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Best known as the author of On Liberty, John Stuart Mill remains a canonical figure in liberalism today. Yet according to his autobiography, by the mid-1840s he placed himself “under the general designation of Socialist.”
For this week’s blog post, MQUP author Helen McCabe takes a closer look at Mill’s life and work in relation to our 21st century economy and our current struggles with income inequality. As we look to rebuild the world in the wake of financial crises, climate change, and a global pandemic, looking back at Mill’s work offers a radical rereading of the philosopher and a fresh perspective on contemporary meanings of socialism.
In her new book John Stuart Mill, Socialist Helen McCabe explores the nineteenth-century political economist’s core commitments to egalitarianism, social justice, social harmony, and a socialist utopia of cooperation, fairness, and human flourishing. Uncovering Mill’s changing relationship with the radicalism of his youth and his excitement about the revolutionary events of 1848, McCabe argues that he saw liberal reforms as solutions to contemporary problems, while socialism was the path to a better future.
“Extreme income inequality is one of the hallmarks of the UK economy.”[1] This was not written by nineteenth-century political economist, theorist and reformer John Stuart Mill, but in 2020. According to the OECD, only Costa Rica, Chile, Mexico, Bulgaria and the United States have greater income inequality than the UK. (Canada is 20th on the list: more equal than Estonia, but less than France).
Research shows that by 5:30pm on 6 January, the median FTSE 100 CEO’s earnings for 2021 had surpassed that of the median annual wage for full-time workers in the UK. At Astra-Zeneca – a company much in the news recently – the ratio of pay between CEOs and the median employee is 190/1. This difference is dwarfed, however, by the ratio at Ocado (2605/1). Making companies disclose this information was a Conservative Party policy in 2017, showing the issue is of concern to voters across the political spectrum.
Inequality of remuneration – and ensuring life-chances, experiences and happiness – was of great concern to Mill. This may be a surprise, as we tend to associate Mill with “classical” political economists like Adam Smith, and see such “classical” figures as inventing “neo-liberal” economic policies epitomized by the phrase, recently invoked by Boris Johnson in relation to vaccine-production, “Greed is good”. But Mill was vehemently opposed to this view, urging contemporary employers to adopt profit-sharing, and workers to create producer-cooperatives.
Mill criticized current modes of remuneration: the “injustice … that some are born to riches and the vast majority to poverty”[2]; and that “the produce of labor” was “apportioned … almost in an inverse ratio to the labor – the largest portions to those who have never worked at all … and so in a descending scale, the remuneration dwindling as the work grows harder … until the most fatiguing and exhausting bodily labor cannot count with certainty on being able to earn even the necessaries of life”[3]. Mill had in mind income disparity between workers and land-owners or capitalist owner-employers rather than modern-day CEOs (who are also employees, though owning shares in the company), but his concern about fairness, disparity, and insecurity are still relevant.
Mill endorsed profit-sharing as an important means of both improving contemporary society, and organically and peacefully transitioning to socialism. In profit-sharing schemes, owner-employers pay their staff wages, and also share profits with them. This sharing might not be equal: it might, for instance, be performance-related. What is essential is that workers’ income should increase if they work hard to make the business prosper. Mill’s idea therefore differs from modern practices of paying workers with shares, because share-price is determined factors well outside workers’ control, and does not harmonize worker- and employer-interests in the way Mill intended.
In producer-cooperatives, the company and all its capital assets are owned collectively by the workers, who democratically elect their management, freely accept the rules at work, and share “profits” in accordance with a mutually-agreed principle of justice, from piecework to equal shares. Thus, wages, which Mill said might “represent a practical necessity” but not “a moral ideal” would be eradicated in favor of collective ownership and sharing.[4]
Mill saw profit-sharing and cooperation as a means of “healing the widening breach” between capitalists and workers, as well as radically transforming the nature of social relationships. Employees would no longer be “a mere bought instrument in the work of production”: everyone involved in production would be “a partner in it.” [5]
Indeed, Mill wanted to widen this sense of “partnership” to society more generally, encouraging us all to view our labour as something we owed our fellow-humans.[6] Ideally, we would see our income not as a “purchase-money” for labour, which should be “given freely”, but as “provision … by society” for our well-being. Society should be grateful for our work, but remunerate us not on the basis of “quid pro quo”, but as regards what it could afford “consistently with the just claims of others”.
But this was a long way into a socialist future. The important first step was to eradicate egregious income inequalities, and heal the “breach” between rich and poor – a step we still seem unable to take.
[1] https://www.aberdeenstandard.com/docs?editionId=2aac7534-0c70-4751-9140-c0bb719aa1f0
[2] John Stuart Mill, Autobiography, Collected Works of John Stuart Mill I (Toronto, 1981), 239.
[3] Mil, Principles of Political Economy, Collected Works II (Toronto, 1965), 207.
[4] See Mill, Auguste Comte and Positivism, Collected Works X (Toronto, 1969), 340-41.
[5] Mill, The Claims of Labour, Collected Works IV (Toronto, 1967), 382.
[6] See Mill, Auguste Comte and Positivism, Collected Works X (Toronto, 1969), 340-41.
Helen McCabe is assistant professor of political theory at the University of Nottingham. She is the author of John Stuart Mill, Socialist.
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