(Click here to continue on the main path)

I think there would be all sorts of problems with the kind of system you are suggesting.

In the first place, you're talking about a massive increase in government regulation of the economy. According to some of its proponents, a property-owning democracy would put a ceiling on capital accumulation, establish a minimum income, require democratic control of most enterprises, somehow force ownership of capital to be very widespread, and impose huge taxes or other limitations on inheritance.

To accomplish this radical transformation, Rawls himself admitted that whole new branches of government would be necessary: an allocation branch, a stabilization branch, a transfer branch, and a distribution branch. Each of these would have extensive regulatory functions.

Can you even imagine the inefficiencies involved in this new level of regulation? It's staggering. Besides that, it would involve constant interference in people's lives.

Second, I strongly suspect that a property-owning democracy would generate all sorts of counterproductive incentives. For example, if there is a cap on capital accumulation, what is the incentive to create and accumulate capital? And let me remind you that it is through the accumulation of capital that our economy becomes more productive and our standard of living goes up.

A lot of what I have said here  comes from a critical paper by Kevin Valliet ("A Moral and Economic Critique of the New Property-owning Democrats: On Behalf of a Rawlsian welfare State"). He argues that a property-owning democracy is both "impractical and unjust on Rawlsian grounds." He also considers the welfare state to be superior in both respects. I agree with him.