Human Flourishing and the Concept of Capital: Buchanan on Justice

Human Flourishing and the Concept of Capital: on Buchanan’s

Justice, Legitimacy, and Self-Determination: Moral Foundations for

International Law (New York: Oxford University Press, 2004)

Alan Buchanan’s most recent work is a major

contribution to an important school of thought in

contemporary social philosophy, “liberal cosmopolitanism”1

As the subtitle reveals, Buchanan insists that international

law rests on moral foundations, in specific, the principle

of moral equality: “justice requires respect for the

inherent dignity of all persons . . . this notion of

dignity” (42). A defense of human rights follows

immediately from this principle: includes the idea that all

person are equal, so far as the importance of their basic

interests are concerned

(T)he implication of the phrase ‘human rights’ is that

there are some interests common to all persons that are

of such great moral concern that the very character of

our most important institutions should be such as to

afford them special protection. These interests are

1

shared by all persons because they are constitutive of

a decent life; they are necessary conditions for human

flourishing (127).

Buchanan defends a fairly standard set of civil and

political rights, including the right to not be unjustly

killed, the right against enslavement and involuntary

servitude, the rights of due process and equality before the

law, the rights to freedom from religious persecution and

freedom of expression and association, and the right to be

protected from damaging and systematic forms of

discrimination (129). He also includes a right to

democratic governance, to which I shall return (143-4). And

he wishes to leave room for economic rights insofar as they

are necessary to ensure that civil and political rights have

concrete actuality, and are themselves “necessary conditions

for human flourishing.” In his view, however, there is

presently a lack of consensus on issues regarding

distributive justice, apart from the growing recognition of

the importance of the right to subsistence. This is the

only economic right added to his list (135).

2

Buchanan insists that both “ideal” and non-ideal”

theory must investigate the institutional framework(s) that

would adequately embody the above normative principles:

The task of ideal theory is to set the most important

and most distant moral targets for a better future, the

ultimate standards for evaluating current international

law. Nonideal theory’s task is to guide our efforts to

approach those ultimate targets, both by setting

intermediate moral targets, as way-stations on the path

toward the ultimate standards laid down by ideal

theory, and by helping us to determine which means and

processes for achieving them are morally permissible

(60-1).

A crucial thesis of the book is that we are not in a

position to say much at all regarding the sort of

institutional framework that would adequately embody the

moral equality principle. As a result of this skepticism

1 Unless otherwise noted, all page references are to this

work.

3

the main practical imperative is reform of the present

global order:

Apart from the requirement of minimal constitutional

democracy, we are presently not in a position to

specify with any confidence the substantive

institutional arrangements that any system of

international law would have to satisfy in order to

achieve full compliance with (the) most basic

principles of ideal theory . . . Because we know so

little about the full range of institutional

arrangements that would satisfy the principles of ideal

theory, we should focus on ascertaining which

principles, if implemented, would produce moral

improvements in the particular system that now exists

(66-7).

The reform discussed at greatest length is

acknowledgement of a conditional right to secession, coming

into play when a subset of citizens has been subjected to

severe and systematic rights abuses. Buchanan also calls

for an international order explicitly acknowledging the

4

right of states to engage in humanitarian military

interventions to stop severe and systematic rights abuses.

In the present context, however, his proposals for the

reform of the global economy are of most interest:

(I)ndirect support for transnational distributive

justice can be achieved by building on current efforts

in the areas of more humane international labor

standards, trade agreements designed in part to

mitigate the disadvantages of poorer countries,

policies regarding donations and favorable loan terms

for developing countries designed to ensure that the

benefits are spread among all citizens, international

laws that distribute the burden of environmental

protection fairly, rather than penalizing developing

countries, and by creating an international

intellectual property rights regime that encourages the

wider distribution of biotechnologies that contribute

to human health (399-400).

I believe that the very strong statement, “Apart from

the requirement of minimal constitutional democracy, we are

5

presently not in a position to specify with any confidence

the substantive institutional arrangements that any system

of international law would have to satisfy in order to

achieve full compliance with (the) most basic principles of

ideal theory” may not be an accurate description of

Buchanan’s own position. I also believe that the statement

is false; we are in fact able to say more than this.

Regarding the former point, throughout his book

Buchanan appears to take for granted that a suitably

reformed global capitalism is normatively acceptable in

principle. He writes, for example, that “there are sound

individualistic justifications for having laws that

designate certain collectivities as possessors of rights.

For example, business corporations are possessors of rights

in all Western-style domestic legal systems” (414). Even

more telling is the manner in which “economic justice” is

defined in terms of the contrast between anti-

redistributivist theories (which “deny any significant scope

for redistributive principles, except for the purpose of

rectifying past unjust takings”) and redistributivist

6

theories (which “assert that individuals have entitlements

to goods and opportunities that are independent of the

claims of rectification” (222). Both positions appear to

take the workings of capitalist markets as given, differing

only on the extent to which the results of exchange need to

be subsequently adjusted. And while Buchanan calls for

improved labor standards, there is no critical discussion

whatsoever of the capital/wage labor relation itself.

Be that as it may, my main concern here will be to show

that we can affirm that the adequate institutionalization of

the moral equality principle requires an alternative to a

global institutional order based on capitalist property

rights and production relations. I shall also show that this

disagreement on the level of ideal theory has significant

implications for non-ideal theory. In my view the

fundamental issue is the manner in which Buchanan takes the

core thesis of political economy for granted.2

The Role of Money in Generalized Commodity Production

The most elementary social form examined by political

economy is the exchange of one commodity for another (C-C).

7

When this sort of exchange is generalized, it necessarily

tends to lead producers to specialize in the production of a

single sort (or limited range) of commodities. Such

specialization tends to generate productivity advances. If

producers possessing commodities they do not wish to consume

then exchange with others who have a surplus of commodities

that are desired, more human wants and needs can be

satisfied than in a world without specialization and trade.

Unfortunately, however, the mutual benefits resulting

from simple C-C exchanges cannot be won unless the “double

coincidence of wants” condition is met. If one trading

partner has a commodity which the other desires, while the

latter does not possess anything the former wishes to

obtain, an exchange will not take place. In the framework

of classical political economy and its divergent offshoots,

money is the solution to this problem. Once money has been

2 I am using the term “political economy” in an extremely

broad sense, including classical political economy and its

many progeny (neoclassical economics, the Austrian School,

Keynesianism, institutionalism, and so on.)

8

introduced, a commodity can be sold, with the money obtained

then used to purchase another commodity from some third

agent. The introduction of money as a means of circulation

(C-M-C) thus greatly extends the mutual benefits of

commodity exchange in space and time.

The next stage in the argument is to note that an

extended series of C-M-C circuits includes M-C-M circuits as

well (…C-M-C-M-C …). In other words, in generalized

commodity exchange some economic agents will necessarily

tend to invest money in order to obtain a monetary return.

We may assume that money is generally not invested with the

intention of attaining a monetary return equal to (or less

than) the initial investment. And so generalized commodity

production and exchange necessarily tends to include a new

sort of circuit, in which money is invested for the sake of

a monetary return exceeding initial investment (M-C-M’, with

M’>M). From the standpoint of political economy this

further complication doesn’t affect the claim that

capitalist markets intrinsically contribute to the aim of

meeting the material preconditions for human flourishing.

9

The goal of attaining money is only a proximate goal,

subordinate to the ultimate aim of using money to purchase

commodities to meet human wants and needs. While many

political economists would dissent from numerous aspects of

Hayek’s position, there is a general consensus that he is

correct on this fundamental claim:

(I)n an uncertain world the individuals must mostly aim

not at some ultimate ends but at procuring means which

they think will help them to satisfy those ultimate

ends; and their selection of the immediate ends which

are merely means for their ultimate ends, but which are

all that they can definitely decide upon at a

particular moment, will be determined by the

opportunities known to them. The immediate purpose of

a man’s efforts will most often be to procure means to

be used for unknown future needs – in an advanced

society most frequently that generalized means, money,

which will serve for the procurement of most of his

particular ends.3

10

Marx was not a political economist; his mature works

were explicitly dedicated to the critique of political

economy. But he began where the classical political

economists began, with generalized commodity exchange. He

then showed how the significance and implications of this

starting point were systematically occluded by political

economists.

In generalized commodity exchange products are produced

with the intent of selling them to others. But this

production is undertaken on the private initiative of

producers, with no guarantees that the hoped-for sales

3 Friedrich Hayek, Law, Legislation, and Liberty, Volume 2: The Mirage of

Social

Justice (Chicago: University of Chicago Press, 1976): 8-9.

Here, as elsewhere, Hayek echoes Adam Smith, who wrote that

“consumption is the sole end and purpose of all production,”

a thesis he regarded as “so perfectly self-evident that it

would be absurd to attempt to prove it.” Adam Smith, An

Inquiry into the Nature and Causes of the Wealth of Nations, Vol. 2 (Oxford:

Clarendon Press, 1976): 155.

11

actually occur. The social necessity of this production can

only be established subsequently, through successful

exchange. A system of privately undertaken production,

which may or may not prove to be socially wasted, requires

an objective measure of the value of commodities, that is,

some measure of the extent to which commodities possess the

special property of contributing to the material

reproduction of the social world.4 Money is this measure. It is

the form in which the value of commodities is objectively

represented.

The social forms of generalized commodity exchange thus

impose a ceaseless competitive pressure for monetary returns

on all units of production. Units that systematically

4 Or, equivalently, some measure is required of the extent

to which the direct and indirect labor that has gone into

the production of these commodities is in fact socially

necessary labor. This socially necessary (that is, value

producing) labor is conceptually distinct from concrete

labor, which may always turn out to have been socially

wasted. It may therefore be termed “abstract labor.”

12

direct their endeavors to monetary returns exceeding their

initial investments (“valorization”) necessarily tend to

grow over time in comparison to units making the

appropriation of monetary returns a relatively secondary

matter. The latter tend to disappear or be pushed to the

margins of social life. Out of the indefinite range of

possible paths of technology and social change at any given

time, in a capitalist social order the valorization

imperative will necessarily tend to be the single most

significant factor determining the paths that are selected.

Product innovations, process innovations, organizational

innovations in the production and distribution chain, and

general social innovations will tend to be introduced and

diffused if and only if they are moments of, complementary

to, or able to be appropriated by, valorization processes.

Capitalism is more than a complicated form of barter,

and money is not a mere convenience, a generalized means, or

a merely proximate end. While the use of money to purchase

goods and services to meet human wants and needs is indeed

part of generalized commodity production and exchange, the

13

satisfaction of human wants and needs is systematically

subordinated to the valorization imperative, the drive to

attain a M’ that exceeds the initial investment, M. Once

the social relations defining generalized commodity

production are in place, money necessarily tends to take on

the form of an ultimate end. This is the ultimate source of

both the historical specificity and the dynamism of this

social order.

Buchanan, along with most political philosophers, is

conspicuously silent on the question of money.5 But a theory

of money is implicit in the following remark: “After all, it

is a commonplace about a liberal domestic society that its

public order does not rest on shared ends” (40). Strictly

speaking, this should read: “shared particular ends.” As we

have seen, there is a shared general end affirmed by

5 It is striking how many of the most influential works of

political philosophy of the last half century lack even an

index entry for money, given the historically unprecedented

extent to which our society is monetarized “all the way

down.”

14

Buchanan for both liberal and non-liberal societies, human

flourishing. His claim is that there is no overall

agreement in a liberal society regarding the particular form

human flourishing should take; different individuals and

groups accept different conceptions of the good life.

Generalized commodity exchange is an essential element of a

contemporary “liberal domestic society.” And so to claim

that “public order . . . does not rest on shared ends” is to

accept the core thesis of political economy: in this social

order money in principle operates as a generalized means,

leaving individuals and groups with the freedom to decide

their ends for themselves. But this is a freedom to

negotiate within a public order in which an intrinsic end is

already in place: monetary accumulation on the level of total

social capital. It is true that a questionnaire would not

reveal that most individuals and groups rank the

accumulation of money capital as the most important matter

in their lives; money is not a “shared end” in this sense.

Nonetheless, it is a “shared end“ in the sense that everyone

15

living in a capitalist society is subject to the overriding

force of the valorization imperative.6

How does this affect our understanding of “the

substantive institutional arrangements that any system of

international law would have to satisfy in order to achieve

full compliance with (the) most basic principles of ideal

theory” (66-7)? The most basic principle for Buchanan is

the moral equality principle: the general end of social life

is human flourishing, to which all persons have an equal

right. But under the social forms of global capitalism,

valorization, and not human flourishing, is the ultimate end

institutionalized on the level of society as a whole. It

appears that on the level of ideal theory we may assert with

confidence that the institutionalization of the normative

principles accepted by Buchanan requires an alternative to

the social forms defining a global capitalist economy.

6 See Tony Smith, “Towards a Marxian Theory of World Money,”

in Marx’s Theory of Money, edited by Fred Moseley, Houndmills:

Palgrave/Macmillan, 2005: 222-35.

16

But are “human flourishing” and “the accumulation of

capital” in fact competing principles, as the Marxian

critique of political economy holds? However one

comprehends the role of money in capitalism, is it not the

case that no social order has done more to develop new human

capacities, new human wants and needs, and new ways of

satisfying those wants and needs?

There are extremely good reasons to be wary of the

claim that by the accumulation of money capital

automatically tends to further the satisfaction of human

ends:

* In generalized commodity exchange there is a

necessary tendency to systematically neglect human

wants and needs that do not fit the commodity form,

since only the sale of commodities contributes to the

accumulation of money capital as an end in itself.

* Regarding the wants and needs that are addressed by

commodities in some manner, “demand” for them is

completely irrelevant in this order. Only effective

demand, demand with purchasing power behind it, counts,

17

for it alone contributes to the accumulation of money

as an end in itself.7

Neither point appears conclusive. Why couldn’t other social

arrangements (the family, associations in civil society, the

state) adequately provide for the wants and needs not

7 Consider, for example, the fact that between 1998 and 2002

only 133 of the 415 new drugs approved by the F.D.A. were

genuinely novel compounds, only 58 of which (14% of all new

drugs over this period) were judged by the F.D.A. to be “a

significant improvement” over existing options. The

industry’s marketing budget is estimated to be almost double

its research and development outlays. (Stephen Hall, “The

Drug Lords,” The New York Times Book Review, November 14, 2004: 8-

9). In the meantime, next to no resources are devoted to

addressing ailments disproportionately afflicting the

majority of humanity living in poor regions. While the

medical industry is a particularly egregious example, its

differences from other sectors are likely to be a matter of

degree rather than kind, given the role of money in global

capitalism.

18

fitting the commodity form? And isn’t the force of the

second consideration undermined by the technological

dynamism of capitalism, which tends to lower unit costs,

making previous luxury goods widely affordable?

At this stage of the argument matters are sufficiently

murky that Buchanan’s skepticism regarding what we can say

about institutions on the level of ideal theory may appear

plausible. But the argument should not conclude at this

stage.

The Capital/Wage Labor Relation

In generalized commodity production labor power too is

a commodity. At the beginning of the M-C-M’ circuit one

group owns and controls investment capital (M). Those who

lack such ownership and control must sell their labor power

for a wage.8 Labor power necessarily tends to be purchased

by the holders of investment capital if and only if this

purchase is foreseen to contribute to the end of

accumulating monetary profits. In other words, the wages

workers receive must be less than the economic value

produced by those workers in the given period. At the

19

conclusion of the circuit those who own and control capital

now enjoy ownership and control of M’, an amount exceeding

initial investment. They now decide what portion of this

surplus value will be devoted to their personal consumption,

what portion will be reinvested again in the same

enterprises, sectors, and regions, and what portion will

flow to different enterprises, sectors, and regions. For a

new circuit to commence the wages received by workers must

have been sufficient to enable them to reproduce themselves

materially, while not being sufficient to free them from

having to return to the labor market to sell their labor

power.9 From this perspective the valorization process is

identical to the reproduction of the capital/wage labor

social relation.

Buchanan acknowledges that the exercise of political

authority over others requires special normative

justification, given the prima facie tension between this

relationship and the moral equality principle. The workplace

is part of the “basic structure” of the global order. And

so the authority exercised in the capital/wage labor

20

relation requires normative justification no less than other

elements of this structure.10 Buchanan himself does not

examine this topic. But a number of themes developed

elsewhere in the book are relevant.

Can we say that the capital/labor relation is based on

the consent of those over whom authority is exercised? Wage

laborers generally have the ability to choose among a set of

possible employers. When they do, there is a sense in which

8 I am abstracting from dependency relations within

households, the so-called “informal sector,” and so on.

Introducing such phenomena would complicate the analysis

without leading to a revision of any of the claims made

here.

9 Individual capitalists can, of course, go bankrupt in the

course of a circuit, and individual workers can win

lotteries, save enough to start a small business, retire, or

die. The statements in the text refer to the class

relations that must hold on the aggregate level of total

social capital if the social forms defining generalized

commodity production are to be reproduced.

21

they “consent” to the particular wage contract. But this is

obviously not the same as “consenting” to the capital/wage

labor relation in general.

Can we say that the fact that most wage laborers do not

devote their energies to abolishing the capital/wage labor

relation show that they “tacitly consent” to it? Even if a

vast majority of workers have psychologically accepted the

capital/wage labor relation, the problem of adaptive

preferences prevents us from granting much weight to this

state of affairs. 11 The problem undermining Locke’s

assertion that remaining within a state is equivalent to

granting it “tacit consent” also arises here:

10 Buchanan avoids this conclusion by implicitly presupposing

a sharp distinction between “political decisions” and the

supposedly non-political exercises of authority in the

workplace. This presupposition is thoroughly arbitrary,

however much ideological work it may do. See G.A. Cohen,

”Where the Action Is: On the Site of Distributive Justice,”

Philosophy and Public Affairs 26 (1997): 3-30.

22

(F)or many people in many states the costs of exit are

so high or the prospects of a better situation

elsewhere so dim, that remaining in place cannot count

as consent. This . . . objection by itself seems to

doom the idea of tacit consent (244).

The costs of exit from the capital/wage labor relations are

also extremely high; the physical, psychological, and social

consequences of extended unemployment in a capitalist

society are immense and pernicious.

Finally, the normative force of appeals to either

explicit consent or tacit consent is completely undermined

if the appropriate background conditions are absent:

Without the fulfillment of background conditions that

place constraints on extreme inequalities in bargaining

capacity or which at least rule out the more extreme

11 “(I)t appears that a society may be indefensibly

inegalitarian and yet may not rely excessively on force if

it has powerful resources for acculturating people to accept

their inferior status” (164).

23

forms of duress … consent cannot confer legitimacy

(304).

Could any serious argument be formulated that the

distinction between a class of people that owns and controls

society’s productive resources and a class that owns next to

nothing besides their capacity to labor does not count as an

“extreme inequality in bargaining capacity”?12

Buchanan would no doubt reply that the right to

organize at the workplace, welfare programs, retraining

programs, and so on, can at least rule out “the more extreme

forms of duress” from the capital/wage labor relation. But

the central project of ideal theory in Buchanan’s sense of

the term is to articulate the institutional framework(s)

that would adequately embody the moral equality principle.

12According to the 2001 Federal Reserve Survey of Consumer

Finances, the top 1% of families in the Unites States held

29.5% of all assets, and the top 10%, 64.6%, far more than

the bottom 90% combined. The bottom 50% held a mere 5.6 %

of assets (Michael Mandel and Richard Dunham, “Where Wealth

Lives,” Business Week, April 19, 2004 (34-37): 36.

24

A society in which the most fundamental social relation is

defined by the sort of “extreme inequality in bargaining

capacity” that characterizes the capital/wage labor relation

blatantly contradicts that principle even if wage laborers do not

face immanent starvation as their only alternative to accepting the terms of an

agreement with the owners and controllers of capital.

Buchanan himself holds that the appeal to consent fails

to morally legitimate political authority. I have argued

that his reasoning provides sufficient grounds to conclude

that an appeal to consent fails to legitimate the

capital/wage labor relation either. Buchanan does accept a

different sort of argument for the legitimation of political

authority: political authority is normatively legitimate

insofar as it reflects the will of those over whom the

authority is exercised. Democratic mechanisms are thus a

necessary precondition for legitimate political authority

(granting for the moment that these mechanisms tend to

result in decisions reflecting the will of the governed):

It can be argued that democracy is itself an important

element of justice because justice requires equal

25

regard for persons and this in turn requires that they can

participate as equals in determining the most basic social rules and the

allocation of the unequal political power that

governance inevitably involves (278; italics added).

The dynamic of social relations in the workplace is the same in all relevant

respects. All individuals in the workplace are of equal

moral worth. “Basic social rules” are determined.13 And

some exercise governance over others. On Buchanan’s own

principles, then, this sort of inequality is justified if

and only if institutional mechanisms ensure that those

13 Given the capital /wage labor relation, process

innovations debasing the creativity and skill level of the

work force tend to introduced whenever doing so lowers wage

costs (and/or increases management control of the production

process), as long as productivity losses adversely affecting

profits are not foreseen. Also, productivity advances

necessarily tend to result in increased output, rather than

increased leisure. Other social rules are possible and

worthy of democratic discussion in both workplaces and

communities.

26

exercising authority are democratically accountable to those

over whom the authority is exercised. And this is ruled out

in principle by the capital/wage labor relation.14

We also arrive at this conclusion taking Buchanan’s

discussion of political secession as a starting point.

Buchanan rightly wishes to discourage wealthy regions from

seceding from existing states in order to evade obligations

to poorer citizens:

(I)f the implementation of a theory of the right to

secede would tend to undermine the processes of

14 Buchanan cannot consistently argue that mere worker

rights to consultation as a “stakeholder” are sufficient,

given his criticism of the role of women in the political

process of the “well-ordered” non-liberal society described

by Rawls, which “is only a consultative process, which

presumably means that even if women participate in it and

accurately assert the fundamental interests of women, what

they say may either be ignored or interpreted

paternalistically, along lines that support grossly unequal

social arrangements” (170).

27

deliberative democracy by introducing powerful

incentives for strategic behavior on the part of

citizens (unprincipled threats of ‘exit’ by secession),

then other things being equal, this is a strike against

the theory (350).

But capitalist property and production relations grant the

owners and controllers of capital “powerful incentives for

strategic behavior” in the form of “unprincipled threats of

‘exit’ by secession.” Work forces that are not sufficiently

docile are continually threatened with capital flight to

regions where workers are more compliant.

This dynamic reinforces the point made immediately

above: capitalist property and production relations

obviously and necessarily “tend to undermine the processes

of deliberative democracy” on the level of workplaces.

Further, governments considering legislation challenging the

perceived self-interest of those holding capital tend to be

threatened with capital flight as well. Capitalist property

and production relations thus necessarily “tend to undermine

the processes of deliberative democracy” on the level of

28

states, undermining the liberal cosmopolitan principle that

all individuals must “participate as equals in determining

the most basic social rules.”15 In response to the threat

of capital flight, capitalist states necessarily tend to

grant the interests of capital priority over other social

15 Rawls notes in passing that liberal societies have had

“oligarchic governments” (John Rawls, The Law of Peoples

(Cambridge MA: Harvard University Press, 1999): 53). But he

fails to explain why this has occurred. He also fails to

note that it has been the normal state of affairs in liberal

societies, with repercussions far beyond the military

interventions overthrowing elected democracies he mentions.

Few cosmopolitan liberals acknowledge that the exit options

of corporations and wealthy individuals just discussed

necessarily tend to be incompatible with “the fair value of

political liberties.” David Held is a notable exception: “A

government’s policies must, thereby, follow a political

agenda that is at least favourable to, that is, biased

towards, the development of the system of private enterprise

and corporate power. Democratic theory and practice are,

29

interests, engaging in the discriminatory redistribution

that Buchanan elsewhere vehemently condemns.16

The above considerations justify an assertion on the

level of ideal theory regarding the substantial

institutional implications of normative principles beyond

thus, faced with a major challenge: the business corporation

or multinational bank enjoys a disproportionate ‘structural

influence’ over the polity and, therefore, over the nature

of democratic outcomes. . . Democracy is embedded in a

socio-economic system that grants a ‘privileged position’ to

certain interests. Accordingly, individuals and interest

groups cannot be treated as necessarily equal, and the state

cannot be regarded as a neutral arbiter among all interests”

(David Held, Democracy and the Global Order: From the Modern State to

Cosmopolitan Governance (Stanford: Stanford University Press,

1995): 247). Unfortunately, Held’s proposals do not

adequately address the problem (see Tony Smith,

“Globalisation and Capitalist Property Relations: A Critical

Assessment of Held’s Cosmopolitan Theory,” Historical

Materialism, Vol. 11, No. 2 (2003): 3-35).

30

what Buchanan is willing to grant: an adequate

institutionalization of the moral equality principle

requires an alternative to the capital/wage labor relation.

That principle demands some form of deliberative democracy

in the workplace, which is ruled out in principle by the

capital/wage labor relation. It also demands that all

individuals “can participate as equals in determining the

most basic social rules and the allocation of the unequal

political power that governance inevitably involves,” which

16 “Discriminatory redistribution, at least in its more

egregious forms, is a grave injustice. By pursuing policies

that systematically discriminate against a group in the

distribution of wealth, the state is violating a fundamental

condition of its legitimacy, failing to function as an

institutional structure for mutual benefit under the

requirement of equal regard for persons” (396). The passage

from Held in the previous footnote points to the reasons

discriminatory redistribution in favor of the interests of

the owners and controllers of capital has been the normal

state of affairs in liberal democracies.

31

is ruled out by the exit options granted to the owners and

controllers of capital. The reproduction of the

capital/wage labor relation is identical to the valorization

process on the level of total social capital. And so we are

now also in a position to confirm that a social order in

which valorization is the immanent end holding on the level

of society as a whole is essentially incompatible with the

end of furthering an equal regard for human flourishing.

Other systematic tendencies immanent in the essential

social forms of capitalism provide further evidence in

support of this conclusion, although there is not sufficient

space to show this in detail here. There are, for example,

powerful arguments establishing that there is a necessary

tendency to overaccumulation crises in global capitalism.17

When an overaccumulation crisis breaks out, unemployment

necessarily tends to rise, job security declines, and

pressure to intensify the labor process and extend the

length of the work day increases. Real wages tend to

stagnate or decline, while states tend to shift resources

from the funding of programs designed to meet human needs to

32

various forms of subsidies designed to help domestic

capitals avoid devaluation. There is, in short, a

systematic tendency for access to the necessary conditions

for human flourishing to be lessened on a massive scale for

extended periods.

Empirical evidence and theoretical arguments reveal

that recurrent paroxysms of “casino capitalism” are inherent

in the social relations of global capitalism as well.18 The

outbreak of overaccumulation crises tends to lower the rate

of investment in industrial sectors, leading to massive

inflows of investment into the financial sector.19 The

benefits of the resulting capital asset inflation

necessarily tend to be disproportionately appropriated by

the wealthy, while the burdens of the inevitable bursting of

speculative bubbles in the global economy necessarily tend

to be disproportionately inflicted on the least advantaged

groups. The regular recurrence of this perverse state of

affairs further undermines the claim that generalized

commodity production and exchange is subservient to human

flourishing, even in principle.

33

The final systematic tendency to be mentioned here is

rooted in the drive to appropriate surplus profits through

technical advances. Wealthy regions by definition have

advantages in the innovation process. It is easier to

mobilize the funds required for research and development in

the private sector in areas where the greatest concentration

of wealthy individuals and firms are found. States in these

regions are generally able to devote more revenues to public

sector research and development as well. These same regions

also have many advantages with respect to the

17 For a mathematical presentation, see Geert Reuten,

“Accumulation of Capital and the Foundation of the Tendency

of the Rate of Profit to Fall,” Cambridge Journal of Economics

15/1 (1991): 79-93. For a brilliant reading of the recent

history of the global economy from this perspective, see

Robert Brenner, The Economics of Global Turbulence (New York: Verso,

2005) and The Boom and the Bust: The US in the World Economy (New York:

Verso 2002). See also Tony Smith, “Brenner and Crisis

Theory: Issues in Systematic and Historical Dialectics,”

Historical Materialism 5 (2000): 145-78.

34

commercialization of innovations resulting from R&D: the

fixed capital already in place provides the framework

required for the successful implementation of many new

innovations; successful innovations tend to be correlated

with educated and trained workforces, and with consumer

markets characterized by high levels of effective demand.

It follows that wealthy regions of the global economy

have opportunities to establish a virtuous circle of

innovation and profits. High levels of investment in R&D

generally lead to process and product innovations.

Successful innovations grant firms temporary monopolies,

enabling them to enjoy higher than average rates of profit.

Surplus profits then allow high levels of private and public

funding for the next generation of research and development,

beginning the circle anew. In contrast, firms and states in

18 See Giovanni Arrighi, The Long Twentieth Century (New York:

Verso, 1994).

19 Jan Toporowski, The End of Finance: The Theory of Capital Market

Inflation, Financial Derivatives and Pension Fund Capitalism (New York:

Routledge, 2000).

35

poorer regions in the global economy are far less able to

engage in the cutting edge R&D that generates the

innovations enabling surplus profits to be appropriated.

This systematically reduces the likelihood that these

regions will be able to participate in the advanced R&D

producing the next generation of innovations and the next

round of surplus profits. The circle here is vicious.

Like all laws of the social world, these are tendency

laws. There are no guarantees that a virtuous circle can be

reproduced indefinitely in any given region. And if certain

exceptional and contingent conditions are met, previously

poor regions can grow rapidly.20 The fact that these

virtuous and vicious circles are not immutable refutes

extreme forms of underdevelopment theory. But the fact that

the place of individual national economies is somewhat fluid

in the hierarchy of the world system does not imply that the

hierarchical structure is itself fluid. The dominant

structural tendency in the global economy is the tendency to

uneven development, that is, for wealthy regions of the

global economy to reproduce their advantages over time. This

36

tendency is rooted in the “rules of the game” defining

global capitalism. It follows that the capitalist world

market necessarily tends to operate in a manner that does

not show equal regard for the fundamental interest all

individuals share in obtaining access to the material

preconditions for human flourishing.

We may now return again to Buchanan’s skepticism

regarding our ability to make assertions regarding “the

substantive institutional arrangements that any system of

international law would have to satisfy in order to achieve

full compliance with (the) most basic principles of ideal

theory” (66-7). The most basic principle of Buchanan’s

liberal cosmopolitanism is the moral equality principle.

The role of money as the end of exchange, the defining

features of the capital/wage labor relation, and the

systematic tendencies to overaccumulation crises, “casino

capitalism,” and uneven development, all justify the

assertion that an adequate institutionalization of this

principle requires an alternative to global capitalism.

37

Buchanan’s failure to acknowledge this is a fundamental

shortcoming of his ideal theory.

This judgment would hold even if it were not possible

to sketch an alternative model of institutions adequately

embodying the normative principles of moral cosmopolitanism

in detail. However, the work of David Schweickart, Diane

Elson, and others makes a convincing case that feasible and

normatively acceptable alternatives to both capitalist

20 See, Ha-Joong Chang, Pulling Up the Ladder? Policies and Institutions

for Development in Historical Perspective (London: Anthem, 2002). In

recent world history one important condition for successful

development has been a giant trading partner willing to

accept high levels of imports despite having its own

manufacturing exports to, and capital investments in, the

developing region strictly regulated. In the Cold War the

U.S. accepted these conditions in East Asia. With the end

of the Cold War this is no longer the case. (Paul Burkett

and Martin Hart-Landsberg, Development, Crises and Class Struggle:

Learning from Japan and East Asia (New York: St. Martin’s Press,

2002.)

38

market societies and bureaucratic central planning can be

conceived.21 While there is not space to examine their

alternatives in detail, some general features can be

mentioned:

* Decisions regarding the overall level of new

investment and the most pressing social priorities

(including the proportion of resources to be devoted to

the production of free public goods) should be made by

democratically accountable agents on a variety of

levels, from the global to the local. This would

remove both the tyranny of the valorization imperative

and the structural tendency to overaccumulation crises.

* Workers should have a right to employment, and within

workplaces managers must be accountable to those

subject to their authority. In this manner the

21 See Diane Elson, “Market Socialism or Socialisation of

the Market,” New Left Review172 (1988): 3-44, and David

Schweickart, Against Capitalism, Cambridge: Cambridge University

Press (1993) and After Capitalism, Lanham, Maryland: Rowman &

Littlefield, 2002.

39

structural coercion and lack of deliberative democracy

defining the capital/wage labor relation would be

removed.

* While markets may play a central role in the

allocation of consumer goods and producer inputs,

capital markets should suffer the fate of slave

markets. With the possibility of speculating on

capital assets removed, no tendency to “casino

capitalism” can arise. And the “exit options” that

necessarily tend to undermine deliberative democracy in

capitalism would be eliminated.

* Particular regions must have at least a prima facie

right to new investment funds proportional to their

population. Scientific-technological knowledge must be

treated as a free good. Both measures would help rule

out the emergence of a dominant tendency towards uneven

development.

It would be foolish and arrogant to think that

philosophers today could dictate the set of institutional

forms that would adequate embody the moral equality

40

principle in detail. But Buchanan’s skepticism on the level

of ideal theory goes far beyond this justified modesty. He

explicitly argues that social philosophers today should not

concern themselves at all with the project of conceiving an

alternative to global capitalism. In his view they should

devote themselves entirely to the reform of the present

social order. His own normative principles, combined with

an acknowledgement of certain essential determinations of

global capitalism, show that this accommodation to the

ideological status quo is not justified on the level of

ideal theory.

What implications, if any, follow for non-ideal theory?

Non-Ideal Theory

The task of non-ideal theory is “to guide our efforts

to approach (the) ultimate targets . . . by setting

intermediate moral targets, as way-stations on the path

toward the ultimate standards laid down by ideal theory”

(60-1). Given Buchanan’s skepticism regarding these

“ultimate standards,” however, he concludes that “we should

focus on ascertaining which principles, if implemented,

41

would produce moral improvements in the particular system

that now exists” (67). He terms this approach to non-ideal

theory “progressive conservativism”:

By ‘progressive conservatism’ I mean that the theory

should build upon, or at least not squarely contradict,

the morally acceptable principles of the existing

international legal system. The most obvious reason

for this requirement is that satisfying it will

generally contribute to the accessibility of the

theory’s proposals, assuming that the most powerful

participants in the existing system are not likely to

support radical and rapid change” (63).

If the central thesis of political economy, the thesis

that money in capitalist society is in principle no more

than a generalized means, were granted, it would be

plausible to hold that there are no limits to the reforms

possible within the set of production and property relations

defining capitalism. But this thesis does not hold, and

there are such limits. It is not possible even in principle

for global order based on capitalist social relations to

42

make human flourishing its immanent end. It is not possible

to institute the “equal worth of liberty” and “truly fair

equality of opportunity” if the capital/wage labor relation

is in place. Nor is it possible to abolish the systematic

tendencies to overaccumulation crises, “casino capitalism,”

or uneven development, given the social forms defining

global capitalism. This implies that the “ultimate targets”

of ideal theory must aim at the construction of an

alternative to the contemporary social order. By limiting

the horizon of non-ideal theory to the “existing

international legal system” progressive conservatism ignores

these “ultimate targets,” despite the fact that the most

fundamental task of non-ideal theory is “to guide our

efforts to approach (these) ultimate targets.”

Of course, no sane person holds that a radical rupture

from the social relations defining global capitalism is a

realistic possibility in the immediate future. To refuse to

endorse any practical proposals short of this rupture is to

condemn oneself to utter political irrelevance. Buchanan is

completely correct to insist on this point, and many of his

43

own proposals provide an excellent starting point. But his

unwarranted narrowing of the horizon of non-ideal theory is

responsible for four serious deficiencies.

First, Buchanan’s progressive conservatism apparently

grants “the most powerful participants in the existing

system” de facto veto power over the proposals formulated

within non-ideal theory. But all major advances in the

institutionalization of human rights have been bitterly resisted by the economic

and political elites of the day. These advances occurred primarily as

a direct result of struggles “from below” that forced ruling

elites to acquiesce to demands for reform. Progressive

conservatism would have discouraged calls to

institutionalize rights of workers to organize, universal

suffrage, and so on, in periods in which “the most powerful

participants in the existing system” were not likely to

support these proposals. If this path had been taken, the

movements from below would never have attained critical

mass, and the institutionalization of the rights in question

would never have occurred. Since Buchanan affirms the

44

institutionalization of these rights, he falls into a type

of pragmatic contradiction here.

Second, many of Buchanan's specific proposals are in

tension with the precepts of his own progressive

conservatism. He calls for “more humane international labor

standards, trade agreements designed in part to mitigate the

disadvantages of poorer countries, policies regarding

donations and favorable loan terms for developing countries

designed to ensure that the benefits are spread among all

citizens, international laws that distribute the burden of

environmental protection fairly . . . [and] an international

intellectual property rights regime that encourages the

wider distribution of biotechnologies that contribute to

human health” (399-400).22 Assuming we are talking about

substantive reforms rather than window-dressing for public

22 Parenthetically, it is worth noting that these reforms go

far beyond seeking to ensure minimal subsistence. It is to

Buchanan’s great credit that his commitment to the moral

equality principle trumps his professed minimalist account

of global distributive justice in non-ideal theory.

45

relations purposes, there are few if any items on this list

that “the most powerful participants in the existing system”

are likely to support today or in the foreseeable future,

unless they are forced to do so. They (rightly) fear that

such proposals are bound to set off the “radical and rapid

change” that progressive conservatism is explicitly designed

to avoid. The framework of Buchanan’s non-ideal theory and

its substantive content do not cohere; “progressive

conservatism” does not merely sound like an oxymoron.

The main task of non-ideal theory must be to contribute

to the formation of massive global movements from below

dedicated to struggle for substantial reforms in the face of

predictable and fierce opposition from political and

economic elites. A third shortcoming of Buchanan’s

contribution to non-ideal theory is that its rhetorical

structure adds to the already immense difficulties of this

project. His book is in effect an appeal to individuals in

wealthy regions to fulfill the moral duties they have to aid

individuals in poor regions of the global economy. Appeals

to moral obligation may have considerable motivating force

46

in certain contexts. But they will always have less force

than appeals in which self-interest and solidarity are

thoroughly entwined. A non-ideal theory informed by the

essential determinations of global capitalism should employ

both types of appeals. Those who do not own or control

significant amounts of capital in wealthy regions themselves

profoundly suffer from a global order in which capital

accumulation is the immanent end, substantive equality of

opportunity and political equality are systematically ruled

out, and tendencies to overaccumulation crises, “casino

capitalism,” and uneven development are inherent in the

dominant social forms. In this context an adequate non-

ideal theory should include an appeal to their material

class interests. It should not be based solely on abstract

moral imperatives addressed to individuals in abstraction

from their concrete class position.

Finally, Buchanan categorizes states in wealthy regions

as the world’s great defenders of human rights, and he bases

his non-ideal theory upon this categorization to a

considerable extent.23 But hegemonic states play a crucial

47

role in the reproduction of a capitalist global order that

is in principle incompatible with the adequate

institutionalization of the moral equality principle. The

military and financial power of these states has been (and

can be rationally expected to continue to be) predominately

devoted to the maintenance of a system in which the ends of

capital trump human ends, substantive equality of

opportunity and political equality are systematically ruled

out, and inherent tendencies to overaccumulation crises,

“casino capitalism,” and uneven development remain in place.

In this context an adequate non-ideal theory must challenge

the moral authority of these states, not enhance it. Here

too a feature of Buchanan’s non-ideal theory undermines

effective struggles for the reforms he himself proposes.

Here again he misidentifies the main agents of those

struggles, which predominately have been (and can be

rationally expected to continue to be) social movements from

below. And he too he fails to acknowledge that his reforms

are transitional demands, that is, demands that can be met only

48

partially and precariously within the dominant economic and

political forms of the present global order.

Tony Smith

Department of Philosophy, Iowa State University

[email protected]

23 Buchanan suggests a moral legitimation for the existing

hierarchical inter-state system from this starting point:

“If it could be argued persuasively that the current

inequality among states actually contributes to improving

the system by enabling the more powerful states, most of

which happen to be strong proponents of human rights, to

impose higher standards for human rights, then it would not

be accurate to say that the inequality of power is morally

arbitrary” (322).

49