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Three Visions of a Realist Utopia

I define realist utopias as models for the Great Society that are far greater than any system ever implemented before yet still realistically within our grasp. These are models that create a just constitutional basic structure for a society/polity that meets the necessary criterion for justice, as defined by neo-republican theory and Rawlsian political liberalism, while remaining entirely realistic in terms of feasibility or real-world applicability.

I want to talk about three viable realist utopian models. However, I should start by noting the essential characteristics of a just basic structure. Any realist utopian model will share these same essential characteristics, though the actual ways that these things are manifested and the mechanisms that guarantee them may be radically different. The basic structure will: (1) entail liberal democracy or a republican form of government, in which people have a say in the matters that affect their lives, (2) guard against the extremes of inequality so that concentrations of wealth cannot be used to exploit the less wealthy or to buy politicians, and (3) ensure that everyone has access to the necessities of life such as food, shelter, healthcare, etc.

Property-Owning Democracy or Neoliberal Distributism

The property-owning democracy model, or neoliberal distributism, is a conservative model that entails liberal democracy but also creates a framework that would ensure widespread distribution of private ownership (as opposed to public ownership) of the means of production. This model may be associated with the ideas of Irving Kistol, Milton Friedman, and F. A. Hayek. The model is chiefly a conservative and neo-conservative model for the Great Society. I have covered the topic more broadly elsewhere, in an essay on property-owning democracy and social insurance.

A property-owning democracy is the opposite of a [socialist] social democracy. In a socialist social democracy, there is public ownership of enterprises, whereas property-owning democracy has private ownership of enterprises. However, property-owning democracy entails the widespread distribution of private ownership, unlike actually existing capitalism where the vast majority of people do not have any share of ownership in the means of production but are rather dispossessed wage-slaves. This vision can broadly be called a vision of an ownership society. Proponents of this system disagree about whether this should be regarded as a form of capitalism or a form of anticapitalism. The answer to that question largely depends on how one chooses, more or less arbitrarily, to define "capitalism." People like Irving Kristol and Margaret Thatcher have called property-owning democracy a form of capitalism because it entails private ownership of the means of production, whereas conservative thinkers like Hilaire Belloc and G. K. Chesterton have called it distributism and set it apart from capitalism since actually existing capitalism always entails a proletariat (a working class that is deprived of ownership and depends upon wages for sustenance). This is largely a debate over semantics and need not concern us here.

It may be contested whether or not F. A. Hayek and Milton Friedman really were neoliberal distributists or proponents of property-owning democracy. However, I would argue that Hayek and Friedman really were in this camp even if they did not employ this language. And, they were in the neoliberal tradition, alongside Kristol and Thatcher, regardless. When Friedman did point to examples of capitalism working optimally, he tended to point at Japan, Taiwan, and South Korea following WWII, places where General Douglas MacArthur implemented distributist policies that fueled a sustained economic boom. Hayek had a "commercial republican" conception of liberty, which led him to support some sort of a minimum income guarantee and social insurance for guaranteeing universal healthcare. Furthermore, the philosophical basis of property-owning democracy, in general, is in civic republicanism. Friedman and Hayek were very similar ideologically. However, Friedman actually developed the principles into specific policy proposals. The mechanism for implementing a minimum income guarantee, for Friedman, would be the Negative Income Tax and the mechanism for guaranteeing access to healthcare would be Universal Catastrophic Coverage. And it should be noted that Corina Boar and Virgiliu Midrigan’s NBER paper on Efficient Redistribution effectively suggests that something like Friedman’s Negative Income Tax proposal is nearly optimal for achieving a widespread distribution of incomes. Friedman’s Negative Income Tax is a version of the distributist philosopher Hilaire Belloc’s differential tax proposal. There is a different rate imposed upon people in different financial positions but the scheme is rendered progressive by lower (negative) rates on the bottom end rather than by higher rates at the top end.

So, how would it actually work? Well, the Negative Income Tax would guarantee a minimum income to all people by making the tax rates on lower incomes negative. If you make less than a certain amount, your tax rate would be negative and you would receive a subsidy. Ideally, Friedman thought that all incomes above the taxable threshold ought to be taxed at a flat rate. You could use this policy to guarantee everyone a certain minimum income and ensure that no one was allowed to fall into poverty. This would also make it easier for people to gain ownership of the means of production. Poorer people would find it easier to purchase land or machinery to start a small business. Workers would have more bargaining power relative to employers and could feasibly demand higher wages or shares of ownership in the company they work for. This tax reform would give more of a share of national income to people at the bottom. Higher incomes means more opportunity to accumulate wealth in the form of land, machinery, and other "means of production."

As an alternative to providing a minimum income guarantee through a Negative Income Tax, other conservatives have proposed a similar scheme being implemented through a consumption tax. This alternative scheme is what Neal Boortz and John Linder refer to as the FairTax. This scheme proposes to abolish the income tax altogether and replace it with either a flat sales tax or a flat value-added tax. However, the FairTax exempts necessary spending from taxation by giving everyone a preemptive rebate or "prebate" to cover the cost of living. In practice, this means that everyone receives a universal basic incomes to cover the essentials and then pays a flat tax on consumption. This bears a strong similarity to Friedman’s Negative Income Tax proposal insofar as it can be seen as a negative tax on consumption — if you are a lower-income individual who does not consume very much, then your taxes may be negative. This FairTax scheme is very similar to Andrew Yang’s 2020 Presidential platform policy proposal for a Freedom Dividend, a universal basic income funded by a value-added tax (VAT). The FairTax does differ from Yang’s proposal insofar as it would be a single tax proposal — that is, FairTax would replace all other forms of taxation and, thereby, greatly simplify the tax code.

Many people on the left will object to such tax schemes as being regressive, since flat taxes are generally regressive ceteris paribus ("all else being equal"). Yet, "ceteris is not paribus," to borrow a phrase from Scott Sumner. A tax scheme must always be looked at in conjunction with the benefits or programs that it is offsetting or "paying for." If, for instance, a formally regressive tax, like VAT, is offset by benefits that overwhelmingly go to lower and middle-income earners, then the tax-to-benefit ratio will render the formally regressive tax actually progressive. Apart from that, a tax scheme can be rendered progressive in multiple ways. It can be rendered progressive by making the rates on higher incomes higher or by making rates on lower incomes lower. In reality, both the FairTax and the Negative Income Tax proposal are far more progressive than the so-called "progressive income tax" that we are more familiar with because the benefits-to-tax ratio for lower-income folks is actually much higher. These conservative tax schemes are also simpler, less bureaucratic, easier to administer, and more appealing to people on the right because they don’t seem to be unfair or to punish top earners.

With regard to access to healthcare, Milton Friedman proposes that it should be guaranteed through Universal Catastrophic Coverage. This is a topic I have covered in more detail elsewhere. This scheme would not cover all healthcare expenses but only those that are genuinely unaffordable. Expenses that one could not reasonably be expected to pay would be covered by the government. Affordability depends on one’s ability. If you are a multi-millionaire or billionaire, then you are able to afford a lot more and therefore would have a higher deductible. If you have no income at all, then any healthcare expense is unaffordable, so you would have a deductible of zero and all healthcare expenses would be covered. As with the Negative Income Tax and FairTax proposals above, the benefits-to-tax ratio would render this scheme highly progressive.

Other conservative intellectuals, like Ezekiel Emanuel and Victor Fuchs, have proposed universal healthcare vouchers as an alternative means of achieving the same goal. This reform plan proposes to establish a public exchange for health insurance, such as the one created by the Affordable Care Act (ObamaCare). However, the exchange would be mandatory rather than voluntary. It would also put an end to employer-based health insurance. All health insurance would be purchased through the exchange and would be available to anyone, independent of employment. However, this proposal entails no individual mandate, nor does it entertain the idea of a public option. The plan guarantees universal health coverage by giving out universal health care vouchers. These vouchers would "convey the right to enroll in a health plan that covers a set of standard benefits," based on the coverage offered by the existing Federal Employee Health Benefits program. It is, therefore, an "insurance voucher" rather than a cash voucher. The healthcare plans would have no deductibles and the entire program would be paid for with a 10 to 12% value-added tax (VAT). Here again, the universal transfer of benefits (in the form of the insurance vouchers) renders the formally regressive VAT actually progressive.

What interests me here is that we have a conservative model of the Great Society that offers a minimum income guarantee (implemented either through the Negative Income Tax or through the FairTax) and universal access to healthcare (either through Universal Catastrophic Coverage or through Universal Health Care Vouchers). Regardless of which way one chooses to do these things, such a conservative neoliberal distributist basic structure would foster property-owning democracy and would create a floor below which no one could fall. It would virtually eliminate poverty and guarantee everyone access to food, shelter, healthcare, and all the other necessities that humans need. Furthermore, the associated tax schemes would result in an automatic widespread distribution of income and property ownership by default. And property-owning democracy and neoliberalism are, as the names suggest, democratic and liberal, so this system meets all three of our requirements for a just basic structure — it is democratic, guards against excessive inequality, and ensures everyone access to food, shelter, and healthcare.

Georgism, Geo-Libertarianism, and the Land Value Dividend

A more centrist proposal is the land value dividend scheme associated with Thomas Paine, Henry George, and Leon Walras. This scheme recognizes land as mankind’s natural birthright, as a gift from nature/God, which is meant to be shared. When we appropriate scarce land for private use, we unjustly exclude others from it and create poverty as a necessary consequence. John Locke held that it is appropriate to acquire land through homesteading under a principle of ownership based around occupancy and use when land is abundant and anyone can freely homestead land that is just as useful/good. This occupancy and use form of ownership is appropriate in primitive societies where land titles aren’t formal and most land remains unclaimed, "where there is enough, and as good, [land] left in common for others."(Second Treatise on Government, Ch. 5) However, Locke asserts that this does not apply in modern societies where formal systems of property rights cause artificial scarcity and make valuable land difficult to attain. When "enough, and as good" is not left in the commons (i.e. left unclaimed), then one ought to have to pay for the right to exclusive access to the land. This is the rationale behind the idea of a land value tax, an idea that has been supported by everyone from Adam Smith, Thomas Jefferson, and Milton Friedman to Michael Hudson, George Bernard Shaw, Pierre-Joseph Proudhon, and Karl Marx. This whole philosophy of land value tax is often referred to as "Georgism" after Henry George, the author of the book Progress and Poverty which explores the economic justification for adopting such a tax.

Rick Falkvinge says we should think of modern societies as entailing a two-tier system of property ownership. There is a tier-one owner in the State or government which creates and enforces property rights while also reserving the prerogative to collect property taxes and a tier-two owner in the individual who has a legal title to the land which has been granted by the tier-one owner (government). As the tier-one owner, the government has a right to collect rent from the tier-two owner. Within the Georgist and geo-libertarian framework, this ground-rent collection (or "land value tax") would be the only tax the government has a natural right to collect, so Georgists have sometimes been referred to as single-taxers. Yet, Georgists have insisted that the government doesn’t have a right to tax your house or the improvements you build upon the land, which are the products of your own labor and therefore naturally ought to belong exclusively to you as an individual, but rather only a right to collect ground-rent in the form of a tax upon the land value (minus the value of structures and improvements). The revenue from this land value tax would fund all government expenses and leave some money left over. The excess money, according to Henry George and Thomas Paine, should be given back to the people in the form of a citizen’s dividend or grant.

This land value dividend proposal would collect a land value tax from the tier-two owner of the land and evenly distribute the revenue in the form of a citizen’s dividend — a direct cash payment to each citizen, corresponding to their share of the rent payment received from all the ground-rent for the land which naturally belongs to everyone. The economic rent from land will always greatly exceed what the government could possibly spend in any given year, meaning that the associated dividend from the excess would always be quite significant and generally be sufficient to constitute a universal basic income. This policy would eliminate poverty altogether.

Contemporary proponents of this land value dividend scheme, such as Scott Santens and Guy Standing, have noted that this scheme alone is not sufficient to meet civic republican and Rawlsian criteria for justice. The scheme would need to be done in conjunction with some sort of scheme for guaranteeing universal access to healthcare. Universal healthcare can be achieved in various ways and the preferred model here seems to be something like Medicare-for-All.

Again, as with the neoliberal distributist model discussed above, this geo-libertarian model would create a society that guards against the extremes of inequality and guarantees everyone access to the necessities of life. Any liberal democracy that adopts such a policy would constitute a realist utopia.


Finally, we have the more left-wing proposal of liberal-socialism, as espoused by people like Abba Lerner, James Meade, and Erik Olin Wright. This is not to be confused with a traditional Marxian Socialist model where all industry is nationalized under a "dictatorship of the proletariat." The liberal-socialist model of Meade proposes a mixed-economy that combines the idea of market socialism, as espoused by Oskar Lange, with property-owning democracy. There would be a widespread distribution of private ownership where appropriate, as conservatives have argued for, but there would also be some socialized industry in areas where the private sector fails to produce. The socialized industries would only be monopolistic in areas where natural monopolies occur even under a free-enterprise system but would be competitive otherwise, meaning private individuals and companies would be free to compete against the government enterprises.

One way to create more government-owned enterprises would be to nationalize (in whole or in part) "too big to fail" industries whenever they have to be bailed out at the taxpayer’s expense. Any bailout, then, would be treated as a purchase of ownership in the enterprise. From that point on, the government would own a certain share of the enterprise and any dividends owed to the government would be used either to reduce tax burdens for all citizens or to provide citizens with a dividend. Ironically, this sort of socialist scheme where the government is funded by excess profits of socialized industries is the only possible path to the conservative and libertarian dream of a society free of taxation! If the entire enterprise is publicly owned, then the whole of the profits (excluding what is reinvested in the enterprise) could even be divided up evenly amongst all the citizens of the nation in the form of a social dividend. Once you have enough socialized industry, the social dividend(s) from the profits of publicly-owned enterprises would supply all citizens with a universal basic income that guarantees everyone sufficient income to supply themselves with food, shelter, and other basic necessities.

Since liberal-socialism does not propose socializing all enterprises, the problems with central planning and economic calculation which plague traditional socialism simply don’t apply. Each socialized enterprise is just one competitive entity within a larger free-enterprise system. And the management of the socialized enterprises may be done in any manner of ways. The enterprises could remain independent of government bureaucracy and be run as hierarchical firms on the principle of maximizing shareholder profits — the only difference here would be the shareholders to whom the profits happen to accumulate.

Alternatively, the socialized enterprise could be structured as a worker-managed co-operative, where the workers have a dividend-earning share of ownership alongside the government’s share. The workers, therefore, attempt to maximize the firm’s profits in order to boost their own income. There is also the possibility of running the enterprise more like a convention publicly-owned entity like the Post Office or the Veterans Health Administration. It is often assumed that privately-owned enterprises perform better than publicly-owned enterprises but the data suggests that the two alternatives are comparable so long as the publicly-owned enterprises are competitive firms rather than monopolies. After WWII, there were a number of publicly-owned enterprises in the United States and their performance was comparable to similar private companies. Whether a company is public or private, in and of itself, has no bearing on efficiency whatsoever. Problems only arise when you attempt to destroy private enterprise altogether and make all firms publicly-owned or when you try to replace the market system with central planning.

This liberal-socialist model would provide universal healthcare in one of two ways: either (1) by creating a National Health Service, such as the one in the United Kingdom, where doctors are government employees and the State is a single payer that employs doctors to treat citizens or (2) by creating a Medicare-for-All system, such as the Canadian and Australian Medicare systems, where hospitals are private enterprises and doctors do not work directly for the State yet the government does act as a single payer through a nationalized insurance scheme. Whether one ought to opt for nationalizing healthcare provision or nationalizing health insurance is largely a matter that will depend on the particular circumstances in the country in question. A smaller country like the U.K. had no problem nationalizing the entire healthcare enterprise whereas the U.S. may find it much easier to do a standard social insurance scheme instead. Either way, liberal-socialism will provide universal access to healthcare.

Again, we find that this liberal-socialist model, just like the neoliberal property-owning democracy and the Georgist land value dividend proposal, meets our second and third criteria of a just society. It guards against excessive inequality while guaranteeing everyone access to the necessities of life. The liberal-socialist model also proposes to do this socialism within the framework of liberal democracy, so it also meets our first criterion.


These are, in my estimation, the only models for a just society that meet or come close to meeting the bare minimum requirements for a just basic structure of society. It is important, however, to note that these could all be implemented in various degrees alongside one another. For instance, you could do a Negative Income Tax or a land value tax alongside liberal-socialism. You could also do a Negative Income Tax alongside a land value tax. You could have socialized enterprises with a social dividend alongside a more conservative scheme like universal health care vouchers to ensure universal access to healthcare. These schemes are not entirely mutually exclusives.

It seems indisputable that these models are far better than anything that has heretofore existed on this planet. However, there are other questions regarding justice that must also be taken into consideration but which are beyond the scope of this particular essay. To what extent are people entitled to have some control or say over matters that affect them? Should the principle that people ought to have a say over matters that affect their lives extend into the workplace? Is workplace democracy necessary to satisfy the demands of justice? To what extent should private owners have complete control over their property? Does your right to control your property end when you harm others by polluting? by selling dangerous products? Does one have any right to completely control their own property if what they do with their property does happen to affect others?

Perhaps none of these three realist utopia models is the ideal perfect model for a society. However, they would be what Charles Sanders Pierce and James Meade referred to as agathotopias (good places) — not necessarily utopias (perfect places) — and this is what I mean by calling them realist utopias. Compared to what we currently have, they seem fantastic and idealistic but they would certainly not be without their problems and shortcoming nor are they utopian in the sense of being so idealistic as to be unrealistic. These are proposed systems that seem almost utopian but nevertheless are completely within the realm of possibility in the very near future.

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