A Lockean approach to issues in contemporary political economy would prove too limited and narrow to be worthwhile. Locke’s analysis of political systems and their legitimating tactics rests on overly simple assumptions of human needs in contemporary life. For example, Locke centers on the legitimacy of a state on its protection of property. A political “community perpetually retains a supreme power of saving themselves… [from a legislature who] carry on designs against the liberties and properties of the subject,” commands Locke (XIII, 149). Yet Locke’s understanding of property is too simple for his legitimating rubric to be pragmatic or useful. As for property, Locke insists that it is obtained through a combination of labour power over unowned goods (IV, 27). A state apparatus who uses its political mandate to deny a person’s use of their liberty to obtain property or threatens to take away any such property may thus be rendered illegitimate. Locke consistently references the property-and-liberty legitimating rubric in a myriad of ways (XI, 135; 137, 139, e,g.). Any close reading or understanding of Locke must therefore conclude that his approach to political economy is constructed on the narrow grounds of rights to property and liberty’s assurance in pursuit thereof.
Locke’s narrowly constructed state thus fails to adequately confront pressing economic issues that contemporary society necessarily wrestles with. Take, for example, progressive taxation and its benefit to economies mired in wealth inequality. According to research by Saez and Diamond (The Case for a Progressive Tax: From Basic Research to Policy Recommendations, Journal of Economic Perspectives, 2011), optimal tax theory inappropriately weights assumptions in its models in order to derive their tax policy recommendations (165-166). Saez and Diamond’s preferred model for tax policy recommendation sheds the assumptions that limit optimal tax theory. In doing so, Saez and Diamond disclose three recommendations for tax policy that are otherwise considered illegitimate under the assumptions of optimal tax theory: high income should be taken at higher marginal tax rates; low-income earners should have their earning’s subsidized; capital gains should be taxed progressively as income (166). Locke’s understanding of property and the role of the state in protecting property as such could be construed as denying the legitimacy of any taxation (save in cases where such taxation is done at the behest of the community, and/or for the maintenance of their natural rights to liberty and property). Given that taxation is assumed necessary for the functioning of any political economy, Locke’s analysis would fail to confront the very real problems of labor inefficiency and wealth inequality in today’s economy (among others).
A similar critique may be applied to the role institutions play in the formation of healthy economies. Acemoglu and Robinson (The Role of Institutions in Growth and Development, 2010), for example, emphasize that institutional differences between extractive colonies (e.g., sugar plantations, the slave trade, etc.) and non-extractive colonies (e.g., Britain’s American colonies) explain the outcomes of their economies in today’s world where the descendants of extractive regimes fare worse on typical measurements of output and GDP than the descendants of non-extractive regimes. Though Acemoglu and Robinson appear to complement Locke in their positive emphasis on the role of property rights in the development of healthy political economies in their no-extractive colonies, they also conclude that such political economies today fail to adequately confront the prevalence of de jure and de fact political power in their midst. The presence of de jure and de facto political power corrupt an economy’s ostensible fairness by allowing those with wealth to construct the state to protect its wealth. Say Acemoglu and Robinson, “when a particular group is rich relative to others, this will increase its de facto political power and enable it to push for economic and political institutions favorable to its interests, reproducing the initial disparity” (7). Given that Locke so clearly emphasizes the right to property, a political economy that looks askance of a corrupting political power should be rendered illegitimate. Yet no such corruption appears to be considered in Locke’s thought, and thus his rubric for legitimacy may be considered wanting for today’s most pressing economic and political issues.