Rawls's framework for global justice

Rawls's A Theory of Justice was immediately received as a major and progressive contribution to the theory of justice within existing societies. His Law of Peoples (1999) was intended to carry his basic ideas about justice to the international realm.  (Here is a PDF of a preliminary version of the title essay of the book as published in Critical Inquiry in 1993.) Here is how he defined the goal of a law of peoples in 1993:

The law of peoples ... is a family of political concepts along with principles of right justice, and the common good that specify the content of a liberal conception of justice worked up to extend to and apply to international law. It provides the concepts and principles by reference to which that law is to be judged. (43)

In contrast to the reception A Theory of Justice received, his work on the international part of the theory has not had much influence, and was roundly criticized for being too accepting of international inequalities.   Philip Pettit put the point this way in his contribution to Rex Martin and David Reidy's Rawls's Law of Peoples: A Realistic Utopia:

John Rawls's work on the law of peoples is notorious for its anti-cosmopolitan stance: roughly, its insistence that those of us in well-ordered societies do not owe to the members of other societies the sort of justice we owe to one another. (38)

This is exactly the critique that Philippe van Parijs offered to Rawls prior to publication of the book (link).

Given that Rawls's intuitions seem to have been solidly progressive in other spheres, it is worth considering why he took this very limited view of the obligations of justice in the global context. Why did he begin with the perspective of peoples rather than persons?  (Here I'll make use of the 1993 statements of the view.)

A number of the critics put their cases in terms of Rawls's anti-cosmopolitanism.  "Cosmopolitanism" is the view that we are all citizens of the world, and we have positive moral relationships with each other no matter what nation issues our passports.  No one would deny that everyone has some kinds of moral relationships to everyone else -- for example, the obligation not to impose harm on innocent people.  But cosmopolitanism extends to the idea of positive obligations -- the obligation to render assistance as well as the obligation to refrain from gratuitous harm.  The contrary to cosmopolitanism might be called "nationalism", but this implies assumptions that Rawls would presumably not have accepted.  So let's call it "bounded people-ism": the claims of justice that a person has against other persons extend only to other members of his/her people and government.

One deep reason for the direction that Rawls took was the assumption he made about how to make use of the original position and the veil of ignorance in arriving at principles of international justice.  If this framework involved all human beings, then the results would have been very similar to the argument made in the case of a well-ordered society: inequalities need to be the least system possible consistent with maximizing the position of the least-well-off stratum of society.  However, Rawls chose instead to include "peoples" rather than "persons" in the argument from the original position in the case of international justice. What is a people?

By peoples I mean persons and their dependents seen as a corporate body and as organized by their political institutions, which establish the powers of government. In democratic societies persons will be citizens; in hierarchical and other societies they will be members. (41)

And he directly addresses the question of why it should be peoples rather than persons whose perspectives are represented in the original position for international justice:

Wouldn't it be better to start with the world as a whole, with a global original position, so to speak, and discuss the question whether, and in what form, there should be states, or peoples, at all? ... I think there is no clear initial answer to this question. We should try various alternatives and weigh their pluses and minuses. Since in working out justice as fairness I begin with domestic society, I shall continue from there as if what has been done so far is more or less sound. So I simply build on the steps taken until now, as this seems to provide a suitable starting point for the extension to the law of peoples. A further reason for proceeding thus is that peoples as corporate bodies organized by their governments now exist in some form all over the world. (42-43)

So his reasons for beginning with this premise are, first, we have to start somewhere and there isn't a philosophically compelling reason to favor persons over peoples in this setting; and second, peoples (and states) exist as actors in the world, so it is feasible to begin the analysis at this level. This way of formulating the original position is designed to establish fair terms of interaction between societies -- or in other words,

... fair conditions under which the parties, this time as representatives of societies well ordered by liberal conceptions of justice, are to specify the laws of peoples and the fair terms of their cooperation. (45)

This formulation, of course, immediately precludes certain questions, including all questions of difference in outcomes for the least-well-off in the various societies.  The fact that the LWO in country X are worse off than the LWO in country Y cannot be a factor in this deliberation, and therefore there cannot emerge a positive obligation to transfer resources from society Y to X to ameliorate this difference.

Here are the principles that Rawls arrives at through this construction:

1. Peoples (as organized by their governments) are free and independent, and their freedom and independence is to be respected by other peoples.
2. Peoples are equal and parties to their own agreements.
3. Peoples have the right of self-defense but no right to war.
4. Peoples are to observe a duty of nonintervention.
5. Peoples are to observe treaties and undertakings.
6. Peoples are to observe certain specified restrictions on the conduct of war (assumed to be in self-defense).
7. Peoples are to honor human rights. (46)

In the final version of the argument in 1997 he adds a final principle:

8. Peoples have a duty to assist other peoples living under unfavorable conditions that prevent their having a just or decent political and social regime.

Later in 1993 he comments on the idea of a human right:

Human rights have, then, these three roles:
1. Their being fulfilled is a necessary condition of a regime's legitimacy and of the decency of its legal order.
2. Their fulfillment is also sufficient to exclude justified and forceful intervention by other peoples, say by economic sanctions or, in grave cases, by military force.
3. "They set a moral limit to pluralism" among peoples. (59)

Several things are evident from these lists.  First, the obligations represented here are indeed minimalist; basically, they are limitations on the use of coercive means by peoples (states) to achieve their ends.  Even the 8th principle added in the 1997 version creates an obligation only to assist other peoples in achieving a just political regime.  Second, there are no requirements of distributive justice in this list of principles.  Each society has internal requirements of distributive justice; but there is no inter-society requirement of distributive justice.  The fact that there are large inequalities of resources between countries is not a basis for a claim of injustice, according to these principles.

This framework has been strongly criticized by philosophers and others who found that it was far too accepting of global inequalities.  Alan Buchanan focuses on the global inequality part of the story in his 2000 contribution in Ethics. Buchanan holds that even representatives of peoples would not have overlooked the significant inequalities imposed on peoples by the global economic system.  He maintains that the original position concerned with international justice would have to take into account two important facts:

There is a global basic structure, which, like the domestic basic structure, is an important subject of justice because it has profound and enduring effects on the prospects of individuals and groups, including peoples in Rawls's sense.

The populations of states are not "peoples" in Rawls's sense and are not likely to become so without massive, unjustifiable coercion, but rather are often conflicting collections of "peoples" and other groups. (700-1) 

The first fact, if recognized, would ensure that the international original position would necessarily take into account the inequalities created by this system for different peoples.  He also believes that the second fact raises salient issues for the international original position.  Essentially the issue here is this: what happens when the multiple peoples of a single state come into conflict? By making the assumptions that "peoples within unified states" are the agents within the international original position, Rawls makes it impossible to arrive at principles of international justice that would specify just behavior in the face of civil war or secessionist movements. This approach makes it impossible to address intrastate conflict.

Tom Pogge extends his own critique of Rawls's position on international distributive justice in a Fordham Law Review article (link) (also included in Martin and Reidy's Rawls's Law of Peoples: A Realistic Utopia).  Fundamentally, Pogge is highly critical of Rawls's failure to arrive at an international theory of justice that provides a basis for critique of global inequalities. In this piece he argues that Rawls's two theories are in fact inconsistent with each other.

As indicated above, much of this body of criticism has to do with the view that Rawls's Law of Peoples creates only the most limited obligations across peoples.  His view is not "cosmopolitan".  But a more fundamental criticism, which Buchanan hints at, is that there is a major strand of injustice embedded within the world system that is wholly invisible within Rawls's formulation of the law of peoples.  This is the fact that global institutions may create systematically imbalanced economic relations among states, with the result that some states are in a position to take unfair advantage of other states. This is a form of injustice that would not be accepted within the terms of a domestic society. But there is no basis within the framework of the law of peoples to identify and criticize these types of injustices.

These criticisms are surely correct.  As a theory of global justice, the Law of Peoples doesn't begin to provide enough of a normative basis to arrive at sound judgments about international arrangements.  I began by asking how it came to pass that Rawls presented such a limited theory of international justice. The best answer I can offer is that he was focusing on the wrong issues.  He focused on issues of war and interstate violence, and he did not sufficiently bring into his view the empirical realities associated with a highly unequal world economic structure.  And this is puzzling, since questions of global inequalities -- of resources, of power, and of self-determination -- were certainly widely debated at Harvard in the 1970s and 1980s while Rawls's thinking on this subject was developing.

(In addition to critics, Rawls has some defenders in this area.  Samuel Freeman provides an extensive and reasoned response to many of these criticisms of Rawls's theory of international justice here (link).)

Rawls's framework for global justice

Rawls's A Theory of Justice was immediately received as a major and progressive contribution to the theory of justice within existing societies. His Law of Peoples (1999) was intended to carry his basic ideas about justice to the international realm.  (Here is a PDF of a preliminary version of the title essay of the book as published in Critical Inquiry in 1993.) Here is how he defined the goal of a law of peoples in 1993:

The law of peoples ... is a family of political concepts along with principles of right justice, and the common good that specify the content of a liberal conception of justice worked up to extend to and apply to international law. It provides the concepts and principles by reference to which that law is to be judged. (43)

In contrast to the reception A Theory of Justice received, his work on the international part of the theory has not had much influence, and was roundly criticized for being too accepting of international inequalities.   Philip Pettit put the point this way in his contribution to Rex Martin and David Reidy's Rawls's Law of Peoples: A Realistic Utopia:

John Rawls's work on the law of peoples is notorious for its anti-cosmopolitan stance: roughly, its insistence that those of us in well-ordered societies do not owe to the members of other societies the sort of justice we owe to one another. (38)

This is exactly the critique that Philippe van Parijs offered to Rawls prior to publication of the book (link).

Given that Rawls's intuitions seem to have been solidly progressive in other spheres, it is worth considering why he took this very limited view of the obligations of justice in the global context. Why did he begin with the perspective of peoples rather than persons?  (Here I'll make use of the 1993 statements of the view.)

A number of the critics put their cases in terms of Rawls's anti-cosmopolitanism.  "Cosmopolitanism" is the view that we are all citizens of the world, and we have positive moral relationships with each other no matter what nation issues our passports.  No one would deny that everyone has some kinds of moral relationships to everyone else -- for example, the obligation not to impose harm on innocent people.  But cosmopolitanism extends to the idea of positive obligations -- the obligation to render assistance as well as the obligation to refrain from gratuitous harm.  The contrary to cosmopolitanism might be called "nationalism", but this implies assumptions that Rawls would presumably not have accepted.  So let's call it "bounded people-ism": the claims of justice that a person has against other persons extend only to other members of his/her people and government.

One deep reason for the direction that Rawls took was the assumption he made about how to make use of the original position and the veil of ignorance in arriving at principles of international justice.  If this framework involved all human beings, then the results would have been very similar to the argument made in the case of a well-ordered society: inequalities need to be the least system possible consistent with maximizing the position of the least-well-off stratum of society.  However, Rawls chose instead to include "peoples" rather than "persons" in the argument from the original position in the case of international justice. What is a people?

By peoples I mean persons and their dependents seen as a corporate body and as organized by their political institutions, which establish the powers of government. In democratic societies persons will be citizens; in hierarchical and other societies they will be members. (41)

And he directly addresses the question of why it should be peoples rather than persons whose perspectives are represented in the original position for international justice:

Wouldn't it be better to start with the world as a whole, with a global original position, so to speak, and discuss the question whether, and in what form, there should be states, or peoples, at all? ... I think there is no clear initial answer to this question. We should try various alternatives and weigh their pluses and minuses. Since in working out justice as fairness I begin with domestic society, I shall continue from there as if what has been done so far is more or less sound. So I simply build on the steps taken until now, as this seems to provide a suitable starting point for the extension to the law of peoples. A further reason for proceeding thus is that peoples as corporate bodies organized by their governments now exist in some form all over the world. (42-43)

So his reasons for beginning with this premise are, first, we have to start somewhere and there isn't a philosophically compelling reason to favor persons over peoples in this setting; and second, peoples (and states) exist as actors in the world, so it is feasible to begin the analysis at this level. This way of formulating the original position is designed to establish fair terms of interaction between societies -- or in other words,

... fair conditions under which the parties, this time as representatives of societies well ordered by liberal conceptions of justice, are to specify the laws of peoples and the fair terms of their cooperation. (45)

This formulation, of course, immediately precludes certain questions, including all questions of difference in outcomes for the least-well-off in the various societies.  The fact that the LWO in country X are worse off than the LWO in country Y cannot be a factor in this deliberation, and therefore there cannot emerge a positive obligation to transfer resources from society Y to X to ameliorate this difference.

Here are the principles that Rawls arrives at through this construction:

1. Peoples (as organized by their governments) are free and independent, and their freedom and independence is to be respected by other peoples.
2. Peoples are equal and parties to their own agreements.
3. Peoples have the right of self-defense but no right to war.
4. Peoples are to observe a duty of nonintervention.
5. Peoples are to observe treaties and undertakings.
6. Peoples are to observe certain specified restrictions on the conduct of war (assumed to be in self-defense).
7. Peoples are to honor human rights. (46)

In the final version of the argument in 1997 he adds a final principle:

8. Peoples have a duty to assist other peoples living under unfavorable conditions that prevent their having a just or decent political and social regime.

Later in 1993 he comments on the idea of a human right:

Human rights have, then, these three roles:
1. Their being fulfilled is a necessary condition of a regime's legitimacy and of the decency of its legal order.
2. Their fulfillment is also sufficient to exclude justified and forceful intervention by other peoples, say by economic sanctions or, in grave cases, by military force.
3. "They set a moral limit to pluralism" among peoples. (59)

Several things are evident from these lists.  First, the obligations represented here are indeed minimalist; basically, they are limitations on the use of coercive means by peoples (states) to achieve their ends.  Even the 8th principle added in the 1997 version creates an obligation only to assist other peoples in achieving a just political regime.  Second, there are no requirements of distributive justice in this list of principles.  Each society has internal requirements of distributive justice; but there is no inter-society requirement of distributive justice.  The fact that there are large inequalities of resources between countries is not a basis for a claim of injustice, according to these principles.

This framework has been strongly criticized by philosophers and others who found that it was far too accepting of global inequalities.  Alan Buchanan focuses on the global inequality part of the story in his 2000 contribution in Ethics. Buchanan holds that even representatives of peoples would not have overlooked the significant inequalities imposed on peoples by the global economic system.  He maintains that the original position concerned with international justice would have to take into account two important facts:

There is a global basic structure, which, like the domestic basic structure, is an important subject of justice because it has profound and enduring effects on the prospects of individuals and groups, including peoples in Rawls's sense.

The populations of states are not "peoples" in Rawls's sense and are not likely to become so without massive, unjustifiable coercion, but rather are often conflicting collections of "peoples" and other groups. (700-1) 

The first fact, if recognized, would ensure that the international original position would necessarily take into account the inequalities created by this system for different peoples.  He also believes that the second fact raises salient issues for the international original position.  Essentially the issue here is this: what happens when the multiple peoples of a single state come into conflict? By making the assumptions that "peoples within unified states" are the agents within the international original position, Rawls makes it impossible to arrive at principles of international justice that would specify just behavior in the face of civil war or secessionist movements. This approach makes it impossible to address intrastate conflict.

Tom Pogge extends his own critique of Rawls's position on international distributive justice in a Fordham Law Review article (link) (also included in Martin and Reidy's Rawls's Law of Peoples: A Realistic Utopia).  Fundamentally, Pogge is highly critical of Rawls's failure to arrive at an international theory of justice that provides a basis for critique of global inequalities. In this piece he argues that Rawls's two theories are in fact inconsistent with each other.

As indicated above, much of this body of criticism has to do with the view that Rawls's Law of Peoples creates only the most limited obligations across peoples.  His view is not "cosmopolitan".  But a more fundamental criticism, which Buchanan hints at, is that there is a major strand of injustice embedded within the world system that is wholly invisible within Rawls's formulation of the law of peoples.  This is the fact that global institutions may create systematically imbalanced economic relations among states, with the result that some states are in a position to take unfair advantage of other states. This is a form of injustice that would not be accepted within the terms of a domestic society. But there is no basis within the framework of the law of peoples to identify and criticize these types of injustices.

These criticisms are surely correct.  As a theory of global justice, the Law of Peoples doesn't begin to provide enough of a normative basis to arrive at sound judgments about international arrangements.  I began by asking how it came to pass that Rawls presented such a limited theory of international justice. The best answer I can offer is that he was focusing on the wrong issues.  He focused on issues of war and interstate violence, and he did not sufficiently bring into his view the empirical realities associated with a highly unequal world economic structure.  And this is puzzling, since questions of global inequalities -- of resources, of power, and of self-determination -- were certainly widely debated at Harvard in the 1970s and 1980s while Rawls's thinking on this subject was developing.

(In addition to critics, Rawls has some defenders in this area.  Samuel Freeman provides an extensive and reasoned response to many of these criticisms of Rawls's theory of international justice here (link).)

Rawls's framework for global justice

Rawls's A Theory of Justice was immediately received as a major and progressive contribution to the theory of justice within existing societies. His Law of Peoples (1999) was intended to carry his basic ideas about justice to the international realm.  (Here is a PDF of a preliminary version of the title essay of the book as published in Critical Inquiry in 1993.) Here is how he defined the goal of a law of peoples in 1993:

The law of peoples ... is a family of political concepts along with principles of right justice, and the common good that specify the content of a liberal conception of justice worked up to extend to and apply to international law. It provides the concepts and principles by reference to which that law is to be judged. (43)

In contrast to the reception A Theory of Justice received, his work on the international part of the theory has not had much influence, and was roundly criticized for being too accepting of international inequalities.   Philip Pettit put the point this way in his contribution to Rex Martin and David Reidy's Rawls's Law of Peoples: A Realistic Utopia:

John Rawls's work on the law of peoples is notorious for its anti-cosmopolitan stance: roughly, its insistence that those of us in well-ordered societies do not owe to the members of other societies the sort of justice we owe to one another. (38)

This is exactly the critique that Philippe van Parijs offered to Rawls prior to publication of the book (link).

Given that Rawls's intuitions seem to have been solidly progressive in other spheres, it is worth considering why he took this very limited view of the obligations of justice in the global context. Why did he begin with the perspective of peoples rather than persons?  (Here I'll make use of the 1993 statements of the view.)

A number of the critics put their cases in terms of Rawls's anti-cosmopolitanism.  "Cosmopolitanism" is the view that we are all citizens of the world, and we have positive moral relationships with each other no matter what nation issues our passports.  No one would deny that everyone has some kinds of moral relationships to everyone else -- for example, the obligation not to impose harm on innocent people.  But cosmopolitanism extends to the idea of positive obligations -- the obligation to render assistance as well as the obligation to refrain from gratuitous harm.  The contrary to cosmopolitanism might be called "nationalism", but this implies assumptions that Rawls would presumably not have accepted.  So let's call it "bounded people-ism": the claims of justice that a person has against other persons extend only to other members of his/her people and government.

One deep reason for the direction that Rawls took was the assumption he made about how to make use of the original position and the veil of ignorance in arriving at principles of international justice.  If this framework involved all human beings, then the results would have been very similar to the argument made in the case of a well-ordered society: inequalities need to be the least system possible consistent with maximizing the position of the least-well-off stratum of society.  However, Rawls chose instead to include "peoples" rather than "persons" in the argument from the original position in the case of international justice. What is a people?

By peoples I mean persons and their dependents seen as a corporate body and as organized by their political institutions, which establish the powers of government. In democratic societies persons will be citizens; in hierarchical and other societies they will be members. (41)

And he directly addresses the question of why it should be peoples rather than persons whose perspectives are represented in the original position for international justice:

Wouldn't it be better to start with the world as a whole, with a global original position, so to speak, and discuss the question whether, and in what form, there should be states, or peoples, at all? ... I think there is no clear initial answer to this question. We should try various alternatives and weigh their pluses and minuses. Since in working out justice as fairness I begin with domestic society, I shall continue from there as if what has been done so far is more or less sound. So I simply build on the steps taken until now, as this seems to provide a suitable starting point for the extension to the law of peoples. A further reason for proceeding thus is that peoples as corporate bodies organized by their governments now exist in some form all over the world. (42-43)

So his reasons for beginning with this premise are, first, we have to start somewhere and there isn't a philosophically compelling reason to favor persons over peoples in this setting; and second, peoples (and states) exist as actors in the world, so it is feasible to begin the analysis at this level. This way of formulating the original position is designed to establish fair terms of interaction between societies -- or in other words,

... fair conditions under which the parties, this time as representatives of societies well ordered by liberal conceptions of justice, are to specify the laws of peoples and the fair terms of their cooperation. (45)

This formulation, of course, immediately precludes certain questions, including all questions of difference in outcomes for the least-well-off in the various societies.  The fact that the LWO in country X are worse off than the LWO in country Y cannot be a factor in this deliberation, and therefore there cannot emerge a positive obligation to transfer resources from society Y to X to ameliorate this difference.

Here are the principles that Rawls arrives at through this construction:

1. Peoples (as organized by their governments) are free and independent, and their freedom and independence is to be respected by other peoples.
2. Peoples are equal and parties to their own agreements.
3. Peoples have the right of self-defense but no right to war.
4. Peoples are to observe a duty of nonintervention.
5. Peoples are to observe treaties and undertakings.
6. Peoples are to observe certain specified restrictions on the conduct of war (assumed to be in self-defense).
7. Peoples are to honor human rights. (46)

In the final version of the argument in 1997 he adds a final principle:

8. Peoples have a duty to assist other peoples living under unfavorable conditions that prevent their having a just or decent political and social regime.

Later in 1993 he comments on the idea of a human right:

Human rights have, then, these three roles:
1. Their being fulfilled is a necessary condition of a regime's legitimacy and of the decency of its legal order.
2. Their fulfillment is also sufficient to exclude justified and forceful intervention by other peoples, say by economic sanctions or, in grave cases, by military force.
3. "They set a moral limit to pluralism" among peoples. (59)

Several things are evident from these lists.  First, the obligations represented here are indeed minimalist; basically, they are limitations on the use of coercive means by peoples (states) to achieve their ends.  Even the 8th principle added in the 1997 version creates an obligation only to assist other peoples in achieving a just political regime.  Second, there are no requirements of distributive justice in this list of principles.  Each society has internal requirements of distributive justice; but there is no inter-society requirement of distributive justice.  The fact that there are large inequalities of resources between countries is not a basis for a claim of injustice, according to these principles.

This framework has been strongly criticized by philosophers and others who found that it was far too accepting of global inequalities.  Alan Buchanan focuses on the global inequality part of the story in his 2000 contribution in Ethics. Buchanan holds that even representatives of peoples would not have overlooked the significant inequalities imposed on peoples by the global economic system.  He maintains that the original position concerned with international justice would have to take into account two important facts:

There is a global basic structure, which, like the domestic basic structure, is an important subject of justice because it has profound and enduring effects on the prospects of individuals and groups, including peoples in Rawls's sense.

The populations of states are not "peoples" in Rawls's sense and are not likely to become so without massive, unjustifiable coercion, but rather are often conflicting collections of "peoples" and other groups. (700-1) 

The first fact, if recognized, would ensure that the international original position would necessarily take into account the inequalities created by this system for different peoples.  He also believes that the second fact raises salient issues for the international original position.  Essentially the issue here is this: what happens when the multiple peoples of a single state come into conflict? By making the assumptions that "peoples within unified states" are the agents within the international original position, Rawls makes it impossible to arrive at principles of international justice that would specify just behavior in the face of civil war or secessionist movements. This approach makes it impossible to address intrastate conflict.

Tom Pogge extends his own critique of Rawls's position on international distributive justice in a Fordham Law Review article (link) (also included in Martin and Reidy's Rawls's Law of Peoples: A Realistic Utopia).  Fundamentally, Pogge is highly critical of Rawls's failure to arrive at an international theory of justice that provides a basis for critique of global inequalities. In this piece he argues that Rawls's two theories are in fact inconsistent with each other.

As indicated above, much of this body of criticism has to do with the view that Rawls's Law of Peoples creates only the most limited obligations across peoples.  His view is not "cosmopolitan".  But a more fundamental criticism, which Buchanan hints at, is that there is a major strand of injustice embedded within the world system that is wholly invisible within Rawls's formulation of the law of peoples.  This is the fact that global institutions may create systematically imbalanced economic relations among states, with the result that some states are in a position to take unfair advantage of other states. This is a form of injustice that would not be accepted within the terms of a domestic society. But there is no basis within the framework of the law of peoples to identify and criticize these types of injustices.

These criticisms are surely correct.  As a theory of global justice, the Law of Peoples doesn't begin to provide enough of a normative basis to arrive at sound judgments about international arrangements.  I began by asking how it came to pass that Rawls presented such a limited theory of international justice. The best answer I can offer is that he was focusing on the wrong issues.  He focused on issues of war and interstate violence, and he did not sufficiently bring into his view the empirical realities associated with a highly unequal world economic structure.  And this is puzzling, since questions of global inequalities -- of resources, of power, and of self-determination -- were certainly widely debated at Harvard in the 1970s and 1980s while Rawls's thinking on this subject was developing.

(In addition to critics, Rawls has some defenders in this area.  Samuel Freeman provides an extensive and reasoned response to many of these criticisms of Rawls's theory of international justice here (link).)

Rawls on the EU

During the final preparation of The Law of Peoples: with "The Idea of Public Reason Revisited" John Rawls had extensive interaction with Philippe van Parijs. Van Parijs was particularly interested in the political and legal circumstances surrounding the establishment of the legal structure of the European Union and the obligations states and their citizens would have to each other within the EU. A key question is whether a political body -- a state or confederation -- needs to encompass a single unified "people" (whether by language, traditions, or culture); or if, on the contrary, such a body can consist of multiple peoples who nonetheless have duties of justice to each other.

What turns on this from a moral point of view is the level of moral concern that members of this kind of union owe each other. Are their obligations limited to the domain of "concern" that gives rise to some obligations of charity? Or are they closely enough interconnected that they are subject to the demands of justice towards each other? If the latter then the difference principle applies to them when inequalities of life circumstances are apparent. If the former then only weaker principles of assistance apply.

For van Parijs this question is particularly acute in the case of Belgium, which was even then subject to fissional pressures along linguistic-cultural lines between Flemings and Walloons.

Van Parijs and Rawls exchanged several careful and thoughtful letters on these issues in 1998, and these letters were published in their entirety in Revue de philosophie économique in 2003 (link).

The disagreements between van Parijs and Rawls are very interesting to follow in detail. There is one aspect of the exchange that is particularly intriguing on the subject of Rawls's own assessment of modern capitalism. The passage is worth quoting. Here is an excerpt from Rawls's letter:

One question the Europeans should ask themselves, if I may hazard a suggestion, is how far–reaching they want their union to be. It seems to me that much would be lost if the European union became a federal union like the United States. Here there is a common language of political discourse and a ready willingness to move from one state to another. Isn't there a conflict between a large free and open market comprising all of Europe and the individual nation-states, each with its separate political and social institutions, historical memories, and forms and traditions of social policy. Surely these are great value to the citizens of these countries and give meaning to their life. The large open market including all of Europe is aim of the large banks and the capitalist business class whose main goal is simply larger profit. The idea of economic growth, onwards and upwards, with no specific end in sight, fits this class perfectly. If they speak about distribution, it is [al]most always in terms of trickle down. The long–term result of this — which we already have in the United States — is a civil society awash in a meaningless consumerism of some kind. I can't believe that that is what you want.

So you see that I am not happy about globalization as the banks and business class are pushing it. I accept Mill's idea of the stationary state as described by him in Bk. IV, Ch. 6 of his Principles of Political Economy (1848). (I am adding a footnote in §15 to say this, in case the reader hadn't noticed it). I am under no illusion that its time will ever come – certainly not soon – but it is possible, and hence it has a place in what I call the idea of realistic utopia.

Several aspects of this passage are noteworthy. The first is a tentative skepticism about the goal of creating a European community in a strong sense -- a polity in which individuals have strong obligations to all other citizens within the full scope of the expanded boundaries. Rawls seems to equate this goal with the idea of creating a somewhat homogeneous and pervasive European culture, replacing German, French, or Italian national cultures. And he offers the idea that the traditions, affinities, and loyalties associated with national identities are important aspects of an individual's pride and satisfaction with his/her life.

What is surprising about these views is that Rawls seems to overlook the polyglot, poly-cultural character of the United States and Canada themselves. Both North American countries seem to have created some remarkable solutions to the problem of "unity with difference." It is possible to be a committed United States citizen but also a Chicago Polish patriot, a Los Angeles Muslim, or a Mississippi African American. Each of these is a separate community with its own traditions and values. But each can also embody an overlay of civic culture that makes them all Americans. It certainly doesn't seem impossible to imagine that Spaniards will develop a more complex identity, as both Spaniard and European. So Rawls's apparent concerns about homogenization and loss of collective meaning seem ill founded.

Even more interesting, though, are his several comments about globalization and capitalism. As we observed in a post about the property-owning democracy (link), Rawls has already expressed the idea that capitalism has a hard time living up to the principles of justice. Here he goes a step further and reveals a significant mistrust of the value system created by capitalism. He refers to the world the "bankers and capitalists" want to create -- one based on acquisitiveness and the pursuit of profit -- and he clearly expresses his opinion that this is incompatible with a truly human life.

The goal of perpetual growth expresses this ideology, and Rawls reveals his skepticism about this idea as well. He offers the opinion that the pursuit of growth by this class is no more than the pursuit of greater wealth and more meaningless consumption. And he clearly believes this is a dead-end. Instead, he endorses J. S. Mill's idea of a steady-state (link). (Interestingly, this position lines up well with current thinking of environmentalists; for example, James Gustave Speth and The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability (link).)

Here Rawls seems to express a cultural critique of capitalism: the idea that the driving values of a market society induce a social psychology of consumerism that overrides the individual's ability to construct a thoughtful life plan of his/her own.

Finally, Rawls criticizes the neo-liberal dogmas about distribution of income that had dominated public discourse in the U.S. almost since the publication of A Theory of Justice: the theory of trickle-down economics. That theory holds that everyone will gain when businesses make more profits. And, of course, the data on income distribution in the U.S. since 1980 has flatly refuted that theory (link).

(Van Parijs' most recent book, Linguistic Justice for Europe and for the World (Oxford Political Theory), will be published in October. It is highly relevant to this debate with Rawls.)

Rawls on the EU

During the final preparation of The Law of Peoples: with "The Idea of Public Reason Revisited" John Rawls had extensive interaction with Philippe van Parijs. Van Parijs was particularly interested in the political and legal circumstances surrounding the establishment of the legal structure of the European Union and the obligations states and their citizens would have to each other within the EU. A key question is whether a political body -- a state or confederation -- needs to encompass a single unified "people" (whether by language, traditions, or culture); or if, on the contrary, such a body can consist of multiple peoples who nonetheless have duties of justice to each other.

What turns on this from a moral point of view is the level of moral concern that members of this kind of union owe each other. Are their obligations limited to the domain of "concern" that gives rise to some obligations of charity? Or are they closely enough interconnected that they are subject to the demands of justice towards each other? If the latter then the difference principle applies to them when inequalities of life circumstances are apparent. If the former then only weaker principles of assistance apply.

For van Parijs this question is particularly acute in the case of Belgium, which was even then subject to fissional pressures along linguistic-cultural lines between Flemings and Walloons.

Van Parijs and Rawls exchanged several careful and thoughtful letters on these issues in 1998, and these letters were published in their entirety in Revue de philosophie économique in 2003 (link).

The disagreements between van Parijs and Rawls are very interesting to follow in detail. There is one aspect of the exchange that is particularly intriguing on the subject of Rawls's own assessment of modern capitalism. The passage is worth quoting. Here is an excerpt from Rawls's letter:

One question the Europeans should ask themselves, if I may hazard a suggestion, is how far–reaching they want their union to be. It seems to me that much would be lost if the European union became a federal union like the United States. Here there is a common language of political discourse and a ready willingness to move from one state to another. Isn't there a conflict between a large free and open market comprising all of Europe and the individual nation-states, each with its separate political and social institutions, historical memories, and forms and traditions of social policy. Surely these are great value to the citizens of these countries and give meaning to their life. The large open market including all of Europe is aim of the large banks and the capitalist business class whose main goal is simply larger profit. The idea of economic growth, onwards and upwards, with no specific end in sight, fits this class perfectly. If they speak about distribution, it is [al]most always in terms of trickle down. The long–term result of this — which we already have in the United States — is a civil society awash in a meaningless consumerism of some kind. I can't believe that that is what you want.

So you see that I am not happy about globalization as the banks and business class are pushing it. I accept Mill's idea of the stationary state as described by him in Bk. IV, Ch. 6 of his Principles of Political Economy (1848). (I am adding a footnote in §15 to say this, in case the reader hadn't noticed it). I am under no illusion that its time will ever come – certainly not soon – but it is possible, and hence it has a place in what I call the idea of realistic utopia.

Several aspects of this passage are noteworthy. The first is a tentative skepticism about the goal of creating a European community in a strong sense -- a polity in which individuals have strong obligations to all other citizens within the full scope of the expanded boundaries. Rawls seems to equate this goal with the idea of creating a somewhat homogeneous and pervasive European culture, replacing German, French, or Italian national cultures. And he offers the idea that the traditions, affinities, and loyalties associated with national identities are important aspects of an individual's pride and satisfaction with his/her life.

What is surprising about these views is that Rawls seems to overlook the polyglot, poly-cultural character of the United States and Canada themselves. Both North American countries seem to have created some remarkable solutions to the problem of "unity with difference." It is possible to be a committed United States citizen but also a Chicago Polish patriot, a Los Angeles Muslim, or a Mississippi African American. Each of these is a separate community with its own traditions and values. But each can also embody an overlay of civic culture that makes them all Americans. It certainly doesn't seem impossible to imagine that Spaniards will develop a more complex identity, as both Spaniard and European. So Rawls's apparent concerns about homogenization and loss of collective meaning seem ill founded.

Even more interesting, though, are his several comments about globalization and capitalism. As we observed in a post about the property-owning democracy (link), Rawls has already expressed the idea that capitalism has a hard time living up to the principles of justice. Here he goes a step further and reveals a significant mistrust of the value system created by capitalism. He refers to the world the "bankers and capitalists" want to create -- one based on acquisitiveness and the pursuit of profit -- and he clearly expresses his opinion that this is incompatible with a truly human life.

The goal of perpetual growth expresses this ideology, and Rawls reveals his skepticism about this idea as well. He offers the opinion that the pursuit of growth by this class is no more than the pursuit of greater wealth and more meaningless consumption. And he clearly believes this is a dead-end. Instead, he endorses J. S. Mill's idea of a steady-state (link). (Interestingly, this position lines up well with current thinking of environmentalists; for example, James Gustave Speth and The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability (link).)

Here Rawls seems to express a cultural critique of capitalism: the idea that the driving values of a market society induce a social psychology of consumerism that overrides the individual's ability to construct a thoughtful life plan of his/her own.

Finally, Rawls criticizes the neo-liberal dogmas about distribution of income that had dominated public discourse in the U.S. almost since the publication of A Theory of Justice: the theory of trickle-down economics. That theory holds that everyone will gain when businesses make more profits. And, of course, the data on income distribution in the U.S. since 1980 has flatly refuted that theory (link).

(Van Parijs' most recent book, Linguistic Justice for Europe and for the World (Oxford Political Theory), will be published in October. It is highly relevant to this debate with Rawls.)

Rawls on the EU

During the final preparation of The Law of Peoples: with "The Idea of Public Reason Revisited" John Rawls had extensive interaction with Philippe van Parijs. Van Parijs was particularly interested in the political and legal circumstances surrounding the establishment of the legal structure of the European Union and the obligations states and their citizens would have to each other within the EU. A key question is whether a political body -- a state or confederation -- needs to encompass a single unified "people" (whether by language, traditions, or culture); or if, on the contrary, such a body can consist of multiple peoples who nonetheless have duties of justice to each other.

What turns on this from a moral point of view is the level of moral concern that members of this kind of union owe each other. Are their obligations limited to the domain of "concern" that gives rise to some obligations of charity? Or are they closely enough interconnected that they are subject to the demands of justice towards each other? If the latter then the difference principle applies to them when inequalities of life circumstances are apparent. If the former then only weaker principles of assistance apply.

For van Parijs this question is particularly acute in the case of Belgium, which was even then subject to fissional pressures along linguistic-cultural lines between Flemings and Walloons.

Van Parijs and Rawls exchanged several careful and thoughtful letters on these issues in 1998, and these letters were published in their entirety in Revue de philosophie économique in 2003 (link).

The disagreements between van Parijs and Rawls are very interesting to follow in detail. There is one aspect of the exchange that is particularly intriguing on the subject of Rawls's own assessment of modern capitalism. The passage is worth quoting. Here is an excerpt from Rawls's letter:

One question the Europeans should ask themselves, if I may hazard a suggestion, is how far–reaching they want their union to be. It seems to me that much would be lost if the European union became a federal union like the United States. Here there is a common language of political discourse and a ready willingness to move from one state to another. Isn't there a conflict between a large free and open market comprising all of Europe and the individual nation-states, each with its separate political and social institutions, historical memories, and forms and traditions of social policy. Surely these are great value to the citizens of these countries and give meaning to their life. The large open market including all of Europe is aim of the large banks and the capitalist business class whose main goal is simply larger profit. The idea of economic growth, onwards and upwards, with no specific end in sight, fits this class perfectly. If they speak about distribution, it is [al]most always in terms of trickle down. The long–term result of this — which we already have in the United States — is a civil society awash in a meaningless consumerism of some kind. I can't believe that that is what you want.

So you see that I am not happy about globalization as the banks and business class are pushing it. I accept Mill's idea of the stationary state as described by him in Bk. IV, Ch. 6 of his Principles of Political Economy (1848). (I am adding a footnote in §15 to say this, in case the reader hadn't noticed it). I am under no illusion that its time will ever come – certainly not soon – but it is possible, and hence it has a place in what I call the idea of realistic utopia.

Several aspects of this passage are noteworthy. The first is a tentative skepticism about the goal of creating a European community in a strong sense -- a polity in which individuals have strong obligations to all other citizens within the full scope of the expanded boundaries. Rawls seems to equate this goal with the idea of creating a somewhat homogeneous and pervasive European culture, replacing German, French, or Italian national cultures. And he offers the idea that the traditions, affinities, and loyalties associated with national identities are important aspects of an individual's pride and satisfaction with his/her life.

What is surprising about these views is that Rawls seems to overlook the polyglot, poly-cultural character of the United States and Canada themselves. Both North American countries seem to have created some remarkable solutions to the problem of "unity with difference." It is possible to be a committed United States citizen but also a Chicago Polish patriot, a Los Angeles Muslim, or a Mississippi African American. Each of these is a separate community with its own traditions and values. But each can also embody an overlay of civic culture that makes them all Americans. It certainly doesn't seem impossible to imagine that Spaniards will develop a more complex identity, as both Spaniard and European. So Rawls's apparent concerns about homogenization and loss of collective meaning seem ill founded.

Even more interesting, though, are his several comments about globalization and capitalism. As we observed in a post about the property-owning democracy (link), Rawls has already expressed the idea that capitalism has a hard time living up to the principles of justice. Here he goes a step further and reveals a significant mistrust of the value system created by capitalism. He refers to the world the "bankers and capitalists" want to create -- one based on acquisitiveness and the pursuit of profit -- and he clearly expresses his opinion that this is incompatible with a truly human life.

The goal of perpetual growth expresses this ideology, and Rawls reveals his skepticism about this idea as well. He offers the opinion that the pursuit of growth by this class is no more than the pursuit of greater wealth and more meaningless consumption. And he clearly believes this is a dead-end. Instead, he endorses J. S. Mill's idea of a steady-state (link). (Interestingly, this position lines up well with current thinking of environmentalists; for example, James Gustave Speth and The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability (link).)

Here Rawls seems to express a cultural critique of capitalism: the idea that the driving values of a market society induce a social psychology of consumerism that overrides the individual's ability to construct a thoughtful life plan of his/her own.

Finally, Rawls criticizes the neo-liberal dogmas about distribution of income that had dominated public discourse in the U.S. almost since the publication of A Theory of Justice: the theory of trickle-down economics. That theory holds that everyone will gain when businesses make more profits. And, of course, the data on income distribution in the U.S. since 1980 has flatly refuted that theory (link).

(Van Parijs' most recent book, Linguistic Justice for Europe and for the World (Oxford Political Theory), will be published in October. It is highly relevant to this debate with Rawls.)

Economic thinking in Rawls's thought

John Rawls's (1971) A Theory of Justice: Original Edition (TJ) had a sizable impact on a number of disciplines, including economics and economic policy thought. (His ideas in this original version of the theory are clarified and further developed in his 2005 Justice as Fairness: A Restatement (JF).)  Rawls's influence on economics largely derived from one aspect of his theory of justice, the theory of justice in distribution, which has implications for economic inequalities, taxation, and social welfare benefits.  Did Rawls actually think about these issues in the ways that an economist would have done?

One of the primary goals of Rawls's theory of justice is directly relevant to economic policy. He specifically wanted to work out the implications of the theory of justice for the justice of fundamental economic institutions:

My aim in this chapter is to see how the two principles work out as a conception of political economy, that is, as standards by which to assess economic arrangements and policies, and their background institutions. (Welfare economics is often defined in the same way. I do not use this name because the term "welfare" suggests that the implicit moral conception is utilitarian; the phrase "social choice" is far better although I believe its connotations are still too narrow.) (TJ, 259)

What is the purpose of this aspect of the theory of justice?

A doctrine of political economy must include an interpretation of the public good which is based on a conception of justice. It is to guide the reflections of the citizen when he considers questions of economic and social policy. (259)

Rawls is explicit in addressing the issue of the relationship between his own theorizing and the theories of the economists:

It is essential to keep in mind that our topic is the theory of justice and not economics, however elementary. We are only concerned with some moral problems of political economy. For example, I shall ask: what is the proper rate of saving over time, how should the background institutions of taxation and property be arranged, or at what level is the social minimum to be set? In asking these questions my intention is not to explain, much less to add anything to, what economic theory says about the working of these institutions. ... Certain elementary parts of economic theory are brought in solely to illustrate the content of the principles of justice. (265)

So what use does Rawls in fact make of current economic theories? Does he think like an economist? Key to thinking like an economist is thinking in terms of incentives, markets, and institutions. Let's start with incentives. Rawls pays attention to the incentives that citizens have within various sets of institutions:

Moreover, the theory of justice assumes a definite limit on the strength of social and altruistic motivation. It supposes that individuals and groups put forward competing claims, and while they are willing to act justly, they are not prepared to abandon their interests. (281)

He also does a good job of articulating and motivating the central insights of public choice theory -- essentially, reasoning about public goods within a democratic public (TJ, 265 ff.). He analyzes the two key features of a public good -- indivisibility and non-excludability. He explains the free rider problem and the prisoners' dilemma clearly and accurately, and reproduces the conclusion that a public of independent citizens will not achieve public goods at an appropriate level without legislation. The discussion is compact, but it is solidly linked to the best available literature on public goods (Baumol, Sen, Buchanan, Olson). Rawls thinks this is a good place to start, because the institutions of the state have a very substantial role to play in establishing conditions in which public goods are achieved. He also addresses a series of reasons for favoring, and limiting, the institutions of the market as determinants of investments and incomes. He refers to allocative efficiency and personal liberty as positive features, while noting the possibility or likelihood that markets by themselves will create economic inequalities in excess of the requirements of the difference principle. "There is with reason strong objection to the competitive determination of total income, since this ignores the claims of need and an appropriate standard of life" (277).

When discussing the role of government in economic activity Rawls refers to four "branches" of fiscal and resource management activity (TJ 275 ff.). The allocation branch keeps the price system competitive and "prevents the formation of unreasonable market power" (276), and actively monitors market imperfections and externalities. The stabilization branch "strives to bring about reasonably full employment". The transfer branch is responsible for managing the transfer of incomes necessary to establish the social minimum. And the distribution branch "is to preserve an approximate justice in distributive shares by means of taxation and the necessary adjustments in the rights of property" (277).

The primary implications of the theory of justice for economics cross several topics: distribution, taxation, and the idea of a social minimum. Rawls thinks about taxation in several places. The topic arises in TJ under "Institutions for Distributive Justice" (277-280):

The taxes and enactments of the distribution branch are to prevent this limit [in the range of wealth inequalities] from being exceeded. (278)

The second part of the distribution branch is a scheme of taxation to raise the revenues that justice requires. Social resources must be released to the government so that it can provide for the public goods and make the transfer payments necessary to satisfy the difference principle. (278)

A parallel discussion of taxation occurs under the topic of "Economic Institutions" in JF (160-162). There Rawls makes several comments on wealth and inheritance taxes:

First, consider bequest and inheritance: we borrow from Mill (and others) the idea of regulating bequest and restricting inheritance. ... The principle of progressive taxation is applied at the receiver's end. Those inheriting and receiving gifts and endowments pay a tax according to the value received and the nature of the receiver.... The aim is to encourage a wide and far more equal dispersion of real property and productive assets.

Second, the progressive principle of taxation might not be applied to wealth and income for the purposes of raising funds (releasing resources to government), but solely to prevent accumulations of wealth that are judged to be inimical to background justice....

Third, income taxation might be avoided altogether and a proportional expenditure tax adopted instead, that is, a tax on consumption at a constant marginal rate. People would be taxed according to how much they use of the goods and services produced and not according to how much they contribute. (JF, 161)

Another important economic idea that emerges from Rawls's theory is the notion of a social minimum -- essentially an income guarantee for low-income people, established through an income supplement system if needed. This principle derives from the difference principle, Rawls's view that inequalities need to be the least system of inequalities consistent with the maximum result for the least-well-off segment of society.

Once the difference principle is accepted, however, it follows that the minimum is to be set at that point which, taking wages into account, maximizes the expectations of the least advantaged group. By adjusting the amount of transfers (for example, the size of supplementary income payments), it is possible to increase or decrease the prospects of the more disadvantaged, their index of primary goods (as measured by wages plus transfers), so as to achieve the desired result. (285)

Here is what seems to come out of Rawls's discussion of economic institutions and justice. It is a theory of political economy that holds that government has substantial obligations based on distributive justice. It has the obligation of maintaining and correcting the system of economic institutions so as to prevent "unacceptable" levels of inequalities of income and wealth. It has the obligation of providing the resources for securing public goods at an appropriate level. and it has an obligation of collecting taxes sufficient to fund the social minimum for all citizens. It is an account that is well informed about then-current thinking about institutions and public choice. It rests on realistic assumptions about motivation and incentives. And it appears to set the stage for a set of institutions that appear to be economically feasible, along the lines of Scandinavian forms of social democracy.

(Some readers may wonder, as I do, whether the concept of a "proportional expenditure tax" has been seriously explored by economic experts. Here is a review by Michael Graetz in the Harvard Law Review in 1979, arguing that the system is politically infeasible.)

Economic thinking in Rawls's thought

John Rawls's (1971) A Theory of Justice: Original Edition (TJ) had a sizable impact on a number of disciplines, including economics and economic policy thought. (His ideas in this original version of the theory are clarified and further developed in his 2005 Justice as Fairness: A Restatement (JF).)  Rawls's influence on economics largely derived from one aspect of his theory of justice, the theory of justice in distribution, which has implications for economic inequalities, taxation, and social welfare benefits.  Did Rawls actually think about these issues in the ways that an economist would have done?

One of the primary goals of Rawls's theory of justice is directly relevant to economic policy. He specifically wanted to work out the implications of the theory of justice for the justice of fundamental economic institutions:

My aim in this chapter is to see how the two principles work out as a conception of political economy, that is, as standards by which to assess economic arrangements and policies, and their background institutions. (Welfare economics is often defined in the same way. I do not use this name because the term "welfare" suggests that the implicit moral conception is utilitarian; the phrase "social choice" is far better although I believe its connotations are still too narrow.) (TJ, 259)

What is the purpose of this aspect of the theory of justice?

A doctrine of political economy must include an interpretation of the public good which is based on a conception of justice. It is to guide the reflections of the citizen when he considers questions of economic and social policy. (259)

Rawls is explicit in addressing the issue of the relationship between his own theorizing and the theories of the economists:

It is essential to keep in mind that our topic is the theory of justice and not economics, however elementary. We are only concerned with some moral problems of political economy. For example, I shall ask: what is the proper rate of saving over time, how should the background institutions of taxation and property be arranged, or at what level is the social minimum to be set? In asking these questions my intention is not to explain, much less to add anything to, what economic theory says about the working of these institutions. ... Certain elementary parts of economic theory are brought in solely to illustrate the content of the principles of justice. (265)

So what use does Rawls in fact make of current economic theories? Does he think like an economist? Key to thinking like an economist is thinking in terms of incentives, markets, and institutions. Let's start with incentives. Rawls pays attention to the incentives that citizens have within various sets of institutions:

Moreover, the theory of justice assumes a definite limit on the strength of social and altruistic motivation. It supposes that individuals and groups put forward competing claims, and while they are willing to act justly, they are not prepared to abandon their interests. (281)

He also does a good job of articulating and motivating the central insights of public choice theory -- essentially, reasoning about public goods within a democratic public (TJ, 265 ff.). He analyzes the two key features of a public good -- indivisibility and non-excludability. He explains the free rider problem and the prisoners' dilemma clearly and accurately, and reproduces the conclusion that a public of independent citizens will not achieve public goods at an appropriate level without legislation. The discussion is compact, but it is solidly linked to the best available literature on public goods (Baumol, Sen, Buchanan, Olson). Rawls thinks this is a good place to start, because the institutions of the state have a very substantial role to play in establishing conditions in which public goods are achieved. He also addresses a series of reasons for favoring, and limiting, the institutions of the market as determinants of investments and incomes. He refers to allocative efficiency and personal liberty as positive features, while noting the possibility or likelihood that markets by themselves will create economic inequalities in excess of the requirements of the difference principle. "There is with reason strong objection to the competitive determination of total income, since this ignores the claims of need and an appropriate standard of life" (277).

When discussing the role of government in economic activity Rawls refers to four "branches" of fiscal and resource management activity (TJ 275 ff.). The allocation branch keeps the price system competitive and "prevents the formation of unreasonable market power" (276), and actively monitors market imperfections and externalities. The stabilization branch "strives to bring about reasonably full employment". The transfer branch is responsible for managing the transfer of incomes necessary to establish the social minimum. And the distribution branch "is to preserve an approximate justice in distributive shares by means of taxation and the necessary adjustments in the rights of property" (277).

The primary implications of the theory of justice for economics cross several topics: distribution, taxation, and the idea of a social minimum. Rawls thinks about taxation in several places. The topic arises in TJ under "Institutions for Distributive Justice" (277-280):

The taxes and enactments of the distribution branch are to prevent this limit [in the range of wealth inequalities] from being exceeded. (278)

The second part of the distribution branch is a scheme of taxation to raise the revenues that justice requires. Social resources must be released to the government so that it can provide for the public goods and make the transfer payments necessary to satisfy the difference principle. (278)

A parallel discussion of taxation occurs under the topic of "Economic Institutions" in JF (160-162). There Rawls makes several comments on wealth and inheritance taxes:

First, consider bequest and inheritance: we borrow from Mill (and others) the idea of regulating bequest and restricting inheritance. ... The principle of progressive taxation is applied at the receiver's end. Those inheriting and receiving gifts and endowments pay a tax according to the value received and the nature of the receiver.... The aim is to encourage a wide and far more equal dispersion of real property and productive assets.

Second, the progressive principle of taxation might not be applied to wealth and income for the purposes of raising funds (releasing resources to government), but solely to prevent accumulations of wealth that are judged to be inimical to background justice....

Third, income taxation might be avoided altogether and a proportional expenditure tax adopted instead, that is, a tax on consumption at a constant marginal rate. People would be taxed according to how much they use of the goods and services produced and not according to how much they contribute. (JF, 161)

Another important economic idea that emerges from Rawls's theory is the notion of a social minimum -- essentially an income guarantee for low-income people, established through an income supplement system if needed. This principle derives from the difference principle, Rawls's view that inequalities need to be the least system of inequalities consistent with the maximum result for the least-well-off segment of society.

Once the difference principle is accepted, however, it follows that the minimum is to be set at that point which, taking wages into account, maximizes the expectations of the least advantaged group. By adjusting the amount of transfers (for example, the size of supplementary income payments), it is possible to increase or decrease the prospects of the more disadvantaged, their index of primary goods (as measured by wages plus transfers), so as to achieve the desired result. (285)

Here is what seems to come out of Rawls's discussion of economic institutions and justice. It is a theory of political economy that holds that government has substantial obligations based on distributive justice. It has the obligation of maintaining and correcting the system of economic institutions so as to prevent "unacceptable" levels of inequalities of income and wealth. It has the obligation of providing the resources for securing public goods at an appropriate level. and it has an obligation of collecting taxes sufficient to fund the social minimum for all citizens. It is an account that is well informed about then-current thinking about institutions and public choice. It rests on realistic assumptions about motivation and incentives. And it appears to set the stage for a set of institutions that appear to be economically feasible, along the lines of Scandinavian forms of social democracy.

(Some readers may wonder, as I do, whether the concept of a "proportional expenditure tax" has been seriously explored by economic experts. Here is a review by Michael Graetz in the Harvard Law Review in 1979, arguing that the system is politically infeasible.)

Economic thinking in Rawls's thought

John Rawls's (1971) A Theory of Justice: Original Edition (TJ) had a sizable impact on a number of disciplines, including economics and economic policy thought. (His ideas in this original version of the theory are clarified and further developed in his 2005 Justice as Fairness: A Restatement (JF).)  Rawls's influence on economics largely derived from one aspect of his theory of justice, the theory of justice in distribution, which has implications for economic inequalities, taxation, and social welfare benefits.  Did Rawls actually think about these issues in the ways that an economist would have done?

One of the primary goals of Rawls's theory of justice is directly relevant to economic policy. He specifically wanted to work out the implications of the theory of justice for the justice of fundamental economic institutions:

My aim in this chapter is to see how the two principles work out as a conception of political economy, that is, as standards by which to assess economic arrangements and policies, and their background institutions. (Welfare economics is often defined in the same way. I do not use this name because the term "welfare" suggests that the implicit moral conception is utilitarian; the phrase "social choice" is far better although I believe its connotations are still too narrow.) (TJ, 259)

What is the purpose of this aspect of the theory of justice?

A doctrine of political economy must include an interpretation of the public good which is based on a conception of justice. It is to guide the reflections of the citizen when he considers questions of economic and social policy. (259)

Rawls is explicit in addressing the issue of the relationship between his own theorizing and the theories of the economists:

It is essential to keep in mind that our topic is the theory of justice and not economics, however elementary. We are only concerned with some moral problems of political economy. For example, I shall ask: what is the proper rate of saving over time, how should the background institutions of taxation and property be arranged, or at what level is the social minimum to be set? In asking these questions my intention is not to explain, much less to add anything to, what economic theory says about the working of these institutions. ... Certain elementary parts of economic theory are brought in solely to illustrate the content of the principles of justice. (265)

So what use does Rawls in fact make of current economic theories? Does he think like an economist? Key to thinking like an economist is thinking in terms of incentives, markets, and institutions. Let's start with incentives. Rawls pays attention to the incentives that citizens have within various sets of institutions:

Moreover, the theory of justice assumes a definite limit on the strength of social and altruistic motivation. It supposes that individuals and groups put forward competing claims, and while they are willing to act justly, they are not prepared to abandon their interests. (281)

He also does a good job of articulating and motivating the central insights of public choice theory -- essentially, reasoning about public goods within a democratic public (TJ, 265 ff.). He analyzes the two key features of a public good -- indivisibility and non-excludability. He explains the free rider problem and the prisoners' dilemma clearly and accurately, and reproduces the conclusion that a public of independent citizens will not achieve public goods at an appropriate level without legislation. The discussion is compact, but it is solidly linked to the best available literature on public goods (Baumol, Sen, Buchanan, Olson). Rawls thinks this is a good place to start, because the institutions of the state have a very substantial role to play in establishing conditions in which public goods are achieved. He also addresses a series of reasons for favoring, and limiting, the institutions of the market as determinants of investments and incomes. He refers to allocative efficiency and personal liberty as positive features, while noting the possibility or likelihood that markets by themselves will create economic inequalities in excess of the requirements of the difference principle. "There is with reason strong objection to the competitive determination of total income, since this ignores the claims of need and an appropriate standard of life" (277).

When discussing the role of government in economic activity Rawls refers to four "branches" of fiscal and resource management activity (TJ 275 ff.). The allocation branch keeps the price system competitive and "prevents the formation of unreasonable market power" (276), and actively monitors market imperfections and externalities. The stabilization branch "strives to bring about reasonably full employment". The transfer branch is responsible for managing the transfer of incomes necessary to establish the social minimum. And the distribution branch "is to preserve an approximate justice in distributive shares by means of taxation and the necessary adjustments in the rights of property" (277).

The primary implications of the theory of justice for economics cross several topics: distribution, taxation, and the idea of a social minimum. Rawls thinks about taxation in several places. The topic arises in TJ under "Institutions for Distributive Justice" (277-280):

The taxes and enactments of the distribution branch are to prevent this limit [in the range of wealth inequalities] from being exceeded. (278)

The second part of the distribution branch is a scheme of taxation to raise the revenues that justice requires. Social resources must be released to the government so that it can provide for the public goods and make the transfer payments necessary to satisfy the difference principle. (278)

A parallel discussion of taxation occurs under the topic of "Economic Institutions" in JF (160-162). There Rawls makes several comments on wealth and inheritance taxes:

First, consider bequest and inheritance: we borrow from Mill (and others) the idea of regulating bequest and restricting inheritance. ... The principle of progressive taxation is applied at the receiver's end. Those inheriting and receiving gifts and endowments pay a tax according to the value received and the nature of the receiver.... The aim is to encourage a wide and far more equal dispersion of real property and productive assets.

Second, the progressive principle of taxation might not be applied to wealth and income for the purposes of raising funds (releasing resources to government), but solely to prevent accumulations of wealth that are judged to be inimical to background justice....

Third, income taxation might be avoided altogether and a proportional expenditure tax adopted instead, that is, a tax on consumption at a constant marginal rate. People would be taxed according to how much they use of the goods and services produced and not according to how much they contribute. (JF, 161)

Another important economic idea that emerges from Rawls's theory is the notion of a social minimum -- essentially an income guarantee for low-income people, established through an income supplement system if needed. This principle derives from the difference principle, Rawls's view that inequalities need to be the least system of inequalities consistent with the maximum result for the least-well-off segment of society.

Once the difference principle is accepted, however, it follows that the minimum is to be set at that point which, taking wages into account, maximizes the expectations of the least advantaged group. By adjusting the amount of transfers (for example, the size of supplementary income payments), it is possible to increase or decrease the prospects of the more disadvantaged, their index of primary goods (as measured by wages plus transfers), so as to achieve the desired result. (285)

Here is what seems to come out of Rawls's discussion of economic institutions and justice. It is a theory of political economy that holds that government has substantial obligations based on distributive justice. It has the obligation of maintaining and correcting the system of economic institutions so as to prevent "unacceptable" levels of inequalities of income and wealth. It has the obligation of providing the resources for securing public goods at an appropriate level. and it has an obligation of collecting taxes sufficient to fund the social minimum for all citizens. It is an account that is well informed about then-current thinking about institutions and public choice. It rests on realistic assumptions about motivation and incentives. And it appears to set the stage for a set of institutions that appear to be economically feasible, along the lines of Scandinavian forms of social democracy.

(Some readers may wonder, as I do, whether the concept of a "proportional expenditure tax" has been seriously explored by economic experts. Here is a review by Michael Graetz in the Harvard Law Review in 1979, arguing that the system is politically infeasible.)