Philosophy 101, 138, 232, 238, 234: Handouts
Three Theories of Justice:
Utilitarianism, Justice as Fairness, and Libertarianism
A society, according to Utilitarianism, is just to the extent that its laws and institutions are such as to promote the greatest overall or average happiness of its members.
How do we determine the aggregate, or overall, happiness of the members of a society? This would seem to present a real problem. For happiness is not, like temperature or weight, directly measurable by any means that we have available. So utilitarians must approach the matter indirectly. They will have to rely on indirect measures, in other words. What would these be, and how can they be identified?
The traditional idea at this point is to rely upon (a) a theory of the human good (i.e., of what is good for human beings, of what is required for them to flourish) and (b) an account of the social conditions and forms of organization essential to the realization of that good.
People, of course, do not agree on what kind of life would be the most desirable. Intellectuals, artists, ministers, politicians, corporate bureaucrats, financiers, soldiers, athletes, salespersons, workers: all these different types of people, and more besides, will certainly not agree completely on what is a happy, satisfying, or desirable life. Very likely they will disagree on some quite important points.
All is not lost, however. For there may yet be substantial agreement--enough, anyway, for the purposes of a theory of justice --about the general conditions requisite to human flourishing in all these otherwise disparate kinds of life. First of all there are at minimum certain basic needs that must be satisfied in any desirable kind of life. Basic needs, says James Sterba, are those needs "that must be satisfied in order not to seriously endanger a person's mental or physical well-being."
A basic-needs minimum, then, is the minimum wherewithal required for a person to meet his or her basic needs. Such needs are universal. People will be alike in having such needs, however much they diverge in regard to the other needs, desires, or ends that they may have.
We may develop this common ground further by resorting to some of Aristotle's ideas on this question of the nature of a happy and satisfying life. Aristotle holds that humans are rational beings and that a human life is essentially rational activity, by which he means that human beings live their lives by making choices on the basis of reasons and then acting on those choices. All reasoning about what to do proceeds from premises relating to the agent's beliefs and desires. Desire is the motive for action and the practical syllogism (Aristotle's label for the reasoning by which people decide what to do) is its translation into choice. Your choices are dictated by your beliefs and desires--provided you are rational. Such choices, the reasoning that leads to them, and the actions that result from them are what Aristotle chiefly means by the sort of rational activity that makes up a human life. We may fairly sum up this point of view by saying that people are "rational end-choosers."
If Aristotle is at all on the right track, then it is clear that a basic-needs minimum is a prerequisite to any desirable kind of life, and further that to live a desirable kind of life a person must be free to determine his or her own ends and have the wherewithal--the means, the opportunities--to have a realistic chance of achieving those ends. (Some of these Aristotelian points are perhaps implicitly included in Sterba's list of basic needs, under the head of self-development.)
So what does all this do for Utilitarianism? Quite a lot. We have filled in some of item (a) above: the theory of the human good, the general conditions essential to a happy or desirable life. The Utilitarian may plausibly claim to be trying to promote the overall happiness of people in his society, therefore, when he tries to improve such things as rate of employment, per capita income, distribution of wealth and opportunity, the amount of leisure, general availability and level of education, poverty rates, social mobility, and the like. The justification for thinking these things relevant should be pretty plain. They are measures of the amount and the distribution of the means and opportunities by which people can realize their various conception of a desirable life. With these things clearly in mind the Utilitarian is in a position to argue about item (b), the sorts of social arrangements that will deliver the means and opportunities for people to achieve their conception of a desirable life.
John Stuart Mill, one of the three most important 19th century Utilitarians (the other two were Jeremy Bentham and Henry Sidgwick), argued that freedom or liberty, both political and economic, were indispensable requisites for happiness. Basing his view upon much the same interpretation of human beings and human life as Aristotle, Mill argued that democracy and the basic political liberties--freedom of speech (and the press), of assembly, of worship--were essential to the happiness of rational end-choosers; for without them they would be prevented from effectively pursuing their own conception of a good and satisfying life. Similarly he argued that some degree of economic prosperity--wealth--was indispensable to having a realistic chance of living such a life, of realizing one's ends.
So, according to Utilitarianism, the just society should be so organized in its institutions--its government, its laws, and its economy--that as many people as possible shall have the means and opportunity to achieve their chosen conception of a desirable life. To reform the institutions of one's society toward this goal, in the utilitarian view, is to pursue greater justice.
Some of the institutions that utilitarians have championed over the years are:
(1) A public education system open to all and funded by public money, i.e., taxes.
The utilitarian rationale for each of these institutional arrangements should be fairly obvious, but it would probably contribute significantly to our understanding of utilitarianism to review, in more detail, some utilitarian arguments for (2) "free" market capitalism. This we shall do later, in the next section.
What do you think a Utilitarian would say about universal medical care? Would he or she be for it or against it? What about affirmative action programs, anti-hate crime legislation, welfare, a graduated income tax, anti-trust laws? For or against? What would decide the issue for a utilitarian?
(2) Utilitarianism and Competitive Capitalism
The key claim about market capitalism for the utilitarian is that free, unregulated markets efficiently allocate resources--chiefly labor and capital--in the production of goods.
By a market is meant only any pattern of economic activity in which buyers do business with sellers. In the classical system of economics competition is presupposed among producers or sellers.
I have quoted this at length because of the clarity, compactness, and absence of technicalities in its explanation of the role of competition in classical economic theory. For purposes of argument I shall now extract some of the salient points from these passages.
The kind of competition in question here, "pure competition," exists in a market if and only if it meets the following conditions:
When pure competition exists in a market, when, that is, the market meets conditions (1)-(3), then the following important consequences will follow:
It should be clear why an economy of pure competition would recommend itself to utilitarians. Such a form of economic organization would provide the goods that consumers wanted, at the prices at which consumers were willing to pay for them, and in the quantities in which they were wanted; and in doing so it would create the needed employment for all willing workers. It would do so because it provided adequate pecuniary incentives to producers to accommodate consumer preferences. The competition among producers for greater profit would--"as if by an invisible hand," Adam Smith said--bring about a situation that was good for the society in general, and not just for the individual producers.
(3) Objections to the Utilitarian Argument for Unregulated Competition
It should be noted that the conditions (1)-(3) for pure competition are an idealization. They have rarely been jointly met in fact. But where they are not all realized, it cannot be argued that the operation of the market is guaranteed to yield the beneficent consequences (4)-(6). Writing in the mid-nineteen fifties, Galbraith noted that "in the production of motor vehicles, agricultural machinery, rubber tires, cigarettes, aluminum, liquor, meat products, copper, tin containers and office machinery the largest three firms in 1947 did two thirds or more of all business" (ibid., p. 39). For other products, "steel, glass industrial chemicals, and dairy products, the largest six accounted for two thirds" (ibid.). The situation has changed somewhat over the intervening half century; you would not find the same list of firms at the top of these industries now as then. There have been mergers and buyouts, and international competition has increased. But the basic fact of a few large firms dominating the market has not changed in these industries.
When there is great consolidation within an industry, condition (1) is obviously violated: there will no longer be sufficiently many sellers doing business with sufficiently many sellers. But condition (2) typically is no longer satisfied either. Very large firms in an industry will have been able to take advantage of economies of scale; production, to be competitive, will have to proceed on a comparable scale. Thus there will be very high start-up costs--a considerable barrier to the entry of new firms into the industry. The few giants that dominate the industry will have some control over the quantity of production and hence over prices.
All this is easy to see in the extreme case: the case of monopoly, of one firm in the industry. The monopolist has no competitors, a condition that could not last for long if there were not significant barriers to the entry of new firms. Without competition the monopolist will have considerable control over the quantity of production and hence over his prices. Indeed he can be expected, so far as he is able, to decide on the quantity of production by determining at what quantity he can achieve the maximum profit. This is quite different from the case of pure competition in which no producer has control over his prices. For in that case the market sets them, by the laws of supply and demand. If the firms currently in the industry cannot meet demand or cannot meet it fast enough, prices will sharply rise. This will attract new firms to the market; supply will thus increase and prices decrease. Prices will eventually stabilize when, roughly, the costs of expanding production are no longer covered by the going price.
A word should be said about condition (3): product differentiation, or rather the lack thereof. In one of the standard textbook examples the product is corn, the producers the corn growers. The product is undifferentiated; that is, the identity of the producer, the grower, is not discernible or identifiable from the product itself. It is therefore not a determinant of consumer preference or therefore price (though modern salesmanship, specifically advertising, has striven to make at least some of the characteristics of the producer relevant to price even for agricultural products). At the opposite extreme, where it has been for some time, is the market for automobiles. Product differentiation is very advanced in this case. Different makes and models of automobiles have long been important to consumer behavior. For some luxury cars the identity of the producing firm (e.g., Rolls Royce) has, all by itself, an appeal--a snob appeal--that significantly affects consumer preference. Something similar holds for clothing. In its effects on the economists' efforts to create a general theory of price product differentiation is a tremendous complication; it brings in a host of further motives, besides price, for consumer demand. To my knowledge there is no sound general theory of price determination for products that are differentiated. It remains an open area of research.
The significance of product differentiation for the utilitarian argument in favor of competitive markets is that with product differentiation there is no guarantee that competition in such markets will drive down prices or lead to technical improvements in production. Competition is more apt to drive producers to diversify or develop their line of products. And here we reach the threshold of another problem for the utilitarian argument; namely, that firms in such markets cannot always be plausibly regarded as producing in response to prior, or independently existing, consumer demand. Rather they sometimes are more plausibly regarded as attempting, through advertising and salesmanship, to create consumer demand. For the utilitarian, if not for the ordinary economist, this raises questions about the urgency or importance of the consumer demand that firms seek to satisfy. For it is no longer a demand that exists independently of the process of production itself. Firms would appear, in the relevant cases, to be endeavoring to satisfy demands that they themselves have to some extent created and that would not exist independently of their efforts. Now a new question can arise as to the desirability of that demand. If the demand is no longer a given, we may wonder whether it might not be better if there were no such demand. Perhaps it would be better if, instead of trying to stimulate demand for the products, we devoted our resources to other ends.
These objections merely touch on much larger issues about the nature of the modern economy, which in its main parts does not fit the classical picture.
(4) Problems for Utilitarianism
The objections, just reviewed, to the Utilitarian Argument in favor of competitive markets are not objections to Utilitarianism itself. They reveal no fault in Utilitarianism but only with a certain argument that presupposes Utilitarianism. The fault revealed is in the argument's assumption that the modern economy consists of markets in which there is pure competition. I want now to consider an objection to Utilitarianism itself as a theory of justice.
Utilitarians look at the means or opportunities available to people to achieve the kinds of lives they find desirable. Let us introduce the term "utility" for all of the things--such as income--that people might desire for the pursuit of their happiness. What the utilitarian aims at directly, then, is an overall increase of utility or utilities. The utilitarian looks to increase the average utility, i.e., the aggregate amount of utility created in the society, divided by the number of people in the society. The utilitarian thinks a just society should seek to maximize average utility in order to promote the happiness of its members or at least to enable its members, with increasing success, to achieve their own happiness.
But this way of evaluating forms of social organization is arguably defective because it may lead to unjust institutional arrangements. John Rawls famously stated the objection in his A Theory of Justice (Cambridge, MA: Harvard University Press, 1971), pp. 23-4, as follows:
Notice the critical difference, pointed out by Rawls, between the cases of an individual and of a social group attempting to maximize their welfare. In the case of an individual it will always be the same person who experiences both the losses and the gains. In the case of the social group it may not be the same people who experience both the losses and the gains. Some may experience the losses and others the gains, or the losses may fall disproportionately on some and the gains go disproportionately to others. Thus, Rawls argues, questions of fairness or justice arise in the case of the social group that do not arise in the case of the single individual, and utilitarianism is unprepared to address these. The problem, as Rawls puts it, is that Utilitarianism does not properly recognize "the separateness of persons"--the fact that the losses and gains may be experienced by separate--and hence different--persons.
It should be becoming clearer what the problem here is. There are two aspects to the problem. First, Utilitarianism, in the light of Rawls's objection, may appear to permit or, in some circumstances, even require that a society adopt unfair, exploitative forms of organization to promote its overall welfare, the average utility. If the welfare or happiness can be maximized by a form of social organization in which some few are exploited--if no other form of social organization can produce greater overall welfare or happiness--then adoption of the exploitative form of organization would be justified according to Utilitarianism.
To this most utilitarians respond that "under most conditions, at least in a reasonably advanced stage of civilization, the greatest sum of advantages is not attained in this way," i.e., by exploitation. This may or may not be so.
The second aspect of the problem raised by Rawls has to do with the inappropriateness of the kinds of arguments by which Utilitarians reject various discriminatory or exploitative forms of social organization. The utilitarians reject such forms of organization, as we have just seen, on the ground that they don't in fact succeed in maximizing the happiness or welfare of the social group. But what if they did succeed in maximizing the happiness or welfare of the social group? Would that show that they really were just? Rawls argues that it clearly would not. Consider the institution of slavery, which is as clearly unjust as an institution can be. It is never an excuse or justification for slavery, Rawls says, "that it is sufficiently advantageous to the slaveholder to outweigh the disadvantages to the slave and to society. A person who argues in this way is not perhaps making a wildly irrelevant remark; but he is guilty of a moral fallacy" (Rawls, "Justice as Reciprocity," reprinted in Great Traditions in Ethics, Ninth Edition, edited by Theodore C. Denise et. al. (Belmont, CA: Wadsworth Publishing Co., 1999), p. 342). But Utilitarianism, Rawls points out, "permits one to argue that slavery is unjust on the grounds that the advantages to the slaveholder as slaveholder do not counterbalance the disadvantages to the slave and to society at large, burdened by a comparatively inefficient system of labor." And in fact this is the only way that the Utilitarian may argue that slavery is unjust. For the utilitarian conception of justice "implies that judging the justice of a practice is always, in principle at least, a matter of weighing up advantages and disadvantages....[So] utilitarianism cannot account for...the fact that it would be recognized as irrelevant in defeating the accusation of [slavery's] injustice for [the slaveholder] to say to [the slave]...that nevertheless [slavery] allowed of the greatest [general, overall] satisfaction of desire. The charge of injustice cannot be rebutted in this way." (Ibid., pp. 340, 341. Rebutting the charge of injustice in this way is what Rawls earlier characterized as a moral fallacy.)
Let's attempt to summarize the arguments against Utilitarianism. The first argument goes as follows. (1) Utilitarianism implies that a society is just if it is so organized that the overall or average happiness or well-being of its members is maximized. (2) A society so organized can nevertheless be unjust or unfair. Therefore (3) Utilitarianism is incorrect as a theory of social justice. This is the main line of argument against Utilitarianism as a theory of social justice.
Much of our discussion of Rawls was in support of premise (2). We saw that Utilitarianism, with its aggregative conception of the welfare of the social group, would permit the average happiness or well-being of the social group to be increased by (what independently seemed to be) unfair trade-offs between the interests of its members.
There is another argument against Utilitarianism that emerged from our discussion of Rawls. This is as follows. (1*) Utilitarianism implies that the justice of a form of social organization is a function of the efficiency with which the overall or average happiness of the social group is promoted by that form of organization. But (2*) the justice of a form of organization is not a function solely of the efficiency with which that form of organization promotes the well-being of the social group; other considerations, left out by Utilitarianism, are relevant. Therefore (3*) Utilitarianism provides an incorrect account of the nature of social justice.
Again much of our discussion was in support of the second premise. We saw that exploitative forms of social organization cannot be shown to be just by being shown to maximize the average well-being of the members of the social group that has adopted them.
These are important criticisms of Utilitarianism as a theory of social justice. They show that it is seriously flawed.
(5) A Final Note about Utilitarians and a Suggested Revision
Historically Utilitarians were no friends or supporters of slavery and were often strenuous advocates for greater democracy in the organization of society. Jeremy Bentham, in particular, actively opposed the institution of slavery in England and also advocated prison reforms. Mill was a notable defender of freedom of speech. He also supported the expansion of suffrage and late in his life became, like Henry Sidgwick (another Utilitarian), an advocate of Women's rights. And these are only some of the pro-democratic positions taken by Utilitarians.
The objections to Utilitarianism are not, then, objections to the Utilitarians themselves or to the positions they adopted on particular issues. The objections aim rather to show inadequacies in the underlying Utilitarian conception of justice as a function of efficiency in promoting overall happiness.
Convinced of the inadequacy of the Utilitarian conception of justice, one might still feel some attraction to Utilitarianism and wonder whether some sort of revision of the position might not save it from the criticisms we have made of it. I now consider one revision, as follows:
A society is just to the extent that "all social values--liberty and opportunity, income and wealth...--are distributed equally except where an unequal distribution of any, or all, of these values works to everyone's advantage." ((Quoted material is from Rawls, A Theory of Justice, p. 62.)
What are here spoken of as social values are the very things that earlier we called the means and opportunities--the shares of utility--required for a desirable kind of life. So what this revision says is that, while a society should aim to promote the overall happiness of its members by increasing its stock of "social values," it cannot do so by means of trade-offs that improve the lot of some people at the expense of others. As the principle clearly says, inequalities in the distribution of social values are permissible only when everyone somehow benefits from the unequal distribution. As a society acts to increase the shares of utility available to its members, it is allowable that some should possess larger shares of utility than others, but this will be allowable only if everyone is made better off by the arrangement permitting the inequalities than they would be under the arrangement that did not permit them. Thus the objectionable sorts of trade-offs allowed by our original formulation of Utilitarianism would be blocked.
So far all this has been at a rather lofty level, and you might be wishing for an example of a form of social organization which permits inequalities that work to everyone's advantage. Again capitalism has had its supporter as a form of economic organization that, to provide adequate incentives to producers, must allow substantial income inequalities in the form of higher profits to successful entrepreneurs. The profit motive, it is argued, is essential to the working of the capitalist system. Without it the system would not yield the beneficial consequences (4)-(6) mentioned in section (2) above, but with the profit motive operative in the system the general level of material prosperity would be increased well above where it would be in a system that did not permit such inequalities. Some would do much better than others under such an economic system--there would be inequality in wealth--but all would do better than they would if the economic inequalities required as incentives to producers were not operative.
The notion of fairness that recommends the revised formulation of Utilitarianism over its initial formulation is yet without adequate support or motivation from anything within Utilitarianism itself. Indeed it seems a quite alien addition to Utilitarianism, which, as we saw, takes justice to be a function solely of a kind of efficiency. This fact forces a question: Though it may be a superior position, does the revised formulation amount to an abandonment of Utilitarianism itself in favor of some hybrid position?
(6) Rawls's Theory of Justice as Fairness
The reformulation of Utilitarianism we just saw comes from John Rawls, who did not present it as a version of Utilitarianism at all. He presented it as a first approximation to a quite distinct conception of justice from Utilitarianism, a conception that he calls "Justice as Fairness." I presented Rawls's idea as a reformulation of Utilitarianism, anyway, because it seems to me to be greatly clarifying of what's wrong with Utilitarianism to have an alternative to compare it to, an alternative that blocks the kinds of fairness objections that are typically raised against Utilitarianism.
In Utilitarianism everyone, in a way, is given equal consideration at the outset inasmuch as everyone's happiness is taken into consideration and is given the same weight in the reasoning by which a form of social organization is settled on as the one that, in the circumstances, yields the greatest average utility. But, as we saw, Utilitarianism may in some circumstances settle on a form of social organization that treats some people unfairly, by imposing undue burdens on them for the sake of the greater average utility or happiness of the whole social group. In the light of this fact it is reasonable to conclude that something is wrong with the Utilitarian procedure for weighing the interests of the individual members of the social group in deciding on what forms of social organization best serve those interests. The procedure puts individuals at and undesirable and unfair risk of being sacrificed for the overall social good. In the principle that we suggested as a revision of Utilitarianism, people would not be put at quite the same risk.
Rawls in fact argues for a more elaborate principle of justice in social organization, one that we haven't seen yet, and he does so by employing a hypothetical model of a situation requiring people to choose the fundamental principles by which the basic institutions of their society are to be evaluated and organized. He argues that in the hypothetical conditions under which the choice of principles is to be made, only fair or just principles can be chosen. He argues that this is so because of the hypothetical conditions he imposes on the situation of the people making the choice. Then he argues that under those conditions people would choose the following conjunction of principles:
The Equal Liberty Principle: Each person is to have the maximum civil liberties compatible with the same liberty for all.
These principles, as they stand, are in need of much clarification. I shall try to provide it by reviewing Rawls's argument for them.
Rawls, as noted, argues for these principles by showing that they would be chosen in a certain hypothetical situation that he defines. This hypothetical situation he calls the Original Position (OP, for short). In the OP people are stipulated to be in a rather peculiar state that could never be realized in actuality. They are imagined to have simpler motivation than people in fact have and to be ignorant of certain facts about themselves that no rational person in fact could be ignorant of; they are imagined to be simply self-interested in motivation and to have no knowledge of their own particular interests. They are assumed to know that they have to choose the fundamental principles of organization for the basic institutions of their society, and given the risks posed by the choice, they are assumed to have adopted a cautious rule for choosing among the alternative principles put up for consideration. The rule by which they shall choose is often called the maximin rule of choice. According to this rule one should choose that alternative whose worst possible outcome will be no worse than the worst possible outcome of any other alternative.
These conditions are purely hypothetical; no one could actually meet these conditions. But this is irrelevant. For Rawls's argument does not require that you or I or anyone should actually make a choice of principles of justice under these conditions. It only requires that we be able to tell what choice we would make if we were to choose under such conditions. (Compare: We are told that nothing can travel at a velocity greater than that of light. But we can still determine what would happen if something did travel faster than light, and it is on the basis of what we thus determine that we conclude that nothing can in fact travel at a velocity greater than that of light.) I will say more about this after we have reviewed Rawls's argument.
So I state again, in more detail, the five conditions that collectively define the OP (the Original Position):
Rawls argues, as I have said, that only fair principle could be chosen by people in the OP. Why? As Rawls argues, each person in the OP knows that he or she has some particular abilities and interests and so on; but, being behind the veil of ignorance, none of them knows what any of these are. Thus the only way that each can look out for him- or herself is to look out for everyone alike. One can look out for oneself only by choosing principles that do not favor any type of person over any other; for there is no type of person that one might not turn out to be, and so it is only in this way that one can guarantee that one will not be disadvantaged by the principles chosen. All forms of invidious discrimination will obviously be ruled out by the principles chosen in the original position; fairness therefore seems certain to be a trait of all of them. Thus, in outline, goes Rawls's argument that only fair principles would be chosen by people in the OP.
We can put Rawls's strategy here in a different way--in a way that may serve to alleviate the suspicion that attaches to the wildly unrealistic conditions that define the OP. Rawls, like every other social-political philosopher, thinks that only certain types of arguments can be used to show a principle to be a fair one. What kinds of argument are these? The arguments must not recommend principles on the ground that they promote the interests of people like us rather than people unlike us. If a principle is recommended on such a ground, then it is not being recommended for its fairness but for some other reason. The OP is in effect a dramatic device that excludes arguments of this kind. The veil of ignorance in particular prevents the people in the OP from knowing which principles would favor people like them over other types of people. It acts as a sort of filter that strains out any arguments that recommend principles on invidious grounds. What's left? Only arguments that would recommend principles on impartial grounds, only arguments that recommend principles on grounds that do not appeal to the interests of this or that type of person rather than to those of other types of persons. We use the device of the OP as a way of checking to see that our choice of principles is not based upon some kind of partiality to ourselves or to persons like us. Our choice is not based upon such partiality if it is the choice that would be made by a person subject to the conditions that define the OP.
But how does Rawls argue that the Equal Liberty and Difference Principles would be the principles chosen in the OP?
There are certain liberties or rights that everyone would want to be respected by the forms of social organization or institutions of their society. Everyone would want these rights to be so respected regardless of who he or she turned out to be or whatever specific interests and abilities he or she turned out to have. I referred to these collectively as civil liberties or personal liberties. These would include freedom of thought, speech, worship, and assembly, plus freedom from physical and psychological coercion, freedom of movement. These would also include basic property rights: the basic right to exclusive use of personal property (where this would not include the full capitalist rights to acquire and own the means of production, or full rights of bequeathal; these latter "capitalist" rights are subject to further negotiation, to be considered later). Everyone, whatever his interests or desires, would want the maximum of these liberties to pursue his interests; he would want this whatever else he wanted. Everyone in the OP would see this point; hence everyone in the OP would choose to have maximum of these liberties granted to everyone. Thus goes the argument for the Equal Liberty Principle.
The choice of the Difference Principle is a little more difficult to explain. Initially one might expect the parties in the OP to prefer a social arrangement permitting no inequalities within society, or in other words to prefer absolute equality across the board, since obviously no one could be disadvantaged by such an arrangement. But Rawls argues that if it could be shown that some forms of inequality in income or property contributed to the improvement of everyone's circumstances, including those of the least well-off--by functioning, say, as incentives to socially productive work--then everyone in the OP would consent to allow them. Everyone in the OP, that is, would consent to a social scheme permitting economic inequalities if those inequalities could be expected to improve everyone's lot over what it would be in the situation of absolute equality. Such an arrangement would then be supplemented, upon further reflection, by an additional protection of liberty: equality of opportunity. If an unequal distribution of wealth and property is to be allowed, everyone must, so far as possible, have an equal opportunity to attain the more desirable positions; otherwise such an arrangement might arbitrarily favor some people over others, by their social position, race, gender, or the like. To those in the original position it would be an unacceptable risk to choose principles of justice that would permit any such serious inequality of opportunity to be built into the very institutional structure of society; for, though under such a scheme one might be in a position of advantage, one might also be seriously disadvantaged. This last is a possibility that, behind the veil of ignorance, one would be obliged to take seriously. For these reasons people in the OP would require that the positions or offices associated with greater income or property or prestige (or whatever) must be open to everyone alike, under conditions of equality of opportunity. This adumbrates the reasoning by which people in the OP would deliberate to a choice of the Difference Principle.
It should be clear why people in the OP would not choose Utilitarianism. It would be too risky. Utilitarianism, as we have seen, may permit institutional arrangements that disadvantage the few for the sake of the greater advantages that would be enjoyed by the many. Using the maximin rule, the people in the OP would have to compare the position of the least well-off persons living under such a Utilitarian scheme with the position of the least well-off persons living under the combined Equal Liberty and Difference Principles. In this comparison the Equal Liberty and Difference Principles are preferable to Utilitarianism.
Let me further explain the Difference Principle by presenting an argument that at least implicitly relies upon it. The Reagan Administration argued for huge tax cuts for the wealthy and extensive deregulation of business on the ground that these would provide incentives to business activity that would produce greater prosperity for all. "A rising tide raises all boats" was the slogan, often repeated, to state the Reagan economic strategy. The tax cuts and deregulation would, it was admitted, benefit the wealthy business sector the most, but as the slogan reveals, it was expected that everyone would benefit to some degree, everyone would come to be more prosperous than they were before the cuts and the deregulation. This reasoning invokes the Difference Principle (clause (a) specifically) to justify an economic policy.
What was the result of Reagan's "trickle-down economics," as the policy was called? One result, which suggests that it worked, was that the economy, after its previous stagnation, began to expand again. Looking at the period from 1977 to 1988, the economy sustained an average annual growth rate of 2.2%--not spectacular but certainly an improvement over its previous stagnation. Arguably, therefore, the Reagan "trickle-down" policy produced results that justified it in terms of the Difference Principle.
But actually this is not so. If we divide the population into income levels from the poorest tenth or decile to the wealthiest tenth and look at the gains and losses sustained by these income groups over the same period of time, we find that most people, particularly the poorest, lost income and only the very wealthy gained in income. Here are the figures, taken from the Republican political analyst Kevin Phillips's The Politics of Rich and Poor (New York: Random House, 1990), p. 17 (again see references therein for ultimate sources of statistics):
Percentage Change in income for the period 1977-88, organized by income deciles from poorest to wealthiest:
Poorest tenth....... -14.8% Sixth................ -5.4%
Second poorest....... -8.0% Seventh.............. -4.3%
Third poorest........ -6.2% Eighth............... -1.8%
Fourth............... -6.6% Ninth................ +1.0%
Fifth................ -6.3% Tenth............... +16.5%
Top 5%.............. +23.4% Top 1%.............. +49.8%
This tells an interesting tale. It is false that everyone was made better off by the Reaganite policy. The very wealthy, the top ten percent and especially the top one percent, were made significantly better off; some members of the upper middle class (the ninth decile) were made very slightly better off; everyone else, especially those in the poorest tenth, was made in varying degrees worse off. The Reaganite policy is not justified in terms of the Difference Principle. (There is some evidence that Reagan officials never expected their policy to work to everyone's benefit; they only expected it to work to the advantage of the very wealthy. So, in their public statements explaining and justifying their economic policy, Reagan and the members of his administration lied to the American public.)
To sum up. Rawls argues that the Equal Liberty and Difference Principles would be chosen by people in the OP, that this shows that these principles are fair or just fundamental principles of social organization, and that because these are fair or just principles, we should adopt them as our fundamental principles of fair or just social organization. We have seen why Rawls holds that only fair or just principles of social organization would be chosen in the OP and why he thinks that his two principles would be chosen over Utilitarianism in the OP. We have also seen a sketch of the reasons he thinks his two principles would be chosen over all other rival principles of justice.
But we have one more theory of justice to consider: Libertarianism. Can we be sure that Rawls's two principles would be chosen over Libertarianism? This will be a good question to keep in mind as we review the Libertarian view of justice.
The Libertarianism, as the name suggests, emphasizes individual liberty as the central and indeed exclusive concern of social justice. A just society, according to the Libertarian, must grant and protect the liberty or freedom of each individual to pursue his desired ends. In the Libertarian view people are essentially rational end-choosers, to use our earlier term, and the kind of life appropriate to rational end-choosers requires them to be free to choose their own ends and free to pursue them without interference from others. This may seem to imply that the Libertarian holds that everyone should be able to do whatever he or she wants, but really the Libertarian holds no such view. The Libertarian view is that each person should have the same freedom to pursue his chosen ends, that each is therefore obligated to refrain from interfering with others in their freedom to pursue their ends, and that the function of the state is solely to protect each individual's freedom to pursue his chosen ends. The Libertarian therefore conceives of everyone as having certain rights, which protect his or her liberty to pursue a desirable kind of life. What is distinctive about Libertarianism is its conception of the rights that each individual has.
The libertarian philosopher John Hospers states the fundamental libertarian principle in a variety of ways that it may clarify the Libertarian view to repeat here. He says (in "The Libertarian Manifesto," reprinted in Justice: Alternative Political Perspectives, edited by James P. Sterba, Third Edition (Belmont, CA: Wadsworth Publishing Company, 1999), pp. 24, 25):
[E]very person is the owner of his own life[;]...no one is the owner of any one else's life, and...consequently every human being has the right to act in accordance with his own choices, unless those actions infringe on the equal liberty of other human beings to act in accordance with their choices
No one is anyone else's master and no one is anyone else's slave.
Other men's lives are not yours to dispose of.
The rights recognized by the Libertarian include all the rights we called civil or personal liberties in our discussion of Rawls, but in regard to property the Libertarian favors a scheme in which each person has a quite unrestricted right to acquire property, including full "capitalist" rights to acquire ownership of the means of production and full rights of bequeathal. Libertarians emphasize property rights as essential to the liberty essential to the life of a rational end-chooser.
So the package of rights recognized as genuine by Libertarians define and protect the freedom of choice and action that Libertarians hold to be requisite to the life desired by rational end-choosers. And property rights--the rights to acquire, use, and transfer property--are held to be absolutely essential to effective freedom of choice and action.
There are two ways of acquiring property, broadly speaking. We can best see what the Libertarian position comes to by seeing what rights and duties a person has in regard to each of these ways of acquiring property.
(I) Property may be acquired through its transfer from one person (who owns it) to another, or from one group of persons to another group. The transfer will be "just," and the person who acquires the property through the exchange will have just claim to the property if the exchange involves no coercion and no fraud, and if the initial owner is the legitimate owner of the property.
(II) One may acquire property by acquiring previously unowned things. In this case one does not acquire ownership through transfer from another owner; for it is an unowned thing that one acquires. How does one acquire ownership of a previously unowned thing? Can I claim ownership of the stars? If so, how? Libertarians often hold that one acquires ownership over previously unowned things by "mixing one's labor with the thing." The phrase is due to John Locke, a 17th century English philosopher. By applying one's efforts or labor to a thing, altering its condition, one can acquire ownership of the thing. Given his time and place, Locke was predictably interested in ownership of land. He thought that by planting crops on previously unowned land and tending to them, one could acquire ownership over both crops and land.
It is clear that ownership must be acquired either by means (I) or (II), and in most cases there will be a chain of transfers leading up to one's acquisition of some item of property, beginning with the initial acquisition of the item as previously unowned and then proceeding through a serious of exchanges that ends with one's acquisition of the item by exchange. If there is nothing objectionable in the initial acquisition and if each of the transfers involves no force or fraud, then one will have a just claim to the item; one will be entitled by right to exclusive ownership of the item. If all property holdings have been acquired by such just means, then according to the Libertarian the distribution of property (which includes all forms of wealth) will be just, and it doesn't matter how ownership is distributed throughout the society: it doesn't matter whether everyone has significant wealth or whether all or most of the wealth is concentrated in a few hands.
Libertarians typically hold that a completely unregulated capitalist economy is the only form of economic organization that respects individuals' property rights. Individuals have the right of free association, the right to trade with one another freely, without coercion or fraud. Regulating--restricting--such rights for the sake of promoting the well-being of the community or social group would amount to an unjust interference with individual liberty. Notice the difference with 19th century Utilitarianism. The Utilitarians then favored a capitalist economy because they thought it efficiently promoted the well-being of the social group. The Libertarian does not favor a capitalist form of economic organization for that reason. He favors it because it respects individual liberty. Libertarians think that the state in particular cannot legitimately intervene in the operation of markets except to prevent fraud or coercion.
The welfare system, social security, Medicare and Medicaid, anti-trust laws, laws against racial, religious, and gender discrimination in hiring and promotion are one and all unacceptable to Libertarians. For each involves an unjust interference with individual liberty as the Libertarian understands individual liberty. People should be free to dispose of their property as they see fit and to associate with whomever they choose. If an employer irrationally prefers to hire only men or only white men, then that is his right and he must be permitted to do so according to Libertarianism; for he owns the property--the business--and may dispose of it as he sees fit, provided that he does not violate anyone else's Libertarian rights. If a homeowner wishes to discriminate by selling his home only to other members of his racial group, then that too is just. Again he owns the property and should be free to dispose of it as he desires, provided again that he does not violate anyone else's Libertarian rights. It is the peculiarity of Libertarianism that in discriminating in these ways one would not be violating anyone's rights. To require a person to practice racial fairness in hiring and promotion would be to recognize some positive right on the part of others that the person provide them with a job or a promotion. Libertarians recognize no such positive rights. No one is obligated to provide anyone with a job, just as no one is obligated to work for any particular employer. An employer may hire whomever he chooses and for any reason at all. It would be an impermissible restriction on his liberty to force him to hire certain types of people or to employ certain types of criteria in making the decision to hire.
In a society organized along Libertarian lines people will have to compete for the material means of survival. They will have to compete even to secure a basic needs minimum. The winners of the competition will gain control of resources and the means of production, the means by which the society provides for the material needs of its members. Thus private individuals are allowed to compete, in effect, for the power to make decisions that affect the welfare of whole communities. The very wealthy minority, by virtue of the control they have won over the community's resources and means of production, will be in a position to run the society, to make all the important decisions about the character of work and investments. And there is nothing to require that those decisions be made in the interest of the community or even that they must not be harmful in their effects on the community. The wealthy in control of economic resources are free to decide on the basis of their own interests alone. It is amazing, though true, that Libertarians see no significant loss of liberty for anyone in such a form of social organization.
(8) Problems for Libertarianism
Suppose, for example, that you somehow acquired ownership of the total food supply for your community and chose to hoard it and even to let it spoil rather than to trade with others. This would lead to starvation, but it would not violate the rights of others in your community according to the Libertarian. For how could it? We are supposing that you acquired ownership of the total food supply through free exchanges with others and thus without violating anyone's rights. The food supply now belongs to you; it is your property. No one has a right to force you to do anything with your property. Others may have need of food, but this doesn't give them any right to your property.
This situation is not so far-fetched as may appear. Amartya Sen, a Nobel-Prize winning economist, in researching the causes of famine, discovered that famines (in the modern period) are rarely, if ever, due to natural causes alone. According to William H. Shaw, "Sen and other experts have pointed out that famines are frequently accompanied by no shortfall of food in absolute terms."
This state of affairs may come about through the normal operations of free market speculation in commodity prices and other market transactions. Shaw again:
What is the Libertarian response to these facts? Shaw again (p. 102):
These objections should be seen to be at least as troubling for Libertarianism as the earlier objections to Utilitarianism were seen to be for that position. Something is clearly wrong with Libertarianism, but what? Can we offer a diagnosis of the problem here as we did for Utilitarianism? Recall that we identified the source of the problem for Utilitarianism with its failure to fully recognize "separateness of persons." The problem with Libertarianism is, in a way, at the opposite extreme: the failure to recognize the "interconnectedness of persons" engaged in a common social life.
Let me try to explain what this means by discussing a favorite sort of illustration Libertarians use to explain their view.
Let us grant that the Libertarian interpretation of this case is quite justified. The second man has no right to the product of the first man's labor. But this example, which occurs very frequently in Libertarian writings, is a very peculiar illustration for Libertarians to use of their position. For it excludes very important and pervasive background conditions of life in a capitalist economy or indeed any other sort of economy: the interconnectedness of individuals, the interdependence of their work efforts and of the success and failure of those efforts, and the presence of competition. In the island example we have two men in a condition of roughly equal advantage and opportunity. Provided that each man respects the Libertarian rights of the other, nothing about the rudimentary social context in which they act will be of much, if any, importance in determining the outcome for either man. Each man has an essentially equal space or range of means and opportunity for successful action, and each man's space is almost exclusively determined by nature rather than by the efforts of the other or by the history of the efforts of other people. Success or failure for each man depends upon his current efforts and is independent of the success or failure of the other. For each man it is pretty much up to him and to nature whether he succeeds or fails.
In actual social life, of course, this will not be so. In an actual society there will be many more than two people; the members of the society, past and present, will compete for material gain and even for survival; in each generation the means and opportunities available to people to pursue their varied conceptions of a desirable life will be set not mainly by nature but by the history of economic and political activity in their society. In particular the kinds of work currently available and thus the kinds of knowledge and skills in demand will be the results of historical developments in the economy; a person's opportunities to acquire the valued skills and knowledge will depend upon his social and economic position, or more decisively upon the social and economic position of his parents or grandparents. Indeed a person's opportunities to increase his wealth and power in general will depend upon the wealth, power, and social connections he (or his family) already possesses. There will also be irrational prejudices, racial, sexual, and religious, from which a person may gain either a competitive advantage or a competitive disadvantage (depending on whether he belongs to a group that is favored or disfavored, through exclusion, by the prejudice). Some therefore will have significant competitive advantages, significantly greater opportunities, and significantly greater power, not as a result of their own efforts (though they may have to exert themselves to exploit their advantages), but as a result of their society's economic and political history. If these inequalities are allowed to play themselves out, over time, through the workings of an unregulated market system, the predictable result will be greater accumulation and concentration of advantages within certain historically favored classes within the group. There will be nothing like equality of opportunity, and inequality of opportunity will only increase with the passage of time.
The island example, in short, is quite unrepresentative of the problems of fairness and social justice in actual societies insofar as it excludes all the background conditions of actual social life which significantly determine an individual's prospects for successfully pursuing his conception of a desirable life.
In any actual society, unlike the island example, a Libertarian form of social organization would thus have the effect, over time, of amplifying social and economic differences among people in a way that favors certain classes. They would enable those already in possession of advantages of social position or natural endowment to greatly increase their wealth and position, while making it more difficult for those without such initial advantages to acquire them. The Libertarians system of rights, in effect, if not by intention, amplifies any advantage in social position or natural endowment into a significant competitive advantage in the struggle for position, wealth, and power. Arguably, therefore, the force of libertarian rights is mainly to make the struggle for position and wealth safer and more profitable for those who already have significant position, power, and wealth. This will be safer and more profitable for the advantaged than an unrestricted competition for position and power in which no rights were recognized or protected. The libertarian scheme, in short, is a modified law of the jungle, and its modifications chiefly favor the strong and already successful by protecting their advantages and decreasing their risks (though it decreases everyone's risks to some extent). It imposes a set of rights on an existing situation of inequality without doing anything to address those inequalities, and thus protects privilege or existing advantage.
The libertarian begins "with the initially attractive idea that social circumstances and people's relationships to one another should develop over time in accordance with free agreements fairly arrived at and fully honored." But "straightaway [the Libertarian] needs an account of when agreements are free and the social circumstances under which they are reached are fair." The Libertarian holds agreements to be free, of course, when they have been arrived at without force or fraud and thus by consent. But as to the background conditions in which such agreements are made, he thinks that nothing further need be said, and this ignores the fact that
The way in which famines come to result from normal market operations and speculation is an example of this (the hypothetical example of someone's coming to own the total food supply for a community is another). Patterns of economic activity in which no individual acts unfairly (i.e., violates any Libertarian rights) can have the cumulative effect of producing a famine. The problem in such cases is not with the fairness or otherwise of any particular exchange or agreement made between individuals but with the cumulative effect of such exchanges on the structure of opportunity, the availability of work, the capacity to acquire the wherewithal to meet even a basic-needs minimum. The problem, therefore, is with the "background conditions of justice" (Rawls's phrase), which can be eroded by sequences of individually free and fair exchanges. From the fact that each of the individual agreements is free and fair and hence just, it does not follow that the whole sequence of agreements is fair and just in its effects on all concerned. This is the fact ignored by Libertarians.
Rawls puts the point by saying that Libertarians do not see the need to maintain "the background conditions of justice" (the structure and availability of opportunities to pursue a desirable kind of life). Libertarians do not see (in fact they deny) that the maintenance of the background conditions of justice requires attention to more than whether individual transactions are free and fair (i.e., free of coercion or fraud).
How can one modify Libertarianism to take account of the importance of the background conditions of justice? Can one modify Libertarianism to take account of this without abandoning it for some other view?
We have reviewed three theories of justice and have explored some of the problems with Utilitarianism and Libertarianism. Though I explored no problems with Rawls's theory of Justice as Fairness, it shouldn't be inferred either that there are no problems with his view or that I don't think there are any. But the problems tend to be technical and difficult to discuss. Mostly they have to do with the interpretation of the conditions that define the original position and the application of his two principles of justice (which require further elaboration for many of their applications). Perhaps we may discover and discuss some of the problems in class.
It may clarify the maximin rule to compare it with other rules of rational choice or rational decision-making and to provide an illustration of the various rules of choice at work. This is done with admirable brevity and clarity by Carl Hempel in the following passage from "Rational Action":