Daniel Chandler headshotDaniel Chandler is Research Director of the Programme on Cohesive Capitalism a “multi-disciplinary initiative to investigate new politico-economic paradigms, institutions and policies that could serve the common interest” based out of the London School of Economics. His book Free and Equal “makes the case for a new progressive liberalism grounded in the ideas of the philosopher John Rawls.”

Unfairness seems as inevitable in political and economic life as death and taxes, but what would a fair society look like? Daniel Chandler draws from the philosophy of John Rawls to explore policies and institutional arrangements which promote fairness.

Rawlsian principles

Rawls is probably most famous for his use of a thought experiment called the “original position.” The idea is this: “you are designing a society, but you don’t know who you’ll be within it—rich or poor, man or woman, gay or straight” — as if behind a “veil of ignorance.” What would you want that society to look like? If we were design society from this position of ignorance it would be fair, just as we might cut a cake fairly if we didn’t know which piece we would end up with. In concrete terms, Rawls argued that people would be eager to provide everyone with enough freedom to choose their own path in life and to actively promote greater equality in politics and economics.

Based on these ideas, Rawls advocates two principles of a fair society. The first and most important is that everyone be granted equal access to the same set of basic rights (the “basic liberties principle”). The rights Rawls considers fundamental are personal freedoms, which we need to live our lives according to our own beliefs, and political freedoms, which we need to participate as equals in collective decision making. The second principle lays out the conditions under which society can accept social and economic inequalities. Rawls contends that we should accept inequalities only if there is “fair equality of opportunity” and only if they benefit the least advantaged people (the “difference principle”).

What makes Rawls different

Chandler points out that Rawls’s principles affirm some important features of the status quo in modern market economies: clearly defined property rights, freedom of exchange, and freedom to contract with others. But while Rawls recognizes that some economic freedoms are truly fundamental – the right to own personal property such as housing and clothing, and freedom of occupational choice – he rejects the view held by libertarian thinkers like Robert Nozick that a commitment to freedom stands in the way of government intervention to regulate markets or tackle poverty and inequality. When it comes to questions about taxation, regulation, ownership and so on, we should organize our economy in whatever way is most likely to bring about genuinely shared prosperity.

Rawls’s principles differ from prevailing policy perspectives — especially within economics — in two key respects: (1) they are more egalitarian and (2) they are concerned with “relational” inequalities, not just material resources.

  1. Rawls’s standard for equality, based on the difference principle, is stricter than most: inequality is only acceptable insofar as it benefits the least well-off people in society. Crucially, it’s not enough that some of these benefits “trickle down” to the least well off. We should organize out economy so that the least well off are better off than they would be under any alternative economic system. This doesn’t require imposing complete equality of outcomes (some amount of inequality can encourage work and innovation, which can benefit everyone), but it is a high bar for egalitarianism. In most political discourse, even those who care about inequality tend to focus on the average person or the middle class, but for Rawls this isn’t enough. In practical terms, this amounts to a clear repudiation of laissez-faire economics: as Chandler argues, while markets can be a force for freedom and economic prosperity, there is nothing about how markets work which means these benefits will automatically be widely shared, let alone that they will maximize the life chances of the least well off – something we have learned the hard way in recent decades.
  2. The vast majority of policies and discussions around social welfare focus on the distribution of material resources, but Rawls takes a broader perspective. He doesn’t deny that material resources are important, but he is also concerned with how our society distributes power and control (say between owners and workers) and opportunities for self-respect (including through meaningful work). Economists often ignore these values, or view them as a means to an end (i.e. power is good because it allows people to satisfy their preferences), but Rawls considers them important in and of themselves. This broader conception of the goals of economic policy highlights the limitations of standard tools for managing inequality, namely taxes and transfers. Although they serve an important purpose, they are incomplete. It points us towards the importance of actively promoting good jobs, and challenges many features of the economy that we take for granted: things like workplace hierarchy and shareholder power. He wouldn’t reject them out of hand, but he would argue that they require justification, and the justification must be built on more than just economic growth or efficiency.

The difference principle has been criticized by economists as making outrageously strict demands for egalitarianism. Taken literally, it would forbid society from taking only a penny from the least advantaged person even if it would give a million dollars to the second-least advantaged person. But even if it doesn’t adequately answer every possible extreme hypothetical, the difference principle provides concrete direction on the real choices we actually face, steering us towards an economic that harnesses the benefits of markets for the good of all. In doing so, it encourages an economic system that can be endorsed by everyone — not just the elite, not just the majority of voters, but even those who have the least in society.

Chandler also emphasizes the moral foundation of Rawls’s philosophy in contrast to economists’ claims to be value-free. All policy choices are moral choices. Economists often get around this fact by limiting analysis to objective measures of efficiency or growth, but basing policy recommendations on these limited measures is still a moral choice. Chandler encourages anyone engaged with policy to make their moral assumptions explicit.

In addition to being explicit, moral assumptions must be defended. Seeking Pareto optimality (the condition in which no one can be made better off without making someone worse off) in economics is convenient because it seems unobjectionable, but it is deeply incomplete as a guide to policy, since true Pareto improvements from policy are rare, and it fails to recognize either the moral arguments or popular support for greater equality, or even a minimum level of material wellbeing in society. Morals are not like preferences, which can’t be disputed. Some moral stances are better than others, so some arguments must be made; limiting oneself to an “unobjectionable” standard is too low a bar.

Applying the principles

Rawls mostly writes in relatively abstract terms of justice, freedom, and equality, but Chandler sees a “vein of pragmatism” running through Rawls’s work. He appreciates that Rawls doesn’t get lost in impractical issues which sometimes bog down philosophy: questions around the nature of reality, the best way of living, or whether or not a theory is “true” in a deep sense. Instead, Rawls focuses on big moral questions and their implications for social life: “What is justice? What is the nature of democratic legitimacy? How can we balance the demands of freedom and equality?”

These questions allow us to engage with real policies, so Chandler’s work uses Rawls’s principles to generate a wide variety of actionable ideas. Some will be familiar to people interested in policy, like universal basic incomes or affirmative action, but others are newer and more radical, like workplace democracy and bans on fee-paying schools.

In developing these policy ideas, Chandler – an economist as well as philosopher, who previously worked as a policy adviser in the UK Prime Minister’s Strategy Unit – goes well beyond Rawls’s own writing, connecting his principles with cutting edge insights from economics and other social sciences, and with promising policy experiments around the world. He criticizes what Paul Krugman has referred to as the “zombie economics” of the 1980s, which is often used to justify low taxes, and argues that the latest evidence suggests that significantly higher taxes and far-reaching co-management between workers and owners is perfectly consistent with a dynamic market economy.

Chandler doesn’t view his proposals as the final word on how society should be run. He is open to new evidence which might generate new ideas or shoot down old ones and thinks governments should be too: experimenting with policies and learning what works. A principled foundation can guide this process and create a society which is not just more efficient, but freer and more equal.
 

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