Economic inequality leads to political inequality. But what would happen if we distribute property... evenly over everyone in a society? That way, no one would be so wealthy... they could influence politics disproportionally, and no one would be so poor... they would have to depend on others. That’s the idea of a property-owning democracy. In a property-owning democracy property is equally distributed over every citizen. One important feature is that everyone owns an amount of property. This can be realized in different ways. The simplest way would be for a government... to give every citizen an equal amount of money directly. This could either be a regular payment, called basic income, or a one-off instalment, called basic capital. Universal Basic Income is a monthly allowance that every citizen gets from the state... and that is the same for every citizen. You would get this income your entire life. Basic capital is a large endowment that you get at a single point in your life. For example, Anne Alstott and Bruce Ackerman argue... that every citizen should get 80.000 dollars in their twenties. Philosophers debate over whether basic income or basic capital would be the better option. You might worry that with basic capital, people will squander all their money... to bad choices, or lose it all because of bad luck. This isn’t so much a worry with basic income, because you collect that your entire life. On the other hand, you might worry basic income won’t make a big difference to your life plans... while basic capital allows you to make important investments in your future. You could start a business or pay for your education. These are two considerations, there are more... and philosophers continue to debate this. But there are other ways in which we could... ensure that every citizen would own a significant amount of property. For example, a government could give tax breaks to help poor people save money for the future. They could also help workers to buy shares in the companies they work for. Another possibility is to give citizens shares in a Community Wealth Fund. This is a state-owned... investment fund managed by the government. They use public funding and invests this... in global financial markets. Returns on these are then distributed evenly over every citizen. The Alaska Permanent fund is a good example. There, the revenues on oil are invested... and the returns of these investments are distributed to every Alaskan equally. These options don’t exclude one another; they can be combined in a property-owning democracy. But these institutions wouldn’t yet amount to a property-owning democracy. That’s because it’s not enough that every citizen owns property. It should also be the case that no-one owns a lot more than others. There shouldn’t be a concentration of wealth. One way to limit this concentration of wealth... is through taxation. If that is our goal, we should tax inheritance, or wealth, or both. An inheritance tax involves paying a percentage of what you inherit. A wealth tax involves paying a percentage of the wealth that you own annually. One option is to set a maximum amount of wealth and tax everything above that limit. Now you know what a property-owning democracy looks like, we can ask why it would be valuable. For that it’s helpful to distinguish these institutions from those of a welfare state. In a welfare state, important social services are free or subsidized. Everyone has access to health care and education. In addition, there is a certain social minimum... below which no citizen may fall. If you can’t get a job, or your wages are low... you get welfare payments from the government. According to the economist James Meade... and later also to the philosopher John Rawls, these institutions are not yet enough... to realize a just society. They argued that for that you also need the... institutions of a property-owning democracy. Rawls gave three reasons for this. The first reason is related to what we have discussed in this course. Rawls argued that a welfare state can’t protect political equality. Because even if no-one falls below a minimum, there can still be economic inequality above that. People can become very wealthy in a welfare state and they can use that money to gain political influence. So we need a property-owning democracy with an equal distribution of property... to ensure political equality and a good democracy. The other two reasons that Rawls gave... are related to distributive justice. Rawls’ second argument was welfare states... cannot protect equality of opportunity. If you are born much wealthier than others... you have an advantage later on in life. And this is true even if everyone in that society... gets a good education, access to healthcare and access to other social services. By contrast, in a property-owning democracy, everyone is much more equal... and opportunities are much more equal. The third reason is about relational equality. In a welfare state, people who receive welfare payments are often portrayed as dependent... or even stereotyped as lazy or undeserving. There’s also some economic inequality... in the welfare state that leads to inequality in status. The result of all of this is that people won’t engage with one another as equals. By contrast, in a property-owning democracy, everyone has property, and so people are more equal... and also more independent. People will respect one another and relate to one another as equals. None of this means that we need the institutions of a property-owning democracy... instead of a welfare state. What Rawls and others wanted was... that we would combine all these institutions together to realize a just society. To conclude: A property-owning democracy is a society with a roughly equal distribution of property. It has institutions to ensure every citizen has a significant amount of property... and to make sure no-one has a lot more than others.
