TABLE OF CONTENTS
Introduction -D. Allen, Y. Benkler, L. Downey, R. Henderson, and J. Simons
DOI: 10.7208/chicago/9780226818436.003.0001
[political economy;non-domination;experimentation;normative;positive;policymaking]
The introduction lays out the book's primary goal. The primary goal is to explore institutions and processes that would lead to a political economy that avoids domination, ensures broad-based economic security and sustainability, and preserves dynamism. Such a goal cannot be pursued through a predetermined path, say, a proper “mix” of the economy in terms of public and private ownership. Instead, achieving the goalrequiresa dynamic process that expects and requires iterations. Advanced economies are in pressing need of institutional experimentation to include exploring new forms of corporate governance, public- private partnerships, and redesigned structures and goals for the administrative state. These models and their performance must be continuously developed through experimentation and iteration, judged by the extent to which they deliver on the core social, economic, and political, and then further advanced and refined over time.The introduction also reviews the working method. Political economy is a mode of intellectual analysis that distinctively aspires to unite normative commitments to empirical and positive assessments of human behavior, at both the micro and macro level, with a view to supporting the efforts of policymakers to steer a society in desirable directions. (pages 1 - 24)
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1: Power and Productivity: Institutions, Ideology, and Technology in Political Economy -Yochai Benkler
DOI: 10.7208/chicago/9780226818436.003.0002
[power;productivity;networks;political economy;pluralism;democracy;markets]
This chapter opens the volume by introducing the theme of production and productivity, linking it to power. The chapteroffers a revival of “political economy” as a frame for understanding the relationship between productivity and justice in market societies. In his framework, political economy reintegrates power and the social and material context— institutions, ideology, and technology— into our analysis of social relations of production, or how we make and distribute what we need and want to have. Organizations and individuals, alone and in networks, struggle over how much of a society’s production happens in a market sphere, how much happens in nonmarket relations, and how embedded those aspects that do occur in markets are in social relations of mutual obligation and solidarism. These struggles, at the micro, meso, and macro levels, involve efforts to shape institutions, ideology, and technology in ways that produce trade-offs in productivity and power, both in the short and long term, including through the production and exploitation of atavistic status- hierarchies, primarily race, gender, and immigration. The outcome of this struggle shapes the divergent paths that diverse market societies take, from oligarchic to egalitarian, and their stability as pluralistic democracies. (pages 27 - 60)
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2: Building a Good Jobs Economy -Dani Rodrik and Charles Sabel
DOI: 10.7208/chicago/9780226818436.003.0003
[production;Pigovian subsidies;uncertainty;policymaking;regulation;good jobs]
This chapter turns to production. The authorsview the shortfall in “good jobs” not just a source of inequality and economic exclusion, but as a massive market failure— a kind of gross economic malfunction, caused by the gap between the private returns to investing in good jobs and the public benefits of doing so. They argue that standard regulatory responses to this externality, such as Pigovian subsidies, fail in this case. Pervasive uncertainty, dependence on differentiated local conditions, and the evolving nature of the goals call for a high-dimensional policy space and an iterative model of highly contextualized or place-based problem solving grounded in strategic collaboration between private actors and the state. They illustrate the governance principles and organizationalframework they have in mind first by examples from two analogous policy domains, where they are already established: fostering of advanced technologies in the context of US Departments of Defense and Energy (DARPA and ARPA- E) and regulation of sources of water pollution (in Ireland).They then show how these ideas are contributing to successful reform of workforce development in US community colleges— a core area of an eventual good jobs strategy— where traditional approaches have failed. (pages 61 - 95)
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3: The Political Philosophy of RadicalxChange -E. Glen Weyl
DOI: 10.7208/chicago/9780226818436.003.0004
[markets;democracy;political economy;technology;RadicalXChange;social movements]
This chapter proposes a way to move beyond the standard tension between markets and democracy. This tension stands in the way of building a political economy commensurate to the challenges technology poses to the twenty-first century. Democracy that is flexible and responsive enough to provide the public goods we require today must harness market mechanisms. Markets capable of coping with a world pervaded by networks must rely on democratic governance throughout. The chapter's argument is not only theoretical. The ideas presented are connected to a social movement. The RadicalxChange movement seeks to build a new political economy based on these principles, as part of a broader process of social innovation commensurate to technological change. (pages 96 - 117)
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4: On Flourishing: Political Economy and the Pursuit of Well-Being in the Polity -Deva Woodly
DOI: 10.7208/chicago/9780226818436.003.0005
[lived experience;Aristotle;flourishing;eudaemonia;social movements]
This chapter takes the view that people’s lived experience can help us find the path to justice. The chaptercritiques philosophical liberals and modern conservatives who have long used Aristotle’s thoughts on eudaemonia or, flourishing, as a justification for a limited state and the primacy of negative liberty because they read the Nicomachean Ethics (Aristotle 1893) as a treatise on the possibilities of individual moral development. On this version of an Aristotelian account, people are best able to achieve their highest good without the interference of the state. Woodly argues, however, that if we take Aristotle seriously and respect his methodological edict, we must begin philosophical inquiry with “what is known to us,” then we must acknowledge that in assessing the flourishing of a polis, we cannot look at the isolated individual but must instead observe the individual-in-context.Through a discussion of the concepts of flourishing and well- being in philosophy, psychology, and economics and a look at the empirical indicators of what increases well- being in a polity and how we can measure it, the chapterproposes a political economy that prioritizes people and their lived experience over graphs recording the infinite increase of the gross national product. (pages 118 - 139)
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5: Beyond the Perpetual Pursuit of Economic Growth -Julie L. Rose
DOI: 10.7208/chicago/9780226818436.003.0006
[growth;agrowth;John Stuart Mill;John Maynard Keynes;John Rawls]
This chapter displaces a focus on gross national or domestic product and anchors to a new political economy in a different human aspiration. Although economic growth is almost universally treatedas a central policy aim and measure of societal success,challenges to the growth paradigm are increasingly prominent. These challenges have spurred searches for alternative indicators of social progress and raised fundamental normative questions about the values and aims that ought to guide a society. The chapterexamines John Stuart Mill’s, John Maynard Keynes’s, and John Rawls’s challenges to the perpetual pursuit of economic growth and argues that they suggest an alternative approach. Reconstructing and extending their accounts more broadly within the contours of liberal principles of justicesupports a just agrowth position, (pages 140 - 164)
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6: What’s Wrong with the Prison Industrial Complex? Profit, Privatization, and the Circumstances of Injustice -Tommie Shelby
DOI: 10.7208/chicago/9780226818436.003.0007
[neoliberalism;privatization;Angela Davis;prison abolition;mass incarceration;justice]
This chapter tackles the question of whether the conventional association of neoliberalism with privatization can suffice to answer the question of when functions should be controlled by the state and when by private actors. To tackle this question, the authortakes up the theme of prison abolition. One of the core objections of prison abolitionists and radical prison reformers to incarceration in the United States is that it is an immoral alliance of ineffective crime control measures, the privatization of public functions, and the maximization of corporate profit. Abolitionists, such as the philosopher and activist Angela Y. Davis, seek to abolish prisons partly because they view them as components of a vast and destructive “prison- industrial complex.” This designation is meant to draw attention to the fact that prison construction, prison administration, and inmate labor attract large amounts of private capital and that commercial profit from imprisonment is a driver of prison growth and mass incarceration. The chapterhighlights the power but also the limits of this line of argument and suggests one way in which prison privatization could promote justice. (pages 167 - 186)
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7: Firms, Morality, and the Search for a Better World -Rebecca Henderson
DOI: 10.7208/chicago/9780226818436.003.0008
[firms;profit maximization;purpose;climate;corporations;private sector]
This chapterargues that the private sector could be an important ally in addressing the great problems of our time. The private sector has a strong collective interest in containing the threat of climate change, in addressing inequality, and in strengthening the institutions that keep markets free and fair and provide the public goods on which every firm depends. Acting on this interest presents significant challenges since it requires overcoming the free-riding problems inherent in any form of collective action, but these challenges can be overcome. Authentically purpose-driven firms— firms that have committed themselves to prosocial goals beyond simple profit maximization— have the potential to trigger a reinforcing process of change that could lead to the rewiring of finance and to a significant fraction of firms actively advocating for strengthening government and rebuilding democracy. Catalyzing this process will require keeping a careful balance between supporting those firms that are authentically committed to change and ensuring that progress against these commitments is measured, audited, and ultimately enforced. (pages 187 - 209)
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8: Corporate Purpose in a Post-Covid World -Malcolm S. Salter
DOI: 10.7208/chicago/9780226818436.003.0009
[Aristotle;Chester Barnard;shareholder value maximization;reciprocity;utility;cooperation]
This chapter argues that the canonization of shareholder value maximization as the only legitimate expression of corporate purpose has contributed to a widening gulf between what markets value and what people value. Narrowing this gulf in a post-Covid world requires a very different conception of corporate purpose based on moral and economic principles that challenge the theory underlying shareholder value maximization. To this end, he first explains what the theoretical underpinnings of shareholder value maximization are, how this conception of corporate purpose has become so deeply ingrained in our capitalist system, and what practical and conceptual problems this widely accepted doctrine presents. He then proposes an alternative guideline for corporate purpose that blends Aristotle’s theory of reciprocal justice with considerations of corporate purpose, along with Chester Barnard’s compatible theory of business organizations as cooperative systems. Aristotle stresses the ethicality of cooperation in transactional settings; Barnard stresses the efficiencies and adaptive benefits flowing from cooperation. Both see utility in truly reciprocal, cooperative relationships, which is not a priority in a shareholder value maximization regime. This alternative approach is referred to as ethical reciprocity. (pages 210 - 236)
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9: Corporate Engagement in the Political Process and Democratic Ideals -F. Christopher Eaglin
DOI: 10.7208/chicago/9780226818436.003.0010
[firms;risk;politics;capture;democratization]
This chapter offersa cautionary note, warning about the risks of capture that flow from corporate efforts to participate in political processes or addressing social problems. He proposes that such engagement by firms would need to be accompanied by more democratic governance within firms. A large literature posits that firms can engage in political processes to improve their financial performance. However, the question of whether they should do so and under what circumstances remains critically underdeveloped. This chapterargues that if we wish to mitigate the risk of corporate capture we ought to consider either meaningfully introducing the voices of external stakeholders to decisions about political actions that firms might undertake or democratizing the shareholder structure of the firm itself. The authorproposes that if we find a close relationship between firms and political processes advantageous to them, then new theoretical and practical tools should be developed to guide firm behavior. (pages 237 - 262)
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10: The Just and Democratic Platform? Possibilities of Platform Cooperativism -Juliet B. Schor and Samantha Eddy
DOI: 10.7208/chicago/9780226818436.003.0011
[platform economy;sharing economy;cooperatives;wages;self-determination]
This chapter takes us into an exploration of the possibilities and limits of the platform economy. The sharing economy emerged with enthusiasm about its ability to provide economic opportunity, fairness, and autonomy for earners. Yet, after a decade, its results have been decidedly mixed, with many earners suffering from low wages and a lack of self- determination. Their findings suggest that while the sharing economy is operating reasonably well for casual earners, the experience of dependent workers is much less positive. At the same time, nonprofit sharing initiatives have failed to scale. For this reason, there has been growing interest in platform cooperatives that are owned and governed by earners. The chapter reports on the first academic study of a platform cooperative, Stocksy United, a stock photography company. They find it has been able to offer better earnings for platform workers, robust governance, and satisfied members and therefore argue that platform cooperatives can be an important component of a just and democratic political economy. (pages 263 - 290)
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11: New Rules for Revolutionaries: Reflections on the Democratic Theory of Economic System Change -Marc Stears
DOI: 10.7208/chicago/9780226818436.003.0012
[systems change;action strategy;experimentation;democracy]
This chapter addresses a question about change and action strategy. Even before the coronavirus broke, an increasing number of thinkers and activists were calling for a whole new economic system, and they were being taken seriously when doing so. But if we are going to shape a new economic system, what kind of democratic politics are called for in its construction? What kinds of constraints should structure its campaigning style? How should activists consider themselves, and how should they think about their opponents in these bleak and often highly partisan times? Thischapter addresses those questions in three parts. First, it looks in detail at the ways in which contemporary system change thinkers and activists themselves understand their democratic position. Second, it then considers whether those desiring system change might better be advised to focus on creating real, lived experiments that are immediately accessible and address the practical concerns of the every day. Third, it asks whether such apparently “small scale” solutions can ever be expected to rise to the enormous challenges that we currently face. (pages 293 - 312)
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12: Structural Justice and the Infrastructure of Inclusion -K. Sabeel Rahman
DOI: 10.7208/chicago/9780226818436.003.0013
[state capacity;opportunity hoarding;structural justice;institutions]
This chapter takes onstructural questions. One of the foundations for the pursuit of justice is the construction of state institutions that are capable of tackling and dismantling root causes of injustice. Because of how critical state action and state capacity is to the pursuit of justice, battles over the scope and operation of governmental authority represent one of the most important battlegrounds for justice. Often, projects for hoarding economic wealth and inequities of power have been advanced through proxy fights over the scope and nature of state authority; by dismantling state capacity, interest groups are able to perpetuate structural injustices. Conversely, building new state institutions is central to the project of advancing structural justice. (pages 313 - 339)
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13: Governing Money Democratically: Rechartering the Federal Reserve -Leah Downey
DOI: 10.7208/chicago/9780226818436.003.0014
[Congress;Federal Reserve;legislators;monetary policy;money supply]
This chapterhighlights an ordinary, everyday decision taken by members of Congress not to revisit their powers of delegation to the Federal Reserve. The chapterexplores a re-capacitation of democratic politics and the democratic state that would flow from teaching legislators to know and show their own power. The Federal Reserve is an independent agency with the power to govern the US money supply. Congress delegated these powers to the Federal Reserve System in 1913. The chapterargues in favor of regularly re-chartering the Federal Reserve. In the absence of regular re-chartering, we are more likely to see an ossificationof who wins and who loses from monetary policy. This is in direct contradiction with the democratic principle that the people hold ultimate political power. This chapteralso argues in favor of transitioning the regional Federal Reserve Banks to regional state investment banks—a provocative proposal to demonstrate the sort of creative thinking that rechartering could engender. Finally, this chapter concludes by considering how this reawakening of democratic power and control over monetary policy could help address climate change. (pages 340 - 366)
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14: Polypolitanism: An Approach to Immigration Policy to Support a Just Political Economy -Danielle Allen
DOI: 10.7208/chicago/9780226818436.003.0015
[immigration;labor market;political economy;polypolitanism]
This chaptertakes up the thorny politics of immigration. Recognizing that the membership and migration policies of the world’s states in fact set the terms of the global labor market, the chapterdrives home the point that politics steers the economy and establishes the parameters of political economy. Ittackles the job of articulating an approach to membership policies that could align with the values articulated in the volume of nondomination, anti-monopoly, political equality, freedom, egalitarian pluralism, and community. Finally, the chapter designates its new approach as "polypolitanism." (pages 367 - 394)
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