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John Rawls and Property-Owning Democracy : A Solution to Economic Inequality?

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Title: John Rawls and Property-Owning Democracy : A Solution to Economic Inequality?
Author(s): Pagkratis, Niko
Contributor: University of Helsinki, Faculty of Social Sciences
Degree program: Master's Programme in Global Politics and Communication
Specialisation: Global and Political Economy
Language: English
Acceptance year: 2020
The aim of the thesis is to explore whether John Rawls’ theoretical concept of property-owning democracy can potentially inform novel avenues in the current debate regarding economic inequality. This concept is used in the thesis to scrutinize the role of property ownership in liberal theory and advocate for a broader, and more equal, interpretation regarding the role of property. More specifically, the attempt is to show that in Rawls’ property-owning democracy there is a possibility for a more equal basis for ownership, which can also enhance broader economic equality. The methodology employed in the thesis is that of concept analysis, which is used to critically examine how some of Rawls’ theoretical concepts have been understood in the academic literature and whether there are more accurate interpretations regarding these concepts. Hence, the aim is to focus on Rawls’ theory’s economic component in the form of property-owning democracy. Furthermore, Rawls’ overall impact amongst mainstream economics is highlighted in order to disclose the narrow nature in which his theory is understood amongst most economists. This narrow interpretation of Rawls’ theory is exemplified by the focus on a single aspect of the theory, namely, the decision theory rule of maximin. However, closer scrutiny reveals that Rawls formulates a complex theoretical structure that aims to formulate macro principles instead of focusing on micro principles. One of the main findings of the thesis is that through Rawls’ property-owning democracy, one can see there to be more space in the liberal political tradition towards greater economic equality than traditionally supposed. This is manifested by the requirement in Rawls’ property-owning democracy for a significant degree of equality in the ownership of the means of production. The importance of equality in Rawls’ theory makes radical interpretations also possible. For instance, Rawls’s property-owning democracy is in accordance with John Stuart Mill’s idea of worker managed firms. Therefore, the ownership and organization of the means of production is potentially a concrete area of improvement where greater economic equality could be achieved. Another interesting finding is that mainstream economics, with utilitarian philosophy as its backbone, seems to have forgotten the question regarding the ownership of the means of production and assumes it to be naturally privately held. One explanation for this is that the paradigm change in economics, from classical political economy to neoclassical economics, also meant shifting focus from the question of ownership of production to other avenues. As a result, questions regarding utility maximization became the focus of attention. The thesis shows that questioning underlying assumptions regarding issues such as economic inequality are crucial in order to properly understand and analyze the issue further. Rawls’ input in this regard is that he emphasizes the normative context, namely, the need to have clear political and moral arguments regarding justice. Therefore, it is important to scrutinize and formulate clearly what are the underlying principles for a just society instead of assimilating principles at face value. In the context of concrete policy outcomes, assuming certain principles without scrutiny also informs policy outcomes that can be detrimental for greater economic equality.

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