The crisis we perceived has three components. First, inequality within wealthy countries, and in particular the US and UK, has been growing dramatically with especially the share of national income going to workers falling.

“Neo-liberals” like Ronald Reagan and Margaret Thatcher promised that in exchange for such inequality their “trickle down” economics would stimulate growth and create jobs. Yet, second, at the same time economic and productivity growth rates have fallen dramatically and employment has declined.

This combination of inequality and stagnation, which we call “stagnequality”, has largely discredited existing economic policy in the eyes of much of the public. At the same time, democratic politics has struggled to respond to conflicts between minorities and majorities within countries, as well as those between international cooperation and national sovereignty, leading to increasingly polarized politics. Responding to both these crises of legitimacy, dangerous and incompetent populist leaders and policies have become prominent and threaten hard-won social progress. Together we call these events the “crisis of the liberal order”.

To respond to this crisis, we look back to a nineteenth-century tradition, led by thinkers like Adam Smith, Jeremy Bentham, John Stuart Mill, Henry George, Léon Walras and Beatrice Webb. These self-styled “Radicals” inspired political movements from the American Progressive Movement to Sun Yat-Sen’s Nationalist revolution in China with their ideas that saw free, open and competitive markets as a force that could emancipate societies from feudal prejudices and privileges. While many of their ideas were neglected during the conflicts of the Cold War, they were further developed in the ivory tower by thinkers like Nobel Laureate William Vickrey and used to design auctions for advertising slots on webpages and the radio spectrum. In Radical Markets, we revive this Radical tradition and show how it can address the crisis of the liberal order.

Property is Monopoly

Imagine a world in which all major private wealth (every factory, patent or plot of land) is constantly for sale at a fair price and where most of the value of this property is paid out equally to all citizens as a social dividend. While one might be tempted to believe the wealthy would dominate such a hyper-market world, in fact most private wealth would become social wealth and would be shared equally by all. With most value of assets accruing to the public, every asset would become cheaper to (partially) own, democratizing the control of assets and offering everyone new opportunities to start businesses or households. At the same time, because there would be a price on every asset, large scale projects, like high speed trains, would become far easier to develop as holdouts could no longer block the right of way.

We propose a new property system, called the Common Ownership Self-Assessed Tax (COST), that would make such a world come true. Every citizen and especially corporation would self-assess the value of assets they possess, pay a roughly 7% tax on these values and be required to sell the assets to anyone willing to purchase them at this self-assessed price. This tax would raise enough revenue to eliminate other taxes on capital (such as on inheritance, corporations, capital gains, property and so forth), significantly reduce income taxes and pay down much of public debt, while at the same time funding a large social dividend (of roughly $24,000 for a family of four in the United States) or funding critical public infrastructure.

At the same time, unlike most taxes, it would actually grow the economy by 5%. Beyond these economic benefits, a COST would create a healthier relationship to property, teaching us to detach from our material possessions and stop trying to exploit one another in commercial transactions, instead seeking to increase the value of common wealth and strengthening the bonds of community. And while such a dramatic change may seem like a speculative pipedream, it is a natural way, even in the near-term, to govern public resources like the radio spectrum.

Radical Democracy

Imagine a world where political minorities could protect their most cherished interests at the ballot box without relying on whims of judges and compromises on sensitive issue could be hammered out transparently in the public square. If citizens were able to trade influence on issues they don’t care or know about for influence on the issues most important to them, the voting process itself could help create reasoned compromises among citizens. Minorities could overwhelmingly vote down populist politicians who threatened to oppress them, while the majority of citizens could choose which of the remaining candidates represent the best direction for the country. The public sector, and organizations of all sorts governed by voting (from corporations to housing co-ops), could make decisions efficient in the best total interests of their stakeholders.

We propose a new system of Quadratic Voting (QV) that would create such a truly radical democracy. Every citizen would receive an equal annual allotment of “voice credits” that they could use to vote in a range of collective decisions from elections to the school board to referenda on membership in international organizations. Every citizen could choose how many votes, up or down, she wants on any given issue or candidate, as long as she has enough vote credits to afford it. Crucially, the costs of votes would be quadratic in the number of votes acquired. For reasons we explain in chapter 2 of our book, this quadratic cost is the only one under which citizens have in theory an incentive to and in experiments in practice do vote in proportion to how important issues are to them.

It is thus the only rule that leads to social decisions that produce the greatest good for the greatest number. By making collective institutions that are thus truly responsive to the general interest and not just the prejudices of the majority or special interets, QV could restore faith in and thus a greater role for public institutions. And it is already being used for governance and to elicit opinions in polling using software created by our start-up, QDecide.

Uniting the World’s Workers

Imagine a world where wealthy countries hosted one migrant for every native-born citizen and where migration has overwhelming popular support. Native-born citizens sponsor visas for migrants, who in return share half of the increase in earnings they achieve by coming to wealthy countries with their hosts. A typical family of four can earn $15,000 by hosting migrant workers and millions of migrants increase their earnings by 5-10 times by working in wealthy countries, sending much of their earnings back to their impoverished families who are finally able to afford nutrition and sanitation. Citizens select migrants to sponsor with whom they often have a personal connection, of heritage, religion, language or interests. Local communities regulate how many migrants their citizens can host and many citizens in search of opportunity move to cities that are open to migration.

We propose a Visas between Individuals Program (VIP) that would tie together the interests of the working classes of rich and poor countries through sponsorship of visas and sharing of the gains from migration. Because every citizen would benefit from migration, rather than just the wealthy or those in cosmopolitan cities, migration would move from being one of the most divisive issues in wealthy countries to a widely popular source of growing middle-class income.

At the same time, the VIP would do more to reduce inequalities across countries, in both material income and political influence, than all development of poor countries for the last thirty years. And while migrants would be much poorer than their native hosts and would likely be somewhat patronized by him, the VIP would begin to break down the barriers of nationalism and bigotry that harden the hearts of the wealthy countries against the plight of their sisters and brothers in poor countries. Experiments with a similar system in New Zealand have already met with great success and, as we suggest in our chapter 3, could be tried in pioneering model cities in wealthy countries.

Dismembering the Octopus

Imagine that, just by changing the structure of corporate ownership and antitrust regulations, wages started growing again, prices for all sorts of goods fell and decent-paying jobs became available to able-bodied worker. The last forty years have seen a dramatic stagnation of living standards for the working classes of in wealthy countries. Yet even as economies have stagnated, stock markets have soared as corporations and the wealthy take an ever-larger share of the economic pie. The fundamental problem is that the antitrust laws that keep competition vibrant, channeling corporate greed towards the public good, have been unenforced. This has allowed a small group of powerful investors to coordinate much of the economy to serve the interests of the wealthy, while corporate consolidation has allowed all companies to hold down worker wages by creating artificial unemployment.

We propose simple, practical and yet radical solutions that would disrupt few of the benefits of corporate consolidation while eliminating the power of the wealthy to rig the economy in their favor. The institutional investors that control most public corporations would have to choose one company to invest in within each industry they invest, so they could not hold (for example) both United Airlines and American Airlines. This would force them to promote competition between the companies they hold and those held by other institutional investors. Antitrust prohibitions against mergers raising competition would be applied equally to cases where the merger gives the companies power to lower workers’ wages, where these prohibitions are currently applied only to mergers harming consumers from increased prices. Tech giants would no longer be able to buy up nascent disruptive rivals and would thus face fiercer competition. And, as we show in our chapter 4, all of this is possible without further legislation: all that is needed is for government antitrust enforcers or harmed groups of citizens to band together to defend their interests in court.

Data as Labor

Imagine a world in which your personal data, currently hoovered up by tech companies and repurposed for their profit, were honored as your dignified work and compensated as such. Rather than the growing prowess of digital systems being seen as “Artificial Intelligence” (AI) that would replace our jobs, it would be seen as a new source of well-paying jobs and income supplements. Rather than being treated like passive consumers of the entertainments dished out to us by digital platforms, we would be honored as the suppliers of the data that make the digital economy work. Rather than all the value of the digital economy flowing to wealthy nerds in cosmopolitan cities, the fruits of digital technology would be shared broadly among citizens.

In our chapter 5, we show that by treating Data as Labor (DaL) not only can we build a fairer and more equal society, but we can also spur the development of technology and economic growth. At present, because data suppliers are not properly rewarded for their digital contributions, they lack the incentive or freedom to contribute the high-quality data that would most empower technology or develop their personal capacities to maximize their earnings and contributions to the digital economy. The current wasteful equilibrium results from the dominance of companies like Facebook and Google that thrive off free user data.

But other companies, like Amazon, Apple and especially Microsoft, have a different business model and could benefit from competing with Facebook and Google to offer users a fairer deal. Awareness among users of their value would already make a large difference, as users might form data labor unions to demand fair compensation. And users are increasingly being empowered by new definitions of property rights over data in the European Union.

E. (Eric) Glen Weyl is a Principal Researcher at Microsoft Research and a Visiting Senior Research Scholar at Yale’s Law School and Economics Department. He was Valedictorian of his undergraduate class at Princeton in 2007 and received his PhD in economics from Princeton a year later.

He was a Junior Fellow at the Harvard Society of Fellows, an Assistant Professor of Economics at the University of Chicago and is an Alfred P. Sloan Research Fellow 2014-2019. He aims, in the spirit of nineteenth century political economy, to interweave insights from a variety of now disjoint fields (such as economics, law, computer science, and philosophy) to propose practical ideas for radically expanding the scope of market exchange. He pursues these ideas both theoretically and practically, writing academic papers, writing for the public, engaging with policymakers and launching commercial ventures.

Eric Posner is Kirkland and Ellis Distinguished Service Professor of Law, University of Chicago. His books include The Twilight of Human Rights Law (Oxford, 2014); Economic Foundations of International Law (with Alan Sykes) (Harvard, 2013); Contract Law and Theory (Aspen, 2011); The Executive Unbound: After the Madisonian Republic (with Adrian Vermeule) (Oxford, 2011); Climate Change Justice (with David Weisbach) (Princeton, 2010); The Perils of Global Legalism (Chicago, 2009); Terror in the Balance: Security, Liberty and the Courts (with Adrian Vermeule) (Oxford, 2007); New Foundations of Cost-Benefit Analysis (with Matthew Adler) (Harvard, 2006); 

The Limits of International Law (with Jack Goldsmith) (Oxford, 2005); Law and Social Norms (Harvard, 2000); Chicago Lectures in Law and Economics (editor) (Foundation, 2000); Cost-Benefit Analysis: Legal, Economic, and Philosophical Perspectives (editor, with Matthew Adler) (University of Chicago, 2001). He is a fellow of the American Academy of Arts and Sciences, and a member of the American Law Institute.