Review of The Ethics of Stakeholding, edited by Keith Dowding, Jurgen De Wispelaere, and Stuart White, Basingstoke: Palgrave Macmillan, 2003
Review by Karl Widerquist, Citizens Income Newsletter, issue 1 of 2007, revised 2008
In the interest of full disclosure, I must reveal that I am well acquainted with all three editors. Stuart White was my Ph.D. supervisor; Jurgen De Wispelaere is my coeditor of Basic Income Studies; and Keith Dowding invited me to join the Citizens Income Trust. However, none of them asked me to contribute to this volume. Assume these two factors balance out perfectly, and I am the ideal, unbiased reviewer.
From the title, this collected volume of essays sounds like a companion volume to Bruce Ackerman and Anne Alstott’s 1999 book, The Stakeholder Society,[1] and it almost is. All of the chapters touch on their proposal in some way, and the book concludes with a chapter by Ackerman replying to some of his critics in the volume. But the editors’ opening essay defines Stakeholding more broadly than Ackerman and Alstott, as “a particular paradigm within social policy that looks to empower individuals by granting them or helping them to acquire assets or a near equivalent guaranteed future stream of income.” Ackerman and Alstott focus on one such policy, basic capital. That is, a lump sum coming of age grant, which is, in their proposal, $80,000 for all high school graduates who aren’t convicted of a felony by their 21st birthday. Dowding, De Wispelaere, and White consider two other kinds of Stakeholding proposals, universal basic income (which provides a small, lifetime stream of income) and target asset-building (which subsidizes savings and investment). Ackerman and Alstott’s proposal remains the main focus of the book, and the other proposals are discussed largely in relation to the basic capital proposal.
Several chapters put forth Stakeholding proposals. Julian Le Grand and David Nissan discuss the baby bond initiative, a very small basic capital grant, which is since be adopted by the British government. Gavin Kelly, Andrew Gamble, and Will Paxton discuss a proposal for subsidized savings accounts. And Robert E. Goodin discusses an Australian proposal for capital grants to the unemployed. His basic idea is that a person who has been unemployed for a year can propose and investment project to the Department of Social Security. If the Department finds it is feasible, they grant or lend the individual as much as two-years-worth of unemployment benefits to get the project underway. It is a very interesting proposal, but Goodin pays too little attention to the question of whether it will encourage people who might have gone back to work in less than 12 months to stay unemployed for the full year so that they can become eligible for the grant.
Two chapters, one by Stuart White and one by Gijs van Donselaar, discuss the issue of whether unconditional grants allow people who may not be working to take unfair advantage of workers whose taxes support the grant. White concludes that a one-time grant or a temporary basic income can give the disadvantaged greater opportunities and protect them in times of crisis without interfering with a lifetime obligation to contribute to society through work. Van Donselaar is more skeptical, criticizing Ackerman and Alstott’s funding of the stake through an inheritance tax as “a tax on love.” He endorses a modified version that provides a voucher that will ensure that the stake is used only for productive investments.
Three chapters criticize Ackerman and Alstott’s proposal. Cécile Fabre criticizes Stakeholding for being insufficiently egalitarian, but most of her criticism amount to the claim that Stakeholding is merely a step in the right direction rather than the full solution. Carole Pateman addresses Ackerman’s allegation that the choice of basic income over basic capital is paternalistic. She argues that basic income must be preferred to basic capital not for paternalistic reasons but because the power and economic security basic income gives individuals (and that basic capital does not). Robert van der Veen argues that for all of Ackerman and Alstott’s criticism of basic income as paternalistic, their system has quite a few restrictions on individual behavior. There are conditions attached to the stake; individuals are to receive a citizens pension (rather than being told to save their stake for retirement), and in between they advocate substantial welfare state protections. Van der Veen estimates that if Ackerman and Alstott replaced all of these other provisions by adding equivalent values to the stake they could up its value by nearly three fold to $228,000. Van der Veen observes that while Van Parijs is consistently focused on the desire to maximize “real freedom,” some other value unexplained principle, is competing with Ackerman and Alstott’s desire to increase economic opportunity.
Probably the most interesting part of the book is Ackerman’s concluding chapter. Surprisingly, he devotes nearly half of the chapter to a rebuttal of van Donselaar’s exploitation allegation. This had special interest to me, because I have spent more time criticizing van Donselaar than possibly anyone else so far,[2] but even I began to feel for him after the way he was handled by Ackerman. Those with an interest in the exploitation objection will be interested in how Ackerman shows that some of the conclusions van Donselaar draws from his models are assumption-specific, and how he defends liberal education against van Donselaar’s case for training individuals to be more productive. Van Donselaar made the tactical mistake of accusing Ackerman of failing to “think through these conceptual complexities.” Ackerman is a venerable, prestigious political theorist, who was able to dismiss van Donselaar’s accusation with an overwhelming amount of self-citations. Van Donselaar left himself wide open to this and so it was a fair tactic by Ackerman. However, although the response was extremely effective rhetorically, it might have allowed Ackerman to escape more substantive parts of van Donselaar’s criticism.
[1] New Haven: Yale University Press.
[2] A chapter in The Ethics and Economics of the Basic Income Guarantee, an article in Political Studies, and these were the result of four working papers on www.usbig.net.
