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The Stakeholder Society
Proposes an economic program that would grant all qualified young adults in the United States an initial stake of eighty thousand dollars, providing them with the means to shape their own future
320 pages, Hardcover
First published March 11, 1999
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Displaying 1 - 3 of 3 reviews
February 19, 2019
The book has a king idea. Granting all citizens a stake in their nation's wealth, and thereby abolishing propertylessness, makes a whole lot of sense. It hits all the right notes. The stakeholder proposal can make the American welfare state more robust and strengthen classical liberal and republican notions of freedom, all the while increasing starting point equality.
But I still think that the book only deserves three stars. Why? It has some big problems. Next, I will go through my four biggest gripes (in order of increasing seriousness):
1) The philosophical foundations are confused, superficial, and very American. The book freely combines arguments based on notions of republican freedom, Madisonian constitutionalism, equality of opportunity, and dignity, among many others. And the language is often very populist in its rhetoric. The book reads like a campaign manifesto, or a visionary party platform, aimed at the semi-educated U.S. voter. This waters down the ethical value of the book. The discussions around utilitarianism, libertarianism, social justice, intergenerational justice, etc., fail to penetrate the surface level of platitudes.
2) More worryingly still, the economic arguments of the book are not constrained by considerations of feasibility. Questions around compliance, corruption, incentives, and other behavioural assumptions, are largely swept under the rug. The moral force of the argument is supposed to overcome many practical objections, but the novelty of the proposal is such that its justification ought to rely on something more concrete than republican and liberal idealism.
3) Furthermore, the model is bloated by unnecessarily baroque addenda, such as the universal old age pension scheme (a sensible proposal as such but not needed for the stakeholder grant itself) and the various tax innovations: the 2% wealth tax, the semi-confiscatory inheritance tax, and, most bizarrely of them all, the counterintuitive privilege tax. Some of these, including the aforementioned privilege tax proposal, are wholly out of place and only serve to dilute the book's central principle down. Although, at this point, the reader has to ask, what IS the book's central principle? Redistributing wealth through a wealth tax? Or equalizing starting points through a privilege tax? Or forcing stakeholders to eventually pay back their own grant in full? These are self- contradictory proposals that reflect the book's often confused philosophy.
4) The most damning argument against the book, however, is the existence of a superior alternative, UBI. This might be a bit unfair, since Universal Basic Income was not as popular when Ackerman and Alstott's book was written. And indeed the book deserves all the praise for playing an important part in igniting interest in the issue. But the authors were sufficiently aware of UBI to sympathize with it before rejecting it. (They reject it on the grounds of its relative paternalism: UBI is given periodically rather than in a single windfall endowment.)
Well, why prefer UBI? Why not let young people control all of the money right away? I won"t go into the details here, but the short answer is that UBI can act as a permanent safety net whereas the stakeholder grant cannot (a fact acknowledged by the authors). The liberal freedom to spend all the money carelessly without having a safety net to fall back on has a few socially beneficial functions but many catastrophic ones. People who fall through the cracks of the safety net bring problems not only for themselves but for others as well. Neglecting the need for a robust safety net is inexcusable for any comprehensive redistributive scheme.
And UBI should not be seen merely as a passive safety net. It is a tool of social liberation via self-empowerment. Granted, it is not as powerful a source of economic freedom as a single-stroke capital endowment. But a regular UBI income flow would still allow people to do most of the things that a stakeholder grant can do: allow people to invest, to move to a new city, to start a business, to raise a family, etc.
UBI can give everybody a fair start in life - not just at the age of 21, but every year of their lives. It can turn all citizens into property owners with the freedom to be robustly autonomous. The stakeholder society, that is, is within our reach - but only if we embrace a minimum dose of libertarian paternalism in the form of accepting the UBI model. The security and freedom of adulthood comes at the cost of forgoing the dizzying freedom of youth.
But I still think that the book only deserves three stars. Why? It has some big problems. Next, I will go through my four biggest gripes (in order of increasing seriousness):
1) The philosophical foundations are confused, superficial, and very American. The book freely combines arguments based on notions of republican freedom, Madisonian constitutionalism, equality of opportunity, and dignity, among many others. And the language is often very populist in its rhetoric. The book reads like a campaign manifesto, or a visionary party platform, aimed at the semi-educated U.S. voter. This waters down the ethical value of the book. The discussions around utilitarianism, libertarianism, social justice, intergenerational justice, etc., fail to penetrate the surface level of platitudes.
2) More worryingly still, the economic arguments of the book are not constrained by considerations of feasibility. Questions around compliance, corruption, incentives, and other behavioural assumptions, are largely swept under the rug. The moral force of the argument is supposed to overcome many practical objections, but the novelty of the proposal is such that its justification ought to rely on something more concrete than republican and liberal idealism.
3) Furthermore, the model is bloated by unnecessarily baroque addenda, such as the universal old age pension scheme (a sensible proposal as such but not needed for the stakeholder grant itself) and the various tax innovations: the 2% wealth tax, the semi-confiscatory inheritance tax, and, most bizarrely of them all, the counterintuitive privilege tax. Some of these, including the aforementioned privilege tax proposal, are wholly out of place and only serve to dilute the book's central principle down. Although, at this point, the reader has to ask, what IS the book's central principle? Redistributing wealth through a wealth tax? Or equalizing starting points through a privilege tax? Or forcing stakeholders to eventually pay back their own grant in full? These are self- contradictory proposals that reflect the book's often confused philosophy.
4) The most damning argument against the book, however, is the existence of a superior alternative, UBI. This might be a bit unfair, since Universal Basic Income was not as popular when Ackerman and Alstott's book was written. And indeed the book deserves all the praise for playing an important part in igniting interest in the issue. But the authors were sufficiently aware of UBI to sympathize with it before rejecting it. (They reject it on the grounds of its relative paternalism: UBI is given periodically rather than in a single windfall endowment.)
Well, why prefer UBI? Why not let young people control all of the money right away? I won"t go into the details here, but the short answer is that UBI can act as a permanent safety net whereas the stakeholder grant cannot (a fact acknowledged by the authors). The liberal freedom to spend all the money carelessly without having a safety net to fall back on has a few socially beneficial functions but many catastrophic ones. People who fall through the cracks of the safety net bring problems not only for themselves but for others as well. Neglecting the need for a robust safety net is inexcusable for any comprehensive redistributive scheme.
And UBI should not be seen merely as a passive safety net. It is a tool of social liberation via self-empowerment. Granted, it is not as powerful a source of economic freedom as a single-stroke capital endowment. But a regular UBI income flow would still allow people to do most of the things that a stakeholder grant can do: allow people to invest, to move to a new city, to start a business, to raise a family, etc.
UBI can give everybody a fair start in life - not just at the age of 21, but every year of their lives. It can turn all citizens into property owners with the freedom to be robustly autonomous. The stakeholder society, that is, is within our reach - but only if we embrace a minimum dose of libertarian paternalism in the form of accepting the UBI model. The security and freedom of adulthood comes at the cost of forgoing the dizzying freedom of youth.
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June 25, 2022Recommended in TP
July 31, 2008
This book presents an interesting wealth-redistribution model. In the context of a graduate seminar, it was the perfect starting point for a social justice discussion. To say that I enjoyed the book is not to say I agreed with it completely, although I found more agreement with it than disagreement.
Displaying 1 - 3 of 3 reviews