Economics, Economy, History, MBA, Politics, Thoughts

Ideals matter: shipwreck survivors, Rawls and Nozick

It’s easy to say that ideals don’t matter anymore and all political parties are very much alike. Maybe they are, maybe they are not, but ideals still do matter, and there are many ways to economic justice.

It’s always a good moment to review the works of John Rawls. American philosopher, 1921 – 2002, his definition of justice is specially interesting. John Rawls () was an egalitarian liberalist. He defined “justice” as equity and fairness opposed to favoritism, utilitarianism (greater good for the majority at the expense of a minority) and prejudice.

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This necessity to avoid prejudice reminds us of the “social contract” of Locke, Hobbes and Rousseau. Justice would require a collective agreement by the different parts regardless of their private interests. This means that a valid contract requires freedom to accept it or not and thus can never be imposed.

The “veil of ignorance” would help the different parts to reach a just agreement because they’d forget who they are, where they come from and what they own, in a similar way that the ideal politician would try to represent all electors regardless of the political party they have voted (!!!) to ensure fair laws. That would mean no lobbying, no big business in election campaigns, and candidates wouldn’t need to be very rich (as they are now in the US, although the US Constitution agrees with Rawls).

For example, imagine a group of shipwreck survivors. They begin anew so they part the land. And they decide to share it on equal parts. But not all parts of the island are equally productive so they reach an agreement: they will all give their land to the lucky owner of the “food well” in exchange for the right to be fed for the rest of their lives.

But time goes by, and another generation comes. And the lucky child who has inherited all the land decides to share the “food well” only in exchange for twelve hours of labour from the other residents. Would that be fair?

From a liberalist point of view, it wouldn’t. The choice is forced upon the residents: either agree or perish. There’s not an equality situation in the contract, nor a way to opt-out. And if they were to make the new contract under the “veil of ignorance”, without knowing who’d be the fortunate ones, they wouldn’t make the bet.

Egalitarian liberalism tries to lever the playing field. It tries to identify which are the legitimate trades and which are not. (Remember the blog entry on Aristotle?) The market won’t produce justice by itself, so it must be controlled by some kind of superior institution: the state, that protects individuals from abuse. (More about Rawls political liberalism here)

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And then there is Robert Nozick, also an American philosopher, 1938 – 2003. Nozick is a libertarian, opposed to the social-democratic liberalist values of Rawls.

Nozick wants to refute liberalism, which he sees opposed to personal freedom. He defines the state as a “watchman”, or a “security company”, but nothing more than that. It’s own existence would only come from the right of the individuals to defend themselves, which they’d externalise. From externalisation would come economies of scale that, in a competitive market, would end up in a monopoly of a great security company. Now change the name of the company and call it “state”.

The state wouldn’t regulate economic activities, wouldn’t provide education or wouldn’t think of what is fair or not. The state only would have the power to defend its citizens and its rights (emanating from the individual right to defend yourself). No taxes, no health care, no minimum wages. Nothing.

In the island case, the owner of the land could do with his property as he sees fit. And the contract would be a perfect valid contract. A capitalist act between consenting adults, nothing more to it. (More about Nozick here)

Rawls and Nozick provide their own conception of social justice. From this basic set of rules, they derive the way society should work. But they are two incompatible views. In this great duality between Rawls and Nozick many might see the dual principles that Europe and America developed from. Big government can be something inherently good for some Europeans at the same time its the “big Satan” for some Americans.

Needles to say between black and white there’s an infinite range of greys. (Fortunately)

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3 thoughts on “Ideals matter: shipwreck survivors, Rawls and Nozick

  1. Pingback: Is Economy as a science solid enough to define what's true and what's not true? « Gabriel’s scarcity rent

  2. Pingback: Finding myself in the political compass (aka different kinds of liberals) « Gabriel’s scarcity rent

  3. Pingback: Tracing back to the ideas that (maybe) made management possible « Gabriel’s scarcity rent

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