemony over its members, is also required to recognize the legitimacy
of alternatives. That is, each culture must at the same time proclaim hegemony
and relativism. Yet, for a culture to be consistent with the relativism
embedded in this version of the ideal of difference, it must give up its
hegemony and thus become a culture of a very different sort, one that does
not claim hegemony over ways of life.
A second alternative involves the attempt to re-establish the hegemony
of the particular culture over ways of life undermined by its presence within
a setting of diversity. Strategies aimed at accomplishing this end include

isolating the group from the outside world so that the act of imagining
difference can be drained of its corrosive power, or attempting to destroy
the other cultures whose existence for the group casts its universality in
doubt. The universality at stake in this struggle is the universality with
which Nussbaum is concerned. What is common to all human experience
will depend on what is and has been allowed to count as human experience.
Control over what is allowed then is control over what is universal
in this sense. So far as possible, retrieving cultural hegemony means

retrieving control over the idea of humanness by regaining control over the
experience of being human available to group members.
The third response to corrosion of the claim to universality is a change
in the significance of cultural experience itself to one in which universality
takes on a different meaning. Rather than the universality of common experience,
which is no longer a practical possibility, we can consider the kind
of culture appropriate to making available opportunities yet undetermined.
Such a culture is not universal because it includes the particular cultures
it displaces. Neither is it universal in the sense that it better expresses the
human essence, somehow defined. It is universal, rather, in the sense that
it recognizes that the ways of life of all particular sub-cultures are not
inevitable. The only universal now possible is the one that is aware of this
condition.
For culture to be universal in this sense, it must give up its claim to establish
ways of life, and provide instead a setting in which different ways of
life are possible, including those previously unimagined. Culture no longer
dictates the interactions between persons, the personal meaning of life
and the beliefs connected to it, the trajectory of life experience, and so on.
Rather, culture provides a setting in which individuals discover and invent
their ways of life. The only remaining universal, then, is the one that develops
when culture as a way of life gives way to culture as the opportunity for ways
of life only restricted by the recognition that such an opportunity be available
to all. This is the universal of opportunities yet undetermined rather
than the universal of hegemony of a particular way of life. In this sense, it is
the universal of individual autonomy rather than group domination. It undermines
rather than celebrating the group, since the diversity it recognizes
challenges the hegemony to which the group aspires.
To live within a culture of the kind just considered requires a special
13
capacity, which is the capacity for freedom. I will refer to the experience
constitutive of an individual with a capacity for freedom as subjective experience.
The term ‘subjective’ here refers both to the internal quality of that
experience, and to the fact that the experience is in some sense that of a
subject. The two aspects of subjective experience, that it is internal and
that it involves subjectivity, are closely connected. All inner experience is
not in the same sense the experience of a subject. Indeed, internal experience
be organized to avoid subjectivity, and this avoidance of subjectivity
can

is also an avoidance of the capacity for freedom. We can say that freedom
considered as a capacity is a configuration of internal experience of a particular
kind. I will refer to this configuration and the experience that goes
with it as subjective freedom. Subjective freedom is to be distinguished
from, though it is connected to, objective freedom, which is a configuration
of institutions and interactions with others. 14
We can think of the normative problem for political economy as one part
of a larger normative project, which is to institute freedom as the animating
principle both for individuals and for the institutions through which they
lead their lives. If we take freedom in the sense considered here, instituting
freedom means completing the project of separating the individual from
the group so that his or her life can be made the realization of opportunities
yet undetermined.
 This project proceeds on two levels, one internal to the individual, one
external. Freedom is a matter of specific individual capabilities, those associated
with the ability to make choices connected to an inner determination
and not imperatives imposed from outside, imperatives such as those
expressed in the ideas of basic need (physical) and subsistence (cultural).
But, freedom is also a matter of institutions and the modes of interaction
they embody. Do institutions enable the individual to live a life expressive
of the capabilities just considered? And, of equal importance, Do institutions
facilitate or impede the development of those capabilities? To answer
these questions, we need to know something more about the capabilities
linked to freedom. Only by understanding the nature of the capacity for
freedom can we understand the demands it makes on institutions.
3 The quality of subjective
experience

Subjective connection

Although normative economy concerns itself primarily with insti-

political
tutions, I will begin with institutions, but with subjective experience.
not

Institutions devoted to freedom support the individual in his or her effort

to have and express a specific subjective experience, which is the experi-
ence of subjective freedom. We need to understand something about the

nature of that experience if we are to understand what sort of institutions

can play a facilitating role in relation to it. Since subjective freedom is a

state or condition of mental life, concern with subjective freedom leads us

naturally to a concern with the nature and conditions of mental life.

We can consider mental life under two headings: cognitive and emotional
capacities. The former have primarily to do with perception of objects in
the world, the latter with the investment of significance in those objects.
The different roles played by cognitive and emotional capacities can be
expressed in the
language of awareness. It is one thing to be aware of objects
in the world; it is something else to find them significant and therefore to
take an interest in them. 1 The significance of an object for us establishes
its connection to us. Our concern here is with the perception of the object
as a part of a psychic experience of that object, which is to say an experi-

ence involving an emotional connection. While both cognitive and emotional

capacities have a bearing on subjectivity, the psychic experience of subjec-

tivity primarily calls on emotional capacities and depends on the
configuration of emotional experience. This follows from the special connec-
tion between emotional experience and the investment of meaning in the
self and its world.
Concern with the emotional dimension of human experience is essentially
alien to the method of political economy, notwithstanding the interest Adam
Smith takes in the subject as part of his work on the moral sentiments. In
that work, the passions loom large, as does concern with the nature and
vicissitudes of self-feeling. This concern disappears in his later work on
political economy, where self-interest is taken for granted, and not treated
with the sensitivity characteristic of the earlier work. By taking self-feeling
 The quality of subjective experience
for granted in the Wealth of Nations, Smith sets a precedent commonly
followed in political economy since his time.
Yet, any serious attempt to take into account the complexity of those
human motivations that drive activity, including economic activity, must
concern itself with what Smith and his contemporaries refer to as the

passions. These passions express the fundamental underlying connections

between the internal, subjective, world, and the world outside. Our emotions
are important because they mark this connection. In the words of Jonathan

Lear, emotions provide ‘a framework through which the world is viewed’

(1990: 52). Anger, fear, or pleasure mark the significance that objects in
the world have for the individual. To fear an object is to experience it as
a threat. To desire an object is to see in it the possibility of pleasure or

satisfaction.
Interest in objects is an essentially subjective matter (Levine 1997 ). It is
synonymous with a connection of the object to subjective experience. Of
course, we can attribute to interest a purely objective meaning, for example
by making interest synonymous with the legal connection of object to person
(ownership). Economic interest is not, however, synonymous with legal
interest understood in this sense, since it involves the prospect that an
object can afford the individual a subjective experience. We can also attempt

to make interest objective, as Marx does, by subsuming the individual into

a group or class, and attributing to him or her the interest of that class,

which we deduce from its objective position in a prevailing structure of

2
property relations.
Marx’s procedure in this matter is illuminating, since it is the treatment
of the individual as a member of a class that makes interest lose its subjec-
tive significance, and become something wholly objective, which is to say
determined outside the individual. The subjective dimension of interest is
connected to individual experience, and to the separation of the individual
from the group. Failure to take the individual, his or her wants, needs, and
experience of the world, into account is one hallmark of the classical concep-
tion of economic life. In this respect, the theory that develops after the
classical period, toward the end of the nineteenth century, takes us a step
further. Yet, while the neoclassical theory does insist on the subjective
dimension of economic life, it does so in a way that focuses attention else-
where than on subjective experience. Rather, it focuses attention on the
implications for markets of simple, and not very convincing, assumptions
about the individual’s subjective life. These simple assumptions make it
unnecessary to consider the complexity of subjective experience as a rele-
vant part of a treatment of economic affairs. The idea that the complexity

just referred to can be summarized in simple assumptions about wanting

and choosing allows the focus of attention to shift from subjective experi-
ence itself to its objective implications and manifestations.

This effort to shift interest from subjective connection to objective

attribute is typical of the method of political economy, which seeks to treat
 Foundations

the economy as an essentially objective system. Thus, the idea that economics
is a science is often confused with the idea that it can discover objective
laws of motion (Marx), or with the idea that we can characterize economic
reality in terms of empirical regularities exhibited by large numbers of
actors taken in the aggregate. Proceeding in this way either eliminates the

subjective dimension altogether, or gets it out of the way by submerging

it into mass phenomena.
The subjective dimension involves, as I suggest, the emotional connec-
tion to objects as markers of interest. Taking that connection into account
requires that we interpret objects as playing, or having the potential to
play, a part in a psychic drama, one involving imagination, hope, and fear.
It becomes important to know what it is we hope for, what it is we fear,
and how we construct potential experience in imagination. None of these
aspects of experience should be taken for granted, as has been the habit in
both classical and post-classical theory.
Of special importance here are the ideas, feelings, and, more generally,
the attitude we have about our selves, about who we wish or fear we are,
in our own eyes and in the eyes of others. These self-ideas and self-feelings

play a prominent part in motivating our conduct in the world. This aspect
of motivation brings into play the idea of the self, whose interests have
long been a central concern in political economy. That the usual treatments
of political economy do not adequately taken into account the complexity
of the self and its interests is primarily due to the lack of any adequate
concept of the self that could offer a foundation for thinking of motivation
in general, and self-interest in particular.

Self-experience
The term ‘self is sometimes used to refer to the personality as a whole,
including its bodily or physical aspect. Sometimes, however, the term is
used more narrowly to refer to a particular construction of the personality,
one that allows the individual to take initiative in conduct and in relating

to others. This second usage connects having or being a self with subjec-

tivity, and is therefore of special importance for normative concerns. This

narrower idea has been emphasi2ed by Heinz Kohut who speaks of the self

as the experience of being a ‘center of initiative’ (1977: 94). Then, the self

is that aspect of the personality as a whole we associate with the capacity

for agency.
The broader and narrower notions of the self can be linked in the following
way (Loewald 1980 : 351). To be or act as your self means to invest your
personality as a whole with a special significance, that of being subject
rather than object. Having or being a self does not, then, refer to the pres-
ence or absence of a part of the personality (the self), but to an attitude

toward the personality. Having or being a self means affirming or valuing

the personality, seeing it as a source of what is valid and good. To have
impaired selfhood means to lack a full sense of personal worth.
In simple terms, we can contrast two states of being, or self-states. One
is dominated by affirmation and the feeling of self-worth that values what
we do and what we produce. The second is dominated by disaffirmation

and the feeling that who we are and what we do has no value. Since the
first affirms the self while the second negates it, we can also say that it is
in the first state that what we do is an expression of our selves, since only
in the first state can the self be the active element. In this sense, the second
state is one in which the self is attacked, suppressed, and, in the limit,

destroyed.
An individual may at times
experience one of these states and at times
another, shifting from one the other for various reasons some of which
to

may remain outside of his or her awareness. We can say, then, that self-
experience is complex, multiple, or divided, and that aspects of it remain
hidden from awareness. When an individual’s attitude toward his or her
self carries differing valences under different circumstances, that individual’s
self-interest has a complex subjective meaning. The differences to which I
have just alluded involve divisions in the self and thus the possibility of
inner conflict.
To understand self-interest, we need to be aware of the complexity of
self-experience. Were self-interest a simple and unitary construct, then there
could be no conflict of the kind just considered. Yet, as I have elsewhere
emphasi2ed, self-interest is no simple matter (Levine 1998 : 85—91). Indeed,
pursuit of self-interest, rather than an obvious and inevitable activity, can
provoke significant anxiety, as it does when it conflicts with ideas about
the self inconsistent with serving its interests.
Thus, we may wish to satisfy ourselves, but at the same time feel that
doing so endangers our connection with others, especially our membership
in a community and our aspiration to identify ourselves with a group ideal
inconsistent with individual subjectivity. Then, to validate our conduct in
the world, and therefore secure a sense of worth for that conduct, we must
give up the pursuit of our self-interest. Here, the pursuit of self-interest
means the loss of positive self-feeling (self-esteem). Under these conditions,

whatever self-worth we have derives from (1) the suppression of the ends
of the self (repression of self-interest), and (2) the pursuit of ends given to
us from outside, from others or from our community.

Such divisions in the self must complicate the idea that individuals act
in their interests, since division implies that they cannot do so without at
the same time losing self-esteem. This division of experience, with the atten-
dant ambivalence of feeling simultaneously drawing us toward and away
from our goals affects our understanding of human motivation and has
important consequences for interaction, including the interaction typical of
economic affairs.
Identity
Treating the self as an investment of meaning and significance in the person-
ality as a whole implies that what we do in our lives may or may not be
an expression of that state sometimes referred to as being your self. Having

the sort of investment in our persons consistent with being our selves means
that what we do and who we are develop in a particular way and under
the influence of a particular motivation. In this development, our conduct
in the world expresses a core sense of our worth as persons. The value we
invest in ourselves is a value we invest in our capabilities and in the things
we do that express our capabilities. Being a self means that the diverse

things we do all express a core of who we are. In this respect, having a self
or being our selves expresses an integration of experience, of being and
doing. This integration of experience constitutes an important normative
ideal, one closely linked to the ideal of human freedom emphasized in the
last chapter. 3
We need to consider further how being a self translates into a way of
life, including a set of needs expressive of selfhood. This translation can
move in two different directions depending on whether the active moment

is external or internal. In other words, we can relate the value we invest

in ourselves to the value we see in what we do and who we become in two

different ways. In one, we value ourselves because of a value we place on
what we do. In the other, we value what we do because of an original
investment of value in who we are (in our selves).
The first mode of being is appropriate for a way of life driven by the
need to adapt to customs and norms given to us from outside. Thus, as
members of a moral community we are good not in ourselves, but because
we have adopted the way of life approved for us by that community. Any

feeling of self-worth we achieve is derivative of adaptation to a way of life

predetermined for us as having worth.
The second mode of being is appropriate to a world organized around
the norm of freedom. In such a world, the line of causation between the
value of our lives and the value of our selves typical in a moral commu-
nity is reversed. Now, what we do has value because it expresses who we
are rather than who we are having worth because it is a reflection of what

we do. In this what we do is the realization in conduct and relating

case,
of anoriginal quality of being. This quality of being, or self, then, is our
potential to become a person of a particular kind. Speaking in this way
makes the self a force capable of shaping a life. The result of the operation
of this force is the realization in life of an original potential to live creatively
and make what we do an expression of who we are. I will refer to this real-
ization in concrete way of life of an original potential as a personal or
a

individual identity. The alternative to individual identity is group iden-

tity. Group identity relates to individual identity in the same way that
deriving a sense of our inner worth from what we do relates to deriving

the value in what we do from the value we have invested in who we are.
For the individual, having an identity means having at least the following
qualities:

1 Self-awareness
2 Continuity of being across time
3 The investment of meaning in a connected life experience
4 Finiteness or boundedness
5 Recognition of who we are by others

To have an identity is to be aware of oneself. Organisms can exhibit conti-

nuity through time without having identity in this sense. Thus we can
identify plants, animals, even inanimate objects, but this does not mean
that they have an identity in the sense considered here. Having an iden-
tity does not begin with being known by others, but with being known
by oneself. This being known by oneself is the prelude and precondition
for being known by others as someone who has an identity, is well defined
and therefore identifiable. Because of this, identity is linked to a special
internal quality sometimes referred to as self-awareness.
Individuals may have the capacity to stand outside of themselves, to self-
evaluate, to gain and use self-knowledge. But, they may not. Self-awareness
is closely associated with the capacity to judge possibilities according to
their fit with capabilities and ideals. In the absence of self-awareness we
find vulnerability to external influence. Beyond this vulnerability, failure of
self-awareness can also foster impulse-driven behaviour, no matter how
apparently planned conduct might appear to be. To realize an identity
through action in the world means we are not driven by impulse, but,
rather, that our conduct has a self-reflective quality.
As a direct expression of the quality of self-awareness, having an iden-
tity means that experiences and actions are connected because they have a
meaning, most importantly to the self. There is, then, an emotional invest-
ment in the sequence of experiences and actions, which is valued as a whole.
Having an identity is an expression of a particular quality of the person

also referred to as having or being one’s self. The difference between iden-
tity and self is that identity refers to the complex sequence of experiences,
actions, and relationships, taken concretely, that make up a life, while self
refers to that inner quality of being that establishes the meaning and connect-
edness of those experiences, actions, and relationships. Put another way, the
term ‘self refers to the potential or capacity for investment in a life expe-

rience, ‘identity’ to the salient concrete elements of that experience.

We can also say, then, that identity is a meeting point of the imagined
and the possible. To have an identity is to be able to imagine what might
be. Without this moment of imagining, our connection to experience would
be wholly adaptive. If the moment of identity is the moment that makes
experience our own, then it is also the possibility and expression of freedom.
While identity is linked in this way to freedom, it is also linked to
boundaries. To have an identity is to be something concrete, the realiza-
tion of a potential in a particular life experience. Being something, of course,
means not being everything else. Having an identity means knowing what

we are and what we are not. Awareness of limits is an essential element of

identity.
That identity represents a meeting point of the imagined and the possible
means that identity connects the inner world to the world outside. Those

qualities of identity that enable us to see ourselves in what we do also allow

others to see us, thus making the self real in a world of others. Its close
connection to the process of identification expresses this aspect of identity.
To shape an identity through identification with others means that our
identity must in some way be shared, no matter how personal it may
also be.
Identity refers to a self made concrete and real in a world of others. It
thus refers to the necessity that subjectivity become objective or real in the
world. We can think of this becoming objective and real as a progression
that moves from an internal possibility (potential) toward its realization,
from talents and interests at one end to activities and outcomes in the world
at the other:

Self (potential) —> Identity (real)

Or,

Talents/Interests (potential) —> Capabilities —> Opportunities

—> Activities/Outcomes

Talents and interests, which we may take to be original for our purposes,
cannot be made real for the individual or for others unless they become
4
capabilities. A talent for and interest in music is not the same thing as
the capacity to play an instrument. To get from one to the other entails a
substantial effort and access to appropriate resources. Without access to an
instrument, and in most cases to supervision by a musician, talent and
interest remain just that. A developed capability does not translate into
a vocation in which we produce music, especially for others, unless we have

the opportunity to exercise our capacities. If women are not allowed to be

musicians, then, whatever their talents and capabilities, their progression
toward full subjective experience is blocked by the lack of opportunity.
In the next chapter, I will be concerned with this progression, with the
nature of the opportunities required by it, and with the obstacles that get
in the way.
Self-boundaries

Notions such as self-interest, self-seeking, and satisfaction of the self, all

centrally important in political economy, presuppose a unit, the self, which
can be treated as a separate entity in the world. The presumption of the
unit status of the self involves a boundary between self and not-self. This
is not so much a physical boundary, although that is implicated in impor-
tant ways, as a psychic and interpsychic boundary, a boundary between

separate and different subjectivities. Establishing this boundary also estab-

lishes the self as a unit that has wants and interests, a self that can seek
and gain satisfaction. The problem of self-boundaries is, therefore, central
to the concerns of political economy.

Self-boundaries also set limits. By defining what is self and what is not,
self-boundaries delineate what pertains to the self and what does not. The
juridical expression for the limit-setting implied in self-boundaries is the
system of individual rights, which establishes other persons as limits on
the individual, who cannot claim what is theirs for his or her self. The
existence of an objective, external, world, including other persons, limits
what the individual can do and be. This limit includes the physical limits
of the individual person, the limit of a finite life span, and the limit of
talents, abilities, and accomplishments appropriate to a bounded self.
Individuals may attempt, in fantasy and in reality, to overcome these
limits. They can do so by violating the rights of others, which denies their
status as subjects in their own right. This violation of right has the subjec-

tive meaning of attempting to overcome the separate subjectivity of the

other. More generally, the attempt to overcome self-boundaries denies the
subject—object separation and, therefore,the objectivity of the external world.
Denial of self-boundaries is a central feature of the subjective landscape of
capitalism, as it is of the image of the good society. The notion that will
overcomes all obstacles expresses this quality of contemporary experience,

a quality that is embedded in the institutions and consciousness of capi-

talism.
It may seem odd to associate capitalism with the violation of self-
boundaries, given that capitalism is essentially a system of (property) right
whose purpose is to protect the individual from the depredations of others.
The problematic relation between capitalism, individual rights, and self-
boundaries is an important theme in the exploration of the subjective
meaning of economic institutions.

The quality of subjective experience

The ideas about subjective experience just introduced carry implications for
normative judgment. These are the implications associated with the idea
of a bounded self and with the idea of shaping a life expressive of the inner
experience I refer to here as having and being your self. The quality of
subjective experience depends both on whether external conditions are or
are conducive to freedom and on whether the configuration of our inner
not
lives enables us to integrate our self-experience in a way that makes being
our selves possible. The main obstacle that stands in the way of establish-

ing this configuration and acting in accord with it is the alienation of

subjective experience.
By alienation of subjective experience, I have in mind the devaluation of
the personality associated above with the loss of self. When we invest signif-
icance and worth not in our persons, but primarily or exclusively in external
objects (other persons, institutions, or groups), we alienate our subjectivity
to those groups. In the language of psychic life, we externalize or project
outside our capacity to be the subject in our lives. This does not mean that
valuing others implies alienation of the self. We can value other selves, and
the subjective experience of groups and institutions, without losing our
investment in our own persons. But, we can also value others, institutions,
and groups at the expense of our selves.
As I have suggested, this loss of self is typical in moral communities,
where the member is only good so far as he or she is connected to the
community in a particular way that involves deriving his or her feeling of
worth from that of the community. This makes the community rather than
the individual the subject; it makes will and initiative collective rather
than individual experiences. In other words, the moral community demands
the alienation (or projection) of subjective experience from the individual
to the group.

Subjectivity is the realization through a development process of an orig-

inal human potential. Whether this potential is realized as the capacity for
individual subjectivity depends on the presence or absence of a facilitating
environment devoted to that end. The potential to develop a capacity for
individual subjective experience is not the only original human potential
that bears on subjectivity. There is also the potential to develop a capacity
to invest subjectivity not in the individual but in the group. These two

capacities ground two very different normative constructs and normative

5
judgments. For reasons summarized at the end of the last chapter, the
capacity for individual subjective experience has a unique relevance in a
world where the isolation and thus hegemony of the moral community is
not a possibility. In such a world, there is justification for placing primary

emphasis on the individual rather than the group subject.

The norm of individual subjectivity makes the investment of value outside
the individual, when it is at the expense of his or her self, the alienation of
subjectivity. Alienation of subjectivity means that the vital element of self-
experience has been separated from the self and placed outside. In the lan-
guage of psychic life, it has been split off and projected. Alienation expresses
the division of self-experience. To speak, then, of the individual as subject
is to speak of the integration of subjective or self- experience. Normative
judgment pursued on this basis centres on the idea of self-integration, which
is the bringing into the self of feelings and experiences that have been
alienated from it (split off or externalized). So far as it is the alienation of
important dimensions of the self (especially those that invest value in the
personality as a whole) that impoverishes our subjective lives, the prospect
for reintegration becomes the central normative concern. Integration enriches
individual subjective experience, just as division and externalization impov-
erish it.
The notion of enrichment of subjective experience offers an alternative
basis for thinking about welfare, and therefore for making welfare judg-
ments. To see this more clearly, it will help to emphasize the connection

between subjective experience and the subject of experience. Subjective

experience refers not simply to the internal quality of the experience, but
also to its connection with agency. Processes that impoverish subjective
experience not only undermine the prospects for a self-experience, they

diminish the presence of the self as an active force in experience. They

suppress the capacity for agency, which is the capacity to be a subject of
action in the world.
This suppression of subjectivity bears on the individual’s welfare so far as
welfare refers to a state in which the capacity for individual agency is secure.
Welfare, then, connotes a subjective state of mind, or self-experience, the
experience of well-being, which is the experience of having and expressing a
secure sense of self in relations with others. This experience of well-being

depends on the individual’s ability to establish secure self-boundaries, with-

out which there can be little meaning to the goal of being your self. Well-

being in this sense depends on institutional considerations such as those

bound up with a system of individual rights that secure the self in relation
to other selves.

Traditional welfare judgment follows criteria linked to what I refer to as

subjective experience. In economics, ideals of need and want satisfaction
predominate. These ideals involve the satisfaction of needs (as exemplified
in the use of notions of subsistence or basic need) or the satisfaction of
wants (as is typical for those influenced by utilitarian thinking). In their

way, these ideals capture something important about normative judgment.

Indeed, they focus our attention on an aspect of what I refer to as subjec-
tive experience. The weaknesses of the prevailing criteria lie less in what
they direct our attention toward, and more in what they direct our atten-
tion away from. That is, each includes something important about subjective
experience, but in so doing also excludes something important, offering a
one-sided ideal as if it were the whole.
Thus, the ideal associated with preference and choice directs our atten-
tion to an essential element of well-being: that it depends on a sphere of
action in which the individual is sovereign, and his or her ends prevail,
that there is no real satisfaction that does not satisfy the need of the indi-
vidual to decide among options according to internal criteria. Yet, the
specific construction advanced fails to connect satisfaction to freedom since
it takes the sovereignty of the individual for granted, never considering
that interaction and institutions might place that sovereignty in jeopardy,
or be needed to help the individual sustain the capacity for decision-making.

This ideal does not focus attention directly on the meaning and implica-
tions of subjective experience as such, which is what I propose to do here.

Self-alienation

The emphasis placed here on division and integration suggests a connec-

tion with the idea of the alienation of labour emphasized in Marx’s early
writings. There, Marx treats labour as the externalization of the worker’s
essence, and labour done for another as the alienation of that externalized
essence. If we consider more closely what Marx seems to have in mind both

by the ‘essence’ incorporated into labouring and its product, and by the
alienation of that essence, we will see important links to the idea of the
integration of subjective experience.
According to Marx, the more the worker produces, which is to say the
more he ‘externalizes himself in his work’, the ‘less he can call his own’

(Marx 1977: 79). The reference is not to ownership in the legal sense of —

property although that also enters. Rather, having nothing to call your
—

own refers more fundamentally to the loss of an ‘inner life’. What the

worker does not have to call his own, then, is a self-experience. Alienation
results not only from the loss of (ownership of) the product of labour to
another; it results as much from the loss of labour as an activity that, in
itself, embodies the worker’s essence into an object, the product of labour.
Rather, the worker’s labour is alienated when it ‘does not belong to his
essence’ (81).
Marx clarifies what has in mind by the worker’s ‘essence’ when he considers
the impact of alienation:

Therefore he does not confirm himself in his work, he denies himself,

feels miserable instead of happy, deploys no free physical and intellec-
tual energy, but mortifies his body and ruins his mind. Thus, the worker
only feels a stranger. . . His labour is not voluntary.
. . .External
.

labour is . self-sacrifice and mortification.

. . . . It belongs to another
.

and is the loss of himself.

(Marx 1977: 80)

The qualities Marx associates with alienated labour suggest the parallel
qualities he associates with labour that is not alienated. In alienated labour,
the worker denies, loses, and sacrifices himself; so in labour that is not
alienated he must find himself. In alienated labour, the worker feels a
stranger to himself; so in labour that is not alienated the labourer must
know himself. Alienated labour is involuntary; so, labour that is not alien-
ated must be free in the sense that it is subject to the worker’s will. That
the worker would be happy doing labour that is not alienated simply
expresses the subjective state of mind that would result from the labourer
finding himself in his activity. It would seem, then, that Marx equates
essence with self, so that the alienation of the worker’s ‘essence’ is the alien-

ation of the worker’s self, or ‘self-alienation’.

Marx tells us more about what this means when he considers what makes
human activity different from that of animals: ‘Man makes his vital activity
itself into an object of his will and consciousness. Conscious vital activity
differentiates man immediately from animal vital activity’ (Marx 1977: 82).
Labour that is not alienated embodies the worker’s freedom (his will and
consciousness). This freedom is what I have referred to here as subjectivity,
the quality of being the subject of activity. Self-alienation, then, means the
alienation of subjectivity.
By alienation of labour, Marx means the loss of subjective experience.
Since, for Marx, subjective experience is what makes us human, the alien-
ated worker is not human while he works. But this means that he loses his
humanness when he engages in what is, for Marx, the main activity through
which we express our human quality. Alienation of labour deprives the
worker of the possibility of being human in his characteristically human
function (production), so he is relegated to being human in what are for
Marx his animal functions (eating, drinking, and procreating).
Whether or not we follow Marx in treating human consumption and
procreation as animal functions, we can see in his judgment of the connec-
tion of activity to the human essence the application of a normative ideal.
Though he may apply this ideal narrowly (only to the activity of labour),
it remains clearly an ideal of integration. The normative ideal is that the
worker should integrate his activity with his subjective being (work with
self), rather than splitting the two apart.
This norm of integration reappears, albeit in a less clear and compelling
way, when Marx turns later from the idea of self-estrangement to that of
exploitation. Indeed, the notion of exploitation is already implied in alien-
ation as Marx indicates when he insists that alienation of subjective
6
experience in work can only be its alienation to another (1977: 84). Legally,
to sell something we own to another is to alienate it. But, doing so only

implies alienation of subjective experience if the sale eventuates in the loss

of that experience.
If I enter into a contract that allows another to use my subjective capac-
ities for agreed upon ends, it hardly seems reasonable to conclude that the
result is self-estrangement. Indeed, the subjective element in activity requires
the aspect of consent. That I do not own the result of this activity does
not negate the subjective element in it. Self-estrangement only results when

the alienation of capacities is linked to the suppression of the subjective

element in them so that they become no longer subjective capacities, but
the capacity for mere physical work. To account for the link between alien-
ation and exploitation, we need to distinguish between the sale of subjective
capacities for agreed upon ends for which those capacities will be used by
us, and the loss of subjective capacities associated with the sale of our
capacity for mere work.
Marx does not really make this distinction. Its absence allows him to

equate the alienation of labour in its sale with the self-estrangement of

labour as a subjective experience. He does not consider the possibility that
what is sold is not the mere capacity for physical activity, but the capacity
to produce something into which has been externalized the individual’s, or
at least an element of the individual’s, subjective being. If we refer to the

latter as the individual’s capacity for creativity in work, then what Marx
excludes is the possibility that the sale of labour might be the sale of
creative capacity to be used by its purchaser for creative purposes. To be
sure, Marx excludes this possibility for a reason, which is bound up with
the argument, more fully developed in his later work, that the domination
of capitalist commodity production impels all labour in the direction of
brute physical work. If this argument holds, then the distinction drawn
above, however valid in principle, has no practical significance so far as
labour working for capital is concerned. If, however, Marx’s argument does
not hold, and wehave good reason to question its validity on both histor-
ical and theoretical grounds, then the equation of labour with the suppression
of subjectivity must also be questioned, and the idea of alienation appro-
priately modified to take the resulting distinction into account.
We can say, however, that so far as the worker’s creative capacities have
been suppressed, or deprived of any opportunity for development, alien-
ation means exploitation. This is so because the unhappiness inevitably
implied in uncreative labour means that the individual will only undertake
it when subject to some significant measure of coercion. This coercion most

notably involves taking advantage of the worker’s vulnerability, which results

from his inability to acquire the things he needs (for Marx his subsistence)
without offering the alienated form of labour for sale.
To arrive at this conclusion, we need not equate exploitation, as Marx
does, with the acquisition by the employer of a surplus value or profit from
the consumption of labour. Such an equation disconnects exploitation from
subjective experience, establishing it instead as a purely objective phenom-
enon. As Marx sometimes insists, exploitation understood as nothing more

than the disparity between remuneration and the value of the product carries
no normative implication, even if the language used seems to point strongly

in a normative direction. Then, the disconnection of exploitation from self-

alienation moves it outside the sphere of normative judgment.
Independently of the matter of the valuation of labour and its product,
however, we can consider the extent to which the labour relation negates
the worker’s subjectivity and enables the use of the worker’s labouring
capacities for ends having nothing to do with that subjectivity. If exploita-
tion means using an individual or his capacities for ends not his own,
alienation of labour is linked to exploitation.
 We may that this conclusion follows whatever the specific juridical
note

setting. It does not matter whether the employer is a capitalist entrepre-

neur, a worker-managed firm, or the state. Both alienation and exploitation
follow from the suppression of subjectivity, which implies the element of
coercion, whatever the specific property arrangements that unite labour and
the means of production.

Creative living
In the last sections, I speak of the quality of subjective experience as a
matter of self-integration. In making concrete what this means, it will help,
I think, to consider the specific aspects of self-experience most directly

implicated in the matter of subjectivity. Doing so leads us to those aspects

of self-experience involved with what I earlier refer to as the capacity for
freedom. When we alienate (by externalizing) our capacity to make choices,
to take responsibility for our actions and their consequences, to be a centre

of initiative, then we alienate the core of our subjectivity. When we make

others responsible for our conduct, we make ourselves objects for their
subjectivity; we substitute their will for our own.
Doing so means the loss of subjective freedom. The idea of subjective
experience as the basis for normative judgment involves an idea of freedom
as the unity of two moments, one subjective, the other objective. I have

used the term ‘subjective freedom' to capture the idea of an inner state and
internal capacity: the capacity to decide and choose, to determine conduct
in accordance not with external rules and expectations, but inner judgment.
The term ‘objective freedom’ refers to the configuration of institutions appro-
priate to developing, sustaining, and expressing in relationships the state
of subjective freedom. I will use the term ‘subjectivity’ to refer to the unity
of subjective and objective freedom, which together constitute the capacity
to live a certain kind of life, one capable of exploiting opportunities yet

undetermined.
I have, however, said relatively little about the conduct of life appro-

priate to a being possessed of subjective freedom, although this conduct of

life is the doing appropriate to being that plays such a large part in the
human capabilities idea. Let me begin to rectify this omission by intro-
ducing a notion of Donald Winnicott’s. This is the notion of creativity or
‘creative living’.
Winnicott defines creative living as the ‘doing that arises out of being’
(1986: 39). Creative living indicates that ‘he who is, is alive’ in the psycho-
logical sense. Winnicott distinguishes being (psychologically) alive from
reacting to stimuli. The ability to live creatively is our ability to ‘affect
our own patterns’ (1986: 40). The alternative to creative living is compli-

ance, the adaptation to the outside world, and thus the disappearance of
the self into what is already given and predetermined. Compliance means
the alienation or externalization of subjective freedom (agency) so that,
lacking any internal capacity to direct conduct, conduct must be directed
from outside.
For creative living, the world must not be wholly predetermined, and
the self must not be shaped wholly by adaptation to what is. Creative living,
then, includes the element of the creation of a world. While we do not, of
course, create the world, we can still be creative if there is a part of the
world subject to our creative influence. At the least, and perhaps this is
also the most we can expect, we can create ourselves in the world and expect
the world to adapt to this act of creation, and in that respect be created
for us.
I can express this notion of creativity in a way linked more closely to
the idea of human capabilities considered especially in the last chapter.
Nussbaum (1995) in her account of human capabilities, considers what
,

humans can do and what capacities they must have if they are to do the
things that are uniquely human. This entails a prior answer to the ques-
tion of what it is to be human. This prior answer gets more problematic
as it gets more concrete (expressing the specific ways of being in a partic-

ular culture). As the answer gets less concrete, however, it gets less
problematic, but also seems to lose any content. The notion of creativity
suggests that vital content remains when we ask our question in a way that
presumes no content whatever. The question would be something like this:
What might human beings become if their upbringing does not presup-
pose any specific answer given ahead of time?
The answer is that they might become self-aware, they might become
capable of organizing a life to express subjective being, and they might live
a creative life rather than one that replicates identities already determined

within a group culture. We may note that the task of identifying human
capabilities, while it points us in this direction in one sense, also points us
away from the answer to our question because it insists we list ahead of
time the functionings (the doings) that make a life uniquely human. We
can, instead, replace the attempt to identify functionings and capabilities
with the task of identifying how human development can be made consis-
tent with the goal embodied in our question. How can institutions and

interactions be made consistent with the task of assuring that human

upbringing and human life do not presuppose an answer to the question:
What does it mean to be human?
4 Needs and rights

Freedom and right

Subjective freedom is the vital internal basis for subjectivity. Subjectivity
depends, however, not only on subjective freedom, but also on the quality
of external relations, and of the institutions in which those relations are
embodied. In other words, subjectivity also depends on the presence of
objective (external) structures devoted to it, which is to say on objective
freedom. The term ‘right’ refers to the recognition of the individual as a
locus of subjective freedom. This recognition makes subjective freedom an
objective reality, which is to say a reality for others. Put another way, rights
secure the expression of subjectivity in conduct and relating.

The term ‘right’ involves us with a specific idea about interaction, the
idea that interaction should not subject one to the wilful control of others.
Freedom, so far as it involves right, is freedom from wilful control, whether
that be on the part of other individuals or groups. The idea of freedom
from wilful control links right to power, if in a negative sense. Power here
refers to the capacity to block subjectivity. Rights, then, protect against
power. It might also be thought that rights bestow or secure power, and
in a sense this is correct. If by power we mean the capacity to accomplish
our ends, then while rights do not assure us of this power, they play an

important part in assuring that we can exercise this power.

Yet, speaking of power in this way causes problems. When we say that
rights not only protect against power but also secure it, we equate power
with capability. Doing so obscures a distinction vital to understanding the
idea of rights. This distinction becomes important when we make explicit
the link between power and overcoming resistance, a link not implied in
the idea of capability. Then, equating power with capability insists that
our ability to accomplish subjectively meaningful goals depends on our
ability to overcome resistance, especially the resistance of others.
If the term capability refers to the qualities we have that enable us to
do something, particularly, though not inevitably, something in the world,
then capability is closely linked to creativity and creative living. In devel-
oping a capability we may have to overcome (internal) resistance, but this
 Foundations

does not mean that exercising capabilities inevitably means the ability to
overcome resistance (to have power). If it does not, then, we can distin-
guish capability from power by the necessity that power involves a struggle
against an opponent.
Here, I am not using power in the general sense of effectivity in the
world, but only in the sense of overcoming resistance, and it must be
acknowledged that for some there is no real distinction to be drawn. For
some, that is, all effectivity, all accomplishment, and all creativity must
encounter resistance. This way of thinking equates two dimensions of human

experience, power and capability, that I think we can learn something

important by distinguishing. Indeed, making this distinction is arguably
essential to the idea of an institutional setting appropriate to creative living.
Distinguishing power from capability makes power the enemy of subjec-
tivity. This follows from the link of power to resistance and thus of power
to the struggle between subjects each seeking to achieve his or her ends. I

will go further, however, and consider power not simply the force brought
to bear in the struggle between individuals or groups over their ends, but

as the force brought to bear against subjectivity itself. Doing so is implied

in the emphasis I place on the element of wilful control. Power as wilful

control has as its end the control, and in the limit the destruction, of subjec-
tivity in others. Referring to the diagram introduced at the end of the last
chapter, power is brought to bear to block one or another of the move-
ments that, as a whole, constitute subjectivity: from talent to capability,

from capability to opportunity, from opportunity to outcome. Thus, to deny

individuals opportunity based on irrelevant attributes subjects them to power
in this sense.
The idea of freedom from wilful control also has a positive meaning. This
positive meaning is captured by the notion of acting on our own will, which
means we are the subjects of our actions, at least within a significant arena

of human conduct. It might be assumed that subjectivity in this sense is

assured by preventing wilful control of others over our lives; or it might
be assumed that doing so only eliminates external barriers to subjectivity,
and that assuring the capacity for subjectivity as an internal matter is also
important. In either case, right specifically refers to the creation of a space
within which conduct and outcome are under control of our will, which is
to say a space for individual subjectivity. Rights assure that we are not

subject to the power of others, that we are not dominated or oppressed

by them.
Rights understood in this way are limited. They do not assure that our
subjectivity (as an internal matter) is intact, and can be asserted in the
world. They do not assure any specific outcomes. They only prevent oppres-
sion. Such a notion of right leads readily into specification of a set of political
rights associated with democratic institutions, so far as those prevent tyranny.
And, this notion works well as the basis for specification of property right
appropriate for a modern economy. This notion of right does not so readily
 Needs and rights
support the currently popular usage that tends to make right the basis not
only of the protection of the person from wilful control, but also of a claim
for non-market provision of goods, whether wilful control is at issue or not.
Thus, it is claimed that we have rights to medical care, that we have cultural
and group rights, that we have welfare rights, and so on.
The right to goods such as these, if it links to freedom at all, does so
only indirectly. Thus, it might be argued that a right to these goods derives
from the likelihood that in the absence of such a right our need for them
will drive us into relations of exploitation (as Marx argues it will). Or, it
might be argued that a right to these goods derives from their importance
in supporting our capacity for subjectivity; without them we cannot be

subjects in our worlds. In these two cases the claim for right is linked indi-
rectly to freedom.
This indirect relation is one with which we will be particularly concerned
here. It clearly implies a connection between right and entitlement to goods
not covered in the idea of property right. But, it does not so obviously

imply that this entitlement has the same character as the one embodied in
the notion of property, or that it is indeed a right in the sense of desig-
nating an arena for the individual’s wilful control.
The connection of right to freedom also connects right to personhood
since freedom pertains to persons. Recognition of personhood by others and
by the state means respect for rights. Those who have rights are persons
and those who do not are not persons. Of course, knowing what it means
to be a person, and exactly what protections and entitlements are associ-

ated with personhood is no easy matter. This is particularly the case in a

context where individual capacities are significantly affected by changing

technology as that translates into a changing and expanding set of economic

opportunities. What access to technology, to education, to communication,
is necessary to being a person?
But, more is involved in the use of the term right than a struggle over
the recognition of personhood. There is also, especially in the proliferation
of claims about right, a use of right not to establish the demands of person-
hood in general, but to insist on the salience of need. However powerful
need might be, and however legitimate may be the insistence that the
public authority should play a role in its satisfaction, need does not in any
obvious way bestow or imply right; nor do rights assure that needs will be
satisfied. To understand the connection between need and right, we need
to consider more closely both the idea of right and the kinds of needs for

which rights are relevant. I will do so by exploring some implications of

the idea of subjective freedom introduced in the last chapter.

The universality of rights

Historically, it has been the case that a few, many, or virtually all humans
have rights, and in this way are recognized as the locus of subjectivity.
We can say that all those
recognized in this way have rights, so that who
has rights depends onwho is considered a subject. To say that rights are
universal, then, is either tautological, since rights pertain to all who have
subjectivity and are therefore universal within this class, or inaccurate, since
rights are not universal if they only pertain to those recognized to possess
subjective freedom. It is also inaccurate to say, as for example the United
Nations Universal Declaration on Human Rights does, that all humans are
born free. Humans are born free neither objectively nor subjectively.
Objectively infants and children are not rights-bearing citizens, and are not
free, though they may become so. Subjectively, infants and young children
have not achieved the psychic integration and mature character implied in
the notion of subjective freedom. Yet, it would be true enough to say that
all (or virtually all) humans are born with the potential to become free,
both objectively and subjectively.
An idea sometimes built into the notion of universal human rights is
that objective freedom (including the legal structure of right) bestows subjec-
tivity. Then, by making rights universal we make subjectivity universal as
well. Yet, it is still recognized that all creatures are not capable, and certainly
not equally capable, of subjectivity. We are aware that we cannot make our

pets free simply by an act of recognition. Whatever we might want to say

about animal rights, we will always run up against the fact that animals
lack subjective freedom. This restriction suggests that objective freedom
only bestows freedom on those capable of being free, which is to say it
involves not simply the creation of freedom, but the recognition of a freedom
already present, in however latent a form.
Subjective freedom depends not on who is or is not recognized, but on who
does or does not have the capacity for subjectivity, a capacity that cannot be
created merely by being recognized. That subjectivity cannot be created by
being recognized follows from its connection to psychic structure. While we
can establish the objective freedom of those who are not subjectively free by

setting them free, so to speak, we cannot create subjectivity in this way,

though we may put in place a vital and necessary condition for it.
The distinction has to do with the difference between potential and
capacity, and therefore with the matter of development. Subjective freedom
is the result of a process of development, of the infant into a person, not
merely a physically adult human being, but a person in the sense of a locus
of subjectivity, a ‘centre of initiative’ in the world. Indeed, the vital element
in this process is the recognition by the parent that the child is a poten-
tial person, and has the potential to develop into an autonomous person.
In this sense, we might say recognition remains the vital element in

establishing subjectivity. Clearly, however, this does not mean that by

simply recognizing subjectivity, we create it. Once we take the necessity
of a definite development into account, we can no longer take freedom, if
that is the unity of its subjective and objective aspects, for granted, but
must consider its preconditions.
 Considering subjectivity the result of a development process allows us to
retrieve something of the idea of universal right if we can assume that what
is distinctive about the human organism is that it contains a potential
for subjective freedom. This idea of a potential is necessary to any notion
of development, which is the realization of an original potential through a
process peculiar to it. Freedom pertains then to all those who (1) have the
potential to develop as a centre of subjectivity, (2) experience a process of
development by which that potential is translated into a capability, and (3)
find themselves living in an institutional setting devoted to subjectivity.
Normatively, we can say that all those with the innate potential and its
realization in a process of development have rights, and in this sense rights
are universal. Indeed, the notion of the universality of right only makes

sense where we recognize the rooting of subjectivity in an innate potential.

The problem with the notion of universal human rights is its refusal to
recognize that the potential and the capacity for subjectivity are not the
same, and thus subjectivity cannot be created by a legal act even if objec-
tive freedom can. 1
Note that right refers to the recognition of subjective freedom and there-
fore involves the expression of subjectivity in conduct and relating. The
concept of right includes the idea that subjective freedom is not sufficient
for subjectivity; there must also be the opportunity to translate the inner
experience of subjectivity into something real in the world and for others.
Given subjective freedom, and the capacity for subjectivity, there must also
be the opportunity to shape a life around that capacity. This means that
the capacity for subjectivity must be made real and concrete. It cannot
remain merely a potential and fulfil its promise. But, to go from potential
to objective reality means also to go from abstract (potential) to concrete

(real), to adopt a particular form.

What is distinctive about a modern society is that, in it, this form is
not predetermined, and therefore it is not inevitable. Because subjectivity

means being a centre of initiative, it means that what we do and who we

are will, in some significant way, be determined not for but by us. This

determination by us is what we refer to as choice (Levine 1998 ). Without

the self-determination of a way of life including a mode of consumption
and a vocation, we cannot realize our being in the world (objective reality)
as the expression and realization of our subjectivity. If our way of life is

prescribed for us, then we are not a locus of subjectivity, but the occupant
of a role, an actor in a scripted drama. If we can imagine nothing more in
our social being than occupying a role, then neither subjectivity nor right

can have any substantive meaning for us. So, in becoming something objec-

tive, subjectivity also becomes something contingent.

The quality of subjectivity to which I have just referred reveals some-
thing important about the idea of right linked to subjective freedom. The
link between right and subjective freedom is also a link between right and
the emancipation of the individual from the group. Indeed, when we define
right as the opportunity to shape a life based on subjective freedom, we
also define right as the freedom to lead a life not already predetermined
for us by custom and tradition, that is, by our group identification. Giving
up the predetermination of our lives in custom and tradition makes our
lives in animportant sense undetermined (not predetermined), which makes
our lives our own. We can connect this indeterminacy to creativity, since

the absence of external determination is what makes for creative living. The
contingency to which I refer above is the necessary expression of creativity,
and therefore of subjectivity.
If right emancipates the individual from the group, it follows that there
2
can be no group rights. Put another way, in a regime of rights, subjec-
tivity resides in the individual and not in the group. Right transfers
subjectivity from the latter to the former, and thus attacks the claim the
group makes over its members: to determine how they should lead their
lives.
While we can refer to right as the opportunity for the expression of

subjectivity in conduct and relating, we cannot speak of a right to subjec-

tivity. That is, we can speak of the right to express subjective freedom, but
not of the right to subjective freedom. We cannot speak this way once we

give up the idea that subjective freedom is the product of objective freedom,
that it comes into existence with the recognition of right. Once we give
up this idea, we introduce an important distinction that follows from the
difference between potential and capacity. This is the distinction between
those aspects of subjective experience to which we can be said to lay claim
by right and those to which we can make no such claim, even though they
are vitally linked to freedom.

Making subjective freedom a matter of right conflicts with the idea of

subjective freedom as the capability expressed in the exercise of rights.
Subjective freedom depends both on an innate potential and on the devel-
opment of that potential into a capacity. There are, then, both requirements
of the development process and requirements of the recognition of its result:
subjective freedom. Only the latter is a matter of right, though it is obvi-
ously no more urgent than the former, and because of this may place no
greater obligation on social institutions.

Need
What I have just said can be put in the language of need. While emphasis
is often placed on needs for subsistence, which places physical survival at
the forefront, for our purposes subsistence is not the primary consideration.
The most vital needs of the human organism are not for subsistence, but
for a subjective life. Such needs are rooted in the organism’s original poten-
tial. If we root need in the organism’s urge to realize an innate potential,
then the idea of development suggests that the human organism has two
related but distinct needs. The first need is for conditions conducive to the
development of potential into capability. The second need is for conditions
conducive to realizing capabilities in conduct and relating. The first need
is for what we might refer to as a temporary external structure of subjec-
tivity. During the maturation process, the nascent subject’s undeveloped
capacity for subjective freedom makes it dependent on an external struc-
ture. The second is the need for subjective living properly considered. As

we will see, these two types of need relate differently to right. The latter

is satisfied by the exercise of right, while the former is not. I will return
to the idea of an external structure of subjectivity later in this chapter.

The connection of right to subjectivity raises questions about the idea

that need, even the most pressing of need, creates a right. The insistence
that ‘acknowledgment of basic human needs ipso facto establishes human
rights’ (Bay 1982 : 61) subordinates right to need. In so doing, it seeks to
make right nothing more than the immediate connection of satisfaction to
need. By immediate connection of satisfaction to need, I have in mind the
idea that having the need should provoke the provision of the means for
its satisfaction. No action is, then, required of the needy beyond the expres-
sion of neediness. The expression of neediness becomes the assertion of right,
so that right disappears into need.

Missing in this is the element of subjectivity expressed in the act of will

we associate with the assertion of right. Will is the mediating term between

need and satisfaction implied in the idea of right. It expresses the freedom of
the subject to satisfy need or not to do so, and to satisfy need in a way con-
sistent with autonomy. We can say, then, that to have rights means to inter-
pose will between need and its satisfaction so that the expression of need
cannot be the expression of right that leads to the means for satisfaction.
We can see this distinction operating in the distinction between prop-
erty right and the right to satisfy particular (‘basic’) need. To own property
is to have the right to satisfy whatever need that property is capable of
satisfying either directly or through other property that can be acquired via
exchange. There is, then, in the right to own property a right to satisfy
need, but not any particular need. This quality of property right creates
both an opportunity and a problem. The opportunity is for autonomy to
enter into the expression of need and the act of gaining what will satisfy

it. When autonomy enters in this way the connection between need and
satisfaction cannot be immediate, need cannot create right. The problem is
that the individual without property, or without adequate property, cannot
satisfy needs, including those needs connected to creative living.

Property right
The need for creative living to which I have just referred is the need to
translate the capacity for subjective freedom (potential) into a concrete and
particular way of life (reality). Doing so constitutes our unique individu-
ality as something real for ourselves and in the world of others. Without
thisuniqueness, or individual difference, we would have at most a group
identity; we would be member rather than individual. Individual identity
refers to the investment of our subjectivity in a concrete way of life.
Externally this means an involvement with things and with others. Intern-
ally, this means maintaining a sense of our selves, including the integration
of aself-experience.
Right secures the opportunity for the individual to shape a life
expressive of subjective freedom. What does this mean more specifically?
As I suggest above, a system of rights makes possible the translation of
3
subjectivity into an objectively existing reality in the world and for others.
It is the visible expression of subjectivity, visible not in the narrow sense
of accessible to sight, but visible in the broader sense of recognizable by
others.
Making subjectivity visible in this sense means embodying it in objects
existing in the world. These objects, while external, are also subjective
since they act as containers for subjective meaning. I will refer to objects
of this kind as property, and the opportunity to use objects in this way as
property right. This way of speaking about property right clearly makes
it vital to subjectivity, but it does not clearly indicate property’s scope
and limits. The problem of scope and limits has three dimensions of
particular importance: (1) recognition of the rights of others, (2) the
limits, if any, of the accumulation of private wealth, and (3) the treatment
of our capacities (labour) as property. In this chapter, I restrict myself
to the first of these dimensions, taking up the other two in Chapters 6
and 7 .

The idea that right is limited by others follows from the location of right
in intersubjective reality. Right enables the individual to make his or her
subjective freedom a reality for others. But these others must also be subjects
if the visibility of our subjectivity to them is to make it real. Subjectivity
exists not in the material qualities of the external world, but in its subjec-
tive meaning. To be sure, this subjective meaning is embodied in things,
and in the shaping of things to make them connect to subjectivity. But
the embodiment of meaning in things is a subjective act that also makes
their physical production a subjective act. Again, the reality of the subjec-
tive meaning of things is both subjective and objective: subjective in that
it is the reality of meaning and not physical form per se, and objective in
that it is the reality of meaning for self and other. Put another way, the
subjective reality of things is their intersubjective reality. The system of
property right, which is a system both of property and property owners, is
such an intersubjective reality.
The intersubjective reality of property has both objective and subjective
conditions. These correspond to the conditions we have already considered
for objective and subjective freedom. They include the legal protection of
property right and the subjective capacity to participate in the property
system. This capacity is part of subjective freedom, the part which, so to
speak, reaches out to others. What this means is that subjective freedom
already contains the element of connection with others, a connection that
is not simply imposed by the external constraints of a legal order.
It follows that subjective freedom only exists for us if we also recognize
it in others. Recognizing the self-in-other is the other side of the recogni-
tion of our own selfhood (the self-in-self). Having subjective freedom means
both having a self and being our selves. In having a self we are the same
as all those who also have selves. In being ourselves, we are different from

others (we are different selves); we have an identity of our own. Having a
self refers to the abstract moment of selfhood or subjectivity, being our
selves to the particular moment. As I suggest above, both dimensions are
necessary to subjectivity.
To have both dimensions means that our subjectivity is both our own
and something shared with others. This means that our recognition of and
respect for ourselves as subjects implies respect for others. The property
system embodies and expresses this quality of subjective experience, and is
therefore essential to subjective living. This means, however, that the prop-
erty system is both a necessary condition for, and a limit to, subjective
experience. This limit exists in the presence of others, who also have rights
and whose subjectivity also demands respect. This principle of recognition
of others plays a vital part in the development of the obligation to respect
the rights of others.

Development
Subjectivity may not exist
as a capacity because it is still in the process of

development out of original potential. In this state, subjectivity cannot

an

be said to exist as such, and therefore cannot establish a locus of right. Yet,
many speak of the needs of development as rights, most notably in the area
of education. A right to education would seem to be a right to a certain
development. It clearly establishes entitlement to the satisfaction of a real
need, the need to develop and thus realize a human potential. But an impor-
tant ambiguity exists in this usage regarding the subject of this particular

right. We can see this ambiguity as a practical matter when we observe

that the right to education for the child translates from the child’s point
of view into a restriction. The child attends school not at his or her will,
but at the will of the parents, the school board, and ultimately the state.
If education is a right, then, whose right is it?
We can get around this problem in two ways depending on the depth
of our commitment to the language of right. Obviously, we can speak of
the role of education not in the language of right, but of development.
Development into a person is, then, an obligation for the child, a goal
imposed (at least in part) externally. Speaking this way expresses something
important about the distinction between potential and capacity, which we
emphasized above.
 There is, however, a way of retrieving the language of right when consid-
ering education. This alternative entails introducing an ideal subject, the
mature adult that the child can become, whose right to develop is exer-

cised in exercising the right to education. Then, while the child may not
want to go to school, the potential adult does want to do so, and even, in
a sense, wills him or herself to become educated. This is not an altogether

fanciful way of speaking since no child will develop without an internal

urge to do so, one strong enough to overcome whatever resistance regres-
sive impulses may put in its path.
Since, however, the adult the child has the potential to become does not
yet exist, he or she cannot will anything. And to get around this, we would
need to introduce a steward for the child’s potential self. The subject of
the right to education would be the potential self, and the agent of the
subject would be the steward to which I have just referred.
As a practical matter, the child has two stewards: the parents and the
state. These stewards may or may not represent different principles. Thus,
the parents as stewards may will the child to be educated in a religious or
ethnic community, with its unique and particular cultural goals. For
example, the parents as representatives of a religious community may insist
that the child be educated in creationism rather than evolution. This conflicts
with the stewardship of the secular state whose goal is not the develop-
ment of a capacity for devotion, but the development of the capacity for

universal citizenship and individuation.

Application of the notion of right here clearly introduces a somewhat
cumbersome use of language. The subject of right is the child’s potential
self, and it is exercised through his or her steward. It would be simpler
to say that the development of the potential for subjectivity into a real

capacity is an implicit goal of the child and an explicit goal of the state,
to be pursued in various ways depending on particular circumstances. Yet,

cumbersome as the language of right is in this area, it may be helpful in

raising some interesting questions about the subject of right, questions that
also apply in cases where limits of subjectivity have to do not with the
process of realizing a potential, but with impairment.

Impairment
The idea that subjective freedom depends on an original potential and on
the presence of conditions favourable for a specific development introduces
the possibility that human beings may fail, to one degree or another, to
develop the capacity for freedom. The result of such failure is what I will
refer to as impaired subjectivity. Impairment may result from a defect in
the original potential, or from a deficit in the development process.
Impairment may or may not be rectifiable, depending on how fundamental
it is, on the availability of remedial measures capable of returning the
individual to the development path, and on the availability of resources
needed to take advantage of those measures.
Impaired subjectivity may have physical or emotional causes. Whatever
its cause, it undermines the individual’s ability to find and express a core
of self in action and in relations with others. Examples of impairment
include learning disorders, low self-esteem, lack of impulse control, and so
on. Each of these can impede the effort to shape a life expressive of subjec-

tive freedom, to recognize autonomy in others, and, as a general matter, to

live creatively. Since subjectivity as I use the term here is essentially an
emotional or psychic accomplishment, the impairment with which we are
primarily concerned is an impairment of emotional development. Yet,
subjectivity also has physical and cognitive conditions. Where physical
impairment is severe enough, it can limit the opportunity to realize cap-
abilities otherwise well developed. And where cognitive skills are limited,
so too is the capacity for the conduct and relatedness we refer to as the

expression of subjective freedom.

As with any significant development, the full realization of subjectivity
is unlikely, and the norm in practice will include a significant element of
failure, or, in our language, impairment. We can say, then, that all are
impaired to one degree or another. This is especially the case since the end
involves psychic integration. We can assume that integration will be attained
only up to a point, and that earlier levels of functioning remain available
so that regression to them is always a possibility. This complicates the

problem of normative judgment, which includes establishing meaningful

categories for evaluating institutions by their ability to secure subjectivity
so far as that is possible. We need to know, that is, not only what the ideal

looks like, but also the extent to which it is reasonable to expect the indi-
vidual to realize it.
Thus, we can usetechnology to enable some of those with physical impair-
ments to lead lives in most ways comparable with the able-bodied. Yet,
doing so is costly, and more costly the closer we attempt to bring the
impaired to a level of functioning equivalent to the able-bodied. Application
of the language of right seeks to cut through the problems posed by the
cost of measures needed for the impaired to reach this level of functioning

(Yamin 1996 : 404). Yet, doing so constitutes a denial of impairment not

only by denying cost, but also by insisting that technology can make impair-
ment disappear.
Some of those who deal with physical impairment address the problem
4
just raised through a distinction between disability and impairment. It
may help in understanding this distinction if we use the language of human
capabilities. In that language, a physical impairment that does not mean a
restriction on human capabilities is not a disability. Our main concern here
has been not with human capabilities in general, but with the capacity for
subjective experience. If the latter is the core capacity in the sense that
without it the particular capabilities emphasized, for example by Nussbaum,
lose their significance, then we can distinguish impairment from disability
according to whether the impairment affects, or is allowed to affect, the
capacity for subjective experience.
Whether impairment means disability will depend, at least in part, on
society’s investment in a facilitating environment that can offset the possible
impact of impairment on capability, that is on the capacity to lead a fully
human life. There is, then, an important distinction between physical
impairment and impairment in human capabilities (disability), in that the
latter may be susceptible to the impact of social conditions, including
those stemming from attitudes toward the impaired. This construction leads
naturally to the idea that fully respecting the rights of the impaired will
assure that they are not disabled, and to the idea that, while impairment

may be a physical condition, disability results from discrimination (Linton

1998 ).
on the distinction between impairment and disability encour-
Insisting
ages us think about the latter as a social construction. Yet, however valid
to

within certain limits, doing so can mean denying the real limitations that
impairment can impose (French 1993). This denial of impairment applies
not only to those with physical limitations, but also to those with impaired

subjectivity, which is our main concern here. Emotional and cognitive

impairment are, as a rule, more closely linked to subjectivity than are the
more commonly addressed forms of physical impairment, but the latter

can also affect freedom. Exploitation of opportunities for the expression of

capabilities often requires a minimum level of physical functioning. This

is obvious in some cases. A loss of physical capability for a musician can
have substantial ramifications for subjective experience, and therefore
substantial emotional consequences. Physical and emotional capacities are
closely linked, and it is reasonable to consider them together under the
category of impairment.
The problem of dealing with impairment is, I think, best addressed not
in the abstract, but as a practical matter. That is to say, a judgment needs
to be made as to what level of achievement we will consider the norm, and
how far we should go to assist those unable to achieve this norm on their
own. The problem is not to deduce such a norm theoretically, but to try

to understand how institutions can make the necessary judgments. I return

to this problem in Chapter 5 .

If impairment is not rectifiable, then those individuals with impaired

capacities for subjective freedom have needs of a special kind. Such needs
differ from, though they are related to, our first two needs considered above
(pp.56-7). I will refer to this third need as the need for a permanent external
structure of subjectivity. Thus, to summarize the three needs. There

are first the needs associated with the development of subjective freedom.

These include the need for a temporary external structure of subjectivity.

There are also the needs associated with expressing a developed capacity for
subjectivity in living and relating. In satisfying such needs, rights play a
central role. And, for those with impaired subjectivity, there are needs that
can be satisfied not by right, but with the assistance of a permanent external
5
structure of subjectivity.

Yet, while we have different categories of need, we often find the language
of right used without regard to these distinctions: children’s rights, the
rights of the handicapped, welfare rights, and so on. Indeed, we find the
language of right used with special force by, or on behalf of, those whose
subjectivity is in some way impaired when set against prevailing norms.
Why is this the case, and what does it mean?
When we insist on applying the language of right to the process by
which those having impaired subjectivity acquire the things they need, we
attribute subjective freedom to those for whom it does not fully exist. To
understand this usage, then, is to understand the insistence that subjective
freedom is not, or cannot be, impaired (though it may be externally confined),
perhaps because it is assumed to be created by the designation of right and
not by the completion of a development process.
In this connection, consider the following statement concerning the

impaired from one student of rights:

Many people, including people with special needs, require help at certain
times in their lives. Because of this, it is important to view the grounds
of self-respect and self-esteem as secure against the need to seek help.
(Copp 1992)

However sympathetic we may be with the idea expressed here that arrange-
ments for satisfying the needs of the impaired should, so far as possible,

respect their integrity, the statement also contains a conundrum. How do

we assure the self-feeling we associate with autonomy, and therefore with

independence, for those who are not independent? Does our insistence on
rights, and therefore on exercise of will, falsely construe their situation and
thus deny them the understanding and empathy without which need satis-
faction will surely be in some ways an assault?
Extension of the use of the language of right beyond its natural bound-
aries expresses the denial of impairment, which is linked to the denial that
subjectivity is an accomplishment. Thus, those who might otherwise be
considered impaired become instead ‘differently enabled’. Wilfred Bion refers
to this denial as the ‘hatred of a process of development’ (1961: 89). By

this he has in mind the wish that we could ‘arrive fully equipped as an
adult fitted by instinct to know without training or development exactly
how to live ..’. If there is no development, then subjective freedom must
.

be an original endowment rather than an accomplishment. Our original

endowment is not our potential, but the capacity itself. We need to consider
what makes such an assumption attractive, since it underlies much contem-
porary thinking about the provision of welfare.
 By assuming capacity rather than potential as our original endowment,
we take a strong step in the direction of
kind of equality. Since no devel-
a

opment process is needed, and we are all endowed with subjectivity because
we are human and need do no more to have it than be human, it follows

that we are all equally centres of subjective freedom. Thus, the equation of
potential with capacity appeals because of its connection to an ideal of
equality. We might ask, then, What makes this particular notion of equality
so attractive?

To answer this question, we need only note that once we allow that some
may not have subjective freedom, we cannot avoid the possibility that we
will find ourselves among them. Then, to protect ourselves from the humil-
iation of being judged lacking, we insist that no such judgment can or
should be made. Here, Freud’s comments on equality have force. He suggests
that the impetus behind the demand for equality is the need to deal with
envy by depriving ourselves of the opportunity to gain what others do not
have so that we can protect ourselves from the danger that they might gain
what we cannot (Freud 1959 ). Hatred of development combined with the
need to cope with (avoid the threat of) envy leads to the insistence that
subjective freedom is present where objective freedom is
automatically
secure. This, then, leads the denial of impairment, or the presumption
to
that it is the result of external factors, or the insistence that it can always
be repaired.
Since it is the fear of impairment in ourselves that provokes the denial
of impairment in others, the phenomenon of projection plays an important
role here. Through projection, we move problematic aspects of our self-
experience outside onto others, onto groups, or onto institutions. Let me
consider briefly what this means.
In simple terms, through projection we can deal with unacceptable aspects
of our self-experience by attributing them to others. Thus, we may expe-
rience our feelings toward others as their feelings toward us, or, we may
find in others those aspects of ourselves we cannot acknowledge as our own.
Our impulse toward self-interested conduct becomes the self-interested
conduct of others; our hatred of others, or even our hatred of ourselves,
becomes their hatred of us; our fear of our own inadequacy becomes a judg-
ment of the inadequacy of others. In each case, a feeling or self-experience
is shifted from an internal or subjective reality to an external, or objective,
reality. Projection makes the subject’s desires, feelings, capacities, and so
on not his or her own, but those of another. The other can be a person, an

institution, a group, or any entity capable of carrying or containing the

relevant aspects of the subject’s self.
It needs to be borne in mind that while projection shifts responsibility
for feelings and attitudes away from the subject, this does not make projec-
tion a matter of conscious intent. On the contrary, the power of the strategy
embodied in projection derives from the fact that the process takes place
outside of awareness, so that the subject actually loses any sense that the
feelings involved are, or ever were, his or her own. This disavowal of inner
experience has important implications. In particular, it impoverishes the
individual’s experience of him or her self by placing that experience outside,
leaving the individual with a diminished subjective life. Indeed, it can be
the individual’s subjectivity itself that he or she externalizes in this way,
thus assuring that agency only exists outside, and that the experience of
being a subject cannot be achieved. So far as action is driven by subjective
experience, by hopes and fears, and by the interests shaped by hope and
fear, the impoverishment implied in projection must be assumed to affect
subjective ends in significant ways.
Projection works best when the object chosen actually experiences or
exhibits the feelings and self-states it is meant to contain. We can assure
this result by choosing appropriate objects for projection, or by provoking
objects to experience the disavowed emotions and to take on the disavowed
character traits. Thus those who really are impaired offer an especially
compelling container for the projection of our sense of our selves as impaired.
To the extent that individuals or groups succeed in assuring that their expe-
rience with external objects (persons, groups, or institutions) confirms the
expectations associated with their use as containers for projected internal
states, they succeed in creating a closed circle linking internal and external.
Doing so has significant implications for defining and addressing social
problems, including those that involve the design of economic institutions.
Projection enables us to treat the impaired as repositories of our own
impaired selves so that we can better deny our own impairment. Projection
enables us to deny our impairment in two ways. First, it assures that our
impairments appear not as our own, but in others. Others are impaired; we
are not (‘There but for the grace of God go I’). Second, our insistence that
the impaired are, or can be made, whole (free) denies the state of impair-
ment in them as a way of denying it in ourselves. If others are not impaired,
then we are not impaired.
Projection results when we cannot tolerate the idea that we too are in

some ways impaired in subjectivity, that we are (and will be) depen-
our

dent on others, that there are things we cannot (and will never) be able to
do, that our lives are less than they might have been. Projection, then,
protects against the narcissistic injury associated with the idea of limits
implied in impairment. The blow to our self-image associated with the idea
of being impaired shapes our idea of those handicapped in ways we are not,
and shapes the way we then relate to them. Indeed, the need to cope with
the loss of self-esteem implied by the internalized image of ourselves as
somehow damaged defines the idea of impairment we then impose on others.
We decide who is and who is not impaired according to the necessity of
externalizing our impaired selves so that we can retain internally a sense
of ourselves as unimpaired, or complete, persons. This means that our under-
standing of impairment, and of those who are impaired, is an understanding
we have of ourselves, of our lives and our experiences, rather than their
lives and their experiences. We then have a very close relation with those
judged impaired, since they are us.
For some, the prospect of impairment in others is intolerable because it
brings to mind their own; to deny it in others is necessary if they are to
deny it in themselves and thereby fend off awareness of their own limita-
tions. This attitude is commonly expressed in the insistence that we can
do and be whatever we want so long as we adopt a positive attitude and
will the outcome we desire. This denial involves an element of sadism
toward those who fail to be all they can be since it insists that failure is
not the result of forces outside their control, but of a weakness of will.

Once failure gets attributed to weakness of will, a door is opened to puni-

tive policies designed (ostensibly) to strengthen will, or to punish those
who give in to their weaknesses.
A less punitive, though no less problematic, attitude stemming from the
same source insists that all have a right to unimpaired functioning. This

then makes the welfare of those whose subjectivity is impaired a matter of

right (which is to say will) notwithstanding the link between impairment
and the failure of subjectivity. Thus, extension of the language of right to
welfare expresses the denial of impairment.
These attitudes centring on denial should be contrasted with the attitude
that accepts the impairment of others as real, and deals with it on its own
terms, on the basis of its implications for the impaired rather than for
ourselves. We can refer to this attitude as empathy, by which I have in mind
the capacity to understand the experiences of others as they have them, rather
than in terms of the significance such experiences would have for us were
we to have them. It is the capacity for empathy that makes possible an alter-

native idea of the impaired, one marked not by the denial implied in the
notion of right, but by the acceptance of their separate reality.
To take the path suggested by this alternative idea, we must first give
up the fantasy that impairment is not real, or that it can be overcome by
acts of will, perhaps enhanced by the appropriate technology. What happens

when we give up the fantasy that reaching physical maturity implies that
a comparable emotional development has taken place? Or, what happens
when we give up the related fantasy that there is no such thing as emotional

development, or, if there is, it has no bearing on the problem of freedom?

The answer is that we can then consider the alternative path for dealing
with impairment. I will refer to this alternative as welfare.

Welfare

When we consider extending right in the sphere ofthe economy beyond

property right, we consider claims of right to goodsthat we neither own
nor acquire in exchange for goods we own. A right to welfare might be

construed in this way, and I would like to consider what such a right might
6
involve, and whether it can be made plausible.
 The first question that arises when we think about welfare rights is that
of identifying the sorts of goods to which such a right would provide enti-
tlement. A natural and appealing candidate has been those goods capable
of satisfying basic needs. The connection of right to basic needs seems to
link right to a sort of need carrying the imperative we associate with right.
We can even argue that, if there are basic needs, their satisfaction must be
a prerequisite for agency or autonomy (Copp 1992). Then, assuring satis-

faction of basic need through welfare secures autonomy, which is also the
purpose of rights. We can also argue, along the same lines, that to fail to
assure satisfaction of basic need by right makes individuals vulnerable
to exploitation and oppression by those to whom they must turn when the
right is not recognized.
While this last argument has a certain intuitive appeal, it runs up against
the central problem with basic needs arguments considered in Chapter 2 .

If the right to satisfy basic need is a right to a basket of goods prescribed

for the individual as a part of a species or a group, it drains need of its
connection to autonomy, while, since it invokes right, insisting on that
connection. If right entails the ability to exercise will, then a right to some-
thing already given (prescribed for the individual) would be a contradiction
in terms. This contradiction is well expressed in the difficulties that arise
in the effort to identify what are basic needs once we leave aside the abstrac-
tions of food, clothing, and shelter. Once we do so, we immediately discover
that the type of food, clothing, shelter, and so on is contingent and not
given. Then, having rights in this area would only make sense if we include
the right to decide what does or does not constitute a basic need and a
good appropriate for its satisfaction.
This is clearly implied when the need to be satisfied is for the develop-
ment and expression of a personal identity. Identity enters into how all
needs are determined, how basic nutrition, shelter, and so on are to be

acquired (through what sorts of food and housing). This poses a problem
then for the basic needs language. We can solve this problem by redefining
the right from a right to satisfy basic needs (or to an adequate standard of
living) to a right to income. A right to income offers the individual not a
prescribed package of goods to satisfy a prescribed set of needs, but money,
which assures discretion in the satisfaction of need.
This solution works so long as we imagine that individuals use the money
they receive in this way to acquire goods capable of satisfying basic needs
somehow defined. But, it makes little sense to assume anything of the sort.
It makes more sense to assume that we only know the individual’s basic needs

retrospectively, once he or she has expressed them by acquiring the things he

or she needs. This, of course, severs the link between the right to income and

basic need, which in turn severs the connection between the right to income
and the argument for a right to satisfy basic need or the right to a basic
standard of living.
The problem in all of this is the notion of welfare on which it depends.
This is a notion that links autonomy to welfare as a capacity we expect to
be secured by welfare, but not as a part of the determination of welfare
itself. More concretely, this notion entails dividing needs into two groups,
basic and non-basic, according to their different connection with autonomy.
Thus, Raymond Plant suggests that basic needs must be satisfied if we are
‘to do anything at all’, while non-basic needs ‘are for those goods an indi-
vidual needs to fulfill his particular plan of life in his particular life
circumstances' (1986, emphasis in original). Basic need satisfaction is neces-
sary to autonomy, but does not contain the element of autonomy. Needs
that express our autonomy are non-basic, which is equivalent to saying that
our autonomy is itself non-basic.

We can begin to escape the problems implied in talk about a right to

satisfy basic needs or maintain an adequate standard of living if we include
from the outset the element of autonomy in our idea of welfare and need
linked toit. Let me reconsider, then, what we might mean by welfare so
we can better judge the relation rights bear to it.
Put simply, welfare is the provision of what the individual needs to secure
his or her well-being. Well-being is a quality of our subjective experience.
Welfare can be secured by the individual acting on his or her own initia-
tive, or it can be secured by a process independent, to a greater or lesser
degree, of individual initiative. In the first case, welfare is secured by the
exercise of right, in particular the right to own and use property including
the right to enter into contracts for the use of productive and creative
powers. So, we can say in this case that protecting rights also protects
welfare, and the end of right is to secure the kind of welfare appropriate

to an individual possessed of subjective freedom. In the second case, welfare

is not secured by the exercise of right, which means that welfare and right
are not so closely linked. Something more than and something different

from right is needed to secure the welfare of those with impaired subjec-
7
tivity. The welfare system as that term is usually applied seeks to provide
support for those who cannot meet their needs through the exercise of
their rights. 8
Let me elaborate on the notion of support just introduced. Those for
whom subjectivity remains sufficiently intact can satisfy their needs by the
use of their property, except in times when the property system has for

some reason failed. Such individuals are, of course, dependent on an external

structure, the market, for need satisfaction. We can think of this external
structure as a structure of subjectivity, even though it sometimes appears

as one of material provisioning, and therefore as a material-technical rather

than subjective order. 9 Considering it a structure of subjectivity follows

from our earlier consideration of the importance of recognition in the creation
of property and property right.
For some, as we have seen, subjectivity is impaired to the point where
recourse to this system is limited in some significant way. In a general

sense, this is because their creative capacities (labour) are too poorly
developed to havesufficient market value to sustain a way of life consis-
a

tent withwell-being. The market is, then, not enough, and another external
structure is needed. In the simplest formulation, this external structure is

another individual who can act as a caretaker, though we still need to know
what sort of external structure (institution) this individual represents, espe-
cially whether it is the family, the state, or a private organization. We will
consider this individual or organization the external structure of subjec-
tivity for those whose welfare is not secured by the market.
Introducing the idea of an external structure of subjectivity as an alter-
native to rights and the market system that instantiates them raises a
particularly important question. Extra-market dependence on others means
dependence that is not reciprocal, and that does not entail the full recog-
nition of subjectivity at both poles. Such dependence has long been deemed
a danger since it has the potential to develop into a relation of power and

exploitation.

Power and right

One reason for insisting on the language of right is a sense of the urgency
of need and the importance of acknowledging obligation. It might seem
that, in the absence of right, important needs will not get satisfied for those
whose impaired subjectivity stands in the way. In this case, the language
of right is used by those who recognize impairment, at least up to a point.
The demand that rights be extended carries the implication that impair-
ment is a reality, and that it imposes an obligation. Yet, using the language

of right in this way causes confusion, especially the confusion about impair-
ment considered earlier, which involves a strong element of denial.
If we do not recognize the rights of the impaired, then we risk leaving
them at the mercy of those better situated, which seems to make their
welfare contingent. Doing so provides little comfort since it includes
the prospect of a dependence that makes exploitation the price of
welfare. The language of right is meant, then, to protect the needy
from the wilful control of others. The problem, if we reject the use of the
language of right in these cases, is how to protect the dependent from
wilful control.
Demanding rights expresses the (possibly legitimate) fear of discretion in
the provision of welfare. This fear translates into a movement to legislate
obligation, not only as a general matter, but in detail, so that discretion
can be replaced by rules. Outcomes need to be fixed in advance. Yet, doing

so runs up against the central problem of welfare: its link to subjectivity.

If we can reduce welfare to the provisioning of a fixed subsistence, then

discretion need play no role. Yet, this reduction of welfare to subsistence
severs the relation of need to subjective experience. Just as this seeks to

protect the subjectivity of the needy by protecting them from the power
of others, it deprives them of what subjectivity they have, however impaired
it might be. The path of subsistence, because it is the path away from
subjectivity, leads further from rather than closer to our goal.
The problem that results from these considerations can be summarized
in the following way. Markets facilitate the satisfaction of needs appropriate
to an individual possessing an adequate measure of subjective freedom. For

those lacking an adequate measure of subjective freedom, markets cannot

protect what subjectivity they do have. This has led to the idea that they
have rights to subsistence, or basic need fulfilment, additional to, or substi-
tuting for, the property rights that constitute the market. This protects the
process of need satisfaction of the impaired from the wilful control of others,
and in this respect protects their subjectivity. It does so, however, by
draining need of its subjective element, which is its link to human creativity
and the potential for subjective experience. We gain subjectivity at one end
by sacrificing it at another.
To solve this problem, we must establish for the impaired an external
structure capable of protecting and nurturing what freedom they have the

capacity for, without assuming that they can be fully a locus of subjec-
tivity, and therefore can or should satisfy all their needs by the exercise of
rights. If a solution exists, it must be in the design of the larger organi-
zations that are the external structures of subjectivity, and in the measures
that can be taken to assure that those organizations are the stewards rather
than the enemies of subjective freedom.

External structures of subjectivity

Earlier I mentioned three institutions that have played the role of securing
welfare for those whose welfare is not secured by the market: the family,
private organizations, and the state. Let me now briefly turn to these
contenders to see how they might be expected to succeed or fail in the role
of stewardship to which I have just referred.
The family is the original external support for the individual’s emerging,
yet still undeveloped, subjectivity. It is reasonable, therefore, to imagine
that the family might continue in this role for those whose subjectivity is
not so much undeveloped as impaired, or impaired due to a developmental

failure. Indeed, emotional impairment is in some ways connected to the

individual’s failure to successfully negotiate the development process. This
means that failure of development expresses the family’s failure in its role

of external support for the child. So far as impairment originates in family

dysfunction, there are obvious problems in relying on the family for the
external support the individual needs once physically mature. If impair-
ment does not result from failure of this kind, it may not be unreasonable
to have recourse to the family for at least part of the support needed.
A normative account of the family would consider how it is or is not
well organized to provide the external structure with which we are here
concerned, and the way in which alternative ends impede the family in this
task. Historically, of course, the family has taken on substantial economic,
political, and cultural tasks, many of which bear a deeply problematic rela-
tion to the task of supporting the development of subjectivity in the child
from potential to capacity.
An example of this would be the organization of the family as a unit of
production, which carries the implication that children will be considered
part of the family’s labour pool. The idea of the child as part of a labour
pool conflicts with the idea of the child as a developing person whose task
is not to contribute to the family’s ability to satisfy need, but to develop
into an autonomous individual. Child labour is the enemy of subjective
freedom, and any organization of the family that makes the child a source
of labour must also be considered the enemy of freedom.
Even if, however, we assume that the family is well organized around
the goal of supporting this development, it can fail. The family can fail
because it fails to sustain itself as a unit due to illness, death, or voluntary
dissolution. It may also fail due to lack of adequate resources, emotional or
material, for the caretaking involved in the support of subjectivity. We
cannot, then, simply resolve the problem of stewardship by referring to the
family, however important it may be in particular cases.
To seek support outside the family is to have recourse to organizations,
either public or private. Many today insist that a large burden can and
should be borne by private, especially charitable and religious, organiza-
tions. In considering whether such recourse is appropriate, we need to
consider the relation of such organizations to subjectivity. So long as we
retain the goal of supporting as much subjectivity as the individual is
capable of given his or her impairment, we need organizations committed
to subjective experience and not to other ends.

This is precisely the point at which we might expect private organiza-

tions to fail as candidates for stewardship of those not fully capable of
autonomous living. As private organizations, they are inevitably committed

to private, which is to say particular, ends. Whether these ends have to do

with group culture, religious ideals, or even secular community, they are
nonetheless ends external, and in important respects hostile, to subjective
freedom.
For stewardship of subjectivity we need an organization that is not private
in this sense. Such an organization is public in the sense that it has no

private or particular ends, and in the sense that it is publicly funded. If

we organize a part of the institution of government around the ideal of
subjective freedom and the quality of subjective experience, we would orga-
nize it to have no end of its own, but only the end of supporting subjectivity.
We would then have an appropriate external structure of subjectivity for
the impaired. Since the relevant organization is public in the senses just
considered, and since it is devoted to supporting the welfare of those who
are fully able to support their own, we can refer to it as the welfare
not

state.At this point, then, the problem of well-being becomes a problem

of the normative standing of the state, which is the problem I consider in
the next chapter.
5 State and society

Introduction
In the older usage of the classical economists, a political economy is an

economy whose boundaries have developed beyond those of the family to

those of the state. This also meant that the responsibility for economic
activity shifted from the family to the market and the state. In the last
chapter, I considered two areas of responsibility for the state: the protec-
tion of property right and the stewardship of the impaired. It is unclear,
however, what assures that the state will be devoted to the stewardship of
subjective freedom rather than to the other ends we normally associate with
it, especially those having to do with advancing the private interests of its
constituencies.
This problem takes on special importance when we consider the sugges-
tion, also advanced in the last chapter, that the organization responsible for
welfare must inevitably make decisions involving large and important areas
of discretion. Thus, what I refer to there as the welfare state must not only
deliver services, but also make decisions concerning the norms that define
impairment, the goals of functioning we apply for the impaired, and thus
the resources to be devoted to their well-being. I suggest that this mandate,
because it involves a significant degree of discretion, creates opportunities
for abuse. The prevalence of abuse encourages the idea that the state is not
the steward of freedom, but a locus of oppression. Understood in this way,
the problem of the state becomes a problem of restricting its conduct in
ways that will assure it serves the needy rather than exploiting them. To
do so can mean attempting to subject the state to externally given rules,
for example derived from rights or from democratic decision-making process.
Indeed, many would argue that the system of rights constitutes a neces-
sary restriction on the state. This makes sense in a context where the state
has been made the tool of private interest. The notion of the state as an
implement of force makes it the enemy of freedom. Whether it then makes
sense to consider right a solution to the problem of the state depends on

how we imagine rights can be realized in the absence of a state, or in the

presence only of the minimal state envisioned, for example, in Locke’s theory.
 Foundations

The problem with many of the available ideas about the state is that they
treat private interests, expressive of private wants and needs, as the driving
force in the operation of all institutions, including those devoted to public
ends.

The separateness of the state

A state the
stewardship role considered in the last chapter would
serving
(1) represent the interest in subjective living of those whose capacity to

represent themselves is in some way impaired, and (2) secure the integrity
of the system of subjectivity considered as a whole. As the steward of subjec-
tive freedom, the state cannot be the creature of private interests. Nor can
it be the creature of a community defined over and against private interest,
since such a state would act as the repressor rather than the steward of
subjectivity.
The state's ability to act as the steward or subjective freedom depends
both on its internal structure and on the way it is experienced by the
individuals and groups related to it as constituents and office holders. The
more individuals and groups see the state as a vehicle for the satisfaction

of their needs, the less can the state serve the purposes connected to the
stewardship role considered here. Put another way, unless the state can
separate itself from private interest (whether of individuals or of groups),
it cannot devote itself to the support of subjective freedom. If we use the
term ‘society’ to refer to the system of private persons and of the relations

they develop to express and satisfy their interests, what is required of the
state if it is to be the steward of subjective freedom is its separation from
1
society. We can say, then, that the welfare state, if it is to accomplish its
end, must separate itself from society so that society (in part or as a whole)
will not treat the state as its agent.
The separation of the state from domination by wants and interests, and

therefore from society, need not mean the separation of the state from citi-
zens so far as citizens can separate themselves from their wants, and act on

a basis other than want and the interest developed out of it. Thus, we can

say that the ability of the state to establish its independence from society
is an of the citizens’ capacities to separate themselves from their
expression
wants. These capacities, in turn, depend on the nature of wants.
Let me note before proceeding that two prominent ideals violate the prin-
ciple of separation considered here. The free market ideal seeks not only to
absorb the state into society imagined as a system of private contracts,
thereby making the state the agent of private interest, but also, so far as
possible, to replace the state with society. The result is to restrict radically,
if not eliminate altogether, the possibility for the stewardship role empha-
to

sized here. Democratic community makes an even more radical attempt to

absorb the state into society by making the state the agent of the commu-
nity and its ends. In a democratic community, the state can do nothing
 State and society

but what the people, directly or through their representatives, want done.
We can say, then, that while the free market ideal allows for only a minimal
state, limited to administering and protecting property right, the democ-
ratic ideal dismisses the state altogether.
The point is to assure that the state makes no decisions and exercises
neither thought nor judgment. We can also understand the principle of
separation in relation to the ideas of thinking and judgment. The principle
of separation is synonymous with the idea that the state must be organized
to undertake a thought process and to make judgments. The alternative is

for the state to follow rules given to it, for example by an original contract,
2
or by the democratic process meant to reveal the will of the people.

Violation of the principle of separation establishes a special relation

between state and society, one in which the former is absorbed into the
latter. Here, I will refer to this special relation as a closed system, and to
the separation of the state as the movement to an open system. 3 The idea
of a closed system is of considerable importance in understanding the
ideal of the state linked to subjective freedom. If we understand the dyna-
mics of closed systems better, we will also better understand the nature
of and prospects for an open system, which is one capable of supporting
subjectivity.
We can say that a system is closed when institutions have no existence

separate from gratification, and therefore from the interest derived from
prospects of gratification. Then, institutions are essentially a part of interest,
and not a separate reality standing in relation to interest. When institu-
tions develop on this basis, the system they help constitute is closed to any
reality outside the wants that drive the individuals involved in it. But,
closure means more than this. It also means that interests control institu-
tions. The term closure refers specifically to this element of control. Let me
explore further this aspect of the closed system since it not only expresses
the specific kind of interest active in the system, but also the limits of
institutional life. Control can also be an interest of a specific kind (the
interest in control), so the matter of control already directs us to consider
interest not in the abstract, but on the basis of its specific content.

Fear and desire

I have thus far alluded only to want, and by implication desire, as the dri-

ving force in interest, and this is accurate up to a point. Reference to desire

implies also an end, a something to be desired. We may imagine that the
individual can desire, if not anything, then a potentially limitless variety
of things, so that any attempt to be specific about desire’s goal limits it in
arbitrary ways. Yet, there may still be something we can say about the end
of desire as a general matter without violating the principle that what
the individual desires expresses his or her individuality. In other words,
autonomy need not imply the absence of any universal element in desire.
 This universal element appears in the idea that desire can adopt any
object as its end, in the possibility that its goal can be achieved in many
different ways, and yet remain the same goal. Knowing this goal is impor-
tant for our purposes, since it will allow us to understand something about

the paths desire takes and the implications those have for the interests that
motivate individuals.
Let me begin to offer a more concrete specification of desire by empha-
sizing its involvement with imagination. Desire forms itself in the
imagination as a fantasy of an involvement with an object. In this fantasy,
the connection with the object achieves an important subjective end. Since
this end is subjective, we can consider it a state of mind, and I think it
will prove useful to emphasize the connection of gratification to state of
mind. In other words, it is the mind that is gratified, even if the vehicle
for this gratification is the body, as in some cases it must be.
When we consider gratification a state of mind, we consider it a subjec-
tive experience. As we did in Chapter 3 we can consider subjective experi-
,

ence under two headings: affirmation and negation. Affirmation and negation
are the gratification and negation of subjectivity. We can speak of the affirma-

tion and negation of subjectivity in the more familiar language of self-esteem

by saying that what enhances self-esteem affirms subjectivity, or gratifies, and
what diminishes self-esteem negates subjectivity, or frustrates.
Our desire for gratification also implies a fear, the fear of frustration. To
desire something means to risk losing it. Desire can be resolved by satis-
faction, but it can also be resolved by renunciation. We renounce our desire
when the prospect of the loss of its object provokes too much anxiety. When
we renounce satisfaction, we may still have wants and interests. These wants

and interests are driven, however, not by desire but by fear. They have to
do with things in the world we imagine will protect us from loss (of self-
esteem) rather than assuring us of gratification. Wants and interests, then,
express fantasies driven by fear and desire. The desire is a desire for grat-
4
ification, and the fear a fear of deprivation. The fantasy is a fantasy, then,
of gratification and deprivation.
Thequality of self-interest depends on the combination of fear and desire
it expresses. Put simply, the quality of self-interest depends on which is
the dominant pole, whether desire is subordinate to fear or able to act inde-
pendently of it. I will suggest that in a closed system fear dominates desire.
This expresses itself in a particular kind of self-interest, one also driven by
fear. In an open system, desire has emancipated itself to a significant degree
from fear, and can act on its own terms.
We have identified two types of self-interest, one in which fear domi-
nates desire, the other in which desire dominates fear. While this is no

doubt an overly simple construction, it will prove helpful in thinking about

closed and open systems. We will consider the role of the state in relation
to the problem of the dominance of fear over desire, so that interest expresses
5
not the creative impulse but the need for security in a dangerous world.
 When we say that interest is shaped by fear, we mean that the indi-
vidual’s primary concern in conduct and relating is to remove so far as
possible the danger that he or she fears. Anxiety signals the presence of
this danger, and it is therefore anxiety that organizes the individual’s
response to, and conduct in, the world. The individual’s interest is to deal
with his or her anxiety. While, as a practical matter, there are many ways
for dealing with anxiety, they all involve removing a threat. The danger to
which the individual responds is the danger of deprivation, which I suggest
above is deprivation of the positive self-feeling we refer to as self-esteem.
Interest, then, is linked to the regulation of self-esteem.

Greed
Let me matter of threats to self-esteem that drive us
consider further the
away from open system. In this connection, it will be useful to consider
an

one of the oldest themes of political economy: the limitlessness of want,

especially when set against available means. We find this theme in different
forms in different versions of political economy: as the drive to accumulate
wealth in classical political economy, and, more recently, as the presumed
insatiability of wants. However it appears, it contains the idea of want
without limit. 6
We can consider the want for all things as a pursuit of a false universal:

My power is as great asthe power of money. The properties of money

are my
—

(its owner’s) —

properties and faculties. I am ugly, but I can

buy myself the most beautiful women. Consequently I am not ugly,
for the effect of its power of repulsion, is annulled by money
ugliness,
. . . I am a wicked, dishonest
man without conscience or intellect, but

money is honoured and so also is its possessor. Money is the highest

good, and so its possessor is good.
(Marx 1977: 109)

The want described here is the want to have and to be everything of value
so that we can establish in our own eyes, and in the eyes of others, that

we are of value. This is the ultimate expression of the dependence of self-

worth on the worth of the things attached to the self. Pursuit of the false
universal expressed in the accumulation of wealth is the way we seek to
compensate for a basic lack of any sense that our selves have intrinsic worth.
It will be useful to formulate this problem in the language of greed. 7
The limitless want of the false universal is the limitless want of greed. So
far as political economy makes insatiability a condition of want, it presumes
that want and interest are expressions of greed.
Greed has two dimensions of particular importance for the study of
self-interest. It involves exclusiveness and withholding (from others), and
it involves a rupture between desire and satisfaction. This second aspect of
greed is well expressed by Harold Boris when he distinguishes between
greed and appetite: ‘Appetite .is susceptible to satisfaction. Greed is not.
. .

In greed, which is a state of mind and of feeling —

though urge might be

the apter term —

any further gratification only further stimulates the greed (Boris

1994 : 38, emphasis in original).
However familiar the notion of greed may be to us, it must also be a
puzzle precisely because of its refusal to be satisfied. It is a desire and yet
it is not. It is, rather, the limiting point of desire, where desire turns into

something else. This transformation of desire into something else leads us

to the first dimension of greed, that it withholds and excludes. The end of

greed is not to gain satisfaction, but exhaustively to contain, consume, or

otherwise incorporate something, to have all of it. Greed is about having
something rather than gaining satisfaction from using or consuming it.
A connection between self-interest and greed develops when self-interest
takes on a quality of exclusion of, even aggression toward, others. This
exclusionary quality of greed and of the self-interest connected to it gives
us the first hint of the vital connection between greed and loss. Greed

expresses the fear of loss and the effort to defend against it. The greedy
person is constantly aware of the threat of loss, and because of this is driven
to attempt to take from others lest they take from him first. He must keep

what he has safe from the depredations of others. Thus, greed exists in a
system of greed, real or imagined.
I must withhold from others because I perceive them as a threat to take
what is mine. What is it that is mine and that I fear I will lose? Psychically,
the apparently varied things to which our greed attaches itself ‘all ulti-
mately signify one thing. They stand as proofs to us if we get them, that
we are ourselves good, and so are worthy of love, or respect and honor, in

return’ (Riviere 1964: 27). What ultimately makes things of value to us is

that our connection with them affirms our own worth.
Desire turns into greed when desire is bound up with the fear of foss.
Then, what appears to be a desire for things is not a desire at all, but a
defence against loss. If the psychic meaning of greed is loss, it is the fear
of loss of those things that establish the goodness and value of the self, the
fear that they will become the property (or properties) of others. Loss becomes
especially painful to us because unconsciously it means ‘that we are being
exposed as unworthy of good things, and so our deepest fears are realized’
(Riviere 1964: 27).
Those driven by greed are absorbed in their wants and in the false idea
that acquiring everything capable of satisfying want will protect their vulner-
able self-esteem. To want things because having them establishes, or more
accurately substitutes for, self-worth makes self-worth contingent on the
things owned. This means that interest in the self must be interest in
the things that attach to it. It is in this sense that greed, because it means
loss of self into objects, also means that those driven by it disappear into,
or become, their desire for things. If greed, in one form or another, dominates
the want that shapes interest in society, then society is dominated by inter-
ests of a special kind: the interests of those who cannot separate themselves
as agents of want from their wants.
When the individual is nothing more than what he or she wants, that
individual can only relate to what is outside on the basis of want, or the
interest derived from it. What is outside, then, satisfies want, prevents the
satisfaction of want, or is irrelevant. The goal of interaction can only be to
control the source of goods to assure gratification rather than frustration.
If there is reciprocity, as there is in the exchange contract, this is not because
individuals recognize the autonomy of others, but because the configura-
tion of force makes reciprocity the most likely route to gratification.
If we now consider the state in this world, it can only be the creature
of want, the king of the children of greed. It is either a source of gratifi-
cation or a source of frustration. To prevent frustration, it must be controlled.
And, since others are also in the business of seeking to control the source
of gratification, the state can as easily become a threat as an ally in the
effort to achieve gratification. If the state becomes a threat, then it is that
much more urgent that we (which is to say our fear and desire) exert control
over it.
When interest is rooted in anxiety and the fantasy of removing the source
of anxiety, and when the state is subsumed under that interest, the state
is also subsumed into fantasy life and into the hope and fear that rule there.
The closed system refers to the refusal of the state’s constituency to let it
out, so to speak, of its fantasy of gratification and its fear of deprivation,
and instead to insist that the state serve purposes rooted in that system.
The state, then, becomes a system of, or it becomes an obstacle to, grati-
fication. Indeed, this is how the welfare state is often conceived, especially
by its critics. For them, the welfare state is not the steward of subjective
freedom, but a source of gratification for those dependent on it. We might
say that, for these critics, there is no meaningful distinction between the
stewardship and gratification roles because the only connection imaginable
is that of gratification or deprivation.
From this vantage point, the only question is: Who gets gratified?, with
the attendant implication that those who do not are to one degree or another
exploited by those who do. To provide services for the impaired implies trans-
ferring the means of gratification from taxpayers to them. This construction
leads in two directions. In one, the goal is to block the relation of depen-
dence on the state in order to block gratification by the state. In the other,
the goal is to assure equality of gratification so that envy will not be pro-
voked by the prospect that some will and others will not have their needs
satisfied. We have, then, the laissez-faire and egalitarian ideals for the state,
both of which operate in the space of the state as an institutional centre of
gratification. To establish state and society as an open system means to free
the state from society’s fantasy of gratification and its fear of deprivation,
which means also to free society from domination by this fantasy.
Open systems
In a closed system, the state is made a part of the community’s fantasy life

or of the fear-driven needs of private interests. The stewardship role with

which we are concerned requires that the state be removed from the sphere
of control of community and society. This cannot be accomplished if the
state is made to disappear into the market or if the state is made to serve

the will of the people, for example through radically democratic procedures.
Indeed, these two options tell us much about the ideal of an open system,
one in which the state exists as an institution sui generis, one over which
the community cannot exert control.
The state becomes part of a closed system due to the absorption of the
individual in wants and interests. When individuals cannot separate self
from want, they have no basis for relating to institutions except that of
gratification and frustration. If the individual does not confront the state
merely as a locus of want, what other dimension of the individual can shape

his or her connection with the state? We have already considered the answer
to this question in a different context when we considered the capacity
for freedom and the individual as the potential to become a particular
person with a concrete identity and the wants associated with it. To sepa-
rate need from impulse, to have thought intervene, is to separate the self
from its needs. The potential moment, where possibilities are open, exists
for the individual who is not lost in his or her need. Put another way,
this individual has the capacity to abstract his or her self from his or her
needs, to be a person who has needs, rather than a person who is what he
or she needs.
We can think of the difference just suggested in the language of iden-

tity. It is identity that limits wants since those with a secure identity want
only those things expressive of that identity and have no need for things
unconnected to their identities. This means that they have accepted the
finitude of the self, that it cannot be and have all things; they have given
up the false universality of greed in favour of finite identity. Finite iden-
tity is also universal, though in a different sense (the sense emphasi2ed in
Chapter 3 ). It is the universal of a potential yet to be realized. The universal
of possibilities not predetermined is not the universal of realizing all possi-
bilities, but of determining for yourself which possibilities contribute to
shaping and expressing a particular identity. The element of self-determi-
nation in wanting distinguishes want from impulse by establishing an agent
who wants. Individual identity is the process connecting talents and inter-
ests (potential), capabilities, opportunities, and outcomes.

The individual with a finite identity knows that the impulse to form and
live as a particular person is not exhausted in his or her particular life plan
and project. There are other ways to be an individual. This is known because
the particular way in which he or she is an individual was not predeter-
mined or given, but discovered. There was, in this sense, a universal moment
in the process of identity formation, and therefore in the identity formed.
This universal moment also expresses itself in the capacity to distinguish
the idea of the self from any particular form it might take, including
the particular form that is the person we have become. Then, it becomes
possible to form a relationship with institutions based not on need, but on
the ideal of self-determination that expresses itself in, but does not disap-
pear into, need.
The capacity to separate self from identity (its particular form) enables
the individual to separate self from want, and then to consider the state as
an institution existing separate from gratification and frustration. This makes

it possible to separate state from society (the system of particular need),

and to consider the state as something more than a source of, or obstacle
to, gratification. Let me now consider what this something more might be.

The state and objective freedom

Consider for a moment the notion from Locke’s Second Treatise that rights
exist in a state of nature, outside the state, and that each individual can
enforce his (natural) rights. The idea that rights are ‘natural’ places them
outside the state. They exist, are well defined and known, to each indi-
vidual outside the setting of a political or civil society. Outside of society,
in the ‘state of nature’ not only does each individual have and know his

rights, he also has ‘the executive power’ to enforce his right against viola-
tion. This condition defines the part to be played by the state:

it will be that it is unreasonable for men to be judges in their

objected
own that self-love will make men partial to themselves and their
cases,
friends. And on the other side, that ill-nature, passion, revenge will
carry them too far in punishing others; and hence nothing but confu-
sion and disorder will follow; and that therefore God hath certainly
appointed government to restrain the partiality and violence of men.

(Locke 1955: 11)

The state enters as the remedy for the ‘inconveniences of the state of nature’.
For Locke, the state is needed not to establish rights, and therefore freedom,
but to facilitate the enforcement of rights because of the inevitability that
the individual in enforcing his or her rights will fall short of objectivity.
The state enters, that is, as the ‘umpire’ (69) who enforces the rules of the
game, rules given to the state, and existing independently of it.
Evidently Locke is aware that in the state of nature right is vulnerable.
In other words, in the state of nature, the existence of rights is to a substan-
tial degree a subjective matter; it depends on the ability for impartial
judgment of individuals who are not impartial. The problem of the state
is to invest right with a stronger reality for the individual by making right
independent of individual judgment and desire.
 When we attempt to consider the state something more than a source
of gratification, we think of it as the institutional setting in which rights
are made real for the individual, the setting where right is made some-

thing outside of and independent of the individual’s subjective experience.

If we consider for a moment not this or that empirically existing state, but
the ideal of an institutional setting in which right can become an objec-
tively existing reality for the individual, we have a notion of a state that
embodies the norm of freedom. This is, to be sure, an ideal state. Here,
we will use the term ‘state’ to speak of the instantiation of rights in insti-

tutions that makes rights real. Then, we can say that right existing outside
the state is contingent, or purely subjective. Though it may be tautolog-
ical, we can say that right cannot exist outside the state since the state is
the objective existence (institutionalization) of right. 8
If rights cannot be made real for the individual without an institution
specifically devoted to that end, an institution I have here referred to as
the state, then why do so many insist that rights exist outside the state,
an idea expressed for example in the notion of ‘human’ rights? One answer,

of course, is that existing states fall short, and in some cases far short, of
the ideal I have outlined above. The deficiencies of existing institutions cast
doubt on the ability of institutions to secure right rather than participate
in a struggle for gratification, with the attendant implications regarding
the oppression of citizens, or of some citizens.
That existing states fall short of the ideal does not fully account for the
rejection of thestate, since failure to meet an ideal can as easily, and presum-
ably more naturally, lead not to the rejection of the ideal but to the call
for the reform of existing institutions. Why, then, the rejection of the state
as the ideal linked to making right, and therefore freedom, real?

I think we will find an answer to this question in the separation of the

state from society implied in the ideal of the state as the institution through

which rights become real. This separation not only frees the state from indi-
vidual wants, it also frees the state from the wants of groups, including
that group of the whole we imagine in the language of community.
Separating the state from individual wants makes it unacceptable to liberals
committed to the idea of the state as the servant of individual want. But,
it also makes the state unacceptable to those committed to the idea of the
state as the executor of the will of the community or the people (as expressed
for example via democratic process).
An institution thatmerely served interests, as is imagined in the utili-
tarian theoryof the state (Buchanan and Tullock 1962 ), would not be a
state in our sense, since it would be devoted neither to making right real
nor to the stewardship of subjective freedom. An institution that instanti-

ated the idea of the group would not be a state in our sense since it would
not be devoted to the universal dimension of opportunity as yet undeter-

mined, but rather to the imposition of group identity. What we might

have instead of a state is the market writ large, or the moral community.
Neither of these contenders has the capacity to translate right from abstract
ideal into concretely existing reality, from subjective to objective. So long
as citizenship is the essence of the commitment of the state, it is linked

not to group identity or to individual want, but to the potential for self-

determination as that strives to become real in the form of individual

identity.

Instituting right
In Locke’s theory, all that is needed to make rights real is enforcement.
This assumes that rights are knowable outside their institutional setting.
This means that the abstract statement of right is the right, that the words
property right tell us what a property right is, or that the list of rights
claimed by the United Nations Covenant need only to be enforced. This
leaves out of account, however, the process by which the abstract ideal
expressed in the statement of a right (to property, to health care, to educa-
tion, and so on) becomes something real. It is in this sense that, without
a state, right cannot exist in the world, as an objective reality. To make

right real, it is not enough to enforce an abstract claim, we must also know
what that claim means as a practical matter. To be real, right must be
made the concrete expression of an ideal in a system of laws made real in
a setting subject to the rule of law.

To see the implications of the idea that rights must be made real not
merely by establishing an apparatus of enforcement, but also by instituting
a process of interpretation, consider an example. I will take as my example

the idea of a right to goods capable of satisfying need. This idea is expressed
abstractly in the Universal Declaration of Human Rights: ‘Everyone has the
right to a standard of living adequate for the health and well-being of
himself and of his family, including food, clothing, housing and medical
care and necessary social services’. It is well known that each element of

the list of items included under the heading ‘standard of living’ is subject
to interpretation. What are health and well-being? What are food, clothing,

and shelter?
The idea of a right to an adequate standard of living is not deficient
because it fails to specify what these items must be any more than the right
to vote is deficient because it fails to specify the mechanisms for recording
and counting votes. Yet, we can say that the right is deficient if its trans-
lation into a practical reality is impossible, or if the result will inevitably
be in some fundamental way inconsistent with the original ideal. Thus, for
example, if we discover that we can only assure the provision of food and
shelter in a way consistent with the idea of right by providing instead an
adequate monetary income and not specific items referred to as housing or
food, then the implementation of the right changes it into something
different. This something different is a right to income rather than a right
to food and clothing. Then, we need to consider in what sense a level of
income is equivalent to something in the right referred to as a standard of
living.
Should we arrive at the conclusion that there is, indeed, a right to income,
the question remains open as to how much income we can claim by right.
That it is subject to interpretation in this sense does not make it inco-
herent as a right. But, again, we can only sustain the idea that such a right
exists if we can find a way to determine the relevant level of income consis-
tent with the idea it is meant to express. Only an ideal that can be

consistently translated into a practical reality can be called a right, and only
a concretely implemented law that expresses the ideal of freedom can be

considered a right.

Professional ethics

Making rights real involves thinking and judgment, so that if the state is
to realize right, it cannot be restricted to enforcing what is given to it.

Before enforcement there must be interpretation and translation. And, in

enforcement, there must be discretion. The statement or ideal form of the
right does not include its specific meaning in context, which cannot be
known ahead of time. So far as knowing the meaning of right in context
cannot take place prior to the emergence of that context, making right real

involves the element of discretion. The element of discretion raises the

spectre of abuse, a spectre all the more real where we assume that institu-
tions are vehicles of exploitation and oppression. I now turn to the problem
of abuse.
I will here consider the solution to the problem of abuse under the

heading of professional ethics, which is the capacity of office holders to act

not on the basis of their desire for gratification or fear of deprivation, but

on the basis of more universal considerations. These are the considerations

summarized under the heading of what is right. Professional ethics refers,

then, to the same separation between self-interest and institutional ends
already considered, except in this case the separation applies not to the
institution’s constituencies, but to those who work in it. Professional ethics
is the capacity for the individual to separate self from organization and to
see the latter as a separate reality.

This does not exclude the individual from pursuing narcissistic ends in
work and through a connection with the organization, in this case the state.
It means, rather, that those narcissistic ends must be consistent with the

separate existence of the organization as an entity sui generis, which is to

say, outside the sphere of the individual’s fantasy life and omnipotent control.
We can say, then, that those conditions conducive to shaping a genuine
professional ethic for the administration of the state are also the conditions
that assure the state will act as the steward of subjective freedom, and not
serve other ends inconsistent with that stewardship. We can readily imagine

the state operating as the steward of subjective freedom in our sense if we

can imagine the individuals both within and outside the state relating to
it as areality separate from their (individual or group) selves. What enables
individuals to do so?
Separating self from organization, and therefore self-interest from the

organization’s ends, means bringing into play a specific emotional and cogni-
tive capacity, which I have referred to as the capacity for ethical conduct
9
(Levine 1999 ). By capacity for ethical conduct, I have in mind the ability
to treat others not as actors in our drama of gratification and deprivation,

but as persons in their own right, with their own (separate and different)
interests, abilities, and life trajectories. What follows from this capacity is
the ability to recognize the integrity of others. This recognition of the
integrity of others is simply the outward expression of the integrity of
ourselves that develops out of the integration of self-experience, that inte-
gration I have referred to earlier as the quality of subjective experience.

Thecapacity for ethical conduct is closely linked to the capacity for

subjective freedom in that both express the presence of well-defined
self-boundaries for the individual. To acknowledge the existence of an orga-
nization other than as a part of subjective or fantasy life is to acknowledge
the boundedness of the self. This boundedness is also the vital element in
identity. Boundedness is the other side of integration, so we can treat the
capacity to relate to an organization as a separate reality as an expression
of self-integration, and of having a secure individual identity.
Like the capacity for subjective freedom, the capacity for ethical conduct
is not innate, but the result of a process of cognitive and emotional devel-
opment. It is a part of the equipment of the mature individual. There is,
then, a symmetry between the two sides of the relationship between indi-
vidual and state. For the state to act as steward of subjectivity, individuals
must relate to it as a separate reality, one outside their sphere of omnipo-
tent control (fantasy driven by fear and desire). And, on the other side, for

the individual to lead a life organized around subjectivity, there must be

a state capable of acting as the steward of subjective freedom.

Where the state fails to act in this role, the individual will also fail to
maintain the perspective on the state as a reality existing outside his or her
sphere of subjective control. Where the capacity for ethical conduct is not
well developed in the individual, the state cannot escape the effort under-
taken by individuals and groups to exert control over it so that it will serve
their interests rather than those of subjective freedom.
Political economy emerges with the idea of a separate economy, one
subject to its own internal ordering principles. This separation of the

economy is essentially bound up with the rise of the idea of the individual,
and of the principle we have here referred to as subjective freedom. Yet,
the emergence of an economy separate from the political order and from
the state is no more important to subjective freedom than is the separation
of the state from society. This latter separation creates an institution capable
of taking on the stewardship role emphasized here.
Part II

Applications
6 Capitalism and the good
society

The basic situation

A primary obstacle standing in the way of making individual freedom mean-

ingful is the loss of subjective experience. Our normative judgment of insti-
tutions should, then, be a judgment of their significance for the individual’s
subjective life understood in this sense. When institutions participate in
the loss of subjectivity, they both require and affirm psychic division and the
alienation of aspects of self-experience it implies.
The specific institutions with which I will be concerned in this chapter
are those we associate with a capitalistic or private enterprise economy of

a particular kind. This is the economy organized around an ideal of inter-

action in which contract, if not the exclusive form, must dominate all others.
In this ideal, freedom means freedom to exchange, and freedom to exchange
means that exchange must be encumbered by few if any external constraints.

To begin, I will consider the subjective situation of the individual as he

or she appears within the original, or classical, construction of an economy

of this kind. By classical I have in mind the idea developed in the eigh-
teenth century especially by Adam Smith, and in the nineteenth century
most notably by Karl Marx. I will refer to this classical construction as the

basic situation. In it, the individual appears either as a capitalist or as a

labourer. I begin with the capitalist, whose construction of the world I will
refer to as the business mentality.

The business mentality

To understand the business mentality, it is necessary to bear in mind that
the businessman imagines himself to be, and to a significant degree is, in
1
a paranoid situation. Surrounded by competitors desiring his market share,
caring nothing for his welfare or even survival, indeed hoping to destroy
that which he values most, the business mentality adopts characteristics we
would call paranoid if they were not given the stamp of reality by the
design of our economic institutions. But, how does the businessman get
into this situation?
 Applications
According to Marx he does so because his prime goal, indeed the orga-
nizing principle of his life, is the accumulation of private wealth in the
form of capital: ‘Accumulate, accumulate, that is Moses and the Prophets
. .
Competition derives from the underlying motive to accumulate. The
limitless quality of this goal runs up against limits or obstacles in the form
of other capitalists similarly motivated to accumulate wealth without limit
through capital investment. Of course, even in the absence of competitors,
there is something inherently frustrating about having a quantitatively infi-
nite goal that can only be accomplished by finite means. To accumulate
wealth in general, money or wealth measured in money, the capitalist must
acquire concrete (finite) means of production that tie up his capital in a
limited form (within a particular industry for example). This is a form in
which the capital will yield only a finite return, in which it ages, eventu-
ally losing its productive potential for the capitalist. It is a form that may
or may not in the end prove to be the best for his purpose, or even suit-
able at all to that purpose.
At first glance, Marx does not give us much help in making sense of the
capitalist’s orientation toward the world. Why pursue a goal that cannot
be achieved, and that, if achieved, has no obvious benefit for the individual
who has succeeded in achieving it? In his early work, Marx does, however,
allude to an answer:

That which is for me through the medium of money that for which —

I can pay (i.e. which money can buy) that am I, the possessor of
—

money. The extent of the power of money is the extent of my power.

Money’s properties are my properties and essential powers the prop- —

erties and powers of its possessor. Thus what I am and am capable of is

by no means determined by my individuality. That which I am
. . .

unable to do as a man, and which therefore all my individual essential

powers are incapable, I am able to do by means of money. [M]oney . . .

is thus the general overturning of individualities . . .

(Marx 1972: 103—5, emphasis in original)

means freedom from self-boundaries. Or,

Wealth, then, at least, the

pursuit of wealth offers the prospect of such freedom. This prospect is not,
however, limited to only one, but available to all. The result is the great
struggle to amass wealth in order to become not one among many, but the
only one. The struggle to amass wealth without limit expresses the indi-
vidual’s refusal to acknowledge the finiteness of his or her self. Establishing
self-limits means recognizing and accepting difference: that the self is not
only one, but also many. The narcissistic illusion that the existence of limits,
particularly as embodied in other selves, can be overcome, toward which
the business mentality drives the individual, constitutes others as obstacles
whose own narcissistic needs must drive them to attempt to undermine
and frustrate his. Thus, a paranoid experience of the world expresses the
 Capitalism and the good society
subject’s seeing in others his own narcissistic needs, and the implied expe-
rience of others as a danger to the satisfaction of those needs.
The narcissism just referred to should be distinguished from the interest
in the self that is an inevitable and necessary part of the constitution of
the individual as a subject in his or her life. 2 To be a centre of initiative
in the world, the individual must have an interest in his or her self, in his
or her activities, and in the results of his or her creative endeavours. This

creative, or healthy, narcissism differs from the narcissism driven by the

illusion of freedom from self-boundaries. The difference has to do with the
fact that the former incorporates the recognition of (different) others and
the desire to preserve others in their relations with the self, while the latter
has a predatory quality, which derives from its inconsistency with life in a
world of (different) others. The self-interest of the classical economists repre-
sents an uncertain mixture of the two forms of narcissism, which, as a rule,

political economy fails to distinguish.

Predatory narcissism involves a specific subjective experience, the expe-
rience of projection. The need to overcome self-limits, and the implied
aggression toward others, becomes the other’s need to destroy limits, and
their aggression toward us. Projection enables the subject to disclaim respon-
sibility for his or her action, especially for the harm done by it, and places
that responsibility outside, in others, or in the system considered as a whole
(Levine 1998 : 85—91). Projection means that, within the basic situation,
the separation between subjective (internal) and objective (external) is not
well established. Rather, the objective world acts as an external container
for unacceptable elements of subjective experience. As we will see, this
failure to separate subject and object has significant consequences.
If we bear in mind the role of projection in the business mentality, we
can better understand the subjective meaning it imposes on markets. This

is the meaning derived from the necessity to contain the aggression projected
onto others, and then experienced by the subject (capitalist) as a threat.

The effort to destroy the other, and thus realize a narcissistic illusion, is
limited by the system of property right, especially the market. What distin-
guishes the so-called free market is that, within the free market, it remains
possible to destroy the other by depriving him or her of a livelihood that
has been made to depend on exchange. The only limits of the free market
are those of the equality of status of property owners and the equality of
right they each enjoy to attempt to gain their own ends. This notion of
equality includes the prospect that some will gain great wealth while others
will live in poverty. By contrast, in regulated markets, the deprivation of
others is further limited by the recognition that their selves should not be
destroyed or put in too severe a state of risk.
We can conclude, then, that the free market establishes the objective
(external) reality of a threat to the self that also originates at a subjective
level in the projection onto others of a narcissistic fantasy. Thus, what we
might otherwise consider a purely psychic phenomenon, the fear of projected
aggression, becomes an external reality. When an objective structure of
interaction validates a subjective fantasy, it both serves and reinforces a
subjective need. This creates a closed circle that tends to be highly resis-
tant to change. Whether we speak of the structure in the language of psychic

experience (as a paranoid construction), or in terms of external reality (as

free market capitalism), we are speaking of the same phenomenon, only at
different levels of human experience.
The narcissistic aspect of the business mentality leads to the interpreta-
tion that it is all about the single-minded pursuit of self-interest. The
implied self-involvement should be looked at more closely, however, partly
because of the claims sometimes made for social benefit arising out of it,
and partly because, on closer inspection, the narcissistic pursuit of self,
which leads to the paranoid construction of the world, expresses not the
power of the self in the world, but rather its weakness.
As it turns out, the capitalist, in the single-minded pursuit of self-interest,
must disavow a central aspect of self-experience, indeed, precisely that aspect
we sometimes refer to as the ‘self. Weber and Marx depict this disavowal of

the self when they speak of the capitalist as the ‘steward’ (Weber) or ‘repres-
entative’ (Marx) of his capital. This is typically the view of the nineteenth-
century capitalist, who was not a person in his own right (however wealthy
and powerful he may have been), but whose personhood was derivative of his
wealth (capital). Thus, having given his name to his firm, his name comes back
to him as the firm’s property, and its value to him is now derivative of its value

for others, its success, and its magnitude.

The capitalist puts in long hours in service of his capital, which is not his
self but an alien being he has created and must sustain as his self-surrogate.
The capitalist enterprise, then, is the capitalist’s self made an external reality
larger than he is, with a life unlimited by his own, which he serves and does
not serve him. This means that he is held hostage by forces that he creates, but

over which he ultimately has no control.

For the capitalist, then, capitalist economic organization implies the

constitution of the self as an alien force with the power to subject him or
her toits own ends, which are the ends of accumulation. These ends are,
as we all know, onerous in the extreme, demanding long hours of hard
work devoted not to self-expression, but to the management of capital in
the interests of its expansion. Subjectively (or psychically) the discipline
involved in this means splitting off and suppressing the parts of the self
associated with pleasure and satisfaction. Satisfaction is always something
for the future, as is implied in the goal of accumulation. Thus, capital is
about the splitting off of the capitalist’s self, its alienation into his capital,
its return as a repressive apparatus (repressive for the capitalist), and the
transfer of any pleasure capital might make available from the present into
the future.
The worker’s fate
From the worker’s look somewhat different. The ends of
standpoint, things
the capitalist are him (or her). Indeed, according to the clas-
unavailable to

sical economists at least, the best to which the worker can aspire is the
subsistence. To acquire their subsistence, workers must sell their labouring
capacity, which sale is facilitated by the simplification of that capacity until
it appears as so much unskilled labour. This means that, to work, the indi-
vidual must separate self from activity (Levine 1978: 174—81). What gives
labour its distinctive quality is the fact that the worker’s self is not engaged
but left outside. No doubt this takes a considerable psychic
(psychically)
effort, effort that is greater in proportion to the degree to which the
an

worker has indeed developed an autonomous self that must be abstracted

from when he or she works. 3
The idea of subsistence reinforces this dimension of the worker’s situa-
tion by making the worker’s life outside the workplace devoid of any
individual significance. In consumption, workers are dominated by the needs
of their class (the subsistence needs), and not by those of their individual
or particular selves. Again the worker must seal off the needs of the self in

the interests of survival.

The phenomena just described involve a splitting of psychic experience
so that those parts, in this case the needs of the self and its expression for

others, found inconsistent with living in the world can be sealed off. The
parts so isolated
experienced
are danger as a to survival (they threaten the
renewal of the wage contract), and, though they cannot be eliminated (and
thus the danger definitively removed), they can be separated from the
conscious self-experience. Once separated in this way (or split off) they are
subject to further psychic manoeuvres, most notably repression and projec-

tion onto others, or more generally into the external world.

This projection, which follows from the splitting off of parts of the self-
experience as a mode of coping with the worker’s situation, is connected
to the paranoid experience of the world typical of the capitalist. To under-
stand it, we must consider the form the projected self of the worker takes
in the world outside. For the capitalist, the self gets projected as his capital,
which returns to him as an oppressive apparatus dominating his life. For
the worker, the outcome is in some ways similar.
To labour, the individual must, for the duration of the contract, split off
that part of the self involving the capacity for agency, so that he makes
himself an object for its purchaser rather than a person possessing a will
of his own. Agency is connected to the capacity for aggression through the
link between aggression and creativity (Winnicott 1971 ). To be creative in
the world is to place your mark on it, in however personal a way, which

involves alteration of, and in that sense an attack on, external reality.
an

Creativity requires the attitude toward the world that sees it not as an inert
or alien and hostile fact, but as something that might be affected by human
action. Thus, creativity, which is the activity of the self realizing itself in
the world, calls upon the capacity for aggression; therefore will, which is
the active dimension of being a self, is also linked to aggression and
creativity.
But, for the worker, livelihood depends on suppression of will, and thus
of aggression. To accomplish this end, will and aggression that threaten
the contract must be disavowed. To succeed in this disavowal is to succeed
as a worker. The repressed aggression then (1) appears outside the work-

place, for example in the family, (2) appears in the workplace threatening
the wage contract and the worker’s livelihood, which depends on it, or (3)
is projected onto external forces (God, fate, government, enemies of the
nation, etc.), and thus lost to the worker. The attribution of a degree of
hostility to the now externalized force of the self expresses the fact that it
contains the selfs projected (thus alienated) aggressive aspect. Splitting
expresses this alienation at a psychic level. The worker’s experience of hostile
and capricious forces controlling his or her destiny constitutes a paranoid
construction of the world, however accurately it may mirror reality, that is
the other side of the necessity of self-alienation.
In the basic situation, what Michael Diamond refers to as a ‘persecutory

organizational identity’ is the norm for the worker, and not an extreme
variant. In Diamond’s words:

The persecutory organizational identity represents the deeper human

experience of many workers in the oppressive workplace. These workers
feel powerless and disrespected. They experience their conflict with the
organization and its leadership in a manner that is passive. In other
words, things (decisions and actions) are done to them.
(1997: 240)

Not only, then, does the oppression of the workplace support a subjective
experience of persecution, but it also promotes the attitude toward the world
captured by the term ‘fate’, which expresses passivity rather than agency.
The alienation of aggression to which I have just referred constitutes an
impoverishment of the worker that is as or more important than the phys-
ical impoverishment emphasized by Marx. Impoverishment of subjective
experience is not the only important implication of the wage contract for
the worker. The alienation of aggression, which impoverishes the worker’s
subjective life, returns to him or her as an alien and aggressive external
force. Because this force is both alien and aggressive, it constitutes a threat.
Thus, the attribution of a degree of hostility to the now externalized force
of the self expresses the fact that it contains the self's projected (thus alien-
ated) aggressive impulses. Splitting expresses this alienation at a psychic
level. The worker’s experience of hostile forces controlling his or her destiny
constitutes a paranoid construction of the world that is the other side of
the necessity of self-estrangement.
 Dependence of livelihood on exchange and dependence of exchange
(demand for his (or her) labour) on the vicissitudes of the market make
livelihood to a significant degree a matter of caprice, often the caprice of
the capitalist or firm, sometimes the caprice of the economic cycle (lately
of the ‘global economy’), clearly out of the worker’s control or even compre-
hension. Thus, linked to splitting of the labourer’s self is the dominance
over his life by forces outside his control and even understanding, forces in

this respect much like the fates that are taken to control the lives of men
and women in traditional society. The notion of fate expresses the alien-
ation of will, which involves its projection outside, and its transformation
into an external dominating force.
Marx apparently experienced the splitting and projection characteristic
of the psychic dimension of capitalist institutions, as can be seen in his
division of the world into classes, and his attribution of all that is (poten-
tially) good to one, and all that is bad to the other. This opposition of
good and bad also carries the psychic meaning associated with splitting and
projection. It lends itself to simplistic and extreme solutions to social prob-
lems, solutions that, for example, remove political power from the capitalist

class and put it in the hands of the workers, or remove political power alto-
gether, or simply remove the capitalists along with the legal-economic
system that nurtures them.
Marx’s solution expresses the psychic situation just summarized. The
dependence of the worker’s livelihood on capricious forces outside his or
her control can be overcome by eliminating the market, which, of course,
eliminates the external container for the worker’s aggression. Yet, elimi-
nating the market does not resolve the problem of integration, in this case
the integration of aggression. 4 The so-called discipline of the market serves
to contain this aggression, whose intensity is exaggerated by the self-denial

associated with labouring. Labouring still demands self-repression, and thus

fosters the aggression that must somehow (and somewhere) be contained if
work is to be done.
If the alienation of the worker’s will from his or her self is to be continued
after capitalism, then a new container is needed. So, capital is replaced by
the political party, by the will of the ‘people’ as expressed through polit-
ical activity, or by the state apparatus. Then workers (ostensibly) control
their own livelihood through collective action (for example, economic plan-
ning). This solution, of course, embodies a contradiction since the workers
cannot control their destinies individually, but only collectively, which

means that, as individuals, they transfer control (and thus their will) to the

group. In a well-known development, the group trans-fers its agency to its

leader, repeating the original situation, except that the alienation of self is
no longer to imponderable forces of the market, but to the group as instan-

tiated in its leader or leaders. Alienation here is no less real, and, as we

have learned from experience, no less oppressive.
Marx circumvents this outcome by assuming that after capitalism, labour
will be unnecessary. By looking to the end of labour, Marx clearly identi-
fies the twofold problem posed for us by capitalism: (1) labour is needed
to produce the wealth that can alone liberate us from labour and afford us

the means to an individual life, while (2) the labour that produces wealth
means alienation and self-denial.

The end of accumulation

We may ask what is the significance of the basic situation just summa-
rized. Even if it were reasonably descriptive of the capitalism of the
nineteenth century, surely it is not descriptive of the capitalism of today.
Indeed, the erosion of its significance is not accidental, but built into a
tension in the construction itself. The tension is the following. For the
capitalist to succeed in his goal of limitless accumulation, he must have a
market appropriate to that end, that is, an endlessly expanding market.
Yet, so long as the system assures that workers have no needs connected
to being a self, but only the need for subsistence, the market can at best

expand with the growth of the working population (as the classical econ-
omists tended to assume it did). Yet, it is the multiplication of need that
not only, as Hegel points out (1952: 127—8), characterizes a modern world,

but also makes possible the expansion of the capital needed to produce the
wealth capable of satisfying genuinely individual need. The denial of the
self demanded of the worker if he is to do the kind of work typical of
capitalism makes him a poor target for marketing the goods produced
by capitalism. Therefore, absent an alternative market for the products of
capitalist enterprise, the workers must undergo a specific development
to become suitable for the task of being a self with individual needs rele-

vant to the products of capitalist enterprise. This development makes them,

of course, less and less well suited to being workers. The tension implied
in these conflicting requirements gets resolved, as Marx predicted it would,

by the transformation of production away from a technology dependent on

unskilled labour. 5
We might add to this the moderation of the persecutory organization of
work alluded to above, which is the norm in the basic situation, but cannot
be considered the norm in more developed economies. Workers’ protec-
tions and workers’ rights, together with fundamental changes in the idea
that the worker can be considered a non-person, have made many work-
places more conducive to an experience of personhood on the part of
employees, thus reducing the need to rechannel aggression derivative of
depersonalization.
Central to the developments just summarized is the expansion of the
creative element in work, an element notably missing in the classical notion
of labour. 6 Today, the sale of labouring capacity increasingly means the sale
of creative capacities, and labour increasingly means the exercise of those
capacities. Put another way, the contract through which individuals gain
their livelihood is one through which money is exchanged not for labour,
but for creative ability. Such a contract supports creative living (and thus
subjectivity) both by providing needed income for an individual way of life,
and by providing an outlet for creative expression in work.
To be sure, this situation is nowhere near universal, and we are a consid-
erable distance from a world in which creativity and work have been
successfully merged. Indeed, new forms of unskilled labour (most notably
in the service sector) have expanded partly in response to the growth of the

highly skilled component of the workforce. Nonetheless, it is in the trans-

formation of work into a creative act that we will find the primary solution
to the alienation of self that is the primary subjective implication of the

basic situation. To escape from the basic situation means to replace the
norm that it embodies with one of subjectivity and creative living.

On the capitalist’s side, the tension inherent in the basic situation depicted
above is no less severe. As the market economy reshapes economic activity
around individual needs, the capitalist’s alienation of self to his capital
becomes less and less consistent with the culture he must nurture to make
expansion of capital possible. Furthermore, his own orientation toward self-
seeking remains, no matter how we (and he) might see in it a virtue only
in its subordination to social ends (the growth of the wealth of the nation).
It gets frustrated since its goal is split in two: on one side the attempt to

gain esteem through the admiration of others for the magnitude of the
wealth he or she has amassed, on the other side the attempt to gain satis-
faction of the self not for others, but in and for itself.
That repression operates through a system of self-seeking marks the
specific difference, at least on a subjective level, between capitalist economic
organization and forms that precede it. Dominance of paranoid elements is
not peculiar to capitalism, but inherited from the mental life already well

developed in the precapitalist setting. The difference is that now the

projected will is that of the individual, while prior to capitalism what was
projected was not the will of the individual, but that of the group. This
difference is important since it makes repression explicitly inconsistent with
the ends it is meant to serve (those of self-interest), which we might imagine
would also make possible the lifting of repression, at least to a degree.
The growth of wealth creates a world in which it is possible for the indi-
vidual to be him or her self by adopting a personalized mode of life. The
emergence of a personalized way of life also makes possible creativity in
the sense alluded to above, since it constitutes a world that can be affected
by the individual’s willing and acting, where the larger world of public
affairs and historical forces cannot. All of this makes the classical theory
obsolete, at least so far as its image of the worker is concerned. Yet, an
important residue remains. This residue is the predominance of psychic
organization centred on splitting and projection, alienation of self and the
domination by fate, in a world where their historical purpose has been more
or less fulfilled.
 We should not underestimate the power of this residue. The business
mentality described above is hardly less powerful today than it was during
the classical period, and the worker’s dependence on capricious forces is no
less real. Work for most people still retains a significant, even dominant,
element of self-repression; and the work situation still reflects the need for
the worker (even the educated professional worker) to leave his or her self
outside to do the job on which livelihood depends. Thus, the dependence
of livelihood on exchange, the dominance of capricious forces in eco-
nomic life, and the business mentality, all remain a powerful part of the
reality of contemporary capitalism. In this respect, the basic situation is
not irrelevant.

Economic determinism

I have thus far spoken as if the subjective experience of worker and capi-
talist are not so much a psychic reality as they are an aspect of an objective
economic structure, which indeed is the case. Given this, it would be natural
to assume that the appropriate character structure, one organized around

self-alienation and projection, develops in response to the situation in which

the individual finds him- or herself. This, then, makes psychic experience
derivative of an objective structure developed independently, and for its
own reasons. It also makes economic reality the source of the cultural forms

that develop in parallel with it, and seem so well adapted to it. If economic
survival depends on our adopting a self-denying psychic organization, it is
not surprising that family structure, attitudes toward children, cultural

forms, and so on, contribute to creating in us and expressing the structures

adapted to life in a capitalistically shaped world.

We might, then, explain the prevalence of paranoid phenomena (as
expressed in hatred, violence, and distrust) in public life by referring to
7
capitalist economic organization. However tempting such an economic
determinism, it suffers from the deficiency of all reductionist hypotheses;
it takes for granted what must be explained: the organization of social insti-
tutions around repression of the self, and thus the subjective inevitability
of self-alienation and the projective phenomena we associate with the para-
noid orientation. We get no further by setting out from the organization
of the family and associated child-rearing habits in an attempt to explain
economic structure by rooting it in accidents of family culture or psychology.
Something more is needed.
We can get an insight into this something more if we consider the ends
this structure is well adapted to achieve. I do not by this refer exclusively, or
even primarily, to the consciously held values and goals we attribute to our

economy and society, but to the latent, generally unconscious, ends that give
it a characteristic shape. These unconscious ends centre on self-denial. 8 Self-
denial lies, of course, at the heart of the classical construction, notwith-
standing the presumed preoccupation of the capitalists with self-seeking and
self-aggrandizement. It will seem odd, in light of this result, that the class-
ical theory has often been criticized for its alleged overvaluation of the self
and of self-interest, as well as for its presumptions about the primacy of the
individual (and thus of the self). 9
Having said that the end of social and economic organization is repres-
sion of the self, it remains to consider whether this repression is an end in
itself, or a means to another end. The most notable contender, of course,
is economic development. If we understand splitting, repression, and projec-
tion as the means to economic development, then our problem is that the
means to achieve development conflict with its end so far as that end involves

self-integration and satisfaction of the wants of an integrated self. The end

of development conflicts with any effort to bring the process to a conclu-
sion, and will be opposed by the objective and subjective structures created
to make its achievement possible. Self-alienation, then, constitutes a larger

structure, which acts as a closed circle. This quality of the structure of the
modern world is the central practical problem we face in attempting to
solve social problems and achieve normative ends inconsistent with para-
noid experience.

Political economy and the good society

I turn now to a to the problems just summarized that involves
solution
regression to more primitive forms of connectedness, specifically those bound
up with notions of community and of merger into the group as a surro-
gate for self-integration. It is this regression that is sometimes called for
in the name of the ideal of a ‘good society’ that might replace capitalism,
or alter it in ways judged more humane. It is also this ideal that gets

brought into play in many visions of a more egalitarian society, one based
on identification with others rather than on the differences so sharply devel-

oped in the world we now live in.

Because notions of a good society tend to move us away from self-interest
as the basis for normative judgment, and connect more to group life and

the demands of community assumed to take precedence over individual

satisfaction, political economy has had little use for such notions. As a
branch of moral philosophy involved with the economy, and more specifi-
cally with the market, political economy has been connected to the
movement against any ideal of a good society irreducible to what each indi-

vidual, taken separately, considers good for his or her self. In modernity’s
attack on notions of the common good, political economy has been among
its sharpest weapons. Indeed, so sharp has this weapon been that the effort
to expand the scope of the public sector has repeatedly fallen before it, most

recently in the series of policies adopted under such banners as privatiza-

tion, welfare reform, and balanced budgets.
Normative ideals that leave aside the main concerns of political economy
have significant appeal for those who see in the celebration of self-interest
a danger to well-being. These are ideals in which the market plays a limited

role, is in significant ways circumscribed by presumed communal or

or

collective ends. Then, the good society, whether it includes the market or
not, pursues ends unconnected to what markets can do (foster individua-

tion), subordinates the market to ends (such as group solidarity) external

or

to, and perhaps even inconsistent with, it. In Polanyi’s (1957) language,
ideals of the good society seek to re-embed the economy in the non-economic
social spheres (as represented by the notion of community).
Like the structure of capitalism considered above, the ideal of the good
society has substantial subjective meaning. If we are to evaluate that ideal,
it will help to understand better what that meaning is. Specifically, we
need consider in what respect the good society is good, and how being
to

good constitutes a normative goal we might apply to institutions.

To make a society good means to endow it with moral standing, since
the good (and the bad) exist in a moral universe. Subjectively, to be good
means to be connected (Fairbairn 1952 ), originally to the parent who

approves of the child’s conduct and whose approval is conveyed by the term
‘good’. To be bad is to be disconnected. But, of course, the questions remain
What sort of connection establishes a set of relations that constitutes a
society as ‘good? and What are the consequences of goodness?
While, for the child, good means connected to the parent by approved
conduct, for the adult in society, the good means connected to the commu-
nity by approved conduct. The transition from a psychological to a normative
category takes place in the transition from the immediate relation within
the family to the relations within the larger group. Approved conduct within
the group is conduct consistent with group norms, and thus with estab-
lishing and confirming the normative value of the group. This marks the
difference between the good society and capitalism, since in the latter the
group withers, and with it so does the moral universe the group alone can
maintain. 10
Under capitalism, the relations that constitute the group are replaced by
those of the market, which also carry normative significance though differ-
ently than does the group replaced by them. The market establishes a
specific relation between individuals, one in which their putative autonomy
is preserved, and possibly made real, within a system of mutual depen-
dence. The relations of community often associated with the good society
have a different significance, and different ends. This difference can be
understood as an aspect of the distinction between identification and recog-
nition. 11 In a system of independent persons, recognition is the primary
social bond. In a community, identification governs social connectedness,
and recognition plays a more limited role, if it is allowed to play a role
at all.

The opposition between capitalism and the good society expresses a split
between difference and sameness in which difference means absence of iden-
tification and identification means absence of difference. This split excludes
any intermediate ground (recognition), on which difference includes iden-
tification and identification allows for difference. Then, community is the
solidarity based on identification as sameness, often associated with a norm
of equality. This is what makes the good society good. Similarly, the contrac-
tual relations of a capitalist market society reduce all connection to the
mere means to the private and particular ends of the participants, and are

not the mode of establishing each participant as a person. This is what

makes capitalism bad. Recognition is a (higher) form of identification, which
retains the element of identification in a context of difference. Splitting
eliminates (or attempts to eliminate) either identification or difference,
leaving the pure utilitarian (or contractualist) model on one side, and the
communal ideal on the other.
The distinction between identification and recognition can clarify the
claim advanced above that normative ideals associated with notions of the
good society involve regression. The specific regression I there had in mind
was from recognition to identification, from difference to equality as same-

ness. This regression is meant to eliminate the split in the self demanded

by life in market-centred, growth-centred societies. Does it do so? And, if

it does, At what price?
I suggest above that the ideal of the good society is connected to the

embedding of the individual in the group, and to solidarity based on

equality. Then, what is good about the good society is that it fosters equality,
and, thus, rather than dividing members, binds them together. This ideal
of the good society has specific implications for institutional design, impli-
cations captured by the language of democracy and participation.
Participation establishes the connection of the member to the group; and,
therefore, the quality of participation measures the goodness of the group.
The good society is democratic, but not in the sense we attribute to existing
mass democracy under capitalism. Rather, the good society is one in which

democracy is substantive rather than formal, grounded in true participation

rather than the passive forms currently dominant. The difference rests on
the presumed instantiation of a norm of equality much more stringent under
substantive or participatory democracy than that which informs prevailing
democratic institutions. The psychic meaning and implications of this more
stringent equality are substantial. To see what they involve, I will consider
briefly the ideal of participation.
It is, of course, easy enough to argue that participation in mass democ-

racy is no participation at all. What is harder to argue is that the call for
greater participation expresses citizens’ real aspirations, and not projection
on the part of the theorist, who attributes to the ‘people’ his or her own

need to govern, notwithstanding the possibility (even likelihood) that what

the people actually want is not to govern, but a government that does its
job well. The ideal of governing carries powerful psychic meaning, since
it involves rule and authority. Thus the wish to govern can include the
wish to rule, and express an impulse to dominate linked to the narcissistic
illusion already considered. Discomfort with this wish, and fear of it, can
lead to attempts to disavow it, to control and repress it, and to project it
onto others.

The projection considered here is in some ways comparable to that of the

capitalist, whose projected narcissism fuels the competition of capitals, and
is contained within a market system organized for that purpose. In the good
society, the projection of narcissism also poses a problem since the grandiose
aspirations of the individual (to govern or to rule) once projected onto others
(including the people as a whole) become a threat, which it then becomes
necessary to control or repress. In the effort to do so, democracy can play
a prominent role. The democratic or participatory ideal copes with the

threat to the individual posed by his or her urge to govern others by limiting
its expression in accordance with a norm of equality. There is, of course,
also a norm of equality operating in the market. The difference is not in
the underlying psychic meaning of the democratic and market solutions,
both of which invoke a norm of equality to contain a threat, but in the
specific shape in which that norm appears. Under capitalism, the norm of
equality protects the individual against predatory narcissism by securing
one or another version of equal opportunity associated with protection of

private property. In the good society, equality protects the individual against
predatory narcissism, projected and real, by preventing exclusion and domi-
nation. The danger defended against by the fantasy of participation is
exclusion (that others will rule and we will be excluded) and the feelings
of envy provoked by it (Freud 1959 : 52). The idea of participation repre-
sents the wished for escape from the world of exclusion and envy. 12 This
aspect of participatory ideals is seldom given the attention it deserves.
Indeed, we may surmise that much of the energy behind the demand for
greater democracy originates in the projected narcissism to which I have
just referred.
In my discussion of markets as a means for coping with and containing
narcissism, I distinguish two possibilities. In one (the free market), preda-
tory narcissism is contained only within the broadest limits, limits that
allow the destruction of others so long as doing so is consistent with respect
for property right. In the other (the regulated market) narcissism is contained
within more severe limits, which secure livelihood and organize contract
not simply around the end of enabling a predatory form of competition,
but around other ends, such as securing autonomy. A similar distinction
can be drawn for the norms of democracy and participation. We can distin-

guish, that is, between democratic norms whose subjective meaning is to

contain the narcissistic aspiration to rule, including the threat that aspira-
tion poses when projected onto others, and norms whose subjective meaning
is not to contain or channel narcissism, but to assure an institutional setting
within which autonomy and respect for the individual (including his or her
self-interest) are secure. Thus, participation can be a meaningful goal for
the individual, so far as its subjective purpose is not coping with projected
and real dangers to the self, but assuring respect for autonomy and self-
expression. This might be the case for participation in decisions associated
with work and professional expertise, where participation is linked not to
rule, but to accomplishing ends meaningful to the individual. Clarifying
the subjective meaning of participation can allow us to judge institutions
by norms rooted in individual integrity rather than predatory narcissism.
Doing so poses a problem, however, which I consider in the next section.

Closed circles
In her study of social systems as defences against anxiety, Isabel Menzies
Lyth notes how those social systems and organizations in which paranoid
structures (involving splitting and projection) dominate are particularly

resistant to change (Lyth 1988 : 79). The reason for this has to do with the
way those structures shape the relation between subjective and objective,
and therefore between the ideal (yet to be realized) and the real. In para-
noid constructions, the external (real) is made a container for the internal,
so that subject and object are not really separated. This dynamic is well

exemplified by the relation between capitalism (real) and the good society
(ideal), since the former carries the rejected (bad) and the latter the wished
for (good). The failure to separate subjective and objective is typical of
actors caught up in what I refer to above as the basic situation.

The failure to separate subject and object, and the related denial of the
externality of the world, impairs the reality testing and learning from expe-
rience that are the essence of human development so far as that is a conscious
(intentional) process. Reality testing cannot mean much when reality for
the actor is constituted by projections of what originates inside. Learning
from experience cannot mean much when experience refers to an interpre-
tation of the past shaped by the dictates of a paranoid construction. What
takes the place of reality testing and development is what I will refer to
as a closed circle. The closed circle expresses the operation of the same

forces we encountered when we considered the idea of a closed system

linking fear and desire on one side with the state on the other.
Thus, for example, the approach to welfare reform that imagines remov-
ing welfare will remove the problem welfare is meant to solve depends on an
interpretation of the reality of poverty that makes being poor a decision based
on an economic calculation. This interpretation is based not on evidence, but

on the projection of unacceptable aspects of the self (rebelliousness against

the discipline and self-repression demanded in the basic situation) onto oth-
ers (those dependent on welfare). This interpretation of poverty has nothing

to do with those who are poor, and everything to do with those who are not.

The same can be said for the interpretation that sees poverty as the result of
injustice. Those who attribute poverty to injustice also project themselves
onto the poor, who represent their victimized selves. Because these inter-
pretations are grounded in projection, they cannot be altered by reality test-
ing or experience, since the template for testing experience is essentially
subjective, nor can success or failure of the resulting policy be judged by real-
ity testing in the future.
Because the external world is taken (consciously or not) to be purely
subjective, it can be made over in whatever image satisfies subjective need.
What is taken to be possible is what serves that need. As we have seen,
this is part of the capitalist spirit, which assumes all that is outside can be
bent to the will and need of the individual. 13 This attitude toward change
is also part of the ideal of the good society, which is shaped by the will of
the group, and not limited by any reality given to the group from outside
its subjective need, including any reality of the members considered as indi-
viduals separate from the group. Development, then, is understood not as
a lengthy and immanent process, which remains largely outside our control

and intent, but as an act of will.

We can make the idea of a closed circle more concrete by considering
the worker’s fate. Having his livelihood depend on exchange places him in
a paranoid situation. It would seem, therefore, that a reasonable approach

to the problem of self-alienation would be to assure livelihood indepen-

dently of exchange, and thus of the caprice of the market. Yet, dependence
of livelihood on exchange is also a way in which social institutions cope
with the paranoid character structure they foster in the individual.
Specifically, linking livelihood to exchange acts as a means by which limits
are set and excess aggression contained. This need for containment is the

underlying meaning of the idea of an incentive system required to assure

that society’s work gets done. To be set loose from the limiting situation
of the market also means to be set loose from constraints on the expres-
sion of destructive impulses in destructive acts, at least so far as economic
affairs are concerned. In this way, liberating paranoid tendencies from the
constraints of a paranoid situation simply makes matters worse. This
dilemma is a main source of the practical problems posed for us by the
structure of a capitalist market economy.
The need to contain aggression fits well with management’s need to act
out its own aggression against the worker in the form of control. The closed

circle thus includes punitive and sadistic forces channelled through the work
situation, as well as through the larger society. These forces play a large
role in maintaining the repression which is at the centre of the basic situ-
ation. There is little point in imagining non-repressive work organization
if we do not first consider the origins and nature of the aggression with
which the organization of work must cope.
The punitive attitude spawned by the redirection and intensification of
aggression occurring in the basic situation in its turn shapes policy-making
in ways that reinforce rather than ameliorate the repression central to that
situation. Punitive sadistic forces impede the effort to alleviate suffering,
and it is with these forces that we must cope if life is to be made more
tolerable, especially for the least advantaged. Measures that might reduce
the pressures on the individual are measures that work against the puni-
tive attitude and sadistic tendencies that dominate policy-making under
capitalism.

Prospects
Are there changes in the organization of economic affairs that might help
us overcome the self-alienation typical of the basic situation? It is tempting,
I think, to imagine alternative institutions, and to believe that such acts
of imagination have a potential to affect the course of events, as, no doubt,
sometimes they do. Yet, a difficulty arises because the enterprise of insti-
tutional design can easily participate in the problems it is meant to resolve.
We can see this danger with special clarity if we recall that one of the
problems of the basic situation is the way it encourages the individual to
disdain limits, to imagine that the only impediment to attaining our goals
is a failure of will. Imagining alternative institutions and then imagining
that they can be made real by acts of will, whether individual or collec-
tive, participates in the disdain of limits to which I have just referred.
Because in doing so it affirms the narcissism underlying the basic situa-
tion, the enterprise of institutional design can reinforce the problems it is
(consciously) meant to alleviate.
The idea of containing narcissism through markets or by submerging the
individual into a community has dominated discussion of institutional
design since the beginning of the modern period. This preoccupation has
been made more or less inevitable by (1) the distrust of self-seeking that
modernity inherits from premodern ways of life and thought, and (2) the
predatory narcissism that makes containment, channelling, and control a
primary institutional objective, and, of course, confirms our discomfort with
self-seeking. Channelling, containing, and controlling predatory narcissism
has also meant channelling, controlling, and containing narcissism in its
more creative form. So, while doing so has fostered progress, as many

students contend, it has also assured that the very problem, predatory narcis-
sism, that necessitates restrictive and punitive social policy is reproduced
by that policy. We can say, then, that predatory narcissism has been a
tremendous force for innovation and for social, economic, and technical
development, but it leaves us with a problem that it cannot solve, which
is its own presence as the moving force in institutional design.
So far as the historical problem is the shaping of a world conducive to
the freedom of individual subjects, appeal to self-interest as its moving
force carries weight. But when the problem becomes one of reshaping the
individual subject to make his or her pursuit of self-interest consistent
with recognition of self-boundaries and the existence of other selves, the
end comes into conflict with the means. Then, it may be that the force of
narcissism can resolve all problems except its own, which is the problem
of the self.
7 Income from work and
social insurance

Introduction
In Chapter 4 , I considered the
problem of external support for those who
were not, due toimpaired or undeveloped subjectivity, fully able to provide
for their own well-being. At that point, I considered only the simple distinc-
tion between those for whom the property system was adequate to satisfy
the needs of subjectivity and those for whom it was not. The assumption
implicit in this distinction is that the market offers an adequate external
structure for well-being where internal structure is well enough developed.

The market can, however, fail to do so, and when it does, individuals depen-
dent on it may need recourse to a support structure. In this chapter, I
consider some of the implications of this possibility.
That individual capacities are intact does not guarantee that they can be
sold or that their sale will yield an income adequate to support subjec-
tivity. The question of market failure in this sense is tied to the idea of an
adequate income or appropriate standard of living. We need to consider,
then, the meaning of a level of income supportive of a way of life consis-
tent with subjectivity, and the appropriate institutional setting for assuring

such support where the market fails to do so.

Adequate income

Once we judge the traditional notion of subsistence inappropriate to the

requirements of subjectivity, it becomes difficult to know what an ‘adequate’

level of income might be. Because of the importance of individual differ-
ence embedded in the notion of subjective freedom, what is adequate will

vary from person to person. Where, in traditional society, adequate means

appropriate to the way of life of a particular class or status, in modern
society adequate means appropriate to the way of life of an individual. Such
a way of life is the external expression of subjective freedom. It is also the

concrete expression of the capacity for subjectivity. This means that what
we determine to be adequate is closely connected to individual identity,

which is the particular expression in a way of life of the abstract potential

 Applications
for subjective freedom. Adequate standard of living is then defined as a
level appropriate to preserving individual identity. This standard is the
individual’s goal in work so far as we consider work’s remunerative dimen-
sion, and it is the goal of external support where sufficiently remunerative
employment is not available.
Whether work, when available, provides adequate support for an iden-
tity appropriate to subjective living depends, in a market setting, on the
value of labour and associated creative capacities. Where these are poorly
developed, or impaired, the needs of identity are not so easily determined
as they are for those who have been gainfully employed.

If we assume, as may or may not be the case, that when employed the
individual acquires an income (wage or salary) adequate to maintain the
living standard to which I have just referred, this sets a standard also for
compensation under circumstances of unemployment. Non-wage and salary
support for income is aimed at securing a previously established way of life.
This follows from the notion of identity, which includes continuity of being
as an essential element. The idea of continuity of being, and of the internal

connectedness it expresses, does not imply that needs are fixed. But the
idea of identity does impose a structure, meaning, and thus continuity on
need. If continuity of need follows from continuity of being, which expresses
the experience of having an identity, then we can use identity to establish
adequate income. Adequate income means enough to maintain continuity
of being over time, and ultimately across the lifespan so far as possible. 1
Theproblem posed by disruption in income resulting from disruption
in employment is that it endangers the continuity to which I have just
referred. Any threat to identity is also a threat to subjectivity. It follows
that subjectivity requires institutional supports appropriate to maintain
continuity of being (adequate income) during those times when the labour
market fails to do so.
We can express our point about identity and standard of living another
way by saying that maintaining our individual identity so far as possible
is what need. Under normal circumstances, and for those with suffi-
we

ciently intact capacities, this need can be satisfied bythe property system
and by interchanges entered into at will. No external structure other than

the market is needed. But circumstances may not be normal in the sense
that there may not be adequate demand for the labour of those able and
willing to work. What is threatened by unemployment and the income loss
associated with it is not subsistence but identity. 2
The normative significance of income loss due to market failure lies in
the threat to identity that it poses. This threat has several dimensions. It
involves a threat to the material requirements of a way of life to which the
individual has become committed because it has become a part of his or
her self-conception. It also involves a threat to the expression of identity
through a vocation, where we understand vocation as the individual’s primary
outlet for creative capacities in work.
 Income from Work and Social Insurance

Insurance

Linking standard of living to identity means that what is lost due to market
failure is no different from what was acquired when the market functioned
well. Because the market cannot be relied on to function well at all times,
provision must be made to sustain income when the market fails. It seems

reasonable to consider this need under the heading of insurance. The idea
is somehow to insure a situation against uncertainty, and specifically against
adverse circumstances of various kinds. This means insuring income adequate
to maintain continuity of being, and thus identity across time and in

the face of the uncertain provision of income by recourse to the labour

market.
I will consider the need resulting from the possibility of market failure
under the heading of insurance, and the object that satisfies this need an
insurance contract. This contract may be with a private firm or with a
public authority, and we need to say something about this distinction. The
terms of the policy may be fixed for all workers, or subject to a degree of

discretion depending, for example, on the individual’s attitude toward risk.

On the surface at least, it would seem preferable to allow discretion in
income insurance, as doing so seems more in line with subjective freedom.
The more important discretion in choosing a contract with terms suited to
individual need, the more appropriate the idea of a private contract and
use of markets to satisfy the need for security against market failure.

A large question raised by this idea is that of the appropriateness of

making the individual dependent on private firms, and I will consider this
matter further on. Before doing so, we need to consider cases more concretely.

Cases can be distinguished by whether market failure is temporary or perma-

nent. Since we are considering income insurance, we can also consider a

somewhat different, if related, problem, which is income maintenance after

retirement from the workforce. I will begin with the two types of market
failure, then consider the matter of insurance for retirement.

Temporary market failure

Temporary market failure means temporary income loss. In a market

economy, because our income depends on decisions of others who have no

ethical or legal obligation to provide us with income, we must consider

the possibility that, for a period of greater or lesser duration, we will not
have income from the sale of our creative capacities. Whether likely or not,
this eventuality is probable enough to demand that we take measures to
protect ourselves against it so far as that is possible.
Saving is the most obvious form of protection, but there are others, most
notably unemployment insurance. Insurance for income responds to the
need to secure our ways of life so far as possible against short-term

failures. We can make an argument that insurance of this kind can, up to

a point, be left to the initiative of the individual, who may provide it for
him- or herself in different ways. These different ways can involve contracts
with insurance providers. Insurance of this kind is not in itself a matter of
right, except as an application of the principle of property right. That is,
we have the right to purchase insurance contracts when such contracts are

available, which is to say so far as insurance providers choose to offer them

to us.
So long the property system offers suitable contractual arrange-
as

ments, the problem of insuring against short-term failure falls wholly within
the system of private contract, and thus has nothing to do with govern-
ment. The property system may not, however, make suitable contracts

available, and it certainly may not make them available to all those
needing to secure their well-being in this way. If private insurers are
profit driven, they need not consider anything like offering universal
coverage, but may elect to cover only those deemed of low enough risk. If
we consider the availability of suitable insurance policies essential to
protecting subjectivity, we may consider this an argument for regulation
of the insurance industry, and possibly replacing or supplementing it with
public insurance.

Permanent market failure I: competition

Market failure may not be temporary, and, if it is not, the resulting situation
poses a set of problems related to those just considered but also distinct
from them. We are familiar with several forms of permanent market failure,
most notably: loss of jobs due to competitive failure and loss of jobs due
to technical change. In a general sense, failures of this kind are linked to
the investment of modern economies in the process of change.
The change to which I have just referred is beyond the individual’s control
and poses a particularly serious threat to his or her well-being. We can
divide the possible responses to this threat into two categories depending
on the adaptability of identity to changing external circumstances.

Robert J. Litton has recently argued that, in the modern world, it is

necessary that identity be malleable so that the individual can adapt
to change:

Over decades of observation, I have come to see that the older version
of personal identity, at least insofar as it suggests inner stability and
sameness, was derived from a vision of a traditional culture in which
relationships to symbols and institutions are relatively intact hardly
—

the case in the last years of the twentieth century. If the self is a symbol
of one’s organism, the protean self-process is the continuous psychic re-
creation of that symbol.
(1993: 4-5)
The protean self, as Lifton terms it, is malleable in certain respects, though
it also exhibits continuity in others. If the protean self is malleable so also
is the identity that gives concrete shape to it. This malleability facilitates
adaptation to change.
Adaptability means that the individual faced with loss of vocation due
to the larger forces ofsocial and economic change can shift over to a new
vocation, with the new elements of identity the new vocation implies. That
is to say, the individual can make this shift as a psychological matter. While
the shift demands a specific psychic capability, it also requires new knowl-
edge and abilities, which in the modern world also means certification for
a new vocation or profession. Acquiring new capabilities requires resources,

and the problem of adaptability becomes one of access to sometimes costly

educational opportunities.
We need to bear in mind that the adaptability to which Lifton refers is
not universal, and cannot be assumed. For those who cannot or do not

adapt, change imposes a long-term loss of vocation and with it a long-term

loss of income adequate to maintain identity. The two categories of response
to threat (adaptation of identity and failure of adaptation), then, imply

different burdens for individual and society. For the first, there is the burden
of the cost of adaptation. For the second, there is the burden of living a
life without a central activity that once gave life meaning and provided
necessary income to sustain identity.
The need for retraining as part of the process of adaptation can be financed
in different ways. Typical in the United States is a combination of what-
ever income from work continues to be available with access to credit

(sometimes guaranteed or otherwise subsidized by the government). In this

setting, those with the psychic and other personal resources needed for adap-
tation can be largely self-driven during the process of retraining. The process
can, of course, also be subsidUed more actively by government, for example
where higher education is publicly rather than privately financed.
For those who are not adaptable in this way, the problem of insuring
against the risk of loss of income takes on a new dimension. The prospect
of long-term loss that may not be made good poses difficulties for the solu-
tions suggested above for short-term income loss. I consider these problems
in the next section under the heading of uninsurable risk.
The difference between the two categories of response to loss of vocation
can, in part, be thought of in relation to the life cycle. The further along
the individual is in his or her life cycle, the more of life he or she has spent
in a particular vocation, the lower the likelihood of adaptation as a

response both for practical and psychological reasons. The likelihood that
external support will be needed increases, then, the further along we are in
the life cycle.
Permanent market failure II: inadequate levels of market
development
All of the considerations advanced so far regarding the use of markets to
satisfy the needs of subjectivity apply where economic arrangements have
developed under the impetus of forces associated with individual autonomy.
Under these conditions, markets are, at least to a substantial degree, orga-
nized to offer opportunities for income from the sale of creative
adequate
capacities (though this may be their only goal). This situation cannot
not

be assumed. On the contrary, under many circumstances markets are poorly

developed for this end; indeed, they are poorly developed overall. Then,
individuals, however well developed and intact their capacities for subjec-
tive freedom might be, may not find an institutional setting capable of
supporting the realization of those capacities.
In such cases, the problem of assuring autonomy in the face of market failure
cannot be fully separated from the problem of economic development.
The problem of welfare becomes particularly acute and particularly intractable
where non-market structures for support (community and family) have
eroded while those associated with the market and the welfare state have not
developed adequately to take their place. As contact with the modern world
erodes local community it does not inevitably replace the obligations of
community with the more modern structures of support we have considered
here. The result is a special kind of poverty unique to the modern world. This
is the poverty resulting from the failure of large numbers of individuals to
acquire their subsistence (as that is defined in the premodern communal or
traditional setting) even in the absence of the types of threat to subsistence
typical in traditional society.
This new type of poverty poses special problems for the state, and it does
so at a time and in a setting where states are often not strong enough to

respond adequately. When poor market development is matched by a low

level of development of a welfare state, institutional settings will fail to
support individuals in need.

Retirement income

Retirement from the workforce severs the link between income and employ-
ment, though not due to market failure. We might consider the needs for
retirement income under the heading of impairment of subjectivity, which
is a likely result of the aging process. Yet, the timing of impairment (dete-
rioration of health) and the timing of retirement need not be connected.
Because impairment may not be the factor prompting the need for income
outside what can be gained from employment, I will consider retirement
under the heading not of impairment, but of insurance.
The problem of retirement is in many ways similar to that of long-term
unemployment. Even if in some ways more predictable, its actual impact
in time and duration is no more certain than is that of market failure. All
of the problems we associate with long-term unemployment due to market
failure apply to retirement except for the possibility of an eventual return
to the workforce.
In the United States, response to the prospect of life without income
after retirement has involved a combination of voluntary and forced saving
(social security), the latter being the controversial element. This controversy
has two important dimensions: the justification for forced savings, and the
justification for a system that takes management of savings out of the hands
of the individual.
The forced element in saving applies both to the individual and to his
or her employer, and the justification for this element differs accordingly.

The justification for constraining the labour contract so that it includes

the element of contribution to a national saving plan follows from the
judgment that the remuneration derived from the wage contract will
be inadequate to enable the worker to provide sufficient saving for retire-
ment. We can say, then, that the problem is not one of saving for retirement,

but of inadequate levels of income.

Insistence that forced saving be managed by the state and not by the
individual seems to follow from a judgment that individuals are incompetent
to manage their own savings, which is to say that they are impaired
in some important way. Impairment does, as we have seen, offer justification
for an external structure, or stewardship. Yet, it is difficult to imagine
how we can arrive at the judgment of universal impairment needed to
support centralized management of individual savings.
The two dimensions of the problem of saving can be brought together
in the following way. Levels of income inadequate to make possible adequate

saving for retirement result from vulnerability. Individuals are vulnerable

when their labouring capacities are not well developed, which is to say they
do not have the sorts of skills that make their labour valuable enough to
secure adequate pay. We can place the problem of inadequate skill under

the heading of impairment, knowing that in doing so we also place the

majority of workers into that classification. It is interesting and revealing
to do so, since it suggests that problems of underdevelopment are not

restricted to the so-called developing countries, but exist wherever large

numbers of workers must make a living by selling unskilled labour.
Treating the problem of vulnerability as one of impairment immediately
justifies intervention. It also, however, seems to place the onus on the worker
for the low level of his or her income. To some extent this is correct. But,
we should bear in mind that vulnerability only translates into exploitation

(acquiring work at a pay inadequate to support subjective freedom) in a

setting where strong incentives exist to take advantage of the vulnerable.
The market is such a setting.
Put another way, we can say that vulnerability is an invitation to the
exercise of power. Use of the language of power can, however, be misleading
in this context. The difficulty with the use of the language of power in
this setting is twofold. First, notwithstanding efforts to reinterpret power
so that it does not entail a subject who exerts power, the absence of a well-

defined subject for exploitation renders the language of power at best

ambiguous, as Marx was well aware. Second, the use of the language of
power hides the problem of impairment, and therefore participates in the
denial of impairment we have seen operating so strongly in the use of the
language of right. Removing power does not bestow subjectivity any more
than granting a right does. When we confuse the removal of constraint
with the capacity for subjective action, we dismiss the requirement for
internal capacities without which the opportunity cannot translate into a
reality of subjective living.

Uninsurable risk
Does the threat of short- and long-term market failure constitute the basis
for a normative argument for provision of income outside what can be
gained in the sale of labour and creative capacities? One way to consider
the answer to this question is to tie it to the question of insurable risk. If
the risk against which we need to insure our income is such that offering
a contract can only be made profitable on terms so onerous that they under-

mine current income in a way that threatens identity, then the cure creates
the problem it is intended to ameliorate.
We might consider this likely in the case of unemployment insurance
for the following reason. Market failure by its nature affects not the indi-
vidual worker alone, but large groups of workers simultaneously. In this,
it is like a major natural disaster that affects a region of the country, not
a single home. Long-term market failure compares to a long-term natural

disaster, a hurricane that lasts for several years, perhaps longer. A disaster
of this magnitude and duration would be hard to insure against through
private contract offered on the basis of a profit calculation.
What makes insurance feasible is the possibility of risk spreading. The
larger the risk, and the larger the likely pay-out, the broader the group of
individuals over which the risk must be spread to make insurance viable.
The largest such group is the nation as a whole. The more considerations
of risk spreading push us in this direction, the more we move in the direc-
tion of a national insurance carrier capable of spreading the risk to the
whole of society. Whether such a carrier is a part of government or not, it
remains an essentially public enterprise. The more universal participation
is required to make the enterprise viable, the more we move in the direc-
tion of a public claim over current income to provide relief for the victims
of market failure.
Income from work

So far, I have considered only the case where income failure results from
the loss of employment. I have assumed, in other words, that adequate
income is not a problem for those who work. Yet, we can also treat loss
of employment as the devaluation of the labour and creative capacities of
the unemployed. Jobs remain available, and at a remuneration commensu-
rate with the now-diminished value of labour where no demand exists for

labour its original value. This way of thinking would apply more specifically
at

the forms of long-term unemployment considered earlier.

to

We have assumed thus far that individual identity can be sustained by

the income available from employment, and that it therefore depends only
on the availability of employment and not on the level of income employ-
ment yields. Yet, this is equivalent to assuming that individual identity in
our sense, which is an identity that incorporates autonomy, is consistent

with any level of income, and thus any standard of living. This would seem
a questionable assumption on general grounds, and more specifically when

we take into account the importance of choice in expressing autonomy.

Monetary remuneration for work assures that the individual can make choices
about his or her mode of life, choices expressive of identity. Yet, the lower
the income the fewer the choices available, until a point is reached at which
choices do not exist at all, or lose any meaningful connection to autonomy.
Clearly, then, the market valuation of labour, which does not take this
concern into account, poses a problem.

The problem with which we are concerned here can fruitfully be linked
to that of the investment of creativity in work. That is to say, the market

value of labour is connected, albeit in no simple and consistent way, with

the creativity involved in work. The less creative the work, the less its
value. Or more accurately, the less creative the work the more likely its
value will fall to a point inconsistent with subjectivity. If we connect subjectivity
to creative living, we can say that the less creativity is involved in

labouring capacities, the less creative living is available to the worker.

The advantage of including this element of creativity is that we can rede-
fine the problem of remuneration as a problem of the presence or absence
of creativity as an element in the capacity to work. In the more usual
language, the less skilful the labour, the lower the remuneration for it.
Then, unskilled labour is likely to receive a reward at best marginally consis-
tent with creative living because the labourer is not considered him- or

herself a locus of creativity and thus in need of creative living.

We can consider this problem on both the demand and supply sides. On
the supply side, we can wonder how individuals fail to develop themselves
to the point that their labour contains the element of creativity that assures

it will have a value commensurate with creative living. On the demand

side, we can wonder how the work of society can be done if no unskilled
labour is available.
Unskilled labour and impairment
I suggest above that we consider the problem of the supply of unskilled

labour under the heading of impairment. The impairment with which I am

concerned expresses a failure of development of the capacity for creativity
in work. It matters whether this failure is the result of an original deficit

in the individual whether it is the result of a deficiency of opportunity

or

to develop an innate potential. I also suggest above that this failure is a

widespread, even typical, phenomenon of the workforce under capitalism,

especially in the early years of its development. This means that we should
consider impairment as a deficit in developmental opportunity rather than
as adeficit in original potential. In any case, it is clear that the majority
of workers did not have the opportunity to develop their creative capacities,
so that the issue of an original deficit in potential for creativity is

moot. If the opportunity to develop is absent, we should begin with the

assumption that this absence accounts for the failure to develop. We can,
then, placea substantial part of the problem of low-wage labour under the

heading impairment associated with deficits in the opportunity to develop,

of
thus placing the solution on the side of education and quality of family
environment.
All of this ignores the possibility that low wage labour is necessary
to support the production of wealth adequate to sustain creative living, if

only for a part of the population. Then, the freedom of some must always
be paid for by the unfreedom of others. If this is true, it raises some
serious problems for the norm of subjectivity with which we have been
concerned here, since that norm would inevitably incorporate the element
of domination.
To see how we might or might not arrive at this conclusion, let me
begin with an argument from the classical economists, one that tends to
support the conclusion that freedom and unfreedom are bound together.
The classical economists tended to consider the economy taken as a whole
under the heading of the division of labour. For them, the social division
of labour defined a set of closely linked tasks that must be done if the
subsistence is to be provided and a surplus produced for the purposes of
investment and economic growth. This division of labour included unskilled
labour as a major, indeed dominant, element. Further, the impetus to
economic growth assured that the domination of unskilled labour in the
workforce would tend to increase as a result of labour displacing technical
change. Thus, the problem with which we are concerned here was seen to
be built into the material-technical requirements of social production, and
to be exacerbated by the commitment to economic growth.
If we take the division of labour to be given, a fact of economic life,
then it is only a matter of how we fit individuals into it. As Marx comments,
all societies must labour, and they must therefore allocate their pool of
labour to needed tasks. It is only a question of the specific institutions
through which this allocation takes place. So far as we accept the idea that
the division of labour is a fact of life to which we must adapt, there is
little we can do to solve the problem of unskilled work, and of the impaired
creativity it implies. Then, we cannot break the interdependence of freedom
and unfreedom also implied by the necessity that we take the division of
labour for granted.
While Marx contributes to this idea, he also denies its validity when he
insists that the trend of capitalist development is to make unskilled labour
superfluous. From our point of view this trend is a promising one, although
it has little to offer those dependent on unskilled labour for their income.
It does mean, however, that the division of labour is not a fact of life, to
be taken for granted, but the result of ongoing social and economic processes
that need not go on altogether behind the backs of those most directly
affected by them.
We can see this by considering a more contemporary example. While
technical change may have eliminated many unskilled jobs associated with
industrial production, other trends in the economy have produced new ones
associated not with mass production but with the service sector. The need
for the service sector cannot be well explained in the classical way by refer-
ring to a material-technical division of labour. Rather, the explanation has

much more to do with modes of life adopted by those with rising incomes
whose labour has a value adequate for them to pay others to do tasks they
might otherwise have to do themselves.
When the demand for unskilled labour derives from ways of life made
possible by the availability of such labour, demand can be said to derive
from supply. If we eliminate the supply, we exclude ways of life depen-
dent on it. So far as this is correct, we can throw the problem back on the
supply side, and consider the matter of impairment as the central concern
of low wage labour on both sides of the equation. 3 Still, when doing so, it
is important to bear in mind that the problem becomes one of supply rather
than demand only when social reproduction does not depend on the availability
of a low-skill waged labour force. This happens as a result of a long
process of economic development, one we cannot assume is complete, or
has proceeded far enough to assure that those capable of creative living are
not at the same time taking advantage of those who are not.

Obligation
In considering the matter of securing income under conditions where the
individual cannot do so on his or her own, I have not used the language
of obligation. Let me briefly consider the reason for this.
One way we sometimes speak about what I have called the stewardship
role of the welfare state treats the state as an intermediary between citizens,
in this case between the employed and the unemployed, between those
who are impaired and those who are not. In this way of thinking, the
government operates as a kind of involuntary charitable organization, which
is a sort of community. Then, the obligations of the members of that
community toward the disadvantaged are executed through the agency of
government. They are nonetheless the obligations of the members, and
obligation is no less the appropriate language for speaking of the relationship
between advantaged and disadvantaged.
When we consider the income needs of the unemployed, we may imagine
ourselves asking if those who are employed have an obligation, through the
institutional mediation of government, to provide income and employment
4
to those who are not. To interpret the problem in this direction, of course,

is to assume that government should be understood as the creature of the

individual citizens acting as a group. Since we have in Chapter 5 rejected
this way of thinking about the state, we cannot here invoke it. When we
treat the state as an institution organized around a commitment to the ideal

of subjectivity, we need not consider matters of obligation. The state appro-

priate to support the needs of citizens where necessary is a state driven not
by the obligations of its citizens, but by the ideal of subjectivity as that
becomes embedded in its institutions.
8 Justice and economic
democracy

A democratic ideal

Students of normative political economy sometimes treat the pursuit of

economic justice as if it were a matter of democratizing the economy, and
responsiveness to democratic decision-making as the primary normative end
of economic arrangements. Doing so mirrors popular usage, which, for
example, speaks of the transition in Eastern Europe and the Soviet Union
as ‘democratization’, thereby making a change in political institutions stand

for the whole. One implication of this use of language is to define a free
or just society according to whether it is or is not democratic, while making

a democratic society inherently just. Of course, even given this equation,

much remains to be resolved, particularly regarding the relation among
markets, justice, and democracy. Thus, many observers, including those who
equate justice with democracy, would reject out of hand the easy equation
of democracy with unregulated markets, also favoured in popular accounts
of the aforementioned transition. 1
Substituting the narrower term ‘democracy’ for the broader ideal of justice
can also mean investing democracy with the significance usually reserved

for justice. Thus, at a conference on democracy, a colleague of mine once

defined democracy as an arrangement that benefits the worst off, thereby
using a definition of justice popular in academic circles to define democ-
racy. Whether justice includes the principle that we arrange our economic
affairs to benefit the worst off or not, defining democracy in this way equates
democracy with justice. Yet, the intent is not so different from that which
subsumes justice under democracy. Specifically, the equation of the two is
a way of assuring that a call for either justice or democracy will be under-

stood as a call for greater equality, an important theme for those who equate
justice with democracy.
Thinking about justice in this way severs the link between justice and
the design of institutions appropriate to secure the rights and integrity of
the individual. Since justice is here understood as a procedure (democracy),
it is in principle consistent with any outcome, and with any political

agenda not in conflict with the political rights associated with democratic
 Applications
deliberation, however that outcome and agenda might conflict with indi-
vidual integrity and the rights needed to protect it. Thus, even the outcome
of greater equality, its presumed goal, is not assured by the equation of
justice with democracy.
We might assume that the equation of justice with democracy is not to
be taken literally, but as a kind of shorthand. Yet, the shorthand that uses
the term democracy for the broader, and sometimes different, concerns of
justice, has itsown significance and implications, which differ, for example,

from those that make democracy only one aspect of a just society. The incli-
nation to abbreviate justice as democracy interprets justice in a particular
direction, endowing it with a specific meaning. When we then consider
justice more broadly, the justice we consider has been shaped by the orig-
inal idea that made its equation with democracy seem a reasonable first
approximation.
Equating justice with democracy is consistent with another habit of mind
in normative political economy: assuming that in a well-ordered society

government and democracy would be coterminous. Oddly enough, we can

find this idea not only in the thinking of those who favour participatory
and communitarian ideals, but also in the thinking of those who favour
free market outcomes. Thus, public choice theory also seeks to subsume
government under democracy when it attempts to make the government a
contract rather than an institution sui generis. Public choice theory limits

government action to what all those having a stake in the outcome will
the government to do. Many assume that limiting government to what is
willed by stakeholders restricts the activities in which government can right-
fully engage. Those who favour a more substantial public agenda, by contrast,
tend to believe that equating government with democracy provides govern-
ment with a licence to engage in a wide range of market-limiting activities.

Their presumption is that the majority is not likely to favour an economic

system that benefits the minority at their expense, which they tend to
assume private enterprise does. We have, then, a kind of democratic ideal

for society, one that sees a well-ordered society as a democratic community

through this equation of both government and justice with democracy.
As I suggest above, this ideal may leave considerable room for the market,
or it may not. On a practical level, the distinction seems to matter a great
deal. Yet, the common ground just alluded to also matters. It is this common
ground I wish to explore here.

Economic justice
Before proceeding with the question of the relation between justice and
democracy, something needs to be said about justice, since, independently
of confusions arising in relating it to democracy, the term ‘justice' poses
some difficulties of its own, especially in economics. These difficulties may

be exemplified by the comments of one author, who, in a discussion of

 Justice and economic democracy
International Monetary Fund stabilization policies, defines justice as follows:
‘By “economic justice” in this context I do not mean anything very complex
or Rawlsian; rather, my premise is that the real incomes of workers, arti-

sans, and peasants should not fall . .' (Fitzgerald 1985). For this author,
.

as is often the case for those advocating greater economic justice, justice
does not refer to ‘anything very complex’. Rather, it refers to the idea that
our economic policies ought to help those most in need, or, at least, ought

not to harm them in order to help others. Taking this as the starting point,

the author goes on to connect justice with measures that assure the satis-
faction of basic needs, a term that, it seems, also refers to nothing particularly
complex or problematic. The appeal of the basic needs idea of justice mirrors
that of the democracy equals justice line of thinking so far as both are taken
to imply greater equality, or economic policy more favourable to the least

advantaged.
However sympathetic we may be with the idea that justice supports

expectations about need satisfaction, and that justice is not served when
certain needs go unmet, clearly the foregoing definition of justice leaves
much to be desired. First, why would justice demand that incomes of
‘workers, artisans, and peasants’ not fall, unless we assume that anyone in
these groups will automatically be below some minimum, or because any
fall in their income is in some sense unfair? If this is the gist of our argu-
ment, it would seem to approximate Rawls’s difference principle, though
without invoking the supporting apparatus of reasoning and argument Rawls
introduces. According to this principle, economic inequality is just only if
it results ‘in compensating benefits for everyone, and in particular for the
least advantaged members of society’ (Rawls 1971 : 14—15).
Rawls supports the difference principle by asserting that it would be
favoured by individuals asked to choose the principles of justice in a situ-
ation where they could not know how those principles would affect them
personally. One way of understanding this idea considers how it involves
a connection between all citizens engaged in setting the foundations for

society (defining a system of justice) and the least advantaged. Following

Rawls’s line of argument suggests that, through a somewhat complex
thought experiment, we place ourselves into the situation of the worst off.
Of course, placing yourself into the situation of another can mean different
things, and lead in different directions so far as the matter of justice is
concerned. The difference involves the type of connection, in this case with
the least advantaged, out of which justice evolves. Alternatives important
for justice are: connection based on self-interest, connection based on iden-
tification, and connection based on recognition (of the self-in-other, or other
self). Before proceeding with the matter of justice and economic democ-
racy, let me briefly consider these alternatives.
Rawls asks us to imagine that we might find ourselves in the situation
of the worst off, so that choosing the principle of benefiting the least advan-
taged becomes a matter of the pursuit of our self-interest, albeit under
unusual circumstances. This connection with the worst off based on self-
interest is the least substantial of the three types of connection referred
to here. Indeed, it does not really connect us with the worst off, since it

imagines them not as persons, but as positions or situations. Then, just

distribution does not so much benefit the least advantaged directly, as it
assures that the worst situation in society is no worse than it must be.

Advocates of greater economic justice do not generally adopt Rawls’s line

of argument. They do not imagine that, in demanding justice, they are
protecting their own (self) interest, but, rather, that they are advocating
the interests of others, in this case the most needy. Their object is not posi-
tions in society, but individuals and groups. This establishes a different
connection with those in need of justice. Two possible alternatives to self-
interest as the basis for connection are identification and recognition. The
difference between the two has to do with the way the self is involved in
the connection with the other. A connection with the poor based on recog-
nition does not presume that the experience of being poor is in some sense
shared, while connection based on identification does.
Those who identify with the poor find that being poor mirrors some-
thing in their own experience. Identification does not require that we are
or have been poor, or that we fear we might be. Rather, it requires that

we find in our own experience that parallels being poor in that

something
it carries the meaning, though that meaning is manifest in a different
same

way. The likely basis for such identification with the poor is deprivation.
Poverty is only one form of deprivation. We are deprived when any of the
requisites for our development as persons are missing, whether those be
food and clothing, a secure environment, or, more generally, an adequate
relationship with parents or other adults capable of facilitating growth.
Since material deprivation is not the only form of deprivation, those who
are not and have not been poor can still identify with those who are by

connecting the deprivation associated with poverty with their own depri-
vation associated with other than material needs.
Seeing the experience of the poor as a mirror for our own deprivation,
even if ours has a different nature and source, constitutes an identification

that can powerfully influence thinking about justice. Those who have expe-
rienced their own deprivation, whether economic or not, can identify with
the poor. In demanding justice for the poor, they demand justice for them-
selves, or use the poor as stand-ins for themselves. The disadvantaged offer
us the opportunity, through identification, to deal with our own depriva-
2
tion, though at a distance from ourselves.
Many advocates of greater economic justice use the evocative language
of justice to express the feelings of the disadvantaged (or feelings attrib-
uted to the disadvantaged), feelings rooted in a link between disadvantage
and oppression. Demanding justice, then, means (1) linking disadvantage
to oppression, (2) identifying with the disadvantaged, and (3) demanding

rectification in their name. The resulting idea of justice ties distributive

justice to as rectification. The link is implied in the way the least
justice
advantaged made
are the central concern of justice, which directs attention
away from universal rights, and from how institutions can be designed to
advance regard for the personhood of all, including, but not exclusively,
the least advantaged.
While identification with the least advantaged leads to demanding justice
as rectification, connection based on recognition leads in a somewhat different

direction. It does not call on the fear that we will be poor ourselves; nor
does it use the poor as receptacles for our own disavowed experience of
deprivation. Instead, it allows us to understand what it means to be poor
by calling upon our access to what is universal about being a person. Those
who have not been deprived themselves can nonetheless understand what
deprivation means, and can concern themselves with those who are its
victims. The basis for such a connection is a capacity to recognize self-in-
other, thus to recognize that the other is also a self, while holding in mind
the other’s real difference from ourselves. By contrast, when we identify
with others, we lose our sense of their difference from us. Thus, those who
connect with the poor by identification tend to see themselves in the poor

rather than seeing the poor as what they are. Identification constitutes a
distorting lens that connects us to others by putting their difference from
us aside.

To be sure, recognition is, in its way, a form of identification. The differ-

ence alluded to above is in the aspect of the self with which we identify

others, whether it is the universal dimension, along which all persons are
considered selves (at least potentially), or the particular dimension, along
which being like us concretely (for example, having a shared experience) is
what it means to be a self. We can formulate the distinction as follows: Is
the self we see in the other our self (particular), or is it the self (universal)?
We can make recognition of the other the basis for economic justice,
but, if we do, economic justice has a broader net to cast than the one that
captures the plight of the worst off, or those below a poverty line however
specified. Those who are not poor also expect and demand justice, and with
as much reason as do those who are poor (or claim to represent the inter-

ests of the poor). This last point is implied if we set meaningful limits on

measures that can be taken to alleviate poverty. If alleviating poverty does

not justify violating basic rights, including economic rights, of those who

are not poor, then we need some principle for judging which measures for

alleviating poverty are consistent with justice. This makes even the matter
of avoiding harm to the least advantaged contingent on a principle of justice.
Support for the poor is not, then, the basic principle of justice, but one
among a number of policies derived from the underlying principle or prin-
ciples of justice.
Whether we link justice to identification or recognition is important in
part because it determines whether justice is or is not a group phenom-
enon. If we connect justice to recognition, then we take the principle
of justice to be regard for the personhood of others, where personhood
includes certain basic attainments, especially those bound up with a quality
we refer to as autonomy, integrity, or self-determination (see Levine 1997 ).

Understood in this way, justice does defend economic rights for the poor,
including the right to life, so far as social policy and social institutions can
secure such a right. Thus, for example, famine is intolerable because it

destroys persons, as does, more slowly but perhaps no less definitively,

chronic poverty and deprivation. Justice, then, refers to the ideals embedded
in institutions designed to secure autonomy of persons. Defining justice in
this way clearly distinguishes it from democracy, though the possibility
remains open that the two will lead us in the same direction, and thus
join forces.
Emphasizing the part played by identification in certain interpretations
of economic justice will help us better understand the equation of justice
with democracy, in which identification plays a large role. Those who tend
to equate justice with democracy also tend to invest democracy with primary

significance, to define its sphere of operation very broadly, and to see demo-
cratic procedure not merely as a way for associations to make decisions, but
also as the life process of community. Linking democracy to community
makes identification with others an important part of democracy, and thus
tightens the equation of democracy with justice.

Democratic community
The significance we attribute to democracy will depend on how we under-
stand the unit whose governance we think ought to be democratic, and on
the range of issues to which we believe democratic procedure ought to be
applied. Particularly important will be two related considerations. The first
is whether we take the unit of democracy to be a group sui generis, or, in
other words, a democratic community. The second is whether and how we
delimit the domain of democratic decision-making: what issues we subject
to democracy, and what issues we insist will be resolved in other ways. The
ideal of democratic community sometimes imagines the unit of democracy
as a group, the life of the group as encompassing an especially wide range

of interests and activities, and the range of democracy as limited only by

group decisions themselves. Thinking this way is not inevitable. Much
depends on whether the end of democratic process is simply the specific
decisions arrived at, or the life of a community.
To make this distinction meaningful, we will need to distinguish between
explicitly group processes, and processes that encompass many individuals
in a structure of mutual dependence. We do not have a group simply
because we have more than one individual, or more than some minimum
number of individuals, even if those individuals are interdependent.
We only have a group where ‘groupness’ exists, which is the kind of
solidarity or connectedness that makes the whole more than a mere set
of individuals linked by contract or division of labour. In a group, the
whole is not so much more than the sum of the parts as it is different from
the sum of the parts. Indeed, in certain dimensions it might be less, for
example if it tended to eclipse the individuality of the composing members.
For present purposes, I will assume that the key element in establishing
the existence of a group is identification. Group members do not simply
depend on, or possibly use, one another; they identify with their fellows.
Thus, being in the group shapes identity in ways consistent with the group
reality; it establishes and enforces a solidarity among members that results
from sameness. When our core identity is contingent on our acceptance in,
and belonging to, a community, it is also contingent on shared values,
ideals, and character traits that establish membership.

The framework of justice

The existence of a system of mutual dependence (division of labour) or the
presence of contractual connection does not establish a community, nor does
it demand democratic decision-making. It does, however, establish a struc-
ture of interdependence greater than the individual, and greater than the

individual contracts taken together. This structure assures that contracts are
enforced, and that those relying on others for things they need can normally
expect the needed transactions to be available to them. Individual welfare
depends on systemic conditions such as: the level of output and employ-
ment, a properly functioning price system, an effective set of financial
institutions supporting a system of money and credit, and so on. For these
conditions to be met, we must have appropriately designed institutions that
enable individuals and corporations to get their jobs done.
Of course, what is meant by getting the job done can vary. Competing
interpretations judge success differently, for example according to whether
price stability or full employment is taken to be the key. The larger struc-
ture within which individuals pursue their ends has its own significance.

Thus, to make individual decision-making meaningful, there must be an

underlying framework. This framework embodies an ideal of justice, and
we can refer to it as the framework of justice. The individual can use this

ideal to judge if the overall structure is well designed. The ideal may be
a group ideal. If it is, we have more than a system of mutual dependence;

we have a group or community. Alternatively, the ideal might not be of a

group, but only of a structure well suited to facilitating the pursuit of indi-
vidual ends, in which case instituting the ideal does not create a community.
Justice, then, may or may not frame a community.
The framework of justice can be set in place by decisions that have doing
so as their explicit goal. Alternatively, the framework can emerge out of

decisions intended to advance certain partial ends of individuals and groups.

In the latter case, the ideal of justice is implicit in the partial ends, rather
than the explicit basis for justifying specific law and policy. The process
for establishing this framework involves politics as that term is normally
used. Politics, then, institutes a collective ideal for an association of persons,
though it need not do so in a conscious or thoughtful manner, and the
association may or may not be a community.
So far as decisions need to be made about the overall structure, proce-
dures need to be instituted for decision-making, and democracy becomes a
relevant issue. Democracy can, however, lead us in different directions. It
can be understood as the appropriate method of governance for a commu-

nity; or, it can be considered a way for individuals to live together without
forming a community. In the latter case, we have an association, but not
a community. We need to distinguish, then, two democratic ideals, one of

which is communitarian in spirit, and one of which is not. The virtues and
limits of democracy vary according to which ideal is invoked.
I have suggested that democracy is a procedure that sets a structure of
interaction in place, embedding an ideal of justice in a set of concrete insti-
tutions for accomplishing specific ends. Some argue, however, that the ideals
of justice underlying the structure of interaction cannot be the subject of
democratic deliberation because, for democracy to be meaningful, it must
already assume that those ideals are agreed upon:

In a sense, what we ordinarily describe as democratic ‘politics’ is merely

the chaff. It is the surface manifestation, representing superficial

conflicts. Prior to politics, beneath it, enveloping it, restricting it, condi-
tioning it, is the underlying consensus on policy that usually exists in
the society among a predominant proportion of the politically active
members.
(Dahl 1956 : 132)

This interpretation is made especially plausible when we consider that

democracy presumes agreement on what Dahl refers to as the democratic
norms. Since democracy embodies one ideal, insisting on it as a decision-

making method already resolves problems in a specific direction. To resolve

the abortion debate by a democratic procedure will have different conse-
quences from resolving it by appeal to the constitution, which, in turn,
takes us in a direction different from the one mapped out for us if we
resolve the matter by appealing to religious authority.
Where ideals clash, accepting democratic procedure for resolving conflict
has significant implications. Perhaps most significant among these is the
implication that the winners must tolerate the continued existence, some-
times the very vocal existence, of the losers, just as the losers must continue
to live in a world shaped by ideals they in some important ways consider

alien to them, or wrong, even immoral. This only makes sense, of course,
if the participants see in the wrong of a particular outcome a lesser evil
than would result from overthrowing democratic process itself. Democracy,
then, requires that we value the procedure above any particular outcome it
might yield. Doing so places living in a particular kind of association above
particular interests, values, and ends.
We can now begin to understand better the equation of justice and
democracy. It follows from the idea that the procedures through which the
association maintains its existence are ends in themselves, indeed, are, or
at least embody, the primary values that animate the interactions among

persons.

Justice and democracy

Equating justice with democracy makes group self-governance the criterion
of justice. An outcome is just not in itself, or because of its implications
for individual rights, but because of the process by which the group agreed
to it. This makes justice a process rather than an outcome, which is why,
in principle, it is consistent with very different political agendas. It also
makes justice pertain to the group rather than the individual. Justice as
democracy does directly imply equality, except in political rights, or
not

fairness, except in thedecision-making process. Traditional liberal fears

notwithstanding, justice as democracy does not necessarily undermine
markets, or free markets, or capitalism, though it might. Clearly, however,
under certain types of democracy, property rights are not secure, since they
exist at the discretion of, and are defined by, the group.
The equation of justice with democracy not only makes justice a process
rather than outcome, it also makes justice a political process. Equating
justice with democracy presages the judgment that the economy is polit-
ical. This judgment is sometimes advanced as a positive one, a generalization
from the observed operation of the market, or a conclusion from a theory
of how markets work. It can, however, be a normative judgment, as it is
when normative argument favours a more democratic economy, by which
is meant one in which economic activity is ruled by democratic procedures.
Thus, the call for more democracy involves a call for greater influence of
politics on economic institutions and what they accomplish. Then, whether
the economy is or is not political, it ought to be; but the politics that
ought to rule the economy is not the same as the politics that currently
does so.The former is democratic, while the latter is not.
If we insist that the economy ought to be more democratic (see, for
example, Bowles and Gintis: 1986), this tends to blur the (normative)
distinction between economic and political activity. 3 Blurring this distinc-
tion has a specific significance. It seeks to expand the domination of the
group over the individual.
We cannot overstate the importance of the group in the associated concep-
tion of justice. If justice equals democracy, self-determination associated
with justice becomes the self-determination not primarily of the individual,
but of the group, and of the individual only acting as a member of the
group. To be sure, that individual has political rights, and, in this respect,
is separate and autonomous. When acting as a citizen engaged in collec-
tive decision-making, individuals cannot be coerced by others, although
they can be coerced by the government executing the decisions made by
the group. It is this prospect of coercion that some liberal thinkers find
particularly distasteful.
The point to emphasize is the transfer of agency and self-determination
from the individual to the group. Here, democracy introduces a well-known
ambivalence. On one side, democracy insists that the group member be
conceived and treated as a citizen, therefore as an autonomous individual,
whose political rights extend his or her self-governance into participation
in governance of the whole. This treatment of the member differs signifi-

cantly from what he or she might expect in a more traditional group, where
rights and duties differ across members, who occupy positions in a status
hierarchy. On the other side, however, democracy, if equated with justice
and made a group phenomenon, continues to place the group above the
member, so, even if the group is self-governing, it can override the autonomy
of the citizen so far as that autonomy requires more than political rights.
Making democracy the foundation of justice assures that this ambivalence,
and the tension it fosters, cannot be resolved (except perhaps by a rule of
unanimity, which clearly extracts a high price). Central to this tension are
the matters of groupness, of the status of a democratic association as a
group, and of universal citizenship as a form of group identity.
While justice as democracy is not necessarily egalitarian in outcome, there
is an important egalitarianism embedded in it, since it makes all citizens
equally governors. This is a strong condition, and one meriting considera-
tion, especially for normative issues in political economy. The tendency to
equate justice with democracy follows from making equality the basis for
normative judgment. Justice as democracy makes all citizens political
subjects for all possible group outcomes. No one can claim special rights
in determining the outcome either because of a special stake in it, or because
of a special competence for judging the issues. The absence of special stakes
follows from the idea that what is always at stake is the life of the group,
that the members are inseparably tied together, that what affects one affects
all, that through identification differences can be dispelled. The absence of
special competence must be assumed to secure the solidarity of the group,
which is made to depend, as I suggest above, not on a division of labour
among members, but on their identification one with another, and all with
the group ideal.
Pluralist theory contrasts with the way of thinking just summarized in
assuming that society divides into groups differently invested in the
outcomes of different government policies. In this understanding, democ-

racy works well when, for example, those on the winning side of an issue
feel strongly about the outcome, while the losers do not. Losing is an accept-
able outcome when the losers may expect to be among the winners on other
issues, about which they feel more strongly. Individuals have membership
in number of interest groups, but the polity does not divide so that the
a

same individuals find themselves in the same set of groups. This, then,
assures that the collection of stakeholders in any given issue is specific to

that issue, and not derivative of a larger social cleavage, between classes,
races, or genders, for example.
Pluralism breaks down when, through identification, the investment of
our fellows in an issue becomes our own, or when we do not recognize the

limits of our own interest, or when society is, or is imagined to be, so

bound together as to assure that all issues equally affect all individuals. If
the group identity that emerges under these conditions embraces the polity
as a whole, pluralism gives way in the face of a strong community of the
whole. If the group identity that emerges is partial, pluralism breaks down
in the face of divisions within the polity not offset by cross-cutting alle-

giances. Then, strong partial communities (based on ethnicity or race for

example) undermine any affiliation based on universal considerations, such
as those I have above associated with recognition of self-in-other. The condi-

tions just introduced imply the existence of a group identity, or community,

whether that be the community of the whole envisioned by some advo-
cates, or the partial communities created by social cleavage along the lines
of race, ethnicity, class, or gender.

Democracy, community, and governance

For group identity refers not to a part of the individual’s life and
some,

being, for
example a professional identity or other particular interest, but
to the personality’s integrating force. Then we have not the pluralist ideal

of partial and cross-cutting alliances, but the communitarian ideal of the

group of the whole. When the identity of each, and with it his or her
feeling of personal integration or wholeness, is at stake with the identity
of all, then, each is a stakeholder in all issues that affect the community.
Indeed, each is a stakeholder in all issues that affect any member, since

members are identified with each other and the lines separating them into
individuals are blurred. As a result, interdependence moves beyond contract
and division of labour to establish a unit with the quality of groupness we
associate with identification among its members.
The ideal is that the separate group identifications will, to a significant
degree, be replaced by the more universal identification of equal citizen-
ship. What has been less clear is whether this new identity constitutes a
group in its own right. Whether universal citizenship can be construed as
a group identity bears on whether the democratic institutions through which

citizenship is expressed are constitutive of democratic community. The new

identification (citizenship) may or may not, then, constitute a new group
(democratic community).
Linking group identification with citizenship has important consequences
for democracy. These consequences arise because the basis for group
identification —

sameness of group members is now made universal. The

—

result is the modern notion of equality that forms a pillar for many of the
arguments about democracy. The strong appeal of democracy stems from
its connection to equality of universal citizenship. So long, however, as
the quality of groupness is retained, democracy’s appeal will also stem from
the hope that it will retrieve older forms of group or communal identifi-
cation in the context of equality. The result of mixing communal
identity with the equality of universal citizenship is to make democracy,
and the politics associated with it, a group or communal phenomenon.
Then, the primary virtue of government is its responsiveness to the will of
the community.
Yet, making responsiveness to the group of the whole (the community)
the primary or only virtue of government raises some important questions
having to do with what it is the group is competent to do. One influen-
tial answer imagines that participation in group processes fosters an attitude
of regard for others necessary for collective life. Participation develops public
spirit, possibly even competence to govern, within the polity. As one student
puts it, ‘To participate is to create a community that governs itself, and to
create a self-governing community is to participate’. Thus:

In a strong democratic community . the individual members are

. .

transformed, through their participation common seeing and common

in
work into citizens. Citizens are autonomous persons whom participa-
tion endows with a capacity for common vision. A community of citizens
owes the character of its existence to what its constituent members have

in common and therefore cannot be treated as a mere aggregation of

individuals.
(Barber 1984 : 155 and 232)

Remove participation and you create apathy, ignorance, and the preoccu-
pation with self-interest that destroys public spirit. Following this line of
argument, the competence of the group to achieve meaningful public ends,
including those we associate with justice, follows from the way groups shape
an ethical consciousness in their members. So far as ethical standing is taken

to be derivative of group process, justice as a virtue of governance depends

on the group.

The thinking underlying this line of argument insists that the experi-
ence of participation will create a regard for others not otherwise present.

The conviction that this will happen appeals to the equation of morality
and group idlentification:

For it is as citizen that the individual confronts the Other and adjusts
his own life plans to the dictates of a shared world. I am a creature of
need and want; we are a moral body whose existence depends on the
 common ordering of individual needs and wants into a single vision of

the future in which we all share.

(Barber 1984 : 224, emphasis oirngi al)

The individual, then, qua individual, is an amoral (if not immoral) crea-
ture. The other only exists for this individual in the context of democratic

participation. This only holds, however, if recognition of the other means

recognition of sameness (identification) in the context of the group.
This restriction of recognition to group identification has significant conse-
quences, both for the ideal of the group and for the way we think about
non-political non-group interaction. Thus, in the relation of exchange, the
individual also confronts the other, here as the owner of property; and, in
exchange, the individual, by recognizing the personhood of the other, enters
into an ethically meaningful relation, even though it is not one of shared
identity in a group. Even if we reject the idea favoured by some that contract
is substantively the same relation as citizenship, so that citizens are under-
stood as parties to a contract, this does not justify treating contract outside
the context of ethical experience. If it does not, then the argument for
participation based on the assertion that it alone establishes moral character
does not hold.
The argument for participation as the crucible in which regard for others
takes shape insists that higher levels of thought and conduct are fostered
by community. This idea runs up against the problem that, so far as we
treat community as a group phenomenon, it must share with other

group phenomena the tendency to demand regression in the mental life of

the member. 4 The group’s existence depends on its ability to establish
and maintain primitive emotional bonds between members, including the
bond of identification. These bonds are essentially concrete, depending as
they do on commonly held character traits and modes of life. By contrast,
recognition of others, if that means regard for the self-in-other and thus
for the self in general, constitutes an abstract connection, since it demands
that we abstract from the concrete attributes of my self or our self (the group
self). While identification with others and with the group requires only
those more concrete modes of thought and relatedness already available at
early stages in emotional and cognitive development, recognition of others
calls upon the more advanced mental functioning generally discouraged by
5
groups. Thus, rather than being the crucible for the mental processes
6
we associate with regard for others, community may be their enemy.

Their dependence on regression is surely part of the reason that ideo-

logical thinking dominates in groups, especially larger groups. The problem
of ideological thinking does not get solved by institutional design, least of
all by a design that makes larger groups, who are presumably even more
susceptible to the simplistic thinking we associate with ideology, respon-
sible for deliberation. Insofar as ideology is group- (or class-) based,
increasing the size of the group, ultimately to the group of the whole, only
exacerbates the problem.
This is less of a problem for us if we are convinced that reason has no
privileged access to truth, or that there is no truth, at least none for which
the political process is relevant, or that the truth is either relative to class
position or ultimately inaccessible. If we proceed on this basis, we set the
foundation for an argument in favour of displacing expertise with politics.
Without guidance from reason, we can more easily choose to be guided by
interests, or see in the political decision a relevant judgment to replace that
of reason. The real distinction between policies is not about which is better
grounded in reason and knowledge, but about the different interests they
serve. Selecting the best policy, then, means selecting the policy that serves

the ‘appropriate’ interest, which makes policy a matter of politics. Vexing

problems remain, of course, not the least of which is how we know whose
interests served by which policies. In any case, treating economic policy
are

as a political matter in the sense just considered does not lead to demo-

cratization, unless we equate democracy with the interests of one or another

partial group.

Politics and economics

I suggest above that the democratic economy is a political economy in the

7
sense of economy that is political. A political economy in this sense is
an

clearly one in which the market is likely to play a more limited role than
it might where the economy is fully disembedded. Yet, we should not be
too quick to assume that the depoliticized economy is the free market

economy, and only a political economy (in this narrow sense) is one in
which the market is constrained within significant bounds. It is, after all,
not only politics that can limit the market. Economic rights instantiated

within a system of justice can also limit market outcomes. This alternative
disappears, however, when we equate justice with democracy. If we do not
equate justice with democracy, we can also distinguish justice from poli-
tics, and conceive a just economy that is not a political economy (in the
sense of political economy considered here). Clearly, however, the equation

of justice with democracy tends to make the normatively compelling arrange-

ment of economic affairs a non-market arrangement, at least to a significant

degree. Making the ideal of the economy one in which markets are eclipsed
by political process is consistent with government control of the economy,
especially once we make democracy and government coterminous. Thus, a
central implication of equating government, justice, and democracy is the
politicization of the economy.
The negative side of this politici2ation is now clear to us from the expe-
rience of so-called ‘real world socialism’, where making the economy political
tended to erode civil society and the system of rights and individual
autonomy associated with it. Some might argue that the problem was not
in making economic outcomes depend on political deliberation, but in the
nature of the political deliberation, specifically that it was not, or not suffi-
ciently, democratic. The failure of real world socialism is attributed, then,
not to its attack on civil society, but to its contempt for democracy. Is it,

then, the wrong politics that causes the problem, or the politicization of
the economy, whatever the politics involved? To answer this question, I
would like briefly to consider the problem of politics and economics, and
of the relation between the two.
Let me begin by drawing a distinction between the processes that deter-
mine outcomes for self-governing associations, or associations that are in
significant respects self-governing, and the processes by which individual
and collective wants and needs are satisfied, including the production and
circulation of required goods and services. If we think of the first as poli-
tics and the second as economics, the two might cover the same ground.
We might, that is, have a ‘political’ economy, but only if wants or needs
pertain, in some sense, to the association, and their provisioning is deter-
mined through a process of deliberation or negotiation.
In proceeding this way, I have given the term ‘political’ a narrower inter-

pretation than has been the habit for some writing on the subject of political
economy. For them, political simply refers to the presence of relations of
domination, or to the presence of class or other partial interest as an influ-
ence on outcomes. This broad definition of politics parallels the broad

definition of economics favoured by those who apply economic reasoning,

as they term it, to all arenas of decision-making, whether private or public,

familial, governmental, or market. The broad definition of politics, in a

similar way, allows us to imagine that the family or market might be polit-
ical. Yet, speaking in this way obscures the differentia specifica of family life,
public affairs, and the pursuit of private interests through the use of private
property. Differentiating between these spheres is vital if there is to be any
clear thinking about the nature and limits of a modern economy. For this
reason, the term ‘political’ will be used here in the narrower sense alluded
to above.

We can now ask what it would mean to have a non-political, or depoliti-

cized, economy. The answer would be that such an economy exists insofar
as wants or needs are not of the association, and are not satisfied by specif-

ically political processes. In other words, there is a non-political economy

insofar as there are individual wants, and insofar as explicitly collective
processes do not primarily determine their satisfaction.
A non-political economy might be a market economy, even a free market
economy, as has been conceived by political economy since its classical period.
Depoliticizing the economy need not, however, mean organizing economic
affairs through unregulated markets. Rather, it could mean that collective or
group decision-making processes do not determine outcomes bearing on want
satisfaction. Thus, if interest rates were set by a self-perpetuating Board of
the Federal Reserve, monetary policy would be non-political, though it would
still bepolicy and not the free market outcome we might expect from, for
example, a gold standard or some other rule aimed at assuring that markets
rather than policy determine outcomes. To be sure, a depoliticized Board
makes decisions that affect individuals and groups in society, and in differ-
ent ways. Depoliticized decisions can, and presumably would, favour some

over others. Yet, the outcomes would not result from politics, and in this

sense would not be political.

The economy is political if the association, through a process of collec-

tive self-governance, determines want satisfaction. The economy is
non-political if wants are otherwise determined, whether through free
markets oradministrative process. Thus, wants may be individual or collec-
tive, and, if collective, they may be group wants or they may not be.
Procedures for want satisfaction may call on the group or association as a
whole, on decision-making by a designated administrative authority, or by
markets.
The association whose self-governing process is political may or may not
be a group, depending on whether the members are bound together by
identification, or simply by a coincidence or interdependence of need.
Accordingly, there are two senses of political economy, both involving the
associational aspect of economic life, but distinguished by whether the asso-
ciation is also a group. If the association is a group, a political economy
(in its more recent sense) is one in which group needs eclipse or displace
individual wants, and where group identity displaces individual identity.
A non-political economy is one in which, to some significant degree, wants
are of the individual, and identity is not given over to the collective, but

established by and for the individual member.

As I suggest above, all of this leaves aside any notion that a political
economy is political not because it involves association, but because it
includes relations of power or domination, somehow defined. Clearly, a non-
political economy, as the term is used here, allows some to take advantage
of others, to influence, perhaps unduly, their conduct, possibly to coerce
them, if not legally, nonetheless in other ways not less significant. That a
non-political economy can facilitate coercion, and more generally restric-
tions on freedom, including the freedom associated with choice, tells us
that depoliticizing the economy does not assure that it will realize the
ideal of justice, anymore than politicizing it does. The issue is not so
much whether we make the economy political, as whether we shape its
institutions to secure autonomy. Shaping institutions to realize autonomy,
as I insist here, is in no way assured by making those institutions demo-

cratic. On the contrary, democratizing can only assure justice if we assume

the equation of the two with which I began this chapter, an equation that
leads us into some severe difficulties if our goal is to implement a just
economy.
Economic democracy
The suggestions just advanced can help formulate the question of the
meaning of economic democracy. To do so, let me begin with some distinc-
tions. Economic democracy may refer either to the organization of specific
economic institutions, especially units of production; or, it may refer to
control over the economy as a whole. More specifically, economic democ-
racy might mean workplace democracy, or it might mean popular control
over economic policy. It might, of course, mean both. It is helpful, however,

to distinguish the two.

Workplacecy
democr

Arguments for workplace democracy can be advanced on different grounds.

Greater worker control might be deemed more efficient because it makes
workers more productive (Bowles et al. 1983 : 31-4; Dymski and Elliott
1989 ; Shapiro 1994). It might be more consistent with respect for the
worker as a person, and the movement away from the once-favoured notion
that the worker can legitimately be considered, at least on the job, as so
much labour. be favoured because work is
Workplace democracy might
organized as a group endeavour, and groups ought
to be governed democ-

ratically (see Dahl 1985 ). These alternatives express three values, taken to
be fundamental: efficiency, autonomy, and democracy (which may or may
not be implied by autonomy). Of these three values, only the last two link

workplace democracy to considerations of justice, the second because it is

a means greater self-determination
to in work for the individual worker,
the third because it appeals to the ideal of self-governance.
Consider the matter from the standpoint of the individual worker, and
of what he or she wants from, or needs to get out of, work. From this
standpoint there are two salient issues, or sets of issues: those having to do
with remuneration, and those having to do with the content and meaning
of work. The former involve both the level and security of income, assuming
income is derived from work. The latter have to do with the significance
the activity of working has for the worker as a person, therefore with the
satisfaction gained from work. A just economy would organize work in a
way most conducive to worker self-determination, and to workers gaining
the satisfaction that can only come from activities that engage the self in
a positive way. If these are the salient issues in work, however, workplace

democracy is not so much just in itself, as it is a possible means to achieving

justice. To go beyond this, and make workplace democracy necessary to
justice, we would need to equate democracy with justice or show either
that only workplace democracy can make work satisfying to the individual,
or that workplace democracy is more likely to do so, or to do it better than
alternative arrangements.
 Our judgment of the work itself will significantly affect how we view
the matter. For those, such as Smith and Marx, who consider most work
done for a wage dehumanizing, satisfaction in work is excluded by its nature,
and not by the specific institutional arrangements in which it takes place.
This is not to say that those arrangements are unimportant, or have no
bearing on the worker’s welfare, including his or her self-esteem. It is only
to say that, even if greater democracy makes the experience less distasteful
to the worker by removing the element of domination by others, it does

not make work consistent with self-determination. Then, if justice demands

self-determination, a predominance of unskilled manual labour in the

economy assures that economic justice cannot be fully realized, whether the
workplace is organized democratically or not.
Yet, democratization of the workplace is important, even where the labour
itself remains dehumanizing to some degree. If our economic arrangements
not only make labour dehumanizing, but also make the context of labour

demeaning, this makes the organization of work all the more inconsistent
with a concept of justice rooted in self-determination. Greater democracy
might, in this case, mean greater justice. Whether it does or not depends
on whether we use the term ‘workplace democracy’ to refer only to worker

involvement in decision-making about the conditions and ends of work, or

use it as a shorthand for workers’ rights, more broadly conceived. This,

again, will depend on how broadly we use the term democracy, especially
whether we equate it with justice.
Thus, respect for workers’ rights in the workplace implements justice,
within the limits of the nature of the work, but it does not implement
democracy, unless we establish a right for the workers as a group to make
collective decisions about the organization and ends of work. A right of
this kind does not obviously follow from the right to be treated with the
respect due a person, rather than as a commodity bought to be consumed.
What makes democracy follow from an argument about workers’ rights is
the constitution of the workplace as a potentially self-governing associa-
tion. Democracy becomes a relevant consideration of justice when an
association exists, and its organizing principles must be determined.
If our concern is with association, and possibly groupness, organizing
work through assembly lines does not meet our criterion, is not a work
group, although many workers work together there. By contrast, some work
organizations (for example teams) that might replace assembly lines by
establishing a more group-like process may very well establish the basis for
an argument for democracy. Yet, the argument for democracy established

in this way is also limited by the limits of the group. That is, self-gover-
nance applies to those decisions necessary to enable the group to do its job,

which are only those decisions associated with the tasks to which the group
is devoted. Here, perhaps for the first time, we have a clear case of economic
justice being tied to group phenomena. Of course, some work does not go
on in groups, and, to this extent, arguments about workplace democracy
are irrelevant to it. Nonetheless, work groups remain a significant phenom-
enon of work, which makes democracy a relevant consideration in their
organization.
Even so, we need to remember that introducing the element of work-
place democracy where appropriate does not secure the rights of the worker
as an individual: the right to work that enhances rather than diminishes

self-esteem, the right to an adequate level of remuneration, the right to be

treated by others with respect for autonomy and personhood, and the various
subsidiary rights derivative of these rights. If democracy is not the crite-
rion of justice, then democracy cannot, in itself, secure justice, whether in
the workplace or in society as a whole. For justice, something more is
needed.

Democratization of economic policy

Like workplace democracy, popular control over economic policy can have
different meanings. It might refer to making economic policy the result of
referenda, or other expressions of the popular will. Expression of the popular
will, when equated with the empirical preferences of the electorate, is, of
course, a matter of degree. One might advocate democratization of mone-
tary policy without thereby meaning that the discount rate should be
determined by popular vote. Still, the idea is that policy should be more
responsive to the will of the people somehow expressed. Alternatively,
popular control over economic policy might mean shifting control from one
group (for example, banking and financial interests) to another deemed
somehow to represent greater democracy (consumers or workers). The
favoured group may be judged more democratic because it is larger, or
because it is more open, or because it includes the disadvantaged. In the
limit, these options merge if the groups that replace those who currently
exert the greatest influence over policy are substantially larger, or more

representative in some meaningful sense.

If democratization of policy-making is taken literally to mean subjecting

policy to the will of the people, or at least moving significantly in that direc-
tion, then it is subject to all the problems considered earlier in our general
exploration of the idea of democracy. Using the criterion of who influences
policy, having the Board of Governors of the Federal Reserve appointed by
Congress is more democratic (Bowles et al. 1983 : 338). Yet, there is noth-
ing inherent in this change of arrangements by which monetary policy is set
that would assure a monetary policy more in line with ‘popular interests’. It
does not, in itself, imply lower interest rates, tolerance of a rate of inflation
more in line with higher levels of employment, or a policy less favourable to

Wall Street, even assuming that these goals are part of the public interest
(which, of course, would need to be established).
Setting monetary policy according to the real needs of the people, then,
means something different from making the process that determines policy
more democratic. If democratization means to make economic policy yield
outcomes more in line with the real needs and interests of the people
somehow defined, then, it is not so much a matter of processes responsive
to popular sentiment, with all its vicissitudes, irrationalities, and confu-

sions, as it is a matter of putting policy-making in the hands of those most

likely to understand the people’s interests and translate them into policy.
Obviously, this idea has some potentially treacherous implications, since we
need somehow to judge the validity of claims advanced by those who might
represent the people’s real interests, and question how they can presume to
know what those interests are, and what policies best serve them.
Some, more ‘radical’, forms of democracy take the real interests of the
people to be their expressed preferences, which, of course, may or may not
be for arrangements anyone would deem ‘democratic’, least of all those who
demand democratization of the economy. The notion of ‘popular economics’,
then, might either mean economic arrangements that would be popular,
given a referendum on the matter, or economic arrangements that some
economists judge most consistent with the interests of the people, or a rele-
vant subset of the people. The latter interpretation makes the economist

the better judge of the people’s real interest in circumstances where the
people themselves are confused or misled. Taken literally, knowing the real
interests of the people, even assuming such a thing exists, when not a matter
of referendum, refers us to a special expertise. This is the expertise of the
economist, who either has the popular interest in mind (knows what it is
and follows it), or has a theory or method more likely than that currently
dominant in economics to yield policies that will serve the popular interest.
By one standard, the policy advocated by such an economist is not really
democratic, since it does not reflect the will of the people, nor follow from
application of a democratic procedure. By another standard, it is democ-
ratic, since it serves a ‘popular’, rather than particular, interest, assuming,
of course, that we can distinguish the two. In distinguishing the two, the
ideal of justice might play a role. If we do not equate justice with democ-
racy, we can have recourse to justice as a basis for judging policy, one that
arguably serves the real interest of citizens, whatever their preferences might
be. Thus, economic policies that benefit the least advantaged arguably serve
the general interest so far as (1) that interest is in justice, (2) justice means
measures that benefit the worst off, and (3) we can establish which poli-

cies benefit the worst off.

We need not, of course, assume that economic justice includes the require-
ment that policy benefit the worst off. Whether we do or not, we have, in

raising the issue, shifted the debate from the terrain of politics and democ-
racy to that of justice. Here, democracy may or may not be relevant,
depending in part on considerations raised in the preceding pages. Then,
whether appeal to democracy will play a large role in shaping policy appro-
priate to serve the general interest is a matter for justice to decide.
9 The economy: national,
international, global

National, international, global

In his book Stoneage Economics, Marshall Sahlins points out that through
most of human history, economic activity was marked by local self-
sufficiency. If economy referred to household management, the premodern
system of production and distribution was deserving of the name, since it
was essentially a household affair. The term ‘political economy’ captures

something of the transformation occurring in the early modern period, when

the division of labour begins to extend itself in a serious way beyond the
limits of the household. As a result of this extension of the scope of economic
activity, the question arises: now that the governance of the household is
no longer the governance of the economy, how is the economy governed?

The first answer, which we find expressed for example in the work of Sir
James Steuart, is that the economy is now governed by the statesman. This
means that we no longer have an economy, we have a political economy,

since its borders are not those of the family, but those of the state. The
governance of economic affairs is no longer in the hands of the head of the
household, but in the hands of the statesman.
The second answer to the question of governance of the economy is that
once the economy develops beyond the limits of the household, it need no

longer be governed, but can operate as a self-regulating system. We asso-

ciate this second answer with Adam Smith who, because he rejects the idea
that a modern economy needs regulation from the state, also rejects the
term ‘political economy’, thus anticipating a later development that would

replace political economy with economics. The economics that replaces polit-
ical economy is, of course, different from the economics that political
economy replaces, since an economy in the modern sense cannot be subsumed
into a household.
Since the domain of the original political economy is the state, the problem
of political economy is also that of the state. This problem is the problem
of national integration. The premodern local economies are also local prin-
cipalities, with local systems of governance, and localized group connections.
These must be replaced by a national economy, national government, and
 Applications
national identity. The term ‘state’ refers to the political unit responsible
for overcoming self-sufficiency and local identity (Gellner 1983 ). But,
creating the state is also the goal of the integration of political, economic,
and cultural life into a unit.
National integration of economic affairs is primarily a matter of three
interconnected processes. First, it involves geographic integration that puts
in place a network of transportation and communication capable of

connecting local units. Second, it requires creation of a national currency

and monetary system capable of integrating transactions throughout the
political boundaries of the state. Third, it means creating a national market
on a scale adequate to overthrow local self-sufficient production. Over-

throwing local self-sufficiency is made possible by large-scale production

whose greater efficiency allows it to displace local producers. Once these
processes have proceeded to a point where we can speak of the state as an
economic unit, we have a national economy. Historically, and perhaps
inevitably, the national economy is a capitalist economy in the sense that
it operates through a system of private transactions and private ownership

involving markets for labour and capital.

The development of a national economy implies the emergence of an
international economy, if by international economy we have in mind the
market transactions that move goods, labour, or capital across national
borders. The term ‘international economy’ can, however, take on an added
meaning when economic activity within a nation comes to depend in essen-
tial ways on economic activities going on outside. Then, international
economy refers to a further integration of economic activity, one that goes
beyond the borders of the state. The term sometimes used for this situa-
tion is ‘interdependence’.
The interdependence just referred to makes both consumption and produc-
tion within the boundaries of the state depend on what goes on outside.
This means, to use a popular language, that there develops an international
division of labour, although use of the term ‘division of labour’ here is just
a metaphor for a system of mutual dependence in production. Within such

a system, production is, in a sense, international, since needed inputs are

acquired from other countries. Any given product incorporates labour and
resources acquired from various regions and countries, and thus is the product

of the international system of production taken as a whole.

Just as interdependence is implied in national integration, and results in
part from the policies of the state, it also creates problems for the state.
These problems have been a major concern of contemporary observers of
economic affairs. In various ways, openness of the economy weakens the
state’s ability to regulate economic affairs. For those who believe that regu-
lating economic affairs is a vital part of what the state does, this development
undermines not only the state, but the economy as well.
Interdependence is in some ways an implication of openness. But, limiting
or regulating transactions that cross state borders need not imply a closed
 The economy: national, international, global
economy; interdependence can still develop in a context of state regulation.
On the other hand, the policy referred to as ‘free trade’ obviously challenges
the capacity of the state to regulate the economy, since it is the aim of
that policy to remove the state from the business of economic regulation.
There is justification for some degree of uncertainty about the precise
meaning of the term ‘free trade’. For present purposes, let us consider two
possibilities:

Free trade means the elimination of any government policy aimed specif-
ically and directly at regulating the prices or quantities of imports or
exports.
Free trade means the elimination of any government policy that affects
trade across national borders.

The difference between the two has to do with what are sometimes referred
to as non-tariff barriers to trade. Virtually any national differences in govern-

ment policy or regulation of industry can affect trade, so the second definition
of free trade is by a wide margin the greater threat to the state. Were
policy implemented along the lines of the second definition, the state would
be reduced to the minimalist role of protecting private property and national
security, assuming of course that securing, and therefore defining the limits
of, property would not affect trade in some way. Of course, even policy
that follows the first definition can undermine the state, at least in its
capacity as regulator of economic affairs; and, clearly, this is exactly what
the policy is meant to do. In both cases of free trade, the underlying moti-
vation or ideal is the same, to remove the state from any intrusion on the
system of private transactions. The second simply takes this removal to its
logical conclusion, applying to domestic affairs what the first version of free
trade applies to international affairs.
If we attempt to introduce the second version of free trade, notwith-
standing its impact on the state, we will eliminate the aspect of economic
affairs that connects them in any way to the state. Products may still have
a national identity in the sense that their qualities may exhibit regionally

or culturally specific attributes. Still, for all intents and purposes, the point

of the policy is to eliminate the national economy in favour of a unit uncon-

nected to any nation. This unit is sometimes referred to as the ‘global
economy’. The term ‘global economy’, then, refers to an economy without
any states, which is, of course, also an attribute of the local economy with
which we began. The difference between the global economy, the putative
endpoint of development, and the local economy, which is its starting point,
is in the scale and goal of production. But, of course, neither the local nor
the global economy is a political economy, at least in the classical sense.
Whether, of course, the elimination of state regulation creates a global
economy or destroys the needed institutional structure to secure economic
activity and results in chaos is an important question. The answer depends
on how we understand the accomplishments of economic, political, and
cultural integration.
There is, however, a way of implementing the second policy without
destroying the effectiveness of the state, and that would be to move toward
a single universal, or global, state. But, of course, if there is only one state,

there is no international trade to regulate. Also, if there is only one

state, we can speak of a global economy, but this global economy would,
of course, be a national economy (if for a moment we equate nation with
state), the consideration of which was our starting point. It should be clear,
then, that the matter of global economy is really about the state, and
whether we need one or not, and whether, if we do need one, we also need
more than one.

There is a substantial element of speculation involved in reference to the

global economy since, even if we are moving in the direction of no state,
or one state, we are clearly a significant distance from arriving at either

destination. The ultimate time line is still more likely to be measured in

centuries than decades. And, in spite of the current enthusiasm in many
circles for openness and deregulation, the pendulum could easily swing
toward a more actively regulated economy, and with it the prospect of glob-
alization, and the global economy, could recede. For the present, we do not
have a global economy in either sense introduced above, although we do
have an international economy. It will be interesting to consider what all
the talk of the global economy signifies under these circumstances, which
is what I propose to do in the following sections. That is, rather than
treating the global economy as a reality to be observed and studied, which
it clearly is not, I will consider it a fantasy rooted in hope and fear. How,
then, does the global economy enter into our hopes and our fears?

The fantasy of the stateless economy

The fantasy of the global economy is little more than a particular expres-
sion of the fantasy of an economy without the state. It therefore expresses
distrust in, if not animosity toward, the state. This distrust is normally
justified by the judgment that the state poses a threat, the threat of domi-
nation, and that the magnitude of this threat is proportional to the size
and scale of state activity and responsibility. The idea of the state as a threat
to freedom, and therefore of the need to limit, if not eliminate, the state
is well expressed by Milton Friedman:

The fundamental threat to freedom is power to coerce, be it in the

hands of a monarch, a dictator, an oligarchy, or a momentary majority.
The preservation of freedom requires the elimination of such concen-
tration of power to the fullest possible extent and the dispersal and
distribution of whatever power cannot be eliminated a system of
—

checks and balances. By removing the organization of economic activity

 from the control of political authority, the market eliminates this source

of coercive power.
(1982: 15)

Setting out from the premise that government is a locus or instrument

of power, Friedman draws the conclusion that less government means less
coercion, and therefore more freedom. For Friedman, this leads naturally to
a well-known connection between freedom and markets. The connection

between freedom and markets, argued to follow from the coercive poten-
tial of the state, sets a foundation for a powerful movement to restrict the
state’s involvement in economic affairs. This movement pushes in the direc-
tion of a global rather than national or international economy.
While we normally associate the argument against government with the
argument for unregulated markets, we can find the same concern about the
coercive power of government expressed by those less favourably disposed
to the market. Distrust of government is also a common starting point for

advocates of a stronger regime of human rights to protect individuals from

oppression. Thus, one theorist notes how ‘human rights emerged to . . .

protect modern individuals against certain standard threats to their dignity

posed by modern markets and modern states’. Furthermore, in the twen-
tieth century, this ‘threat to human dignity from the state has grown, not
receded’ (Donnelly 1993: 135).
Those who see human rights as a solution to the dangers posed by the
state do not share Friedman’s sanguine expectations regarding the ability

of markets to protect individuals from oppression. On the contrary, they

consider markets equal, if not greater, threats to the individual. Advocates
of human rights sometimes express this distrust for the market by insisting
that the market is not constituted by right, and can therefore make
no normative claim rooted in right. ‘In the market, one has exchange
entitlements but not rights’ (Wood 1997: 83). Once we deprive the
market of its claim to embody right, protecting individual right no longer
implies protection of property including the right to alienate property
via exchange. On the contrary, rights become claims for protection against
the market.
we may wonder, of course, what distinction makes property not a right

but an entitlement. One possibility is that entitlement refers to a claim

contingent on law, whereas right refers to a claim with the normative
force to shape the law. Clearly, the more we use the language of right for
the constitutive relation of the market, the more we establish property and
exchange as the foundation of law rather than a contingent expression of
the law-making process. When law embodies right, it is more than a mere
entitlement, which might be a legal claim that exists for reasons having
nothing to do with, or even in conflict with, right. Thus, considering
property not a right but an entitlement makes it a claim contingent on
law rather than part of the normative basis for shaping laws.
 Why, then, separate property from the normative force of the ideal of
right? One answer is that doing so is bound up with the effort to replace

the ideal of individual autonomy with that of group self-governance, as that

is expressed in the ideal of participation. The norm of participation, when
made primary, seeks to subject institutions, including both state and market,
to the rule only of those rights embodied in the appropriate decision-making

process. This points toward an ideal of economic democracy rather than

individual freedom. Such an ideal would constrain, if not eliminate, both
the state and the market.
The attempt to separate the market from right makes clear the distance
between the human rights oriented critic of the market and those who, like
Friedman, see themselves defending the market against the state. While
this difference is important, it should not be allowed to obscure the common
ground shared by advocates of human rights and of unregulated markets,
which is the ground of distrust of government, and insistence on shaping
institutions in ways that limit government’s power.
The idea then is that the more elaborate our system of human rights,
the greater the limits on both state and market. This idea runs up against
a difficulty, however. So far as the state is responsible for defining and
1
protecting rights, it becomes difficult to see in rights a limit to the state.
The problem originates in the idea that the state is a locus or apparatus of
power and not the institution through which rights are established and
secured. The more we insist that the state is a vehicle for exploitation and
oppression, the more we need to protect individuals from it. But, the more
we insist that the state offers the opportunity to translate private power

into publicly sanctioned and intensified power, the less we can call on it
to secure autonomy and thus protect individuals from oppression and

exploitation.
A comparable problem arises for the idea that extending human rights
means restricting the market. Even if we reject the easy equation of freedom

with markets typical in certain circles, it does not follow that freedom can
be meaningful in the absence of strong protections for private property and
therefore markets. While markets may not be free in the sense of unregu-
lated, they are free in the sense of bearing an important association with

the demands of individual autonomy.

For those who see the state as a threat, distrust of public institutions
stems from the presumption that they will be used to achieve private ends,
an assumption easily supported by historical evidence. Thus we have the

Marxist idea of the state as the instrument of class rule, or the pluralist
idea of state power exercised according to the amount of pressure brought
to bear by private interest groups. If the state is an apparatus of power,
then its use is the exercise of power by those individuals and groups who
gain control over it. While it may be no more accurate to say that the state
oppresses anyone than it is to say that guns kill people, it is still accurate,
given this understanding of institutions, to say that the existence of the
state implies oppression. Similarly, if the market is essentially a means for
the exploitation of labour, it may be inaccurate to say that the market
exploits anyone, but it would be correct to say that the use of markets to
provide livelihood implies exploitation.
We can accept the claim that the state and market have been used as
vehicles for oppression and exploitation, and the claim that a system of
rights expresses a commitment to protect the individual from the wilful
control of others, including wilful control exercised through political and
economic institutions. Doing so need not inevitably lead toward an ideal
of rights as external limits on state and market. The alternative is to consider
how those institutions can be shaped to instantiate rights, so that the
growing capacities of the state and the growing scope of the market do not
threaten the individual, but better secure his or her autonomy.
The movement against the state pushes in the first direction. While this
may work well enough for those committed to free market solutions, it
does not work so well for those committed to a system of rights. This is
not only because the state must administer and protect rights, including

those putatively held against the state, but also because the state must
translate the abstract statement of right into a practical and concrete reality.
Our concern with rights, then, presses us to reconceive the state in a way
that makes it something other than an apparatus of power and means to
private ends.

The problem of integration

Consider now the circumstances that impede the development of the state
in the direction just suggested. These circumstances have to do with the
ideal of integration pursued through public institutions, and thus to which
those institutions become committed. This danger is clearly expressed in
Milton Friedman’s critique of the state.
For Friedman, a connection exists between the coercive power of govern-
ment and the pressure to establish a level of social integration that under-

mines, or even obliterates, individual difference. This makes the movement

against the state a part of a larger movement against integration.

The widespread use of the market reduces the strain on the social
fabric by rendering conformity unnecessary with respect to any activities
it encompasses. The wider the range of activities covered by the market,
the fewer are the issues on which explicitly political decisions are required
and hence on which it is necessary to achieve agreement.
(Friedman 1982 : 24)

Because of the connection between integration and oppression, and because

the state is a prime locus for imposing integration on society, expanding
state capacities increases the threat of domination. Control of the state is a
means for imposing hegemony of part over the whole, which is to say
over other parts, and thus a means for overcoming differences. Overcoming
differences works to the end of securing group hegemony, which can (it is
hoped by those in the dominant groups) re-establish the universality of
(particular) ways of life in a context of diversity.
However we judge Friedman’s fear of integration and his celebration of
the free market, we should not ignore the problem with which he is
here concerned. Thus, consider how Clifford Geertz, in his essay on the
struggle to establish the nation-state and national identity in developing
countries, draws attention to the same problem of unity and difference.
For developing countries, the problem appears as one of subordinating
‘specific and familiar identifications in favor of a generalized commitment
to an overarching and somewhat alien order’. Geertz suggests that the

new national identity poses a danger to the individual that he or she will

suffer a

loss of identity as an autonomous person, either through absorption into

a culturally undifferentiated mass or, what is even worse, through dom-
ination by some rival ethnic, racial, or linguistic community
that is able to imbue that order with the temper of its own personality.

(1963: 109)

The emphasis here is on the possibility that sub-national groups will use
the state to impose their ends on those not part of their group. This obser-
vation clarifies the danger posed by the state. The danger is twofold. First
it is the danger that groups will use the state to impose their ends on

society. Here, integration means to subsume all under a particular group’s

identity. Second, the state seeks to establish a political and economic unit
on a scale appropriate to a modern society, which implies a degree and kind

of integration unnecessary and inappropriate to a society organized around

small locally self-sufficient units, as Ernest Gellner (1983) has argued.
So far as the state is inherently devoted to this latter integration, it poses
a threat to all local culture and to the groups defined in relation to local

cultures. The state pursues integration as a part of the imperative of estab-

lishing a modern society, which is to say a society operating on a scale and
unified by a type of integrating force appropriate to modern economic,
political, and cultural life.
Gellner links this movement to the domination of the larger political
unit by a particular culture, which has, no doubt, historically been the case.
But, this loses sight of the change in culture implied by the larger scale
and different basis for integration implied in a modern society. Gellner
notes this change when he differentiates the new culture from the culture

of the premodern group from which it may derive:

 Culture is no longer merely the adornment, confirmation, and legiti-
mation of a social order which is also sustained by harsher and coercive
constraints, culture is now the necessary shared medium, the life-
blood or perhaps rather the minimal shared atmosphere, within which
alone the members of society can breathe and survive and produce.
For a given society, it must be one in which they can all breathe and
speak and produce; so it must be the same culture. Moreover, it must
now be a great or high (literate, training sustained) culture, and it can

no longer be a diversified, locally tied, illiterate little culture or tradi-

tion.
(1983: 37—8, emphasis in original)

Gellner goes on to insist that such a culture must be sustained by the

appropriate organization or institution, and that this institution is what we

have come to know as the modern state.

The state poses, then, not one danger, but two. One is the danger the
group poses to the individual, where the likelihood exists that the state
will come under the domination of the group. The other is the opposite
danger that integration into a modern political unit poses to the group
member both because citizenship and group membership are not necessarily
the same thing, and because citizenship can derive from membership in
one particular group. If this is correct, then the danger to the individual

is not in the state, but in the possibility the state will come under the
domination of the group.

Integration and the individual

The state represents a principle of integration, first into the high culture
of a dominant group, but eventually into a cultural milieu unconnected to
the group and appropriate to the life of citizens rather than group members.
If this is so, we may wonder about the relation between the integrating
mission of the state and the integration of individual subjective experience
that I have considered the primary basis for judging institutions. This can
be considered a part of the question of the connection between group iden-
tity and integration of subjective experience.
If individuation means separation from the group, it means establishing
boundaries separating into distinct units what were previously members
of a single organism (the group). Where subjective experience was the
experience of the group as expressed most notably in the ideas of group
spirit and solidarity, subjective experience is now that of the individual.
The separation of persons implied in the movement away from group
membership demands a new centre for the integration of subjective
experience, which we refer to as the individual. And, in this sense, we can
say that the push toward cultural and political integration led by the state
has as its other side the integration of subjective experience at the level of
the individual.
If integration operates against the power of the group, it weakens the
group’s domination over the individual. This links political and social
integration to the integration of subjective experience. Then, far from
endangering the individual, as Friedman fears, integration is a necessary
condition for securing the central experience that constitutes individuation.
Yet, integration is only possible in this sense if the principle of individual
subjective life as it appears for this particular individual is not inherently
in conflict with that principle as it exists for others. That is, underlying
the assumed conflict over the state, and thus the emergence of the state as
a means of coercion, is the prior assumption that others and their ends

constitute a threat to the individual’s attempt to achieve his or her ends.

This is an assumption about the nature of the individual, one consistent as
we have seen with the business mentality and the economic institutions of

an unregulated private enterprise economy.

Uneven development and global society

If the normatively compelling economy is not stateless, is it global in the
sense that itanswers to a single state, rather than existing in the legal
structure of a system of states? The movement toward integration, because
it separates right from particular groups to make it universal, impels us
toward large units. This movement calls into question the particular state
as one linked to a particular nation, and rights that are particular to national

cultures. The resulting ideal is the one expressed in the notion of universal
human rights originating not in a particular nation, but in an international
organization.
Rights are particular to national and sub-national units so far as culture
continues to assert its hegemony over ways of life rather than affording the
freedom of opportunities yet undetermined. We can say, then, that the inte-
gration of a supranational culture hinges on the extent to which the particular
national cultures have given up their hold over ways of life and offer instead
only particular settings for individual freedom to develop in directions yet
to be determined.
This movement progresses at different rates and achieves different degrees
of success within different national and sub-national groups. Because of this,
the development in the direction of a political and cultural unit appropriate
to subjective freedom and the emancipation of the individual from the

group is not uniform, but proceeds unevenly across geographic, social, and
political space. Uneven development poses a problem for international inte-
gration. Those states that express most fully the principle of integration
around the universalistic norm of freedom will find integration with states
still committed to the hegemony of culture over ways of life a threat, just
as the latter will find integration with the more modern nations a threat
to cultural survival. Thus, for example, integration of a religious state with
a secular state demands that the former give up the claims to hegemony

embedded in religious belief, or that the latter restrict citizens to ways of

life consistent with that hegemony.
The persistence of the state system expresses the link between states and
particular national cultures. It also expresses the wished for hegemony of
those cultures, and the different degrees to which different states have
achieved their emancipation from the fantasy of cultural hegemony over
ways of life. Thus, the state system both protects the hegemony of the
particular national culture within its borders, and undermines that hege-
mony by situating the particular culture within a setting of many cultures
of many nations. The multiplication of cultural experience undermines the
claim of culture to endow ways of life with moral standing, and thus weakens
the hegemony of group culture over the individual.
The processes just briefly summarized establish the relativism of moral
judgment, that is, the judgment rooted in the morality of group life. It is
not surprising, then, to find that these processes provoke various forms of

philosophical relativism that express the insistence that since morality is

group morality, there will be as many moralities as there are groups.
Relativism stems, then, from the breakdown of the hegemony of the group.
But it also insists on group hegemony, only now in the form of many
groups, and thus fails to grasp the alternative made available by the loos-
ening of the hold of the group over its members, which is the universality
of creative living.
Exploring this alternative has been my primary concern in this volume.
When the putative universality of common life experience gives way, norma-
tive judgment can no longer seek to determine for us what is the good life,
and therefore how we ought to lead our lives and how we ought to shape
institutions that instantiate predetermined ways of life. For political economy
since the time of Adam Smith, this has meant an attack on those institu-
tions through which society imposes order and ends on its members. Such
institutions can also allow collective moral judgment to overtly and
consciously govern conduct. As an alternative, the early political economists
favour institutions that, at best, yield a normatively compelling outcome
as an unintended by-product of an activity guided by a self-interest that

makes no claims to ethical standing.

Yet, self-interest need not be judged
to be without ethical standing, or

even the enemy of ethical conduct. Nor must the ethical standing of insti-
tutions other than the market be judged by their ability to impose ways
of life on individuals. There is a self-interest that recognizes its limits in
others. This is the interest in creative living explored here. We can conceive
institutions that facilitate creativity and the self-interest associated with it
rather than imposing group interests or norms on the whole. Indeed, the
norm of creativity can animate institutions, as it can ways of life made
possible by those institutions. If we adopt this norm, we can retain what
is valuable in the insights of the political economists regarding freedom,
choice, and markets, without joining their attack on the state and celebra-
tion of an unregulated system of self-seeking. Freedom as creative living
rather than freedom as the absence of limits will enable us to judge economic
institutions by the opportunities they afford us and not by the constraints
they do or do not impose on our choices.
Notes

1 Introduction

1What I refer to here as the liberal image can be interpreted in various ways.
I have found the account presented in Unger (1975) particularly helpful.

2 Ends

a line of
1 There is thinking within the classical theory that treats subsistence
need primarily a matter of physical survival. Because, however, this way of
as

thinking about subsistence runs into difficulty, the main classical thinkers even-
tually abandon it; see Levine (1998: Chapter 1).
2 In a recent work. Sen equates capabilities with freedom, in this way making
freedom his central normative ideal (Sen 1999).
3 For our term ‘disembedding’ has the disadvantage that it presumes
purposes, the
we can speak of economy in the general way discussed at the end of the last
chapter; though for Polanyi this is not a disadvantage.
4 I use the term ‘modern society’ here not to refer to a specific national experi-
ence (‘Western’ societies for example), but to refer to those societies organized

to a significant extent around the ideal of individual self-determination.

5 Though the classical economists tend to lock the individual into a division of
labour in a way that dismisses any possible element of autonomy. This is because
they treat the division of labour as something given independently of the inter-
subjective system, particularly of exchange. This, then, requires that exchange
and want adapt to the material reality of a preset division of labour.
6 These terms should not be confused, and important distinctions can be made
between them. For present purposes, however, I will use them interchangeably.
7 Thinking this way assumes that self-interest is driven by greed, which it
may be. But, to assume that self-interest is attached to greed assumes too
much about the nature of the self and its interests. I consider this problem in
Chapter 6.
8 If we distinguish difference from equality, we might make some progress with
one problem Sen raises, which is why all ethical theory includes ‘equality’ on

some level. The answer is that Sen has made equality synonymous with any

consideration of persons as other than irreducibly particular, thus having some

common quality as persons (‘personhood’), the distinctions between ethical theo-

ries being in what that quality is.

 9 The result is something like the effort to eliminate the influence of drug addic-
tion on society by removing the supply of drugs rather than concerning yourself
with demand, because of the assumption that little can be done about the
human impulses that lead to addiction.
10 Sen suggests we define poverty as ‘capability failure’ rather than amount of
wealth or basic need satisfaction (Sen 1992: 109).
11 For an interesting argument along these lines, see Zucker (2000).
12 There may, of course, be different types of corn, in which case corn is also a

universal. This does not bear on the argument advanced here however.
13 We may consider this capacity innate in the sense that humans are typically
born with the potential to develop the Capacity, though the potential may or
may not be allowed and enabled to develop this way. We could say, then, that
the potential is universal in Nussbaum’s sense, though neither the capacity
itself nor its normative significance is universal in this sense.
14 I have borrowed the term subjective freedom from Hegel, who uses it in a

different, though related sense (1952: 109).

3 The quality of subjective experience

1 The opposition drawn here is arguably too sharp. Awareness also depends on

interest, so cognitive experience is itself invested with the elements I here

attribute to psychic life and emotional experience.
2 I refer here to Marx’s later writings on political economy. In some of his earlier
work, the quality of subjective experience plays a primary role.
3 On integration as a normative ideal, see Hinshelwood (1997) and Levine (1999) .

4 I leave open in what sense talents and interests are original and do not claim
they entirely, a matter of physical endowment.
are, or are
5 I have elsewhere distinguished the two normative constructs in the languages
of morality (the norm of group membership) and ethics (the norm of indi-
vidual subjectivity); see Levine (1999) .

6 We can also question the assumption that alienation must be to subject oneself
to another. This leaves out of account the possibility that we may be both

victim and victimizer in our own self-estrangement.

4 Needs and rights

1 There are problems in the idea that objective freedom can be created in
also
the absence of its subjective conditions. A system of law organized around the
idea of freedom is unlikely to secure freedom where subjectivity is not well
enough developed as an internal or psychic structure.
2 For a critique of the idea of group rights, see Donnelly (1993).
3 Objectively existing need not mean having a material or physical form. The
object is outside us in that it exists for others. Thus an idea may be objective
for us though it is not manifest in a material thing. Nonetheless, material form
is important to objectivity, and even ideas eventually take on this form in one
way or another.
4 For discussion of this distinction,
a see French (1993).
5 There may also be a point at which impairment of subjectivity calls into ques-
tion the individual’s capacity to have and exercise rights. When we limit the
 rights of criminals, we clearly insist that their impairment does not so much
bestow additional rights, but jeopardizes the rights we consider universal. It
is important to consider at what point impairment of subjectivity makes the
individual a danger to self or others and thus means that participation in the
system of right must be in some way restricted. This limitation on right carries
a claim for
support as much as does the limit imposed by impairment for the
individual’s ability to take advantage of the system of right for creative living.
6 Arguments for rights of this kind can be found in Plant (1986) Sadurski ,

(1986) and Copp (1992).

,

7 It is also the case that those whose subjectivity is intact will at times (due for
example to illness or unemployment) need to have their welfare secured by
means other than the exercise of right. I consider the security of those whose

subjectivity is not impaired in Chapter 7.

8 Clearly, what I say here applies only when we accept the distinction between
need and right and that need does not create right.
9 For a discussion of the system of commodity production as a subjective
(social) rather than material-technical order, see Levine (1978) and Winfield
(1988).

5 State and society

1 I am
using term society to refer to what Hegel terms ‘civil society’, which
the
is system
a of the pursuit of private interest.
2 In this connection, we might also consider the ideal of the hermeneutic state
whose task is to interpret sacred texts, whether those be the constituting myths
of the group, or a written constitution produced by its founders. Here, also, the
idea is to restrict the state to thinking what has already been thought for it.
3 For a discussion of the idea of a closed system, see Fairbairn (1958) .

4 Fear of deprivation can become a fear of desire since desire leads us toward the
object we fear we will lose. If the fear of loss is great enough, then desire
provokes that fear and becomes something to fear.
5 The distinction to which I have just alluded has been formulated in the language
of narcissism. The different kinds of self-interest express different types of narcis-
sism, which Otto Kernberg refers to as pathological and healthy narcissism
(1975).
6 The idea of want without limit actually contains two different ideas, and it
will prove important to distinguish between them. In the first, want without
limit means a want for all things. In the second, want without limit means a
want that is not already given or predetermined for the individual, but the

expression of his or her own creative capacities and unique identity. For the
present, I will focus on the first sense of limitless want, which has a special
connection to the idea of a closed system.
7 This language is strongly implicated in Hobbes’s theory of the state, where
greed plays a primary role in shaping the human motivations that then enter
into determining the form that political association must adopt.
8 I do not consider here the international setting in which rights can exist by
agreement among states.
9 The capacity for ethical conduct is closely linked with Lawrence Kohlberg’s
idea of moral judgment, see Kohlberg (1971). The difference is that Kohlberg’s
 focus is on cognitive development, where the emphasis here is on psychic struc-

ture and psychic meaning.

6 Capitalism and the good society

1 I use the term paranoid to refer not to delusions of persecution, but to the use

of the defences of splitting, projection, and introjection to cope with the preva-
lence of powerful aggressive impulses (see Laplanche and Pontalis 1973).
2 On normal and pathological narcissism, see Mitchell (1988 : 182) and Kernberg
(1975).
3 Following Melanie Klein and Ronald Fairbairn, we could refer to the psychic
effort involved in this isolation of ourselves from our experience as a schizoid
defence (see Fairbairn 1952: Chapter 1).
4 Integration refers here to reclaiming the split off and disavowed aspects of the
self.
5 Or, it gets resolved by transferring the most alienating labour to others: workers
in other (less developed) countries, or immigrant workers (internal others).
6 Though some attention is paid there to skilled labour, emphasis is never placed
on the idea that work can express the worker’s creative capacities.

7 I explore the paranoid quality of public life in Levine (1999) .

8 Freud, of course, argues that repression is the necessary basis of civilization

(Freud 1961 ).
9 I have elsewhere explored the celebration of the self and its interests in the
post-classical theory, and shown how it too is deeply problematic (Levine 1998 ).
10 Because a society becomes good by splitting off and projecting outside what
is bad in it, a society can only be good in relation to one that is bad. This
splitting of good and bad is typical of the paranoid situation already consid-
ered. We can readily see, then, the powerful connection binding the good
society capitalism, which is its opposite.
to

11 The distinction developed in the following paragraphs is a variant on one that

was important in nineteenth-century and early twentieth-century social thought;

see particularly Durkheim (1984) .

12 Yet, in practice, participation creates significant opportunity to exclude others

by providing a public forum and captive audience for those with a need to
dominate.
13 On this aspect of the spirit of capitalism, see Tawney (1962).

7 Income from work and social insurance

1 This only applies for a finite identity that can be maintained by a finite amount
of income. Finite identity in this sense is not inevitable in a capitalistic society,
where it is also possible for the individual to shape a purpose in life not around
finite identity, but around the limitless accumulation of wealth
2 Here, we are of course concerned with individual identity and with the income
needed to sustain it. The idea of a standard of living linked to identity is not
limited to individual identity, as we saw when we considered the subsistence
as the means to satisfy the needs of group identity.
 3 There is an important exception to this, which is the possibility of acquiring

low-wage labour abroad. I will not take up the implications of the various ways
of using foreign labour here.
4 Alternatively, we may be asking whether those who are employed would find
it in their self-interest to provide support for the unemployed.

8 Justice and economic democracy

1 A good example of the interpretation referred to in this paragraph is Bowles
and Gintis (1986) especially Chapter 1.
,

2 The identification referred to here is frequently the sort that seeks comfort for
our own feeling of deprivation by displacing it onto others, where we can deal
with it in a less personal way that does not engage the damage we feel we
have suffered, but only that suffered by others. Such identification also, of
course, uses others for our ends, and, in this sense, as has sometimes been
observed, is a form or exploitation.
3 At the end of this chapter, I consider what, more concretely, might be implied
in making the economy more democratic.
4 This is a major theme in Freud’s essay on group psychology (Freud 1959).
5 For a fuller discussion of the connection between abstract thinking and the
capacity for ethical conduct, see Kohlberg (1971).
6 For a discussion of regression in groups, see Eisold (1985). For a discussion of
group phenomena in connection to relevant issues in political theory, see Alford
(1994).
7 This is, admittedly, an odd use of the term political economy, which tradi-
tionally refers to the difference between a national economy and a family
economy. For the classical economists, including Marx, a political economy is
not at all political in the sense considered here. The non-political nature of the

economy followed, for these thinkers, from what Karl Polanyi refers to as the
‘disembedding’ of the economy from non-economic social relations. This disem-
bedding is characteristic of modernity. Without the disembedding of the
economy, which makes the economy a separate sphere, there would be no polit-
ical economy. Marx was very much the classical economist when he defined
political economy as the study of the ‘anatomy of civil society’, thus invoking
Hegel’s notion of civil society (a non-political realm) in defining his subject
matter.

9 The economy: national, international, global

1 It is for this reason that Durkheim (1958) insists that the emergence of the
individual as the end of the state implies a growth in the responsibilities of

the state.
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Index

agency 45 Dahl, R. 126

aggression 93 - 4 104 , Dell, S. 15 16 -

associations 126 , 133 - 4 , 136 democracy 74 - 5 101- 2 , 119- 20 ; ,

autonomy, see freedom economic and workplace 135 - 8

equated with government 120 ;se
Barber, B. 130 1 -

participation
basic need 14 - 17 31 67- 8 120 , , , denial of impairment 61- 2 , 64- 6
basic situation 89 -98 104 105 , ,
dependence: mutual 22 125 ; personal ,

Bion, W. 63 17 30 ,

Boris, H. 78 deprivation153
122
,
76
Bowles, S. 127 desire 75 - 7
business mentality 89 - 92 98 , destruction, asger ion
development 27 54 5 59 61 63 ,
-

,
-

, ,

capabilities 17 - 19 35 , , 42 44 50 , , , 96 7 99 104 112 ; uneven 148 50

-

, , ,
-

51 2 56 7 62
-

,
-

, Diamond, M. 94
capacities: creative 48 , 108 ; cognitive difference 24 5 28 9 100 1 107 -

,
-

,
-

, ,

and emotional 36 145 6 151-

capacity for ethical conduct 85 difference principle 121

capitalism 26 89 - 98 100- 1 116 , , , , disability 61 - 2
140 disinterest 5 - 6
capitalist 92 97 , division of labour 22 - 3 116 , 140 151 , ,

character structure 98 104 , domination 116 134 ,

choice 13 , 45 55 ,
drug addiction 152
citizens 128 129 - 30 , Durkheim, E. 154 155 ,

civil society, see society

classical economics 3 , 13 - 14 , 15- 16 , economic determinism 98 - 9
22 26 73 89 99 116 17 149
, , , , ,
-

, , economic policy 137 - 8

151 economics and politics 132 - 4
closed circles 92 99 103 5 , ,
-

economy 8 - 9 100 ; depoliticized ,

closed systems 75 153 , 132- 4 ; global 141 - 2 ; government

coercion 48 128 134 , , control of 132 ; international 140 ;
community 27 28 40 44 80 82 , , , , , , local 139 141 ; stateless 142 - 5 ; see
,

99- 101 ; democratic 74 - 5 101- 3 , , separation

124 5 129 32 ; see group
-

,
-
education 59 - 60
competition 110 - 112 emotions 37 , 38
creativity 7 8 49 50 56 116
-

,
-

, , ,
empathy 66
149 50 ; in labour 48 93 4
—

- 96- 7 , , ,
envy 64 , 102
108 115 116
, ,
equality 23 9 64 -

, , 101 2 -

, 128 ,

culture 33 4 146 30 -

,
-

129 30 151
-

,
 Index

Erikson, E. 20 integration, see subjective experience,

ethics, see capacity for ethical conduct ,
integration of
regard for others interdependence 140
exchange: voluntary 5; as ethical interest 6 37 , , 42 , 74 76 132 ; , , see

relationship 131 self-interest

expertise 132 138 , interest rates 133 -4

exploitation 5 - 6 47- 9 113- 14 , , , International Monetary Fund 121

145
justice 29 31 103- 4 119 29
-

, ,
-

family 3 - 4, 20 , 70 1 -

, 73 135 8 -

famine 124
fate 94 95 ,
Kohlberg, L. 153
fear 75 7 -

Kohut, H. 38
Federal Reserve Board 133 - 4 137 ,

free trade 141 labour: alienation of 46 - 8 93- 6 98 ; , ,

freedom 17 18 23 27 28 31 5 40 ,
-

, , ,
-

, , of children 71 ; and income 108 ;

45 6 51 2 116 17 134 142 3
-

,
-

,
-

, ,
-

, unskilled 96 7 113 14 115 17 -

,
-

,
-

150 151 ; see subjective freedom

, 136
Freud, S. 64 154 155 , ,
large-scale production 140
Friedman, M. 142 - 3 145 , Lear, J. 37
frustration 79 liberal image of society 4 - 6
Lifton, R. 110 11 -

Geertz, C. 146 livelihood dependent on exchange 95 ,

Gellner, E. 146 98 104

,

global society 148 50 -

Locke, J. 73 81 83 , ,

good society 99 103 104 -

, loss 78
gratification, see satisfaction
greed 77 9 151 management: need for control by
-

group 2 3 7 8 15 19 26 29 30
-

,
-

, , , ,
-

, 104
100 104 124 5 128 136 147
, ,
-

, , , , markets 70 95 102 143 ; , , ,

149 ; identity 40 1 55 6 58 -

,
-

, , embeddedness of 2 19 ; failure of, ,

129 32 134 145 154

-

, , , 107 109 112 ; freedom of 1

,
-

19 23 74 91 139 141 ; regulated

-

, , , ,

Hegel, G.W.F. 96 , 152 91 ,

Hobbes, T. 153 Marx, Karl 4 5 - 6 19 25 26 29 , , , , , ,

honour 26 32 37 77 96 114 116 17 152

, , , , ,
-

, ,

155 ; on alienation 46 - 9 95- 6 ; on ,

identification 100 122 125 131 , , , , business mentality 90

134 155
, mental life 36
identity 2 6 20 40 2 67 80
, , ,
—

, , , Menzies Lyth, I. 103

107 8 115 154
-

, , modern society 17 24 - 5 26 27 28 , , , , ,

ideology 131 2 -

32 4 52 55 96 99 107 151
-

, , , , , ,

impairment, see subjectivity morality 7 100 131 149 152 , , , ,

incentives 27
income 107 - 9 , 113 ; from work 115 ; narcissism 105 ; see self-interest
right to 84 narcissistic illusion 90 101 2 ,
-

individual 3 6 8 20 25 29 44 ,
-

, , , , , national integration 139 - 40 145- 7 ,

57 8 97 105 6 107 8 131 134 ;

-

, ,
-

,
-

, , need 56 - 7 , 96 ; and identity 108 ; see

integration of 147 8 ; separate from —
want

need 79 - 81 ; separate from neoclassical economics 37

organization 84 - 5 non-tariff barriers to trade 141
inequality, see equality norms 29
institutional design 105 , 119 - 20 Nussbaum, M. 17 19 31 -

, , 32 , 50 62 , ,

insurance 109 - 114 152

 Index

objective freedom 34 54 56 , , , 81 -

3 , self 5 38 43 58 9 61 106 123 ;

,
-

,
-

, , ,

152 adaptability of 110 11 ; division in —

obligation 16 - 17 , 69 , 117- 18 39 ; finite 80 1 90 154 ; see -

, ,

open systems 80 - 1 subjective experience

opportunity 20 24 28 30 - 1 32 , , , , , 34 , self-alienation 44 , 47 9 97 99 152 -

, , ,

56 116.
self-awareness 41
oppression 30 , 94 122 145 , , self-boundaries 42 , 43 85 , , 90 , 106
self-denial 98
paranoid 154 ; character 104 ;situaion self-determination of workers 135
89 98 103 104
, , , self-esteem 26 39 , , 40 44 63 65 , , , ,

participation 101 2
-

, 130 -
1 , 144 , 154 ; 76 7 136
-

see democracy self-interest 5 6 24 5 36 7 39 64 -

,
-

,
-

, , ,

passions, see emotions 76 8 91 2 105 6 149 50 151 ;

-

,
-

,
-

,
-

people 95 , 101 -
2 , 137 8 -

predatory 6 91 102 105 153 , , , , ,

Plant, R. 68 154 ; see interest

Pluralism 128 - 9 Sen, Amartya 14 25 151 152 , , ,

Polanyi, K. 2 19 100 151 155 , , , ,

separation: of economy 1 , 4- 85 100 , ,

political economy 3 - 4 73 85 99 , , , , 127 - 8 132- 4 ; of persons 147 ; of

,

127 132 139 149 155 ; see

, , , , state 74 5 82 85 -

, ,

separation service sector 117

politics 125 - 6 , 127 , 132 ; and Smith, A. 14 26 27 , 36 7 139 , ,
-

economics 132 - 4 socialism 132 - 3

poor 121 4 138
-

,
society 74 81 132 3 153 , ,
-

popular economics 138 splitting 93 101 154 , ,

potential 32 , 42 , 44 , 54 , 56 - 7 , 59 , standard of living 83 4 - 107 154 , ,

60 , 63 4 , 80 , 152
-
state 22 60 73 7 79 81 5 139 40
, ,
-

, ,
-

,
-

poverty 13 14 28 103- 4 , 112 123 142 7

- -

, , ,

power 51 69 70 113 14 , 134 ,

,
-

,
-

143 state of nature 81

professional ethics 84 5 -
statesman 139
projection 64 5 91 93 102 -

, , , state system 148 - 50

property right 6 , 20 , 23 , 57 9 , 70 , Steuart, J. 139
-

127 , 143 stewardship 60 , 71 -

2 , 74 , 79 , 84 5 , -

public choice 120 113 , 117 18 -

Stewart, F. 15
Rawls, J. 121 2 -

subject 45
reality testing 103 - 4 subjective: and objective 103
reason 132 subjective experience: enrichment and
recognition 53 59 100 123 - 4 131 , , , ,
impoverishment of 45 47 65 94 , , , ,

regard for others 130 - 1 154 ; integration of 44 - 5 47 58 , , ,

regression 99 101 ; in groups 131 , 61 99 147 8

, ,
-

relativism 149 subjective freedom 34 36 49 51 , , , ,

repression 97 99 104 , , 54 6 58 9 62 4 84 5 152

-

,
-

,
-

,
-

retirement 112 - 14 subjectivity 34 42 44 48 51 - 9 , , , , ,

rights 29 30 43 51 60 63 70 73
-

, ,
-

,
-

, , - 69 70 108 114 118 ; impairment

, , ,

82 - 4 132 ; of criminals 152- 3 ; as

, of 60 6 69 112 115 17 152 3 ;
-

, , ,
-

,
-

limits to state and market 143 - 5 ; structures of 57 62 3 68 9 ,

-

,
-

natural 81 ; workers’ 96 136 - 7 , 70 2 -

risk 114 15 -
subsistence 15 , 56 ,93169-7501 ,

Sahlins, Marshall 14 16 139 , ,

Tawney, R.H. 16 20 , , 29
satisfaction 6 - 8 , 13 , 21 , 45 , 75 80 , -
truth 132
92 97,

saving 109 113 ,

unemployment 108 - 15
schizoid defence 154 Unger, R. 151
United Nations 54 83 , Weber, M. 92
universality 18 31 5 53 ,
-

,
-
6 welfare 45 66 - 9 112 ; reform
, ,

103 4
-

vocation 108 , 111 wilful control 51 , 69 145 ,

vulnerability, see exploitation will 57 63 66 70 94 95

, , , , , , 104 ,

105
want 2 - 3 6- 8 74 133 ; limitless
, , , Winnicott, D. 49 - 50
77 9 153
-

, work, see labour

wealth: enough 24 27 ; growth of 97 ;
, worker’s fate 93 - 6 104 ,

need for 14 23 6 30 1 90
,
-

,
-