Discussion with E. Glen Weyl on “Radical Markets”
April 24, 2018
On April 24th, 2018, the Penn Wharton Public Policy Initiative hosted a talk with E. Glen Weyl, Principal Researcher at Microsoft Research, New England, about his recently published book, Radical Markets: Uprooting Capitalism and Democracy for a Just Society. His lecture was then followed by a discussion moderated by Herbert Hovenkamp, the James G. Dinan University Professor at Penn Law and the Wharton School and Ioana Marinescu, an Assistant Professor at Penn’s School of Social Policy and Practice as well as a long-time friend and colleague of Weyl’s.
Glen Weyl’s book aims to use technology and economics to find new ways of organizing societies in order to reduce inequality, increase productivity, and ease political tensions. Weyl began by communicating the most basic and central concept of his work through a thought experiment of sorts. He asked the audience to suspend all academic thought for a moment and join the author in an imaginary world known as Marketopia.
Marketopia is much like Zootopia but rather than the city being defined by a populous of animals, it is made distinct by how large-scale private property such as land, houses, and buildings are all always constantly eligible for purchase to the highest bidder. In this world, the current highest bidder of any asset must pay a rent for this property that contributes to a common fund. Ultimately, instead of these resources being allocated permanently to the highest bidder, proceeds from the public auction are added up, equally divided, and refunded to the entire public as a type of universal income as found in countries such as Finland.
Marketopia is Weyl’s radical vision of a free market, a concept that is central to both his critiques and solutions to today’s economic inequality and political bi-partisanship. Weyl claims that our world is not a free market, and instead, a controlled system of concentrated interest. That is to say, in our current society there is almost no asset that is up for liquid purchase by anyone, unlike Marketopia where everything would be purchasable simply to the highest bidder.
However, this society then raises the question, “Doesn’t that mean that the rich will just buy everything and disenfranchise the rest of the society that is unable to do the same?” Weyl responds by asking the audience to first re-examine how we define affluence and wealth. He claims that wealthy individuals are those with huge holdings of private and public assets such as land, real estate, and or stock, but since such private ownership is impossible in Marketopia, wealthy individuals of this sort could never exist in the first place. Instead everyone would have equal access to and be a beneficiary of a universal social dividend drawn from the bid system.
Weyl acknowledges that the notion of an extreme free market as an example of common ownership seems paradoxical for individuals that grew up after the Cold War, but he claims that prior to that point in time this philosophy existed as a widely popular theory in political and economic scholarship thanks to the author, Henry George. Weyl says that the goal of his own book was to revive these ideas of competitive common ownership theory and update them for the modern reader in order to address the fundamental structural problems of the modern world through five policy proposals that work out the spirit and details outlined in Marketopia. These recommendations are as follows:
- First, implement a “common ownership self-assessed tax” where every individual self-assesses the value of their private property (a price at which anyone could then take the possession through purchase) and pay a tax on this asset at that self-assessed value. This would discourage owners from setting super high evaluations simply to hold onto property or to deter other potential buyers, while also creating a revenue that would be redistributed to everyone as a social dividend. In doing so, the tax helps facilitate a liquid market for private property and reduce socioeconomic inequality through a public monetary return.
- Second, practice “radical democracy or quadratic voting,” a system under which democratic governance could avoid the disenfranchisement of minorities by distributing an equal number of what he calls “voice credits” to all citizens that can be used to influence or voice any political topic that they choose. The cost of these voice credits would be the square of the number of tokens they would like to receive.
- Third, establish a visa program between individuals where rather than corporations or governments being the determinant of one’s eligibility to enter a country, any citizen of a wealthy nation can sponsor migrants and negotiate for a share of the benefits that the migrant would receive so that the rewards of migration do not just go to government agencies or the migrants themselves but rather to potentially anyone.
- Fourth, actually <strong, which Weyl argues hasn’t been happening in the most important sectors in recent years. He claims that while power in the labor markets has been growing, antitrust laws have been almost completely unenforced in this area. Furthermore, because institutional investors such as Vanguard and Blackrock own most of the corporate economy, there has been a dramatic decline in competition as well. The confluence of these two forces results in the consistent and widening wealth disparity found in the US. Weyl claims that by enforcing antitrust laws, we are able to help deconstruct and prevent the formation of these power parities that attempt to over centralize authority.
- Fifth, protect data that we produce when we participate in the digital economy because it is the basis of the artificial intelligence organizations that are going to allegedly displace human jobs. Weyl claims that if we treat this data as the labor that it is, it can help generate a lot of new opportunity instead.
Weyl goes on to concede that these policy recommendations are not things that the authors want done overnight but rather slowly and deliberately over a period of time. For each rule, they have near-term, practical, and non-controversial ideas that they want to be experimented with, prior to larger-scale social adoption.
Ultimately, Weyl hopes these policies will help address a problem he coins as “stagnequality,” which is where economies are stagnant while inequality continues grow. In wealthy countries, we are witnessing a dramatic increase in socioeconomic inequality and as a result firms have increased their monopoly hold in markets by almost three fold since the 1970’s thereby further broadening the wealth disparity of the economy. Furthermore, globally, economic growth has dramatically decreased since World War II, showing a stagnation of sorts in the financial sector as well. As a result, the growing socioeconomic inequity along with the stagnation of the global economy or stagnequality has largely discredited the existing democratic orthodoxies by which we organize our societies. Consequentially, democracies are struggling to deal with conflict between minorities and majorities that grow discontent with the immobility of stagnequality. This has led to a reactionary populous movement on both the left and the right, creating a great deal of political tension. Considering these issues, Weyl claims that his book, through a revisionist lens, attempts to tackle stagnequality in a systematic but radical way to address both the economic inequalities and the political unrest of the 21st century.