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R8ymond Plant 
Equality, Markets 
and the State 
Fabian Society 
No.494 
R8ymond Plant 
Equality, Markets 
and the State 
Fabian Society 
No.494 

Fabian Tract 494 

Equality, Markets and the 
State 

Chapter 
1 Introduction 1 
2 Equality and the New Right 2 
3 The Value of Liberty 5 
4 Equality, Liberty and Decentralisation 10 
5 Equality in Hard Times 16 
6 The Nature of Socialist Equality 24 

Raymond Plant is Professor of Politics at the University of Southampton, and 
is currently at Nuffield College, Oxford, where he is working on problems of 
democratic socialist thought, particularly centred around the legacy of Tony 
Crosland. He is the author of numerous articles and five books, including 
Community & Ideology (1974), Political Philosophy and Social Welfare (1981) 
and Equality (forthcoming 1984). He contributed the essay on "Democratic 
Socialism and Equality" to the Fabian collection The Socialist Agenda: 
Crosland's Legacy (eds. David Lipsey and Dick Leonard, 1981 ). 

This pamphlet, like all the publications of the Fabian Society, represents 
not the collective view of the Society but only of the individual who 
prepared it. The responsibility of the Society is limited to approving the 
publications it issues as worthy of consideration within the Labour 
movement. 

January 1984 
ISBN 7163 0494 5 
ISSN 0307 7523 


Designed &oprinted by Blackrose Press (TU) 
Typeset by Range Left Photosetters (TU) 


I. INTRODUCTION 
After the recent election defeat there is no point in rushing into detailed 
policy pronouncements. We need rather to reflect upon the vision of 
society which, as socialists, we seek to represent; to achieve greater 
clarity about this vision to enable us to argue more persuasively for it; and 
to defend it more successfully than in recent years against the powerful 
counter attack which has been mounted by the new right. If the experience 
of the last four years has taught us anything, it is that some kind 
of ideological clarity and conviction can galvanise political parties. 

The current political and intellectual 
climate is deeply hostile to egalitarian 
ideas, and it is against this bleak background 
that the socialist commitment to 
equality has to be reassessed and restated. 
Equality, in its legal, political, social and 
economic aspects, remains the distinctive 
socialist value. Other political parties and 
movements can lay some legitimate claim 
to uphold the other values of the radical 
creed -liberty and fraternity; it is however 
equality which for the socialist is the instrument 
for extending individual freedom 
and securing a greater sense of fraternity. 
Accordingly, this pamphlet is about the 
value of equality and does not present a 
detailed set of strategic proposals for 
achieving it; although, as I shall try to 
show, the mixed record of Labour governments 
in the sphere of equality is, in part, 
the result of a failure to confront directly 
what might be called the ideology of inequality, 
and to have sufficient confidence 
in the moral claims of greater equality to 
act more directly on marked inequalities 
of wealth and income. 

The conversion of a large section of the 
Tory Party to monetarism and neoliberalism 
is an indication of the strength 
of these ideas, and however malign their 
influence may be, no one can deny the role 
that they have played in giving the government 
a strong sense of identity and conviction. 
It is also these ideas which form 
part of the intellectual and political background 
against which the egalitarian 
socialist must struggle. The ideology and 
practice of neo-liberal monetarism within 

the Conservative Party is profoundly anti-
egalitarian and its influence seems to be 
growing; witness for example Dr. Owen's 
speech at the SDP Conference in Salford 
and his subsequent article in the journal of 
the Institute of Economic Affairs, the 
intellectual centre in Britain for the dissemination 
of neo-liberal values. 1 It has to 
be said at the outset that many of these 
ideas are very persuasive and can only be 
rebutted by extensive argument. This 
pamphlet can only make a small contrib.ution 
to a task in which many will have to 
engage if the moral claims of equality are 
to come to be seen as persuasive as they 
once were to the respective generations of 
Tawney and Crosland. 

The strategy of the pamphlet is as 
follows: firstly I shall discuss ·the response 
of egalitarianism to a range of currently 
popular neo-liberal arguments; I shall 
then look at the relationship between 
equality and liberty and decentralisation. 
Problems with economic growth obviously 
pose problems for egalitarian strategies 
and I shall next look at these. During these 
discussions I shall operate with a none too 
specific conception of equality, and in the 
final sections of the pamphlet I shall go on 
to consider what sort of conception of 
equality is morally defensible; but I hope 
that the general structure of this will 
emerge fairly clearly from earlier elements 
of the argument. It is central to the whole 
point of the pamphlet that it is no longer 
sufficient for socialists mer~ly to cite facts 
and figures about inequalities and expect 
the moral demands which these make on 


2 ------------------------------------------------------


governments to be obvious. The present basis of socialism which has become overgovernment's 
attitude to the Black Report laid by a pragmatic, technical and man-
on inequalities in the NHS demonstrates agerial approach to basic political issues. 
this. We have to become clear and more This is no longer adquate. "Conviction 
persuasive about the moral demands politics" from the Tories force us to re-
which inequalities make upon our con-consider and redefine the basis of our own 
sciences, and to rediscover the ethical beliefs. 

2. EQUALITY AND THE NEW RIGHT 
Equality and the Market 

The neo-liberal critique of egalitarianism has a number of strands which 
need to be disentangled if they are to be subjected to clear criticism. This 
is in some respects a new task for socialists. When previous statements 
about the nature ofsocialist equality were produced, for example by Tony 
Crosland in the 1950's, the market-based neo~liberalism of figures like 
Hayek and Friedman was on the very margins of politics. The post-war 
Conservative governments had accepted the constraints on the market 
imposed by the welfare state, the power of the unions and the management 
of the economy with Keynesian techniques by the government. In 
our day however these constraints are being challenged by monetarists, 
and the intellectual roots of their market-based approach are to be found 
in the writings of Hayek and Friedman. In this pamphlet I shall dwell 
mainly on Hayek because his views are more systematic and sophisticated, 
and in particular I shall be concentrating on his recent book, The 
Mirage ofSocial Justice. 2 

Hayek argues that egalitarian social jus-to pursue a goal which is illusory and 
tice, or for that matter any attempt to cannot be achieved it will become prey to 
secure social justice on whatever con-the resentment of individuals and groups 
ception, mistakes in a fundamental way whose distributive share does not match 
the nature of economic relations between their own subjective view of what they 
individuals. We have no adequate or deserve. The pursuit of equality and social 
generally accepted standard by which we justice will create expectations which cancan 
judge the justice or injustice of par-not possibly be met and this is bound to 
ticular distributive shares; the pursuit of create a crisis of legitimacy and authority. 
one particular conception of justice is The only solution is for the government to 
bound to lead to a highly collectivised and opt out of the distributive arena altogether 
authoritarian state and hence is incom-and leave the outcomes of the economic 
patible with personal freedom. It follows market intact. The state can only solve the 
from these points that the action of gov-problem of legitimacy by narrowing the 
ernment in seeking to create a more just range over which government exercises 
and equal society will have no moral authority. This means playing no part in 
legitimacy, and in so far as the state seeks the distributive arena and confining itself 


------------------------------------------------------3 


to the institution and maintenance of the 
framework of law within which individuals 
can live with the absolute minimum of 
coercion, and allowing them to pursue 
their own good in their own way. On 
Hayek's view therefore the results of 
economic activities are not to be constrained 
by moral principles. 

Coercion and Injustice 

What then is the basis of this fundamental 
and influential critique? The major, but 
perhaps the most abstract argument goes 
something like this: the attempt to impose 
distributive criteria on the market implies 
that market activities restrict freedom and 
cause injustice. The fact that it does is at 
the heart of the socialist's critique of the 
market as an allocative institution. Because 
of the large disparities in income and 
wealth which markets will produce the 
socialist will want to argue that the freedom 
of the worst off members of the 
society will be restricted vis-a-vis that of 
the better off. In addition those who come 
bottom of the hierarchy of income and 
wealth will be seen as suffering from an 
injustice. Hayek decisively rejects both of 
these socialist assumptions. It is central to 
his argument that coercion and injustice 
can only occur as the result of deliberate 
action -for example when person A 
threatens B or interferes with his rights. 
However in Hayek's view the outcomes of 
economic transactions do not have this 
degree of intentionality. In the market innumerable 
individuals make small decisions 
to buy and sell in the light of their 
own necessarily restricted knowledge and 
in the light of their own view of their best 
interests. In a complex economy some will 
no doubt suffer as the result of the aggregate 
of the individual decisions which are 
made, but these outcomes were not intended 
by the individuals who took the 
decisions. Indeed the very complexity of 
the economic relations involved makes it 
impossible for them to act deliberately to 
cause harm in this way. The suffering 
which may well be an outcome of a par


ticular set of market transactions is an 
unintended , remote and unforeseen consequence 
of an aggregate of individual 
decisions which were taken for all sorts of 
different and limited reasons . 

Granted this view , the market cannot be 
criticised because it is coercive towards 
those who do not wield large economic 
resources. While these people may in fact 
suffer, they are not coerced because coercion 
has to be an intentional act. The 
freedom of the worst off is not diminished 
by their lack of resources. Similarly they 
do not suffer from injustice. Injustices 
equally are only caused by intentional 
actions. Therefore there is no moral basis 
for a critique of the market in terms of its 
coerciveness and injustice. The suffering 
which may be caused by the operation of 
the market is not to be rectified by claims 
to rights, justice and equality, but by 
charity and voluntary action. The provision 
of a welfare safety net whether by 
voluntary or political action is a gift to be 
bestowed not a right to be claimed. 

Perhaps two analogies will make the 
argument more clear. The weather is a 
natural phenomenon outside human control. 
The weather does not do anything 
deliberately and although it may cause 
suffering, it would be absurd to rail against 
it because it is coercive or because the 
suffering it causes is an injustice. These are 
purely naturalistic outcomes of a non-
deliberate process and the consequences a 
matter of luck as much as anything else. 
Similarly, if someone is born with a genetic 
handicap we would see this as a matter of 
luck and ill fortune rather than an injustice. 
In both cases the rights of those 
who suffer as a result of these non-
deliberate actions have not been infringed. 
They suffer from misfortune and 
they may indeed make demands on the 
virtues of charity and generosity, but none 
of this is a matter for rights or for justice. 
So it is with the market. While it is of 
course true that the market consists of 
human actions and is thus not like the 
weather or a genetic lottery, nevertheless 
they are similar in that in all the cases the 
outcomes were unintentional. Hayek 


4 -----------------------------------------------------------


makes this point as follows: 
" It has of course to be admitted that the 
manner in which the benefits and burdens 
are apportioned by the market 
mechanism would in many instances 
have to be regarded as very u.njust if it 
were the result of a deliberate allocation 
to particular people. But this is not the 
case. Those shares are the outcome of a 
process the effect of which on particular 
people was neither intended nor foreseen. 
To demand justice from such a 
process is clearly absurd, and to single 
out some people in such a society as 
entitled to a particular share evidently 
unjust. "3 

It is perhaps worth noting in passing that 
this argument would apply to any theory 
of distributive justice and not just those 
favouring socialist criteria of distribution. 
If we operated with a meritocratic notion 
of distribution, favouring merit and 
desert, the same arguments would apply. 
The market does not and cannot, in 
Hayek's view, distribute according to any 
particular set of moral principles, and it is 
a deep illusion to think that it can. So 
conservatives and liberals who extol the 
market because it rewards those with most 
ability or who are more deserving in some 
way are, in Hayek's view, as mistaken as 
socialists. A free market rewards market 
value and nothing else, on what X can sell 
to Y not on the basis of X's moral qualities 
-whether they are deserts or needs. No 
doubt there is some relationship between 
rewards and talent in a market, but this is 
highly imperfectly correlated and certainly 

·cannot be organised. Luck and windfalls 
are ineliminable aspects of free markets, 
and luck is as likely to play a role ih 
entrepreneurial success as ability. There 
can therefore be no moral justification of 
markets on a meritocratic basis and no 
socialist critique of them as coercive and 
causing injustice. The outcomes of free 
markets are in principle unprincipled. 

However, even if we accept the bulk of 
what Hayek says about the fundamental 
nature of market transactions between 
individuals, it does not follow that his 

conclusions are valid. The egalitarian response 
to the so called naturalistic outcomes 
of the market is not to concentrate 
on how they were caused but on how we 
respond to them . The weather may be a 
naturalistic phenomenon but we make 
collective efforts to avoid its ravages. 
Handicap may not be the result of deliberate 
action but injustice and justice come 
into the picture when we consider the 
response of society to these misfortunes. 4 
Justice and injustice are matters of our 
attitudes and not just causation. It follows 
from Hayek's argument that the misfortunes 
which individuals experience in 
the market are unmerited and undeserved; 
surely in these circumstances 
the question of justice arises in our response 
to misfortunes for which the individual 
bears little or no responsibility. 

The second point is that while the 
market transactions are unintentional they 
may, like the weather, be predictable in 
that misfortunes are likely to fall heaviest 
on those least able to bear such burdens. 
Those groups in society which are best 
equipped with resources, economic knowledge 
and entrepreneurial skills are still 
liable to be the groups most likely to 
benefit from the operation of the impersonal 
forces of the market. The impersonal 
market does not distribute its 
benefits and burdens in a wholly random 
way. If this is so, then there is a place for 
the egalitarian's question of whether there 
is a justifiable moral basis for the burdens 
of market activity falling where they tend 
to do, on individuals and groups who are 
least able to bear them. Questions of 
justice and injustice can therefore be 
raised about markets and their outcomes, 
particularly in circumstances in which 
current right-wing ideology is to encourage 
market forces while being callously 
indifferent to the question of 
whether individuals have the resources 
necessary to make their wants and desires 
effective in the market place. 

Equality and Personal Freedom 

These points do not of themselves defuse 


the power of market ideology and we must 
turn our attention to other aspects of the 
Hayek/Friedman critique of socialism 
which may prove to be-more intractable. 
One of the other major themes of this 
critique is that equality is incompatible 
with personal freedom and that markets, 
because of the ranges of choice which they 
allow to individuals, are the only means of 
allocation compatible with the freedom of 
citizens. We need to take both aspects of 
this critique seriously for several reasons. 
In the first place many socialist egalitarians 
have themselves argued that there is a 
trade-off to be made between liberty and 
equality; gains in equality have to be set 
against limitations on personal freedom , 
and there would come a point at which we 
would no longer want to trade off a large 
amount of individual freedom for a small 
gain in equality. Politically this is perhaps 
the criticism which puts the egalitarian 
most on the defensive. Many Social 
Democrats, for example, have expressed a 
belief in greater equality but have been 
unwilling to contemplate action against 
private education and medicine on the 
grounds that this would be too extensive 
an interference with the individual's freedom 
to save and spend his money in his 
own way. This kind of criticism requires 
that we become very clear about our view 
of the relationship between equality and 
liberty. 

The second form of the libertarian 
critique of egalitarian socialism is that it 
would require an extensive, interfering 
and bureaucratic state to maintain it. Such 

a state would have insidious overtones in 
that individuals would depend upon state 
officials rather than free markets for their 
distributive share and would be turned 
into clients of bureaucracies rather than 
robust citizens expressing their preferences 
in the market. Again this criticism 
has to be taken seriously because it also 
strikes a very significant chord within the 
socialist tradition. We are now seeing 
within the socialist movement a critique of 
the extensive state depending upon the 
collectivist Webb/Fabian tradition, and a 
growing interest in the values of decentralisation 
and fraternity as developed 
by socialists such as William Morris, 
Douglas Cole and other guild socialists. 5 

This emphasis upon decentralisation 
does seem to touch a public mood, and 
one on which Mrs Thatcher has capitalised 
effectively in her rhetorical onslaughts on 
bureaucracy and the civil service, even 
though this enthusiasm is belied by the 
extraordinary centralising tendencies of 
her Environment ministers in the field of 
local government. It has also been important 
in the development of the stance of 
the SDP which has highly elaborate decentralist 
proposals. Finally we have to 
take the view seriously that markets are 
the best way for the freedom of the individual 
to be secured, through his expression 
of his preferences in the market place, 
and that the great constraints which would 
be put on the market in the interests of 
equality would remove this arena of free 
individualism. 

3. THE VALUE OF LIBERI Y 
Liberty and Equality 

For the democratic socialist there is an intimate link between liberty and 
equality, but at the same time it has often been difficult for us to say with 
any precision what that link is. Perhaps the most productive line of 


6------------------------------------------------------


reasoning on this issue goes something like this. Other than as a kind of 
aesthetic ideal it is very difficult to see what the appeal of equality, taken 
as an end in itself, is supposed to be. Why should people be made more 
equal just for the sake of it? It is much more likely that greater equality is 
to be seen as a means to greater liberty, or greater fraternity, or greater 
welfare, which are ends which it seems to make more sense to pursue for 
their own sake. Equality is a method of securing other values rather than 
an end in itself. If this is so, then we have to explain how and why we 
expect liberty to be extended by equality when most of our critics seem to 
be convinced that the opposite is the case and how, ~fat all, the state 
organisation which greater equality might seem to require can be made 
compatible with the view that we value equality for the sake of liberty. 

It is argued by liberal critics of socialism 
that individual freedom , in the sense of 
being able to perform or not to perform an 
action without being prevented from 
doing so by others, is secured by a structure 
of negative rights: rights not to be 
interfered with, assaulted, coerced, or 
killed. Within this protected private bastion 
the individual is able to choose to live 
his own life in the way he pleases, and 
whether this life is one of passive lethargy 
or active commitment to various activities 
is a matter of total indifference to the 
state. The state should seek to secure that 
structure of rights which will prevent 
mutual coercion and then allow individuals 
to live their own lives in their 
own way, accepting with indifference the 
inequalities of outcome which will inevitably 
result from this. A negative view 
of freedom is central to the liberal tradition 
of political thought and underpins 
the liberal conception of political and 
economic freedom as well as their critique 
of socialist views of liberty. Any attempt to 
secure positive rights to resources, to income, 
to work, to welfare are bound to be 
coercive and to violate basic negative 
rights, which include my right not to have 
my property taken away if I acquired it 
legally and non-coercively. 6 

However, the obvious difficulty with 
this kind of view is that if we ask proponents 
of negative liberty why freedom is 
valued, the answer is that to be free of the 
arbitrary constraints of others will allow 
me to live a meaningful life, to live it in my 

own way, shaped by my own values and 
purposes. This is a noble ideal, and one 
which goes to the heart of what it is for a 
purposive creature to live a meaningful 
life. But while it may be that a structure of 
negative rights does secure equal liberty in 
that it defines the same limits of non-
coercion in the same way for all, it does not 
secure an equal or even fair value of 
liberty. In order to live a purposive life 
shaped by my own values and not those of 
others I need opportunities and resources 
to choose my own way of life and values. 
The limitations on individual freedom are 
not just those imposed deliberately by the 
intentional actions of others and which the 
liberal tradition rightly wishes to resist and 
restrict, but also those limitations which 
are imposed by natural differences of birth 
and genetic inheritance, together with 
those which are the result of human action 
whether deliberate or not, in the field of 
family background, economic resources, 
welfare and education. The positive resources 
which individuals need to be able 
to live their own lives in their own way 
cannot be secured by a set of negative or 
procedural rights, important though these 
are. They require rather the marshalling of 
economic and social resources to enable 
individuals to live the kinds of lives which 
they want to live. The liberal is interested 
in equal liberty; socialists are concerned 
with trying to secure the distribution of 
resources which will mean that liberty is of 
roughly equal value to all persons. The 
worth of liberty to individuals is related to 


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their capacities, opportunities and resources 
to advance the purposes which 
they happen to have. Those with greater 
income and wealth, fortunate family background 
etc. will, on the whole, be able to 
pursue those things for which we value 
liberty more effectively than the person 
who does not enjoy these benefits. It is 
because we value liberty for all that we are 
concerned to secure a greater equality in 
the worth of liberty. 

In this sense, therefore, redistribution 
will be concerned with the general class of 
goods which are likely to be necessary for 
the pursuit of any plan of life or purposes 
liable to be pursued in our pluralist 
society. These goods are almost certainly 
going to include income and wealth, education, 
health care and welfare services. 
These goods correspond to basic needs, 
the means necessary for us to pursue our 
own plan of life and to advance our purposes. 
Understood in this way, equality is 
concerned with a more equal distribution 
of these primary goods to secure a fair 
value for liberty. In so far as this reduces 
the very high worth of liberty of those who 
are already better off, it is a legitimate 
restriction and one which we, as socialists, 
have to face squarely. If the better off 
person values liberty and his education, 
income, wealth etc. as a basic means 
whereby his freedom can be realised, then 
it is difficult to see how he can respect his 
fellow citizens and not agree that those in 
worse circumstances, for which they have 
modest responsibility, should have the 
worth of their liberty improved, even at 
the cost of some diminution of his own. 
Except in conditions of high economic 
growth the greater equality in the worth of 
liberty cannot be attained without a cer


tain amount of levelling down. We have to 
be clear about this, and obviously this 
situation means that we have to be even 
more confident about the moral ground of 
equality. 

Political Liberty and Equality 

In our ociety equal political liberty ts 

taken for granted. While political philosophers 
may argue about the exact way in 
which equal political rights are to be 
grounded, for the citizen at large the issue 
is uncontroversial. It is only when we come 
to the sphere of social equality that controversy 
arises, and this is because social 
equality articulates a claim to a share of 
goods which are the objects of competition 
and are in short supply. However, 
it is a naive and mistaken view, although 
one characteristic of !iberalism, that 
formal political equality can exist independently 
of a high degree of material 
inequality. This point has been made very 
forcefully by the American philosopher 
John Rawls in his book, A Theory of 
Justice: 

" Historically one of the main defects of 
constitutional government has been the 
failure to insure the fair value of political 
liberty. The necessary corrective 
steps have not been taken, indeed, they 
never seem to have been seriously 
entertained. Disparities in the distribution 
of property and wealth that far 
exceed what is compatible with political 
equality have generally been tolerated 
by the legal system . . . Moreover, the 
effects of injustices in the political system 
are much more grave and longer 
lasting than market imperfections . .. 
Thus inequities in the economic and 
social system may soon undermine 
whatever political equality might have 
existed under fortunate historical 
conditions. "7 

This can prove to be a powerful defence of 
social equality if it is linked in a defensible 
way with uncontroversial equality of political 
rights. 

Equal liberty understood in negative 
terms will have unequal political results. 
While equal political liberty may be defined 
in terms of procedural rules the fact 
is that without a greater equality of 
material resources political liberty is likely 
to be of unequal worth. Studies in political 
science have demonstrated the differential 
levels of political participation and political 
influence generally between groups 


8-------------------------------------------------------


with different command of resources. 
Universal suffrage grants all citizens the 
same voting rights but it is very clear 
indeed that the wealthy will have more 
ability than the poor to influence the 
selection of candidates, the media, public 
opinion and political authorities. Politically 
equal liberty can turn very easily 
into an unequal worth of liberty, and the 
same arguments hold true within the legal 
system: the rich and the poor have the 
same rights, but differences of wealth at 
least allow better counsel to be employed, 
not to mention the questions of whether 
the better off members of society can in 
fact secure laws which favour their interests, 
or whether they can exercise influence 
upon what kinds of crimes are 
prosecuted (for example in the field of tax 
evasion). The same is also true in terms of 
the equal right to free expresssion. Those 
in better circumstances are able to utilise 
this liberty more effectively and it is 
greater value to them. If we see greater 
equality as equalising the worth of liberty, 
and thus link our defence of equality with 
the defence of the equal worth of liberty, 
we shall be on stronger ground and have 
clear resources for resisting the libertarian 
assault on equality. The libertarian's defence 
of liberty is disingenuous because it 
neglects the resources and opportunities 
which make this defence of equal liberty of 
equal value for all citizens. The egalitarian 
is concerned with the maximisation of the 
worth of liberty between individuals, although 
as we shall see later this may in 
certain circumstances mean that some 
inequalities are to be seen as legitimate by 
egalitarians. 

Equality and the Liberal State 

This kind of argument also enables us to 
respond to other aspects of the neo-liberal 
critique of egalitarian politics: namely that 
if the state is to treat citizens with equal 
respect, as surely egalitarians would wish, 
then it is morally wrong for the state to 
impose any specific conception of the good 
life on individuals. Since individuals are 

liable to differ over their view of the good 
life the state cannot respect its citizens as 
equals if it seeks to impose one view of the 
good as opposed to another. Again the 
liberal view here is that the state should 
seek only to secure the framework of 
mutual freedom within which each individual 
may pursue his or her good in 
their own way. However if the earlier 
argument holds, we can say that greater 
equality in the provision of resources is not 
designed to secure a particular conception 
of life, so much as to secure the equal value 
of liberty to individual citizens to enable 
them to pursue their own good in their 
own way. Indeed this argument could be 
strengthened by saying that if the liberal is 
consistent in his adherence to the principle 
of equality of respect, he cannot in fact 
justify arrangements under which some 
individuals will have far greater resources 
to pursue their own conception of the 
good. A strongly unequal distribution of 
the means to liberty could only be justified 
if the state took a distinctive moral view by 
holding that some individuals were intrinsically 
more deserving--or that their 
purposes were intrinsically more valuable 
than others -a strategy which would be 
incompatible with the idea of equality of 
respect with which the argument started. 

However, there is still a genuine dilemma 
involved in the attempt to generate 
greater equality as a means to liberty. The 
whole point of this strategy is to secure a 
wider distribution of the resources needed 
to exercise liberty and · thus to secure a 
more equal value of liberty between citizens, 
and yet the form of state action 
which may be required to secure this may 
well restrict the range of choices open to 
individuals, for example by prohibiting 
private schooling or private hospital treatment. 
This seems to involve a paradox. 
Liberty involves the freedom to choose 
between alternatives, to enable the individual 
to choose the sort of life which 
suits him. It is thus incompatible with the 
state imposing a particular pattern of life 
on individuals. Without the ability to 
choose between genuine and non-trivial 
alternatives there is no freedom. At the 


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same time an egalitarian political regime is 
likely to involve some restriction of the 
range of choice open to individuals. Thus, 
the argument goes, the defence of equality 
as a means to liberty is a sham. 

There are perhaps two ways of responding 
to this type of criticism. The first 
is to argue that the kind of freedom which 
is envisaged in this criticism is a freedom to 
choose an outcome which is likely to be of 
disadvantage to others, and to weaken the 
value of liberty to others over a not inconsiderable 
period of their lives. The 
freedom to choose a private education, 
with all the non-educational advantages 
and influences which that can bring, is not 
at the same level as spending money on 
beer and cigarettes (which is often the 
preferred analogy -and this shows something 
about the attitudes of those deploying 
the argument) . Rather this is a choice 
which secures a positional advantage over 
others in the distribution of one of the 
most basic resources and opportunities for 
the exercise of freedom. The egalitarian is 
only interested in restricting that range of 
choice which, if exercised, would enable 
an individual to impose on others a lower 
value on their freedom, by devaluing the 
basic means which they have to pursue 
their ends. The egalitarian is therefore 
only interested in those restrictions which 
will have an adverse effect on the possibilities 
which others have to make their 
freedom effective, to restrict those choices 
which will lead to an unequal value for 
freedom. It is no part of the egalitarian 
strategy to seek to impose some uniform 
outcome, some uniform pattern of life. In 
fact the opposite is true. He is looking for a 
society in which all individuals will have 
the best possible chance of expressing 
their own individuality, their own conception 
of the good, and is aware that this 
requires greater fairness in the value of 
liberty between free citizens. Why is it that 
the better off assume that when those who 
are less well circumstanced have a fairer 
share of the resources to enable them 
effectively to pursue their own freedom , 
that it will issue in some dull conformity? It 
might well be the opposite that will be the 

case. 

However, the egalitarian ought to learn 
something from this criticism: namely that 
egalitarian policies should always be 
designed to secure and promote the 
greatest amount of freedom possible within 
the institutions which it endorses. For 
example, if we are to have a state education 
system on egalitarian grounds, 
there can be no possible basis for restricting 
the opportunities for schools to 
have diverse patterns of subjects of 
specialisms and to be innovative so long as 
these are not secured at the expense of 
others. Similarly freedom in the field of 
social policy suggests services in cash 
rather than in kind to give those in receipt 
of the services the widest discretion to 
spend their money in their own way and to 
avoid as far as possible the dependency 
and paternalism which might come from 
the provision of services in kind. It might 
also suggest the greatest amount of involvement 
and negotiation between the 
givers and recipients of services to ensure 
that where the provision is in terms of 
service rather than in cash the greatest 
degree of freedom should be allowed to 
individuals in their consumption of the 
service. 

There are obvious counter arguments to 
this view. It might be argued for example 
that the provision of resources in cash will 
be no gain in equality if the family concerned 
has no real decision-making competence. 
In this sort of situation the critic 
might say we ought to forget about abstract 
arguments about freedom and the 
right to fail and provide the resources in 
kind which most fit the family's needs. The 
critic may well recognise that there will be 
a high degree of paternalism in this view 
but he will claim that this is the most 
realistic position to take. The difficulty is 
however that it leaves the egalitarian wide 
open to the kind of argument developed 
by David Marquand recently: 

" ... if the state takes my money away 

from me to give it to someone else, my 

freedom is thereby diminished. Ifthose 

to whom it is given receive it in the form 

of cash, which they spend as they like, 


10 _____________________________________________________ 


and if there are a lot of them and only a 
few of me, there may well be a net gain 
in freedom. Ifthey receive it in the form 
of services, in the direction of which 
they have no say and over the allocation 
of which they have no control, there will 
be no gain in freedom, though there 
may still be a gain in equality. "8 

This criticism has to be taken very 

seriously if the defence of equality is 

linked to liberty as it is in this pamphlet. 

My own view would be that granted the 
existence of families with poor decision-
making capacities, which may in turn be a 
reflection of their circumstances, the role 
of aid in kind should always be with the 
greatest amount of discussion with the 
family and where possible, social workers 
should act as aids to making decisions. 
There is nothing inherently demeaning in 
this; after all the very rich employ investment 
consultants! 

4. EQUALITY, LIBERIY AND 
DECENTRALISATION 
Markets and Choice 

It is often argued by defenders ofmore or less unconstrained markets that 

the market is the allocative mechanism most compatible with freedom of 

choice and egalitarian mechanisms of allocation are bound to have 

adverse effects upon this. Milton and Rose Friedman have called their 

recent T.V.-based book Free to Choose, and in his recent defence of 

markets in his article for the journal of the Institute ofEconomic Affairs, 

David Owen argues that markets are like continuous referenda.9 

Individuals make use of their limited knowledge, their acquaintance with · 

prices etc., to register their preferences and to make effective their own 
demands and no-one else's. Samuel Brittan has described market institutions 
as being a form of participation without politics. Because markets 
register individual choices and are therefore the nearest economic 
· mechanism to democratic political order, markets should be extended to 
more and more areas of life, to make the consumer and not the bureaucrat 
the sovereign. In addition, markets are the most efficient ways of 
matching supply with demand. These two points about markets, freedom 

and efficiency constitute the major theoretical basis for privatisation. 

However there are major difficulties and these. The first is that despite what David 
untested assumptions about this position Owen argues there is one way in which 
despite its current, widespread attraction. markets are very unlike referenda. In a 
In the first place there are clear cases in referendum there is an absolute equality 
which the market limits choice, and we of political right: each person's vote counts 
could perhaps concentrate on two of for one and not more than one, whatever 


his resources or lack of them, whereas the 
'votes' registered as preferences in the 
market vary in their value. A wealthy 
person can register in the market a much 
broader range of preferences than a person 
who is less well off. We could only 
make the market analogous to a referendum 
if we were to go in for a major 
redistribution of the resources which affect 
how individuals are able to conceive of 
and register preferences, but this strategy 
would be indistinguishable from the egalitarian 
one, except in one respect. The 
current Social Democratic policy is to encourage 
markets in the economic sphere in 
the interests of freedom and efficiency and 
go in for redistribution in the field of social 
policy. However it is not at all clear that 
this is a coherent doctrine. If you accept 
the arguments about market efficiency, 
then presumably you also have to accept 
the inequalities which will result from the 
competitiveness and the incentives which 
will be necessary, on this view, to make the 
market efficient; these must put a very 
definite limit on the extent of the redistribution 
which is possible. It will certainly 
have to stop a long way short of the kind of 
equality Labour egalitarians from Tawney 
to Crosland, and more recently Hattersley, 
have proposed. 

In addition the whole conception of 
highly competitive and incentive-oriented 
markets combined with altruistic redistribution 
looks very unlikely. The kinds of 
values and attitudes which would be 
needed to sustain markets of the sort 
envisaged by Social Democrats fit very 
uneasily with the demands on altruism and 
the sense of justice which their re-
distributive measures call for. We should 
not be taken in by glib assertions that 
markets preserve freedom. They may do 
so in the most abstract sense, but not in 
terms of securing a fair value of liberty for 
each individual. It is rather like compelling 
a group of people to play football and 
being indifferent as to whether they have 
football boots. Unconstrained markets 
will not come anywhere near to securing a 
fair value of liberty to individuals. 

There is another sense too in which the 

market limits choice, and this is the sense 
in which the market cannot provide a 
framework within which strategic decisions 
can be made. For Hayek, Friedman 
and others part of the justification of the 
market is that it allows individuals with 
limited knowledge and imperfect information 
to record their preferences. That is 
to say the individual is able to make small 
decisions each of which is within his competence 
to make. What could be more free 
or more liberal than that? The trouble with 
small decisions however, as Hayek implicitly 
acknowledges, is that when taken 
together they may well have unintended 
consequences which the individuals 
making the decision did not foresee and 
would not have chosen had they known. 

This may seem a very abstract and 
rarified point but it is part and parcel of 
everyday experience. For example, I may 
live in an area in which there is a corner 
shop within walking distance which I use 
for convenience and a supermarket two or 
three miles away which I use together with 
the car for the week's shopping. Prices are 
lower at the supermarkets as their bulk 
purchases mean discounts from the suppliers. 
Obviously for any particular individual 
this arrangement is best for all 
concerned but the overall effect of rational 
individual choice, using the supermarket 
for most purchases and the shop only on 
occasion, is to drive out the corner shop 
which we all found convenient and did not 
wish to see disappear. The driving of the 
shopkeeper out of business was an unforeseen, 
unintended and unchosen consequence 
of rational behaviour in the 
market. It is an outcome which none of us 
wanted and none of us would have chosen, 
but it emerges as a consequence of our 
choices. 

It is very difficult on a very decentralised 
market basis to take rational strategic 
decisions which may be of great importance 
to the overall quality of our lives, 
and to make choices more important than 
the small decisions which are characteristic 
of the much vaunted freedom of 
choice of the market. The example which I 
have used may seem rather trivial but it is 


12------------------------------------------------------


in essence the one which bedevils the 
provision of public transport on a rational 
basis, and would also apply to the consequences 
of developing private medicine 
alongside NHS institutions. For example I 
may approve of the existence of the NHS 
in a general way but prefer private medical 
insurance for myself. If sufficient people 
do this, and given the inelastic supply of 
doctors and nurses, the demand from the 
private sector may well put up the price of 
the services of doctors and nurses in the 
public sector: this will either increase the 
cost of such services (to me as well as a 
taxpayer) , or lower the standards of such 
services, or restrict the services available. 
This may in turn affect the level of medical 
innovation in the NHS on which the 
private sector may also depend at least in 
the short term. None of these consequences 
would I have chosen had I been 
able to foresee them, but they are an 
unintended consequence of an aggregate 
level of choices. These are not arguments 
against markets as such but they do go 
some way to weaken the hold of the idea 
that markets are the bastion of choice. 
Sometimes strategic decisions overriding 
market considerations taken by democratic 
governments may well reflect the 
strategic choices of individuals rather than 
the tyranny of small decisions in the 
market. 

These strategic decisions are going to be 
far more crucial to the maintenance of an 
equal value to liberty than are the small 
decisions made in a market. So long as 
these more egalitarian decisions are taken 
by democratic governments there -is no 
reason to fear for freedom , particularly 
when as I have argued the planning or 
strategic decisions of governnents may 
well reflect people's more general choices 
taken in the polling booth rather than the 
unintended outcomes of small scale decisions 
in the market. 

Markets and Morality 

As we have seen it is central to the view of 
influential market-based theorists such as 
Hayek and Friedman that egalitarian social 

justice is a mirage which threatens individual 
liberty. Instead of seeking social 
justice we should cast off substantive constraints 
on markets, and so long as the 
market procedures are fair we should 
accept the outcomes of market transactions 
as morally legitimate, whatever 
they may turn out to be. On this view the 
market is neutral between political and 
moral principles; these are for each individual 
to determine for himself. Most 
market theorists regard this as one of the 
greatest strengths of 'markets, but there 
are weaknesses and attention has been 
drawn to these as much by non-Thatcherite 
Tories as by socialists. 

The basic difficulty is this. If, as the 
neo-liberals hope, the market is to come to 
dominate more and more of our lives, and 
welfare for example is to be turned over, 
as much as possible, to private insurance 
markets as the social market mentality 
now abroad in the Tory Party and the SDP 
would seem to require, then the market 
must have some legitimacy in the eyes of 
ordinary citizens, who will perhaps be 
unable to appreciate the complex economic 
arguments which favour markets 
(so we are told). Some kind of citizen 
commitment has to be mobilised behind 
the market, and this has to at least equal 
the weight of the loyalty spread throughout 
society to non-market institutions such 
as the NHS. Broadly speaking this legitimacy 
might be of two sorts. The first 
would be a material legitimacy, that 
markets can increase prosperity for all 
more effectively than a planned economy. 
It would do this by the 'trickle down' or 
'echelon advance' theory, that what the 
rich consume today will be available by the 
processes of economic growth to all tomorrow. 
This is legitimacy understood in 
terms of self-interest -we shall all be 
better off via markets than via socialism. 
However, as we shall see, as a theory of 
legitimacy this view is very vulnerable to 
the arguments developed by Fred Hirsch 
in The Social Limits to Growth , which 
show that for a fair class of important 
goods this promise is an illusion. However, 
for the moment I want to concen



------------------------------------------------------13 


trate on what might be called the moral 
legitimacy of markets. On this view citizens 
will have to be convinced that 
markets represent something important 
and morally valuable. 

I do not want to deny that markets are 
important and should be kept within a 
socialist society; rather the arguments I am 
seeking to deploy are aimed to weaken the 
idea that markets should be the dominant 
mode of allocation and that therefore 
egalitarian socialism is a threat to the 
values which markets represent. What 
then are these values and are they sufficient 
to secure citizen loyalty? The usual 
answer, as we have seen, is that markets 
secure freedom , and we have already seen 
grounds for doubting this in the sense in 
which it is usually put forward . Does it 
therefore have a more substantive moral 
basis? The answer to this is clearly no , as 
Hayek has the courage to admit. It does 
not secure social justice, whether understood 
in terms of need, desert, performance 
or anything else; it does not secure 
a fair worth of liberty; it does not secure 
equality. The market is neutral and 
amoral. Success depends upon luck as 
much as anything else, the luck of birth, of 
upbringing, of education, of being in the 
right place at the right time, and certainly 
not upon merit or desert. In the light of 
this meritocratic conservatives and liberals 
ought to be rather wary of linking their 
ideas with those of the market. 

In fact Hayek sees this. In The Mirage of 
Social Justice he argues that while the 
market does not reward merit or desert, or 
any other principle for that matter, most 
political defenders of the market believe 
that it does, and this is the basis on which 
the claims of the market are legitimated 
with the electorate. 1°Citizen allegiance to 
the market may thus depend upon the 
existence of false beliefs, which may at the 
same time be functionally necessary because 
citizens would not feel loyalty to an 
institution which was totally indifferent to 
their moral claims and capacities. This 
does not seem to be a very secure moral 
basis for the market, and if it cannot meet 
its promise of increasing prosperity, which 

hitherto may have disguised its indifference 
_to moral claims, its legitimacy may be 
very msecure. 

The dominance of markets can also be 
combatted by reflecting upon the basic 
elements of a more traditional socialist 
critique which could be developed. There 
may well be a place for markets in a 
humane society but they must be kept in 
their place because they encourage some 
forms of human behaviour rather than 
others, viz egoism over altruism, and 
rational calculation of advantage over 
trust. The wider market values extend the 
more they will displace these other attitudes, 
which may well be central for the 
operation of the market itself as much as 
for other social institutions. The second 
aspect of the argument is that the operation 
of markets is likely illegitimately to 
extend the range of goods which we want 
to turn into commodities because, in some 
admittedly vague sense, there is a feeling 
that to treat certain things as commodities 
is to undermine human respect and 
integrity. 

The point of these arguments, when 
taken together, is that there are substantive 
moral limits beyond which we would 
not want a market mentality to go and that 
the very legitimacy of markets depends 
upon them remaining within these limits. 
The first form of the argument is that the 
attitude of rational self-interest which 
market operations have to presuppose if 
they are to operate effectively has very 
definite limits, otherwise the defence of 
the free market itself becomes incoherent. 
For example, it is very difficult to give the 
rational egoist an answer to the question of 
why he should not seek subsidy, monopoly 
and other special privileges which, if 
generalised, would make the market work 
inefficiently. 11 Of course one could argue 
with him that these actions will not benefit 
society or the maintenance of the market 
in the long run, but without some restriction 
on egoism and orientation towards 
some notion of the public good it is difficult 
to see how these arguments could be 
persuasive. Rational egoism, devoid of a 
sense of the public good, makes for free 


14-----------------------------------------------------


riders, which in turn may make the market 
as a whole less efficient, although it will 
benefit the individual. Thus markets 
themselves run up against moral limits. 
Some shared moral values and some conception 
of the public good are needed to 
provide an environment within which the 
market can flourish . Not everything can be 
made a matter of competition and the 
recognition of these limits is a necessary 
condition for the market to operate 
legitimately. 

However, the second part of the argument, 
which has been deployed most 
recently in Richard Titmuss' book The 
Gift Relationship , looks at ways in which 
the sphere of markets can be seen to overstep 
the boundaries of moral legitimacy 
and despoil the objects which it seeks to 
turn into commodities. Titmuss' own 
example is blood for donation and how 
this altruistically given gift would be despoiled 
(and make less efficient) if it 
became a commodity to be bought and 
sold in the market. Titmuss points out that 
if human tissue does not present a definite 
limit to what can be turned into an 
economic commodity then nothing can. 
Most people would argue that in the case 
of buying and selling human tissue whether 
it be blood or body parts -the 
commercial mentality had overstepped its 
limits. But is there really a central moral 
difference between selling blood and 
kidneys which may be the means to life for 
others and other medical goods to satisfy 
the needs which they may have? Again, 
however vague and intuitive they may be 
there do seem to be very definite moral 
limits to markets in terms of the commercialisation 
of goods and services which are 
central to the life opportunities of individuals. 
Any sensitive defence of markets 
wiH make some reference to the general 
environment within which markets operate 
because, for the reasons which I have 
discussed in this section, it is very doubtful 
that markets can secure their own legitimacy. 
They do not necessarily protect 
liberty, they are indifferent to any distributional 
outcome, they may not be able 
to secure the echelon advance towards 

rising prosperity, and they may at some 
point begin to deplete the moral underpinnings 
upon which their own operations 
rest. Not all human values are comprehended 
in the freedom to buy and sell. 
Some sense of community and integration 
is an important ideal and it is indeed one 
on which the operation of the market in its 
sphere rests. 

Equality, Decentralisation and 
Community 

A major part of the attack of the new right 
and the SDP on egalitarian socialism is 
that the maintenance of equality would 
require a strong bureaucratic state, and 
this is a threat to personal liberty. This 
critique has also found echoes on the left. 
In this context the criticism has been twofold. 
On the one hand socialist libertarians 
have shared the right's worry that the 
statism of egalitarian policies would be a 
threat to liberty; on the other they have 
been concerned that the strong centralised 
state of an egalitarian society would be a 
threat to community. Community or grass 
roots socialism has been put forward as a 
response to this emphasis upon statism, 
and its advocates have drawn upon the 
decentralist tendencies in the cooperative, 
guild socialist, syndicalist traditions of 
socialist thought. This response to centralisation 
also seems to capture some of 
the public mood, which is held to be 
critical of the growth of state power, the 
role of bureaucracy, form filling etc. It is 
also natural enough that a decentralised 
approach to socialism seems appealing in 
the aftermath of an election defeat when 
the only paths open to genuine socialist 
advance seem to be in the local field. 

However, we should also bear in mind 
that this critique of the state can take a 
right-wing as much as a left-wing form: 
witness the growth of anti-tax parties in 
Scandinavia and the success of such movements 
in California. At home the criticism 
of the statism inherent in redistributive 
egalitarianism has been a marked feature 
of recent conservative and neo-liberal 


thinking. Indeed, in Face the Future David 
Owen argues correctly that the decentralist 
critique of statism is i~ danger of being 
monopolised by the Hayek right; he criticises 
the Fabian egalitarian tradition and 
particularly Anthony Crosland for being 
far too centralist in attitude. 

There is certainly a dilemma here for 
democratic socialists, but it is one in which 
hard thinking can easily be turned into 
sloganising. It is certainly true that the 
appeal of community and fraternity 
underlying the appeal to decentralisation 
is beguiling, but at the same time it is an 
almost indefinite one. I do believe that 
egalitarian strategies can be made compatible 
with decentralisation, but only up 
to a point and we may as well recognise 
this. Roy Hattersley was clearly right 
when he argued in his recent British 
Association Lecture that the egalitarian 
may well be committed to a greater use of 
state power tnan it is currently fashionable 
to confess. 12 

The basic problem with decentralised 
forms of socialism is that while it may be 
true that within relatively autonomous decentralised 
economic units -whether 
worker-owned cooperatives or whatever there 
may well be a high degree of equality 
of income, power and status, this does not 
address the question of relations between 
such cooperatives and the extent of possible 
inequalities between them. There are 
perhaps two forms which this problem can 
take. 

In the first place, in any system of 
autonomous enterprises, whether industrial 
or political, differences are almost 
bound to arise between such enterprises 
because of differences between internal 
efficiencies, the skills of workers and 
managers, accessibility to and relations 
with suppliers and consumers, the age and 
quality of equipment, consumers' choices 
and demands, decisions as to how the 
earnings of the enterprise are to be allocated 
between wages, bonuses, services, 
increasing employment opportunities, depreciation 
and investment. In short, 
without some redistribution between 
enterprises, the outcomes will be very 

IS 


similar to those within individualist 
markets with labour cooperatives or whatever 
replacing individuals. If as socialists 
we criticise the market for being indifferent 
to the distributive outcomes between 
individuals we cannot consistently neglect 
similar differences between autonomous 
groups in a decentralised socialist economy. 
If this is so, then it would seem that 
broadly speaking only two strategies are 
feasible. The first seems utopian, namely 
that the experience of decentralisation, 
equality within the workplace and a 
greater sense of fraternity will generate 
such altruistic impulses that cooperatives 
will voluntarily transfer some of their 
resources to less fortunate enterprises. 
Alternatively and more realistically, such 
redistribution would have to be effected 
by a centralised state in order to make the 
burden of redistribution equitable between 
groups. These arguments which 
have concentrated upon industrial enterprises 
would also apply with appropriate 
modification to decentralised political 
institutions and to social and public services. 
Granted the differences in prosperity 
and revenue bases between regions 
and localities, it is inevitable that inequalities 
in the provision of services will 
arise, and the attempt to equalise these 
can only be realistically achieved by the 
mediating power of the state. To repeat 
the point because it is important: we 
cannot criticise the private market for its 
inequalities and be indifferent to the inequalities 
produced in a decentralised cooperative 
economy. 

Of course, none of this should be taken 
to imply that community is not an important 
value and that the claims of equality 
or the public good should always override 
communitarian considerations13 ; but as we 
have seen there are difficulties with a grass 
roots or communitarian socialism, and it is 
an illusion to think that criticisms of state 
power in a redistributive welfare society 
can be deflected by invoking the values of 
decentralisation and community. However, 
a decentralist policy is perhaps most 
compatible with equality when we are 
considering power rather than income or 


16-------------------------------------------------


wealth or other material resources. It 
seems axiomatic that if we are to secure 
greater equality in the exercise of power, 
decision-making has to be centralised and 
shared on a broader basis. This is clearly 
true, and this form of equality is very 
important in securing the fair worth of 
liberty for the individual to decide to live 
his own life in his own way as far as possible. 
However, we should not be lured 
into thinking that power is independent of 

other forms of material inequality, so that 
it can be distributed more equally by decentralisation 
while leaving other inequalities 
in place. Wealth and income are very 
important political and industrial resources; 
it is naive to think that power can 
be decentralised and equalised without 
touching the broader framework of material 
inequality, which as I have argued 
may be very difficult to attack in a decentralised 
framework. 

5. EQUALITY IN HARD TIMES 
Growth and Equality 

It has been a central plank of Labour thinking about equality since the 
end of the war that economic growth is central to the achievement of 
greater equality. This argument has been put most elegantly by Tony 
Crosland in his Fabian pamphlet Social Democracy in Europe: 

''The achievement of greater equality without intolerable social 
stress and a probable curtailment of liberty depends heavily upon 
economic growth. The better ofT have been able to accept with 
reasonable equanimity a decline in their relative standard of living 
because growth has enabled them (almost) to maintain their absolute 
standard of living despite redistribution." 14 

The fiscal dividend of growth has enabled the position of the worst ofT to 
be improved without making the better ofT very much worse ofT. Granted 
the existence of electoral politics, how can the egalitarian argue for 
greater equality in a situation of very low or zero economic growth? In 
such a situation the egalitarian strategy seems to be a zero sum game in 
which in order for the worst ofT members of society to benefit by a 
significant amount, a large number ofelectors will have to be made worse 
off. Surely, the critic will argue, to advocate an egalitarian strategy in 
such circumstances will be electoral suicide. 

There are of course things which can be 
done in a period of low growth as Crosland 
recognised in his later writing. These would 
include paying attention to non-material 
inequalities such as inequalities of power, 
and concentrating limited resources upon 

those most in need. However, in the case 
of inequalities of power we have already 
seen that a good case can be made that 
reform here will have to take account of a 
diminution of inequality in other spheres 
oflife. Concentrating resources where they 


____________________________________________________ )? 


are most needed is obviously a rational 
policy in hard times but we ought to be 
able to say more than this. One of the 
problems with the egalitarian vision is that 
it poses as a rather profligate one, concentrating 
upon distribution and leaving the 
problem of production to be solved by 
other means. However it is central to the 
egalitarian view that it is a production 
philosophy as much as a policy for distribution 
and in this sense a more egalitarian 
society ought to be a more productive one. 
I shall leave consideration of this important 
point to the next section and concentrate 
here upon one or two specific ways in 
which growth and equality are linked. 

It is often argued that the unemployment 
of the past few years is not likely to 
be solved by greater economic growth. It is 
this, it is said, which makes the current 
unemployment more soul-destroying than 
in the 1930's. In earlier periods of depression 
the unemployed could look to an 
economic upturn, which would not be of a 
sort which would displace the particular 
skills they had but would rather create an 
increased demand for them and thus increase 
employment opportunities. However, 
it is argued that any future economic 
upturn now will not lead to dramatically 
increased employment prospects. New industries 
which might benefit from economic 
recovery are not likely to be particularly 
labour intensive, based as they will 
be on information technology, computers, 
robotics and the rest. If this is a correct 
prognosis, and I see no way at all in which 
we can decide this question at the 
moment, what are the consequences likely 
to be for socialist values and equality? 
Neo-liberals will of course argue that it is 
not the role of the government to organise 
the distribution of work opportunities if 
these are as restricted as some pessimistic 
forecasts predict. Those who fail to find a 
job in the shrunken job market suffer from 
bad luck and that is all. There is no right to 
work and no duty on the state to secure 
work opportunities to satisfy this right. 
Tory paternalists such as Francis Pym are 
likely to argue that we need to change our 
attitude to work and concentrate on 

leisure-oriented activities in which the out 
of work will be able to find a meaningful 
life without stigma. This course of action is 
all very well but suffers from two crucial 
drawbacks. The stigma of unemployment 
is not likely to disappear for a generation 
or more, and the long-term unemployed 
are likely to experience a good deal of 
frustration and stigma at not being able to 
meet society's expectations of them. Indeed 
government in so far as it lies within 
its power has done nothing at all to lessen 
the stigma of being unemployed, and in its 
attacks on social security frauds has not 
encouraged an attitude in which such a 
change could come about. Secondly a 
leisure society is going to require generous 
levels of unemployment benefit and investment 
in social capital to provide facilities 
for large numbers of leisured citizens. 
The last few years give us no ground for 
believing that a Conservative government 
would take this problem seriously. 

It would appear that socialist values, 
particularly distributive/collective ones 
are the most relevant here. If there are a 
very large number of unemployed in the 
future, and if jobs are a scarce resource, 
then this is going to raise in a very acute 
way the question of why some people have 
markedly different life chances to others. 
Unless those in work are to be regarded as 
beneficiaries of a neo-liberal 'luck of the 
draw' mechanism, which is perhaps not all 
that likely, there is going to be a demand 
for a fair sharing out of work opportunities 
and the differences in income which these 
opportunities represent. Work sharing 
and income/salary sharing may become an 
important item on the political agenda, 
which can only be tackled by having some 
coherent and consensual egalitarian values 
for sharing work so that those who are in 
work can be seen as consuming a scarce 
resource in a fair and legitimate manner. 
Of course any work sharing scheme is 
going to involve many hard choices, because 
if it includes income sharing (and a 
situation of low growth would seem to 
require this) then some people's incomes 
are going to have to be lowered in order to 
improve those of others. It is only plaus



18 _______________________________________________________ 


ible to imagine that a strategy like that 
could work in a situation in which there 
was overall a far more equitable sharing 
out of the resources of the society and 
particularly income and wealth. 

The practical difficulties involved in 
facing up to these issues is immense in a 
parliamentary system. On the one hand if 
we, as a society, link someone's integrity, 
standing and personal qualities generally 
with being in work and yet decline to 
secure a right to at least a share in a job for 
all who want one, our society is deeply 
unjust: it defines a norm of human fulfilment 
and is then indifferent as to whether 
three or four million people and their 
families have the means to fulfil it. On the 
other hand the unemloyed are in a minority, 
and if jobs are short and the Labour 
Party does believe in securing a right to 
some share in a job, as the SDP has 
offered, then this means convincing the 
majority to vote for policies which may 
make them worse off. On this kind of 
future scenario, we cannot appeal to 
growth to act as the solvent of distributional 
dilemmas; rather growth in high 
tech industries may well be the cause of the 
dilemma. The only possibility in these 
circumstances would seem to be to concentrate 
on the propagation of socialist 
values such as equality, solidarity and 
community. There is no magic wand which could 
solve the distributional dilemma without 
making many people worse off. 
Soaking the very rich will be neither here 
nor there for this particular problem, although 
it would be an important part of 
the background to greater equality which 
would make policies for work and income 
sharing acceptable; rather we are talking 
about the jobs and the incomes of those 
who would naturally support Labour. This 
is the dilemma we cannot avoid if we are at 
all serious about socialism and equality, 
because the problem of the distribution of 
work opportunities in a shrinking job 
market can only be tackled 'by some redistribution 
of resources from professional 
groups and skilled and unskilled manual 
workers. 

As I have already suggested scarcity 

exacerbates distributional politics. While 
the G .N.P. is growing and individ1;1als and 
groups are getting more, they will be less 
worried about their fair share relative to 
others. However, if the G.N.P. is static, 
shrinking or growing at a very low rate, it is 
more than likely that the question of 
relative shares will become more accentuated. 
This problem has been raised in a 
very broad perspective by Fred Hirsch in 
his The Social Limits to Growth. I argued 
earlier that one of the practical claims to 
legitimacy of the market order lay in the 
fact that it claims to-be able to increase 
wealth more efficiently than socialism, and 
through the echelon advance or trickle 
down mechanism to benefit the worst off 
more effectively than socialism. In the 
absence of a more overtly distributive 
morality this promise seems crucial to the 
acceptability of markets. However, Hirsch 
argues that this argument is as seriously 
flawed as was the approach to egalitarian 
redistribution favoured by Crosland, because 
both of these strategies presuppose 
that all goods can be distributed more 
widely (for the neo-liberal) or more 
equally (for Crosland), at the same level of 
quality and the same level of value. In 
Hirsch's view this is false. Certainly some 
goods, for example electric fires and 
washing machines, can be distributed 
more widely or more equally without 
changing their quality or their value. But 
there are certain sorts of goods -what 
Hirsch calls positional goods-which cannot 
be more widely distributed without 
altering their economic value. The value 
of some sorts of goods to any individual 
depends upon the fact that only a limited 
number of people are consuming them. 

An example will help to explain this. 
The paradigm case of a positional good 
might be taken to be standing on tiptoe in 
order to see a procession better. This is 
however a positional good in the sense that 
the value of doing it declines the more 
people take part in it. Similarly tourism, 
and having the benefit ofsecluded beaches 
or cottages, are positional goods in this 
sense. It might be thought that if these are 
the only examples of positional goods, the 


socialist could contemplate their discovery 
with equanimity just because they seem so 
marginal and unimportant. However education 
is also a positional good for Hirsch 
in the sense that as an instrumental good, 
one that has a marketable value, as opposed 
to being a means ofself-fulfilment in 
a non-material way, the value of education 
depends to a great extent on its scarcity 
value. It cannot be distributed more equally 
without changing its value to those who 
consume it. So in fact instead of individuals, 
as in the trickle down theory, being 
able to consume today the same educational
·goods which were reserved for the 
rich two generations ago, they do not 
consume the same good; the good has 
declined in value the more people have 
come to consume it. 

Similarly education was a major weapon 
in the Croslandite armoury for increasing 
equality and lessening social resentment, 
but again on the Hirsch analysis this has 
not turned out to be the case. Education is 
a positional good which cannot be distributed 
more equally at the same level of 
value. Far from increasing equality and 
lessening tensions the more equal distribution 
of education has led to the growth of 
credentialism, with more and higher 
qualifications being demanded for jobs 
which in previous generations may not 
have required qualifications at all. It 
would of course be comforting to think 
that the demand for qualifications was the 
result of the growing complexity of the 
jobs, but clearly in many cases this is not 
the case. Credentialism is a function of the 
paper chase and not the cause of it. In so 
far as this is true it follows that a good deal 
of working class demand for education is 
defensive in nature. Jobs which could be 
done in the past without qualifications 
now require them. The demand for educational 
expenditure could be seen as an 
attempt to secure access to the same jobs 
which in previous generations might not 
have needed publicly certified levels of 
educational attainment at all. As the 
American economist Lester Thurow has 
written: 

"As the supply of educated labour in


creases individuals find that they must 
improve their education to defend their 
current income position. If they don't 
they will find their current jobs no 
longer open to them. Education becomes 
a good investment not because it 
would raise people's incomes above 
what they would have been if no one 
had increased his education, but rather 
because it raises their income above 
what it will be if others acquire an 
education and they do not. " 15 

In this sense education acts as a screening 
device for recruitment to unequal positions 
rather than as a Croslandite engine 
for equality. 

The idea of positional goods and the 
social limits to growth which they imply 
pose two sorts of questions to political 
theory. For the Hayekian neo-liberal it 
poses the problem of the legitimacy of the 
market order. The neo-liberal claims that 
we can dispense with raising distributional 
questions about the market because if left 
unconstrained the trickle down effect will 
work and we (including the poor) will get 
better off. This may still be true of material 
goods which can be consumed without 
positional advantage appearing, but is not 
true of positional goods such as education 
and leisure goods. If we all become richer 
in material terms so that our basic needs 
become satisfied, then it is likely that 
attention will focus on the consumption of 
positional goods -an area where the 
trickle down promise of neo-liberalism is 
an illusion. It is likely that the failure to 
deliver the illusory promise will cause 
frustration and resentment, and because 
he turns his back on distributional questions 
the neo-liberal has no theory about 
who should legitimately consume positional 
goods. That they are legitimately 
consumed by those whose market position 
enables them to consume them is about all 
the neo-liberal can say. But this is not 
going to be sufficient. 16 The failure of the 
promise is more likely to give rise to 
demands that opportunitie~for the consumption 
of these goods must be seen as 
fair and legitimate, and this makes soc



20-----------------------------------------------------


ialist values which focus upon distribution 
more relevant than market based 
principles. 

Secondly, the positional goods argument 
undermines what might be called the 
oblique approach to greater equality 
favoured during the 1950's and 1960's, 
which involved looking for greater 
equality through expenditure on health, 
education and welfare rather than acting 
more directly on inequalities of income. In 
so far as these goods are positional in 
character, there is a flaw at the heart of this 
strategy. The scarcity engendered by 
positionality makes the whole business of 
scarcity much more acute than egalitarians 
of this period realised, and this is particularly 
so if the positionality of goods like 
education is combined with the projected 
shortage of work opportunities which I 
discussed earlier. 

In these circumstances it is clear that 
socialist distributive values are more not 
less relevant. While it is true that positional 
goods place limits on the extent of 
equality, it does mean that socialists have 
to be concerned with the legitimate consumption 
of goods which are socially 
scarce; we cannot just leave the allocation 
of these goods to the random effects of 
markets. 

Hirsch concentrates his argument on 
the social rather than the physical limits to 
growth. But leaving aside his strictures, 
even if we assume that the more doom 
laqen predictions related to the depletion 
of natural resources are overdrawn and 
that in the sphere of material goods we can 
look forward to some incremental advance, 
it is doubtful that growth can play 
the role assigned to it by Tony Crosland in 
the quotation earlier in this section. His 
strategy could be called a 'hidden hand' 
approach, in that it did not stress a direct 
attack on inequalities in the spheres of 
income and, to a lesser extent, wealth, but 
concentrated on removing the consequences 
of inequality by public spending 
in the sphere of education and welfare. 
However, recent evidence collected by 
J ulian Le Grand in his The Strategy of 
Equality suggests that with inequalities of 

income and wealth the better off will still 
be able to make better use of these services 
than the less well endowed, and that their 
impact upon equality has not been that 
great. This problem will become even 
more stark if goods like education are 
positional, because the better endowed 
will be able to make differentially better 
use of a service which already has a strong 
positional element within it. But if we are 
to approach the problem of inequality in a 
more direct way by . looking closely at 
policies for diminishing inequalities of 
income and wealth, we shall have to face 
the fact that we shall be accused of fostering 
inefficiency by disregarding incentives 
and concentrating our attention on 
distribution when the real need is for 
competition and efficiency. We shall 
therefore have to confront directly that 
aspect of what Le Grand calls the 'ideology 
of inequality' which insists that there is 
a big trade off to be made between 
equality and efficiency, particularly when 
we are talking about income and wealth, 
and that in the harsh world ofthe 1980's we 
have to choose efficiency rather than 
equality. It is to this influential aspect of 
the ideology of inequality to which we now 
turn. 

Production, Efficiency and 
Equality 

The arguments so far might seem misplaced 
when we contemplate the circumstances 
in which a future Labour Government 
might take office. The scale of the 
defeat at the last election was so large that 
a major failure in the government's economic 
policy is likely to be a contributory 
factor to the future success of the Labour 
Party at the polls. In such circumstances, it 
might be argued, to be concerned about 
equality and distribution generally is 
wholly unrealistic. The basic problem is 
going to be one of production, and distribution 
will have to take a second place. The 
electoral problem here is clear enough: if 
the Labour Party makes an egalitarian 
strategy central to its appeal, then the 


---------------------------------------------------21 


charge will certainly be made that such a: 
policy threatens efficiency and incentives, 
that Labour will kill the goose that lays the 
golden egg and that it treats goods and 
services like manna from heaven -as if the 
only problem is how to distribute social 
goods and benefits, not how they came to 
be created and produced. If the products 
of labour are taxed for redistributive 
purposes, this will lead to gross inefficiencies, 
irrespective of any moral 
rights to property which may be overridden 
by such taxation. On this view 
workers and professionals need incentives 
to work hard, and to pay lower taxes. Both 
of these features have strongly anti-
egalitarian overtones: incentives ex 
hypothesi create differences between 
people which cannot be reconciled with 
equality, lower taxes will limit the possibilities 
of public spending for egalitarian 
redistribution. 

It would be ridiculous for an egalitarian 
to dismiss arguments about production, 
precisely because high productivity is 
necessary to achieve his distributional 
aims. What, therefore can be said about 
the view that there is a big trade off between 
equality and efficiency? How far is it 
true and how far are incentives necessarily 
incompatible with equality? 

The first thing we should say is that if 
there are trade offs between equality and 
efficiency they are going to be extremely 
complex. Certain sorts of egalitarian 
strategies can be seen as enhancing efficiency. 
We could perhaps take two 
examples here. Greater equality of opportunity 
in the sense of fair and open 
competition for jobs must be more efficient 
in matching talents to jobs than 
restrictive job recruitment. Fair equality 
of opportunity must be more economically 
efficient if it involves more than just the 
removal of legal and conventional restrictions 
on recruitment and extends to some 
positive attempts to encourage groups of 
people who have not typically entered a 
particular area of the job market to do so. 
A wider pool of talent together with fair 
equality of opportunity ought to be the 
best way of matching abilities and jobs. 

Similarly positive trammg programmes 

which would improve the skills and earn


ing capacities of manual workers could be 

defended both as a gain in efficiency and a 

gain in equality. Forms of education pro


vision which involve spending more money 

on the children of unskilled manual 

workers could again be defended as much 

on grounds of encouraging the efficient 

use of scarce resources as on grounds of 

equality. We should beware of slogans in 

this field and over-simplified views of the 

nature of the trade off. However, this is 

not to deny that there are trade offs to be 

made. The important point is to be aware 

of where they occur and to see what 

consequences there are for egalitarian

policies. 

The fundamental argument here is 
about incentives and the extent to which 
incentives are needed to make people 
work more productively and efficiently. It 
should perhaps be said in passing that the 
empirical nature of this claim is shrouded 
in mystery. 17 Many confident assertions 
are made about the need for incentives 
without it being at all clear what evidence 
there is for this view beyond anecdote. 
Indeed as even some conservative commentators 
have realised, arguments about 
incentives can be stood on their head, so 
that if incomes above a certain level are 
taxed at a differentially high level individuals 
will work harder to maintain their 
standard of living. However it is no doubt 
also true that they will resent doing so and 
we should take seriously this resentment, 
just as we ask the better endowed to take 
seriously the justice of the resentment of 
those less well circumstanced. 

Let us therefore accept as a fact, although 
it may not be, that incentives are 
necessary for higher productivity and efficiency. 
Perhaps the first point then to 
notice is that if this is the ground on which 
the inequality of income is being claimed it 
has nothing whatsoever to do with moral 
qualities like merit and desert. What society 
is being asked to pay is a rent of 
ability, to mobilise skills which otherwise 
will no longer be mobilised and without 
which we should be worse off. The moral



22-----------------------------------------------------


ising of incentives is a nauseating and smug 
business. They are not ends in themselves; 
they are means to ends, and they are 
linked to justice only in the sense of the 
degree of economic rent which is required 
to be paid to generate prosperity for the 
welfare of citizens. The argument about 
incentives is not a moral argument at all. 
Indeed moral considerations might well 
take us in the opposite direction if we were 
to follow them through. 

What the incentive argument asks is that 
we pay a differential rent to mobilise 
abilities for which the individual may claim 
only some modest responsibility. Abilities 
and talents are not engendered by individuals 
in a vacuum; they are rather in 
some large part due to genetic inheritance, 
fortunate family background and education, 
for which the individual concerned 
bears little or no responsibility. If I deserve 
something it must be in terms if a 
feature of my life for which I am responsible. 
Individuals are not the sole bearers 
of the responsibility for their abilities, and 
in some respect they already represent a 
considerable investment of social capital 
which in turn is being rewarded by more 
expenditure on the individual. So we 
should not be confused by the moralistic 
fog which sometimes envelops discussions 
of incentives. We are talking about a pure 
economic criterion: that sum of money 
which will get a job done and without 
which society would be the poorer. 

I do think we have to recognise and 
accept this notion of incentives. It is true 
that some socialist societies and some 
socialist theories try to do away with the 
notion of incentives altogether, but they 
presuppose some fundamental change in 
consciousness and human attitudes which 
seems utopian and unrealistic. Certainly 
societies-such as China during the period 
of the Great Leap Forward-which tried to 
do away with the rent of ability were not 
particularly successful. So on empirical 
grounds there do seem to be good reasons 
for accepting that there is an ineliminable 
role for incentives in economic relations, 
and this fact must place a constraint on the 
operation of the principle of equality. The 

point could be put in a more theoretical 
way which would link together incentives, 
efficiency and personal liberty: if we believed 
in absolute material equality {which 
of course we do not, although many of our 
critics like to pretend we do since such 
theories are easier to refute) so that we 
fixed 100% taxes on incomes above the 
fixed level and 100% subsidies below it, 
then there would be no reason at all to 
move economic resources such as labour, 
capital, equipment, land or whatever to 
areas and occupations in which the marginal 
value of the occupation was higher. 
This must limit efficiency and innovation, 
and if there was no incentive to respond to 
these technological and other changes, 
without which society would be worse off, 
there would have to be direction of labour 
and therefore a considerable loss in personal 
freedom. Given this powerful argument, 
what place can a recognition of the 
need for incentives have in egalitarian 
political theory? 

Apart from those incentives which 
could be seen as compensation for doing 
dirty, risky or health threatening jobs, 
where the incentive is compensation for 
the diswelfare experienced, it is in the 
nature of the case that incentives are going 
to create inequalities. Thus it follows that 
socialists are going to be concerned with 
the range of legitimate inequalities, that is 
with those considerations which will give 
the structure of differentials some legitimate 
role in society. No one is suggesting 
that there is a way in which a pay relativities 
board could produce a hard and 
fast scientific answer to the question of the 
proper rent of ability to be paid; rather 
that there is an onus to justify incentives 
and the level at which they are set. If as I 
have argued, incentives are legitimated by 
economic rather than moral criteria to do 
with desert, then of course incentives can 
be limited by the rent of ability criterion. 

Some jobs however incorporate a wide 
band of incentive factors which may well 
go beyond what is necessary to secure the 
rent of ability. Just in case I am accused of 
trying to sort out other peoples' lives let us 
take the case of university professors. In 


----------------------------------------------------23 


this case we might well consider that the 
rent of ability criterion. has been exceeded. 
The job is highly paid, e_njoys a high social 
status, involves civilised hours of work 
together with a good deal of self direction 
in terms of mode of work and what to work 
on. Are all these incentives necessary to 
mobilise the rent of ability in these cases? 
In these and many other cases in the professions 
and in business, incentives have 
arisen on an ad hoc basis and may have 
moved a good deal further than what is 
necessary to recruit people to such posts. 
Of course we could only secure an empirical 
answer to this question if we were to 
squeeze these incentives for egalitarian 
reasons until such time as the rent of 
ability clearly came into play weakening 
recruitment to such positions. Ifthe argument 
about incentives is genuinely related 
to rent of ability rather than desert, it 
might well be that the structure of incentives 
to meet the genuine social requirements 
mentioned earlier might well look 
very different to what it does today. 

An egalitarian government might therefore 
attempt a strategy of taxing incentives 
on jobs over a certain upper limit. It would 
seem that if government is to be serious 
about greater equality of income and the 
social distance between occupations, it 
will have to tackle the financial aspects of 
the reward structure directly, partly because 
this is more clearly within the 
competence of government, for example 
through a payroll tax, and partly for a 
more complex reason connected with 
positional goods which I discussed earlier. 
Some of the non-material benefits of high 
status occupations, such as self directed 
work (to some degree) , the ability to exercise 
some choice about work routines, 
company cars, foreign travel, the exercise 
of authority etc. may all be much more 
closely integrated into the nature of the 
occupation in the sense that to do the job 
involves some of these features which are 
in themselves positional advantages. 
Granted that these cannot be squeezed 
directly without altering the nature of the 
job, which it is beyond the competence of 
the government to do, the obvious egali


tarian solution would be to tax the income 
up to the piont that rent of ability considerations 
come into play. 

In this sense a theory of legitimate 
inequality may be necessary for the legitimacy 
of markets as much as for any other 
reason. If Hirsch is right that the market 
cannot meet the promises held out in the 
trickle down effect once we go beyond 
consumer, material goods, then I would 
argue that it is only a market constrained 
by a theory of legitimate inequality which 
is likely to ease the inherently frustrating 
competition for goods which are in socially 

hort supply. If these goods are in short 
supply (while we may all carry a Field 
Marshal's baton in our knapsack, and 
anyone can become a Field Marshal, of 
course not everyone can become one), it 
will be important to limit as far as possible 
the social distance and resentment that 
frustrated competition for positional 
goods may take. This can be done as I have 
argued by trying to reduce some of the 
extraneous material incentives which currently 
accrue to such positions. 

Thus equality is not incompatible with 
efficiency. Indeed a theory of legitimate 
inequality based upon considerations of 
rent of ability may take a genuine concern 
for efficiency much further than do those 
who shout loudest about the need for 
incentives. However the egalitarian will 
require a justification of the range of 
incentives in society, to make sure that 
they really do reflect the claims of efficiency 
rather than privilege unrelated to 
economic function. 

In this way the system of rewards would 
come to have some principle and structure 
and not be involved in the terrible anarchic 
free for all which is characteristic ofBritish 
society. Only a structure of rewards based 
broadly on principle can provide the 
foundations of an incomes policy. 
Baroness Wootton once said that incomes 
policies operate in an ethical vacuum and 
this is one reason why they are difficult to 
operate. An egalitarian vision may go 
some way towards filling that vacuum. 
What I have tried to do so far is to show 
that despite the prevalence of right-wing 


24-------------------------------------------------------


theories, distributional dilemmas will not more equal, fairer society can be a more 
go away as the Hayekians hope; despite efficient and more productive society 
their temporary popularity the un-because the basis of cooperation will be 
principled individualist solutions which present. In the next section I shall try to 
they espouse have very serious short-spell out more clearly the conception of 
comings, which they are not likely to be equality with which I have been operating 
able to solve without a resort to a degree of and the justification for it. 
coercion which they profess to abhor. A 

6. THE NATURE OF SOCIALIST 
EQUALITY 
So far I have operated with an undefined conception of equality although 
I think that the final form of the concept is clearly implicit in aspects of the 
argument so far. In this section I shall try to say something more directly 
about what I take to be a defensible socialist view of equality. A theory of 
equality has to do several things: it obviously has to recommend a 
particular distributive outcome; it has to say what kinds of goods and 
services, benefits and burdens are to be distributed according to this rule; 
and some justification of the rule has to be given. In addition a socialist 
theory of equality will have to relate to other socialist values such as 
liberty and community. At the same time it has to take into account the 
circumstances of human life as we know it. There is no virtue at all in a 
normative political theory which recommends arrangements which are 
unworkable. In this context we should bear in mind the arguments about 
incentives and positional goods which are bound to pose fundamental 
constraints upon egalitarian theories. Having said this I shall look at 
three types of egalitarian theory: equality of opportunity; equality of 
result or outcome; and democratic equality, that is a theory of legitimate 
inequality. 

Equality of Opportunity not to bir~h, race or sex. However, the 

principle has to be subjected to a good 
Equality of opportunity seems on the face deal of interpretation, and when this is 
of it to be a very persuasive conception of done it becomes clearer that it is at bottom 
equality, and perhaps the most consensual very vague and ambiguous and its wide-
form which it could take in British society. spread acceptance in society may well 
It is concerned with fair recruitment pro-depend upon its remaining ambiguous. 
cedures to jobs, and can be portrayed as On a minimalist interpretation of the 
an important factor in increasing efficiency principle we might say that it is concerned 
because it matches recruitment to ability, with the progressive removal of legal im



-------------------------------------------------------25 


pediments to recruitment and giving all 
children a fair start in schools. It is a 
procedural notion concerned with making 
sure that the race for positions is a fair one. 
It is this procedural aspect of equality of 
opportunity which makes it attractive to 
liberals. Liberals argue that more substantive 
forms of equality such as equality 
of outcome will involve intolerable interferences 
with personal freedom, whereas a 
procedural form of opportunity will 
involve few if any interferences with 
freedom. 

However, this easy compromise is illusory. 
A fair equality of opportunity cannot 
be attained on a purely procedural basis. 
Otherwise we shall be in the position of 
maintaining that there is equal opportunity 
for all to dine at the Ritz. There are 
doubtless no legal impediments against 
dining at the Ritz so long as one has the 
resources to do so. If we are concerned 
with an equal or fair opportunity for the 
development of talent and ability, then 
more substantial policies than the removal 
of legal and procedural limitations on 
recruitment will have to be involved. 
Granted that background inequalities 
between individuals and families are going 
to affect the development of talent, if we 
are to equalise opportunities we shall have 
to act on these background inequalities. 

However if we do this two problems 
arise for the liberal commitment to the 
principle. In the first place, if we try to 
compensate for background inequalities 
which bear upon upon the developments 
of talents in children then it might seem 
that this is going to threaten the personal 
freedom of families to live their own lives 
in their own way; and thus the claim that 
equality of opportunity and personal freedom 
may not be so compatible as is usually 
supposed. Secondly, if a policy of seeking 
to compensate for background inequalities 
which make a difference to the development 
of talent is adopted seriously, 
the redistributive consequences of such 
compensation would make the principle of 
equality of opportunity merge into that of 
greater equality of outcome which liberals 
reject. Equality of opportuniity is the 

equal opportunity to become unequal but, 
as I have argued, unless we are to stick to a 
disingenuous procedural conception of 
equality of opportunity, the idea of equalising 
starting places in the competition will 
take on very substantive aspects in the 
sphere of compensating for unmerited inherited 
disadvantage and in restricting 
rights of bequest for the better off. Only 
strategies of this sort are likely to be able 
to equalise opportunities, but such strategies 
pose exactly the same problems for 
liberty as do socialist conceptions . of 
equality. 

The basic socialist objection to equality 
of opportunity is concerned with the fact 
that there is no critical approach to the 
differential positions to which equal access 
is being proposed. It takes the existing 
structure of inequality for granted and is 
concerned about recruitment to it. However, 
this is not satisfactory for socialists: 
they will want to probe the legitimacy of 
the differential reward structure, otherwise 
greater equality of access may give a 
greater legitimacy to a structure of rewards 
which the sociaiist may regard as 
unjust. Of course if there is a socialist 
defence of differential reward structures, 
as I have suggested earlier, then of course 
fair equality of opportunity for recruitment 
to such positions would only be 
consistent with general socialist values. 
However, this equality of access to legitimate 
inequalities must include substantive 
compensatory techniques for background 
inequalities which bear upon a fair development 
of talent. 

Equality of Outcome 

The obvious alternative to equality of 
opportunity, given the difficulties which it 
involves, would be to endorse greater 
equalities of outcome in terms of income, . 
wealth and welfare. The reasons for this 
can be developed out of an internal 
critique of equality of opportunity. I have 
already suggested that the redistribution 
which would be necessary to secure a fair 
development of talent would itself make 

' ' 


26------------------------------------------------------


inroads upon the reward structure and 
thus narrow differential outcomes. However 
there is an important subsidiary 
aspect to this argument. If we seek to 
compensate those who do not have a fair 
chance to develop their talents because of 
circumstances beyond their control-their 
genetic endowment, their family background, 
their sex, their colour-there will 
in fact be very definite limits to which this 
can be done consistently with the maintenance 
of the family and individual freedom. 
There is a point at which the attempt 
to secure a fair background for the development 
of talent cannot go without 
being intolerably intrusive. 

So what do we do at this point? There 
are two alternatives. One is to endorse the 
existing differential reward structure, admit 
that there are limits to which equality 
of opportunity can go, and argue that it is 
an unfortunate fact that some individuals 
will be penalised in realising their life 
chances because of factors which are outside 
of their control but cannot be altered 
in a way compatible with individual freedom. 
The other alternative is to argue for a 
greater compression of the reward structure 
and in favour of greater equality of 
outcome. If the family is to be maintained 
and personal liberty secured so that 
equality of opportunity must be limited, 
then it is wrong to reward as prodigiously 
as we do a narrow range of talent for which 
the indivudal does not bear entire responsibility 
and to make the costs of failure 
so heavy for those whose opportunities 
have been more modest and who similarly 
do not bear full responsibility for their 
condition. 

This is the general ground for equality of 
outcome, and it follows fairly naturally 
from a recognition of the defects of 
equality of opportunity. The obvious difficulty 
with it is that in endorsing a wholesale 
critique of an income and status 
hierarchy it may well embody very weak 
demands in terms of efficiency, while at 
the same time failing to recognise the 
positionality of certain goods which cannot 
be distributed in a substantively equal 
manner. The obvious solution to this 

difficulty is to seek to develop a theory of 
legitimate inequality. This I believe is the 
central socialist task in this field, and one 
which will have to involve a social consensus 
if it is ever to be supported electorally. 
In what follows I can only give the 
broad parameters within which such a 
theory could be developed. 

Democratic Equality 

Earlier I argued that the defence of equality 
should be linked to that of liberty in 
order to secure a fair or equal worth of 
liberty. This argument was developed in 
the light of the idea that political and social 
freedoms and rights could be credited on 
an equal basis to citizens, but differences 
in social and economic circumstances 
would mean that these liberties had differential 
value for individuals. As purposive 
creatures, liberty to pursue our own good 
in our own way is central to us; but this 
means that we cannot be indifferent to the 
worth of liberty to individuals, and to the 
resources they have to pursue their conception 
of the good. Consequently a socialist 
theory of equality will be concerned 
with the distribution of those resources 
which are necessary basic goods for experiencing 
a life of purpose and agency 
and making full use of the rights of 
citizenship. 18 In our society these will 
include health services (unless people 
have the greatest degree of physical integrity 
of which they are capable they will 
not be able to act effectively), education 
and welfare goods generally. These resources 
are also going to include income 
because, as Le Grand has shown, differences 
in income lead to marked differences 
in the use of other sorts of basic 
welfare goods. A fair distribution of the 
worth of liberty is therefore going to involve 
far greater equality of income and 
wealth as well as the provison of services. 
It also follows from what I argued earlier 
that these basic resources which are necessary 
to live a life of active citizenship 
should so far as possible be distributed in 
cash rather than in kind, in order to 


----------------------------------------------------27 


enhance the ability to live life in one's own 
way and avoid bureaucracy and paternalism. 
This linking of equality and a 
more equal worth of' liberty should 
demonstrate to critics that we are serious 
about freedom and value equality as a 
means to liberty. 

However, we have to take into account 
the points about incentives and positional 
goods which I emphasised earlier. It 
follows from these points that while I have 
talked interchangeably so far about a fair 
worth and an equal worth of liberty, these 
may diverge and this marks the difference 
between the view which I am advocating 
and a stricter equality of result. Moves 
away from equality in the worth of liberty 
would be justified on this view if such 
moves would lead to a greater value of 
liberty, i.e. resources, both financial and 
welfare, for all. If incentives need paying 
for reasons of economic efficiency, to 
produce more goods without which the 
worst off members of society would actually 
be worse off then they would be 
under a differential system of rewards, 
then a theory of legitimate inequality 
would justify incentives on the grounds 
that they still secure a fair, but not an equal 
worth of liberty to all members of the 
society including the worst off. Similarly, 
positional goods such as limited educational 
opportunities which ex hypothesi 
cannot be distributed more equally would 
also be consumed legitimately if their 
consumption by particular individuals 
benefited society as a whole. 

It might of course be argued that this 
argument goes too far away from a genuine 
socialist outlook because it does not 
constrain the extent to which inequalities 
could exist if they were for the general 
good. There are I believe t\yo answers to 
this point. In the first place, if we are 
concerned with individual liberty then it 
would be irrational to prefer a more equal 
distribution of goods in which the worth of 
liberty to many citizens would be less than 
it would be under some degree of inequality. 
The second point is to emphasise 
the values of community and fraternity 
operating here as an independent value. 

There is a point, which cannot easily be 
specified in advance, at which the inequalities 
linked to efficiency to pursue a 
greater value to freedom will threaten a 
sense of community and fraternity because 
of the social distance which would be 
created between those occupying differential 
positions and the rest of the society. 
However, this social distance would be 
lessened to some degree, because the 
argument, as I have deployed it already in 
the pamphlet, presupposes common and 
not private services in the spheres of 
health, education and welfare, and despite 
the earning of differential rewards it is 
likely that this sort of provision will limit 
any social distance which might occur. 
However, it is still true that there may 
come a point at which we would want to 
say that we would prefer community to 
efficiency if the structure of incentives 
require for the former threatened to override 
the latter. 

There is no point in pretending that 
thinking about values can provide us with 
a detailed blueprint for the future. Political 
values and principles are always 
going to be ambiguous and susceptible to 
many interpretations. Nor are all our 
values capable of being reconciled in one 
coherent schedule. There are trade-offs 
and choices to be made. Nevertheless, 
while this is true, a moral theory is still 
central to socialism. Unless it is explicitly 
grounded in a clear moral standpoint, the 
claim for greater equality can be misrepresented 
by our opponents as just the 
product of class resentment or the politics 
of envy. In the view developed in this 
pamphlet, however, by securing a fairer 
value for liberty, and thus a share in the 
common rights of citizenship, the greater 
equality can be seen as an essential means 
both to liberty and fraternity: it is thus 
central to any restatement of the socialist 
position.

A good many of the bureaucratic and 
regulatory features of the welfare state are 
a consequence of attempting to tackle the 
symptoms rather than the causes of inequality. 
Intervention, subsidy, compensation 
and the network of rules which go 


28----------------------------------------------------


along with these could to some extent be istic interference in the lives ofindividuals. 
offset by a straightforward and more egali-To achieve the link between equality and 
tarian approach to the taxation of wealth, liberty, the next Labour Government 
income and inheritance. This would re-ought to be prepared to act more directly 
quire less bureaucracy and less paternal-upon inequalities of wealth and income. 


------------------------------------------------------29 


References 


1. 
D. Owen, "Agenda for_competitiveness 
with compassion", in Economic Affairs, 
vol4 no 1, 1983 
2. 
F. Hayek, Law Legislation and Liberty 
Vol I/: The Mirage ofSocial Justice, 
London 1976 

3. 
!bid, p. 64 
4. 
For a further development of this 
argument see John Rawls, A Theory of .. 
Justice , Oxford 1972, and P. Dasgupta, 
"Utilitarianism, information and rights", 
in B. Williams and A. Sen (eds), 
Utilitarianism and Beyond, Cambridge 
1982 
5. 
See E. Luard, Socialism without the State , 
London 1979; and G. ~dice, Community 
Socialism , Fabian Tract 464, 1979. 
6. 
See Robert Nozick, Anarchy, State and 
Utopia , Oxford 1974. 
7. 
Rawls, op. cit. , p. 226 
8. 
"Taming Leviathan: Social Democracy 
and Decentralisation", Socialist 
Commentary 1980, p. 8. Frank Field's 
book , Inequality in Britain: Freedom, 
Welfare and the State , London 1981 , has a 
good deal to say about the issues raised 
here. For the alternative view to the one I 
advance, see L. Thurow, "Government 
Expenditures: Cash or In-Kind Aid?" in 
G. Dworkin, G. Berrnants, P. Brown 
(eds) , Markets and Morals , London 1977. 
9. 
Owen, op. cit. 
10. 
See Hayek, op. cit., p. 74. 
11. 
For further discussion of this point see 
R . Dahl, Dilemmas of Pluralist 
Democracies, Yale 1982. 
12. 
Guardian , 25 August 1983. 
13. I have tried to provide an analysis of the 
notion of community in Political 
Philosophy and Social Welfare , London 
1981. 
14. 
Fabian Tract 438, 1975. 
15. L. Thurow, "Education and Ecqnomic 
Equality", in J. Karable and A. H. Halsey 
(eds), Power and Ideology in Education , 
Oxford 1977. 
16. 
See J. Gray, "Classical liberalism, 
positional goods, and the politicisation of 
poverty", inK. Kumar and A. Ellis ( eds), 
Dilemmas of Liberal Democracies: 
Studies in Fred Hirsch's Social Limits to 
Growth , London 1983. See also my own 
contribution to the same volume for the 
contrary view. 

17. 
For a sceptical view of the role of personal 
incentives in economic growth, see E.F. 
Denison Accounting for United States 
Economic Growth (Brookings Institute 
1974), in which he argues that the major 
factors making for growth are the size of 
the labour force, its educational level, 
increasing human knowledge and 
economies of scale: the personal qualities 
of entrepreneurs come a very long way 
down the list. 
18. 
For a further discussion of these sorts of 
goods see Plant, Political Philosophy and 
Social Welfare, op. cit. 

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