Principal Researcher at Microsoft Research New England
Radical Markets: Uprooting Capitalism and Democracy for a Just Society, to be released May 8, 2018
“I think that at this moment of crisis for the things we all believe in—both libertarians and liberals—we have to come together and find new ways of bridging our differences and offering a positive alternative to those who want to take society backwards, both to the failings of fascism and communism.”
The Politic: One of the big ideas that seems to fuel your book is the idea that right now, markets are facing something called “stagnequality,” in which economies are stagnant while inequality is growing. What kind of risks are associated with leaving this issue unaddressed?
Glen Weyl: Stagnequality—in the book we emphasize—is sort of two of three problems, and the other problem is political unrest. I think stagnequality is harmful in its own right. I think it’s leading people to no longer have growing living standards. I think it’s slowing social progress. But it’s also creating political conflict. It’s in many ways threatening [to encourage] the rise of ethnonationalism within wealthy countries, and the potential for that to turn into conflicts between wealthy countries and developing countries and create an atmosphere that’s the most dangerous in terms of the stability of the world—certainly since the Cold War, and maybe since the 1930s. So, I think it’s a very dangerous moment for the world, because people feel dissatisfied with stagnating living standards in wealthy countries for ordinary people, resulting both from stagnation and inequality, and the possibility that they’ll take that out on minority groups or on international competitors to wealthy countries is a real fear.
Something else you mention in the book is the conflict that’s often presented by differing economic and social ideas of the left and right, and the perceived incompatibility between the two. So, in what ways do you think that partisanship might be holding society back from becoming more efficient and/or fair?
I think there’s two separate issues—one is partisanship, and one is ideology. They’re related to each other, but they’re not exactly the same thing. The United States has become very divided by parties in a way that’s not completely driven by ideology. A good part of it is just tribalism: groups fighting each other. But I also think that there is a very narrow vision represented by the current ideological conflict between the right and the left around the world, and that both of these tendencies used to be united as part of this broader liberal movement. Libertarianism and what we call liberals in the U.S. these days used to be allied in a fight for greater equality and growth. And I think if we can reunite that alliance, we’ll have a chance of really confronting the so-called populists who really have no workable new ideas to offer and are just reacting against the failures of the existing system.
I think that you’ve seen that happen in France, where there’s been a realignment of the political system with Emmanuel Macron, uniting progressive forces of both the left and the right against the populist movement. But if he doesn’t come up with bold reforms that can really restore equitable growth—which I’m really worried he won’t—I think in the end he’ll lose, and the populists will come to power and really threaten the stability of the society. So, I think that at this moment of crisis for the things we all believe in—both libertarians and liberals—we have to come together and find new ways of bridging our differences and offering a positive alternative to those who want to take society backwards, both to the failings of fascism and communism.
The book also introduces the idea of sort of an ongoing public auction for property, made possible by a COST, or a “common ownership self-assessed tax,” on wealth. Could you explain that concept a little bit more?
The idea is that everyone would take all private property—let’s put aside personal possessions, like furniture or watches or whatever—but big things like land, and intellectual property factories. They would self-assess the value of those possessions, and anyone could take the possession from them at that price, and they would pay a tax on it at that self-assessed value. That would discourage them from setting a super high value just to hold on to it and keep it away from others. But on the other hand, it would create a revenue that would be redistributed to everyone as a social dividend, so it would eliminate the inequalities that come from the ownership of wealth.
Something like that sounds like it could put property ownership in constant limbo—so how can you introduce stability into that model, or how is it already present in the model?
You would choose exactly how much stability you have. Nothing is perfectly stable in this world—there’s always earthquakes, there’s always fires, and in fact, most people have a mortgage on their home, or they’re renters and they could be evicted if the rent goes up. So stability is always imperfect, and here you could choose exactly how much stability you want to pay for. If you want to have more stability, you would raise the price, which would reduce the chance that anyone would want to take it from you, and you would pay a tax on that. Stability, in our present world, is largely a luxury of rich people who own things outright. In this world, you would have to pay—it would be a luxury to have more stability—but it wouldn’t only be available to the rich, because the money that was raised from the tax on all that stability would be redistributed to all people. So an ordinary person who, in the United States, maybe has sixty, seventy thousand dollars of net wealth would only have to pay a tiny tax of one or two thousand dollars but would be receiving a social dividend of twenty or thirty thousand dollars that they could use to pay for that.
Shifting gears slightly—thinking back to 2016, there was a considerable amount of frustration about President Trump’s electoral college victory despite his loss of the popular vote, which led a lot of people to criticize the Electoral College as an unfair system because of the way it distorts the traditional democratic idea of “one person, one vote.” But in your book, you also introduce this idea of “Quadratic Voting,” which creates a market for politics by allowing people to amass “voice credits” and spend them on additional votes for issues they care about, to replace the “one person, one vote” model. So, how does that change the idea of what a fair voting system really means, and how might it do a better job of addressing citizens’ needs?
I know a lot of people didn’t like the Electoral College, but the truth is that Donald Trump almost won the election in the popular vote as well, and I don’t think that it’s at all implausible that he could have. In fact, in Britain where they just had a referendum, Brexit passed, and that was, I think, almost as problematic as Donald Trump being elected. So, I don’t think we can rely on the great quality of “one person, one vote” to save us from outcomes that we think are disastrous. Hitler was also elected in a “one person, one vote” proportional representation system. There’s a fundamental problem with the “one person, one vote” system—it’s not just the fact that sometimes it gets undermined. The problem is, it doesn’t protect minorities, and it doesn’t allow people to show when they’re strongly opposed to some outcome, like Hitler getting elected. Or, you know, the reason that Hitler got elected was that a lot of people were afraid of the communists getting elected.
“One person, one vote” systems trap us in these “lesser of two evils” systems, where people end up voting for someone they don’t like just to avoid someone else getting in. Under Quadratic Voting, that would never happen, because everyone can express their preferences in proportion to how important they are to them, because they have a budget out of which they can spend credits to get more influence on each of these issues. And while everyone has an equal vote—number of voice credits—they can spread it over many different elections over time, or different elections that have different importance to them, so that they can have the greatest influence on the issues that are most important, and they can vote down things that are really negative to them—like say, Trump getting elected, or Hitler getting elected, or maybe Clinton getting elected—some people really disliked Hillary Clinton. And so all those really unpopular or really hated candidates would go down, and more moderate or consensus options would rise up, because they would then be able to compete.