Guardianism, Equality, and Fairness
Despite the problems created by guardian domination of property, the industrial revolution produced one of the most democratic innovations of all time: the joint stock company.
Early in the industrial revolution, when there were more new ventures than wealthy patrons to back them, entrepreneurs sought alternative ways to raise money. With the creation of joint stock companies, whose shares even people of modest means could afford, the benefits of property ownership became available to previously un-propertied citizens. If the venture succeeded, its share price increased and investors could sell their stock for a profit. To give these arm’s-length investors at least a nominal says in the firm’s activities, each share brought with it one vote on issues referred to shareholders by the company’s primary guardians: its elected board of directors. Stockholders also enjoyed a claim against the firm’s assets if the company went bankrupt (although their claim was subordinated to that of lenders) and received dividends, if the directors declared them, in proportion to their number of shares. It was plutocracy, not democracy, but it was more participatory than other forms of guardian ownership and established a principle of informed consent that continues to transform the political economy.
When attempts at property reform cut too close to private guardian interests, joint stock companies were incorporated or turned into a fictitious artificial person. This gave corporations many of the same rights and legal protections afforded to individuals. While there is no compelling social or economic reason to do this, there is a powerful legal and political incentive. By turning their companies into fictitious citizens, corporate guardians insulate their enterprises from unwanted intrusion by either the state or ordinary citizens while enjoying all the liberties designed to encourage individual civic participation–including the right to contribute money to candidates and lobby for specific legislation.
The success of this strategy, which took root in the nineteenth century and flowered in the twentieth, was not lost on other groups, particularly non-guardian activists weary of depending on guardian goodwill to achieve their aims. Just as individual rights were hijacked, so to speak, to benefit corporations, so were they co-opted by identity groups claiming rights parallel or superior to those of the general population. Using judicial activism to expedite or avoid the often lengthy and contentious legislative process, these groups advanced a wide range of programs in matters related to the environment, racial and gender discrimination, workplace and product safety–including special treatment for preferred groups, such as affirmative action–all under the banner of protecting individual rights.
These efforts, like economic guardians’ efforts to protect and enhance the power of corporations, succeeded not because of any formal consensus within the demos, but because their sponsors were able to obtain at least a momentary choke-hold on the apparatus of legislation and judicial review. Unfortunately, even if one applauds their objectives, their methods devalued the idea of a uniform code of civil rights until today, issues involving the general will and common good rarely receive a hearing. Indeed, some guardians deny such things even exist; and if they exist, they cannot be knowable.
Key players in this undemocratic process are the public bureaucracies and private organizations established to implement guardian designs. In the public sector, state bureaucracy has become a virtual fourth branch of government, using its own weight, inertia, and regulatory and enforcement powers, as well as its independent legal resources, to exercise its (sometimes very independent) judgment and minimize outside interference–even by elected officials. In the private sector, advocacy groups and lobbyists perform what was originally conceived as the duty and prerogatives of individual voters: the “town hall” advisement of government officials. This led to another accommodation between elected and non-elected guardians as binding as any of history’s other unwritten constitutions, the inviolability and indispensability of organizational, as opposed to individual, agency.
Temporary measures, such as the New Deal’s efforts to mitigate the effects of the world wide Great Depression, not only amplified the power of bureaucratic guardians, it made them a permanent fixture in the political economy. Compensation due to loss or misfortune became not just one-time remedies for victims of droughts, floods, wars, and other disasters, but ongoing entitlements claimed by anyone who could show membership in a government designated, preferred group, including favored industries who received generous subsidies and tax breaks. In the latter half of the twentieth century, transfer payments to, and special considerations for, such groups were viewed as a property right, as sacred to those receiving them as any other constitutional guarantee. This led to a further accommodation between private and public guardians, transcending the ideology of the left or the right. The shared agenda of both liberals and conservatives–using the coercive power of the state to protect and promote the interests of favored groups–employed civil (including corporate) rights as bargaining chips. Each cycle of expanded individual rights created new privileged groups and, as the tension between majority rule and minority rights increased, governance (as James MacGregor Burns aptly puts it) by “stalemate and spasm.”19
In short, so effective had the U.S. Constitution, as amended, been at forestalling the tyranny of the majority, that it had inadvertently created a tyranny of minorities–an all-but-official denial that anything remotely resembling the common good and general will could even exist.
The rallying cry for these special groups was perceived inequalities of all kinds, a traditional magnet for social theorists drawn to “first causes.” Rousseau, for one, posited three stages of gradually increasing inequality, beginning with laws that made artificial distinctions among people (creating class); then progressing to institutions that enforced these class distinctions (discrimination); and culminating in groups that learned to monopolize political and economic power to keep their own guardians in control (tyranny).20 He concluded, like Jefferson, that periodic revolutions were required to restore more equitable conditions once an intolerable level of inequality had been reached. Unlike Jefferson, however, Rousseau believed that strong democracy could not exist without checks and balances on the ownership and control of private property, which he felt was the root of most evil. This goes a long way toward explaining why political guardians on both the left and right bitterly resist any serious attempts to reform our fundamental modes of property ownership and control; a problem that is solved ceases to be an issue, or a rallying cry, and leaders require followers, guardians require dependents.
Nonetheless, inequality to some degree has always been the lifeblood of free enterprise. In the Middle Ages and Renaissance, successful merchants, craftsmen-inventors, and investment bankers seeking to improve their lot quickly became islands of prosperity in the feudal sea of manorial and ecclesiastical hierarchy. Roman law and Germanic custom reinforced an individual’s claim to land, chattels, and labor, creating a robust system in which inequalities in one area were often counterbalanced by inequalities in another: what a rich man lacked in political clout, he made up for by exploiting his tenants and workers. Thus, Western political and economic institutions–spurred by technical advancements, discovery, and warfare–created a new kind of imperialism that converted “hit-and-loot” conquest to “grab-and-hold” colonization that depended as much on assimilation as suppression to control the local inhabitants.
When inequalities between segments of society, whether among various types of guardians or between guardians and dependents, get too great, pressure mounts for accommodation: restructuring of property laws or reapportioning of rights. When these accommodations fail, the stability of the state is threatened. From this perspective, the American revolution was more about adjusting marginal inequalities among guardians–substituting one form of representative guardianism in place of another–than about creating a free and equal new state for all. The French and Russian revolutions were more far-reaching, discarding “ancient regimes” for new ways of defining social relationships, although those relationships, too, quickly became guardian-dominated and showed their anti-democratic colors.
The real question is not whether inequality is good or bad, but rather how much of it is fair. To answer this question, Robert Dahl suggests that three kinds of equality are necessary in a democracy.
The first is moral equality: all citizens are moral agents responsible for their actions. The second is personal autonomy: no citizen can dictate the conditions of another citizen’s life. The last is political equality, best embodied in the ideals of “one citizen, one vote” and “equal treatment under the law.”21 Unfortunately, equal treatment under the law is often sacrificed in our relentless pursuit of the other two forms of equality: compensating people handicapped by nature, events, or their own bad decisions by giving them benefits not available to the general public; and mitigating guardian abuses by creating new guardian roles–leading mostly to new inequalities. We diminish legal equality whenever we use coercive state power to achieve one group’s ends at the expense of another’s, or when we let guardians use their own moral and economic preferences to make decisions for us.
In other words, equality turns out to be more meaningful as a journey than a destination: a moving target fixed by consensus, and adjusted periodically, not a static condition defined by guardians.
Over time, our tolerance for economic inequality increases our demand for political equality. The kind of inequalities we accept, however, tend also to complement and perpetuate the power of guardians who serve our interests. For example, on the pretext of defending individual or group rights, certain guardians regularly trample not only on the rights of out-of-favor groups, but diminish the value of universal rights–those used to pursue the common good and general will–possessed by the entire demos. Although we don’t complain when our group benefits from this discrimination, it is hard to find a scenario–theoretical or otherwise–in which this condition meets the test of consensual fairness.
Consensual fairness in this sense may be defined as the principle that makes any system of property, rights, and inequality acceptable to the demos. The key phrase here is “acceptable to the demos”–not, “acceptable to guardians” or “acceptable to guardians acting on behalf of the demos,” or “acceptable to those less fortunate,” or “acceptable to those who are highly altruistic.” Unfortunately, fairness is often depicted as being so subjective, relative, and situational that it defies description, let alone political or economic expression. It’s better, most guardians think, to simply assume that fairness resides with them–as duly elected (or self-appointed) members of the power elite; or that fairness is a quality inherent in a particular set of beliefs, such as those reflected by a political party, a religion, or a set of corporate policies. Other utilitarians ask: why be fair at all? What’s the point of moral behavior if immorality or amorality advances your cause and keeps you and your group in power? Such beliefs, obviously, lie at the root of much political and economic behavior, even when it is not articulated.
One problem all guardians face is that people, individually and in groups, have a real thirst for fairness and a good, intuitive sense of what it means. This quality is so pervasive in human nature that it seems to be an inextricable part of our mind-brain function, like our desire for autonomy. Without some innate and shared sense that “fairness counts,” we would have no reason to maintain voluntary, reciprocal associations or resolve disputes nonviolently. We value fairness because, like Gordon Gecko’s greed,22 it works–and in the long-term, if not always the short. Unlike greed, though, we need no special argument to justify being fair. Any school child can give you a serviceable definition of what fairness is, and what we learn on the playground, we put to work later in boardrooms and at the ballot box.
Fairness at this intuitive level–what some call the Golden Rule of Equity–means that everyone gets more or less the same thing, or the same kind of treatment, unless they deserve something different. The real debate, then, is not the idea of fairness, but the definition of “deserving”–in other words, the meaning of justice in a given society.
The sad fact is, equity does not always mean equality, and justice often demands that they be different. Guardians try to convince dependents that the inequalities resulting from their decisions are always just–a fiction necessary to preserve the status quo, if not their jobs. If guardians suggest that a given balance between equity and equality is unjust, it is usually because they are preparing to redistribute property or rights in favor of some newly preferred group so that, after the change is made, a critical mass of citizens will still feel comfortable with the accommodation. Because most guardians realize that coercive force usually causes a backlash, they seldom do all they can do for favored individuals or groups, but only as much as they can justify as “fair” at a given moment. When such changes are introduced incrementally over many years–as a “moving peg” upon which constituents may hang their day-to-day sense of equity—changes that society might have rejected outright or resisted bitterly are gradually accepted as just and fair.
For example, FDR’s New Deal legislation was passed only after long and harsh debate and was struck down, in its earliest forms, as unconstitutional by the U.S. Supreme Court; whereas decades later, similar legislation–much of it going well beyond New Deal principles–passed Congress and state legislatures, not to mention judicial review, with relative ease. Similarly, objectives of the civil rights movement, which before 1964 demanded “equal treatment for all,” had changed by the 1970s to “preferential treatment for some.” Had Americans during these periods somehow changed their minds about what was fair and just? Or had guardians, in cooperation with preferred groups, gradually altered the terms of public debate so that the rights in question could be redistributed without causing excessive social disruption? Again, the question here is not the merits of any specific social proposal, but rather whose sense of justice does it serve? Just as a judge may not hear his own case, one aggrieved party ought not to be allowed to dictate the terms of a remedy to its opponents simply because it controls, however briefly, the levers of guardian power.
In the private sector, our sense of fairness is just as acute, but also subject to guardian influence. Employees know they sell their time and expend physical and mental energy at guardian direction, getting wages and benefits in return. Executives are often paid for results, not just effort, so their interests tend to be aligned more with owners than with the workers they manage–although this is not always the case. Because they have little control over how the money they provide is used, lenders and investors are given property rights that are legally and morally superior to the rights of other parties in a business. Generally, though, all participants claim their highest rewards and entitlements are fair–in proportion to the contribution they make to the enterprise, just as other stakeholders (customers, suppliers, politicians, and the local community) feel it is fair for them to have a strong voice in how the firm does business.
In fact, all these claims have merit. They go awry only when one group says its claims are more central to economic processes than all the others, all the time, and therefore deserve permanent preferential treatment. The point these adversarial stakeholders miss is that a political economy depends on all its parts. Non-consensual subordination of any one group to another cannot be justified by intuition or rational argument, or even an appeal to some abstract principle, but only by custom, tradition, bargaining, or coercive power. Since that’s the case, the only people who can decide which stakeholder (or stakeholder group) should enjoy preference over another at any given moment are the stakeholders themselves, acting jointly, and not through power-wielding guardians allied with one particular group.
This model extends to the public sector. Political guardians, like everyone else, keep their own scorecard about who contributes what to society, to the party, and to each politician’s career. This means public guardians have a pretty good idea about which individuals or groups should be rewarded or punished at any given time. Their priority is usually to reward first those who have helped them in the past, then reward those who can help them in the future–but practical reciprocity like this does not preclude altruism, or even a larger sense of justice. Although most public guardians act undemocratically, that by itself does not prevent them from being fair, public-spirited, and conscientious. Political guardians thus compare their personal contributions to society (and the psychic and material rewards they receive from them) to the contributions and rewards of other guardians, as well as those derived from, and bestowed upon, the dependents they represent. Just as economic guardians use property and profit as a measure of, and tool for, power; so do political guardians use rights and inequalities to reward and punish, to measure their own success, and to stay in power.
Thus begins a complex dance in which guardians measure each other’s performance and worth, then invest, or disinvest, in each other’s interests and careers. Here’s how it works:
If an economic or political situation is truly unfair and the individual or group seeking redress is part of, or necessary to, the guardian’s power structure, the changes the guardian proposes will be real. Such changes typically include a redistribution of rights or an increase, or decrease, in inequality in some area–usually through transfer payments, tax credits and deductions, the awarding of government contracts, or legislation that restricts or enables some type of economic or social activity.
If the situation is truly unfair but the individual or group seeking redress is not part of the guardian’s power structure, or necessary to it, the change will be cosmetic or illusory. The tools of political illusion are vast; examples include nominal or hortatory resolutions, proposing bills that guardians know will fail in committee or flunk judicial review, and showcase legislation that placates critics while evading crucial issues.
Political guardians wield these two forms of power simultaneously–sometimes in the same piece of legislation, as when a law dealing with substantive matters contains a rider catering to some frivolous or pork-barrel issue. When such actions are linked to the parallel and equally self-serving activities of economic guardians, we get a society in which officially sanctioned rewards and punishments are notably different from those which make the political economy run most efficiently, effectively, and fairly. “Fairness” in this case becomes anything you can get away with: from golden parachutes for executives to brazenly illegal fund-raising by political candidates.
This brings us back to the original question, expressed in a slightly different way: Is it fair to use state power to make some groups or individuals better off while making other groups or individuals worse off, especially when guardians (by virtue of their monopoly over resources, agenda-setting, decision-making, and enforcement), have so much power to manipulate our perceptions? Even if the answer is yes, we may reasonably ask if it is fair to redistribute property and rights, or to increase or decrease inequalities, without the consent of those who must live with the consequences.
The ultimate answer, again, lies in defining fairness not as an outcome, but a procedure: a process for making decisions that is widely accessible and widely accepted. Because the particulars of every legislative bill or judicial verdict can’t please everyone, and because some political and economic decisions will always cause more problems than they solve, the process by which these decisions are made must be accepted as valid, or even good laws and just verdicts will be rejected. A system that depends entirely on an unbroken string of successes for its politics can never last, because human beings make mistakes. A system that has the mechanism to detect and correct its mistakes, however, will likely stand the test of time. An unjust decision can result from a fair process and still be accepted by citizens (as, some will argue, was the case in the notorious O.J. Simpson criminal verdict or the controversial election of President George W. Bush in the year 2000); but people–especially those on the losing side–will never accept as just an adverse decision that resulted from an obviously unfair process: as asserted by many Japanese-Americans who were interned during World War II by federal edict without individual due process.
Bentham believed that the fundamental measure of a fair society was the broadness of its electoral base: the wider and deeper the demos, the more valid its laws become. By this reasoning, the mini-democracy called the U.S. Congress is about 500 times more valid and just than the rule of a single king; but even that system is about 500,000 times less valid and just than it would be if all Americans ruled themselves.
- 19. Burns, James MacGregor, with Overby, L. Marvin. Cobblestone Leadership: Majority Rule, Minority Power. Oklahoma City: University of Oklahoma Press. 1990.
- 20. Rousseau, Jean-Jacques, trans. by Cranston, Maurice. A Discourse on Inequality. Middlesex: Penguin. 1984.
- 21. Dahl. Democracy and Its Critics.
- 22. A fictional corporate raider in Oliver Stone’s 1987 film Wall Street, Gecko defended predatory capitalism with the catchphrase, “Greed, for lack of a btter word, is good. Greed is right. Greed works.”–although he later expanded his definition to include not just acquisitiveness, but any form of ambition, including scientific curiosity and artistic creativity.
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