Tuesday, 25 August 2009

Mill on Equality and Distribution: Political Economy

Primary version of this post, with visual content, at Barry Stocker's Weblog.

On 7th August I posted ‘Rawls in Relation to Mill, Nietzsche and Sophists'. There, amongst other things I suggested that Rawls engaged in a rather tortuous attempt to turn Mill into an an egalitarian liberal (in the Rawlsian sense which implies restraints on the permissible level of inequality in a society). I am certainly not withdrawing that view, but I have a qualification. Rawls went down the wrong road in thinking that it’s Mill’s ethical theory in Utilitarianism which supports egalitarian liberalism. Rawls jumps from there being a utilitarian concern with the welfare of society as a whole to the idea that this requires egalitarian liberalism.

Rawls would have been better off invoking Principles of Political Economy, and maybe it was in the back of his mind. The Principles suggests that a socialist, or even communist, economical and social system might be possible at some time in the future. Mill argues that distribution of income is a distinct issue from the existence of markets. Income distribution is decided by public institutions rather than the market. This itself rests on separating the discussion of wages from the discussion of costs and prices, and placing the discussion of wages before the discussion of prices. Wages are treated as if they are not a normal cost, and can be changed at will on a political basis. Mill ads detail, suggesting that communism might undermine economic incentives, but that markets as currently organised also deprive the low paid worker of incentives. Mill seems to be arguing for the future possibility of socialism, and in a very hypothetical way, but it certainly undermines any view of Mill as a completely seamless limited state free marketeer, even if most of what he says does lean in that direction. Since Mill thinks that production and prices to the consumers are determined by markets, he is certainly not a seamless socialist or communist. This aspect of Mill does open the way to market socialism, welfare or egalitarian liberalism, social democracy and any other system which might try to combine markets with major state led reallocation of resources.

This seems at odds with what Mill generally says about the role of markets in economics in that book, and is certainly at odds with On Liberty which is not separated from it by a major chronological gap. Principles is not as widely read than On Liberty or Utilitarianism, but the ‘socialist’ aspect of it seems to have influenced a lot of people’s understanding of the two more famous texts, and certainly what Mill says in Principles does justify a search for egalitarianism in the other texts, i just don’t think such a search can succeed. The reason for the influence of the more egalitarian reading may be that the Principles was a major economics text book for some decades. So during that time it must have been at least as widely read as On Liberty and Utilitarianism, and probably influenced the interpretative tradition as it was being formed. Some guess work here, but it looks very likely to me that something like that happened.

No comments: