[The Ethics of Social Democracy: Justice Meets Capitalism by Richard D. Miller (Oxford University Press, 2026; xii + 392 pp.)]
This is an amazing book. Richard Miller—a distinguished philosopher of science who taught at Cornell for several decades—was one of the leading academic defenders of Marxism. And his version of Marxism was not a mild one. He stressed the importance of class struggle, favored the labor theory of value, and rejected talk of rights and justice as ideological distortions. But in this posthumous book, edited by a friend, he abandons Marxism, calling instead for “social democracy.” Morality now plays a key role. Moreover, although he mentions Marx a number of times, he never refers to his own former views. Not only has Miller gone over to the class enemy, he does not announce his defection.
He now thinks that a market economy is essential. Central planning is out. As he puts it:
The inequalities of political influence could serve as reasons to end and replace capitalism, to cast into the garbage can of history in which production and distribution are largely the activity of enterprise owned by individuals (including joint owners), enterprise competing for profit from what they sell and largely relying on wage contracts with employees as the basis for the efforts producing their profits. But this is not an option for informed morally conscientious political choice.
The replacement that has been tried is state-run economic coordination via a central plan. The replacement of the capitalist way of coordinating a modern economy with this alternative would produce stark material losses due to the inefficiency of central planning, for example, its stifling of innovation of innovation and of responsiveness in international opportunities, which disrupt the central plan, its pressure to hoard inputs needed for production dictated by the plan, and its maladjustment of goods on offer to consumers’ desires on account of lack of competition for sales. These costs would include substantial material losses to those who are worse-off and less influential under capitalism, a change in their prospects which they would rightly oppose. (emphasis added)
Miller mentions the loss to the worse-off because he attaches special moral importance to their interests. Readers familiar with Rawls will find here a familiar theme, but Miller is not a follower of Rawls’s theory of justice. Miller is a moral pluralist and thinks that Rawls ignores competing considerations that must be weighed in the balance when assessing moral issues.
Further, he restates what I take to be the fundamental argument of The Road to Serfdom. According to Hayek, there will be a tendency for central planners to restrict free elections and criticism of the plan, because the success of the plan can only be determined after a number of years. Miller says:
In addition, the political consequences of such an economy are offensive to the collaborative sense. The effectiveness of national central plans requires stable political obedience that is incompatible with genuine multiparty competition. Widespread opposition to the centrally imposed mandates of the one-party regime pose the danger of a spiral of disruption, economic worsening, and increased disruption in turn, so repression and manipulation preempt open argument among competing public advocates. The motivations to repress and to stultify political discussion in society at large are greatly strengthened by a danger to the party itself of successful organized opposition: a danger of rebellious overthrow rather than mere electoral loss and mere temporary status as a minority party.
Some people, reluctant to abandon socialism, suggest instead an economy run by worker-owned cooperatives. (John Stuart Mill supported this idea). Miller points out that this won’t work either. Relying on the work of the economist J. E. Meade, he notes that this system leads to unemployment:
To sustain efficiency based on competition, the workers in the worker-owned firms are motivated in their decisions by the profits that they equally share and their firms operate under pressure of realistic fear of bankruptcy in case of competitive defeat. In this system, the worker-owners of surviving firms will have inadequate incentive to expand and take on refugees from the failed firms, who will dilute their profit shares.
If we turn to the Marxist account of exploitation, based on the extraction of surplus value, Miller once again has sensible things to say. Suppose, as is in fact false, that the labor theory of value is correct. What is supposed to be morally wrong with a capitalist who earns a profit because he supplies workers with tools?
Exploitation as extraction of surplus value is a typical feature of the buying and selling of labor in a capitalist economy. . . But the clarifications that reveal the accuracy of the characterization undermine its standing as a moral criticism. It is far from obvious that transactions yielding net revenue to employers in return for mere satisfaction of the material needs of employees who must find employment are evil.
From what I have said so far, you might think that Miller has abandoned capitalist exploitation, but in fact he has his own version of this concept to peddle. In the capitalist market, as it actually exists, workers lack “bargaining power.” They are dependent on employers for work and have little room to seek better terms than they are offered, since, except in unusual conditions, employers can easily find a replacement worker, but workers cannot find a better job.
You might ask, what about the classical works of W. H. Hutt, such as The Theory of Collective Bargaining and The Strike-Threat System that argue against the notion that the determination of wages in the free market leaves vast “zones of indeterminacy” that employers exploit to their advantage though their superior “bargaining power”? What has Miller to say in reply to them?
The answer is that he has nothing to say at all. He does not cite a single free market economist in the entire book, with the exception of Adam Smith, who supports his position on “bargaining power.”
I quoted earlier an argument that comes right out of The Road to Serfdom, but Miller never mentions Hayek, nor does his demolition of central planning cite Mises or Hayek. We see a glaring example of ignorance of the free-market literature when he says that “a high minimum wage reduces the pressure on adolescents to limit time spent in higher education in order to supplement their family’s income.” It seems not to occur to him that minimum wages cause unemployment and that the effect is especially strong on young adults.
