A property-owning democracy is a social system whereby state institutions enable a fair distribution of productive property across the populace generally, rather than allowing monopolies to form and dominate. This intends to ensure that all individuals have a fair and equal opportunity to participate in the market. It is thought that this system is necessary to break the constraints of welfare-state capitalism and manifest a cooperation of citizens, who each hold equal political power and potential for economic advancement. This form of societal organisation was popularised by John Rawls, as the most effective structure amongst four other competing systems: laissez-faire capitalism, welfare-state capitalism, state socialism with a command economy and liberal socialism. The idea of a property-owning democracy is somewhat foreign in Western political philosophy, despite issues of political disenfranchisement emerging concurrent to the accelerating inequality of wealth and capital ownership over the past four decades.
Etymology and history
Although popularised by Rawls, the term 'property-owning democracy' had been used in different ways before him. Coined by British MP Noel Skelton in 1920, the concept emphasized the terms 'property-owning' and 'democracy' as a conservative response to left-leaning ideas of liberalism and socialism. At this stage, the term represented the necessity of protecting property rights from democratic organisation.
British conservatives had one meaning of the term 'property-owning democracy' before it was reconceptualized by British economist James Meade. He co-opted it to argue that re-distributive policies are required to achieve the model society proposed by Skelton and his followers. The concept has since been used to describe an ideal society in which property-ownership is broadly distributed throughout the population.
Rawls borrowed the term from Meade in A Theory of Justice (1971), which caused it to spread widely.
Description and theoretical foundations
Rawls described 'property-owning democracy' as a social system that aspires to distribute the ownership of property widely throughout the populace, so that citizens may co-operate under equal and free relationships. This ideal is based on the premise that individuals must possess productive resources in order to enable fair societal participation and equal political influence. Whereas conventional liberalist thought endows each individual with the autonomy to make rational self-maximising decisions in their own interests, the concept of a property-owning democracy would contrarily argue that citizens cannot freely make political decisions due to the undue influence of wealth inequality. This is identified by Rawls in his Justice as Fairness: A Restatement: Inequalities in the ownership and control of wealth, income, and property can reduce the fair value of basic liberties. This system does not condemn the use of markets to determine demand and fair prices, however, it asserts that private ownership of productive means may corrupt a fair equality of opportunity. As levels of wealth inequality increase, so does the political influence of affluent classes. Similarly, Rawls contrasts property-owning democracy against socialist forms of governance, which are thought to dismiss basic individual liberties in a manner that is inconsistent with democratic values. Although depicted in opposition to these systems, property-owning democracy is accepted by both conservative and liberal theorists.