Nien-hê Hsieh poses a deceptively simple yet urgent question: is capitalism legitimate? Drawing on Scheffler’s “relational egalitarianism,” Hsieh’s answer is—probably not. The challenge is not merely a question of appropriate redistribution through taxation or levels of social welfare, but about the legitimacy of property and power relations at the heart of the system itself.
Hsieh highlights three structural features unique to capitalism that shape the relationship between capital owners and workers:
Capitalists can withhold capital at will, exercising unilateral power over workers.
They often hold interests beyond a single firm, undermining reciprocity and shared purpose with workers.
They claim residual profits, appropriating the surplus generated collectively.
These features are not natural or inevitable; rather, they arise from historical evolution and entrenched social conventions.
However, these conventions are far from arbitrary. As Ellen Meiksins Wood has shown, capitalist property relations were not gradually or neutrally adopted; they were imposed through what Marx called “primitive accumulation”—the violent separation of producers from the means of production. What we call the “free market” is, at root, a crystallization of historic domination and enclosure.
Hsieh’s argument gains further strength through Philip Pettit’s neo-republicanism, which identifies domination—not just inequality—as the central threat to legitimacy. In capitalism, domination is not an incidental outcome: it is structurally embedded into the very logic of ownership and contract. Thus, legitimacy demands more than equalizing outcomes; it requires dismantling arbitrary power. In this context, Nancy Fraser’s work reminds us that capitalism’s apparent contractarian equality is propped up by unpaid care work and social reproduction—systemic dependencies not captured by focusing on employment contracts alone.
Given the critical significance of the freedom-property nexus and persistent failures to legitimate existing property structures (see also Cohen’s critique of Nozick), I completely concur with Nien-hê that a revision of property distribution, rather than simply the redistribution of proceeds, is urgently required. Nien-hê here revisits Rawls’s notion of “property-owning democracy,” an evolution of liberal egalitarianism intended to address legitimacy concerns. Yet, as I have argued before, Rawls’s framework often glorifies personal interests and procedural fairness, falling short of Rousseau’s vision of a common will and collective good—or of any substantive ideal of freedom and social justice.
So, the central challenge remains: if capitalism is fundamentally illegitimate, how can we theorize and enact economic relations grounded in true reciprocity, not disguised domination? Can property and capital be reimagined to support collective flourishing rather than individual accumulation? What would it mean to establish moral and just economic relationships—without repeating the coercion and inequality found in socialist experiments?
But the problem is, of course, not just legitimacy, but feasibility. Even if capitalism is indeed illegitimate because it systematically fosters domination and entrenches inequality, is meaningful political and social transformation even possible—especially in a transnational economy? Any reform worth the name would need to be sweeping. The appropriative relationships that define capitalism—unilateral capital withdrawal, lack of reciprocity, and residual profit entitlement—are not accidental byproducts but constitutive features. They create social relations skewed by power imbalances, making even well-intended reforms liable to perpetuate oppression. any political and economic voices who tout “inclusive” or “ethical” capitalism while ignoring the foundational distribution of property either misunderstand how capitalism actually works or are simply being hypocritical.
Moreover, the lived realities of collectivist experiments and the vast literature on institutional change (from Mancur Olson’s free-rider dilemma to Jon Elster’s “normative-institutional gap” and Antonio Gramsci’s insights on cultural hegemony) are sobering. Beyond the monumental difficulty of envisioning and successfully implementing genuinely better economic systems, the status quo is protected not only by law and power, but also by a powerful ideology. As Slavoj Žižek wryly observes, “It is easier to imagine the end of the world than the end of capitalism.”
Perhaps, as Gramsci put it, “the old is dying and the new cannot be born.” Yet, as Hsieh reminds us, the legitimacy question cannot be avoided. As long as our economic system is structured by relations of domination, any talk of justice or inclusion risks becoming just another tool of power.
PS: I’m reminded of a line from William Burrows’s introduction to the 20th Anniversary Edition of Bosch’s Transforming Mission: “What we seek to contextualise, in other words, are not cultural forms of religiosity [or indeed capitalism], but culturally appropriate ways of dying to self and rising to manifest God’s life-giving love [read: the best society we can collectively realise].” Much to Gramsci’s likely displeasure, perhaps it will take a kind of secular religion to give rise to the new—otherwise destined to remain unborn.
#leadership #economyforgood #relationalegalitarianism #democraticeconomy #propertyrights
(Commenting on: https://www.youtube.com/watch?v=Cqf3NRQU8Z8)
Originally published: 03.07.2023