Which groups of 1) crony capitalists and 2) lumpen-proletarians will become the main tax-eaters?
Contractarianism is an intriguing approach to ethics, but unlike what Rawls imagines, it still yields laissez-faire capitalism as its political economy and ethics.
Assuming society is not divided into rigid castes and the lack of government fetters and restraints that would prevent some from succeeding in certain ways, a person's destiny is in his own hands. If he fails repeatedly, he may come to feel self-loathing and self-contempt. These feelings are unsurprising. But there are two ways of ameliorating them: one can continue to try to lift himself up or try instead to pull others down.
Rawls mentions a zero-sum society where one person's gain is another's loss. There is no way to lift oneself up without in the process pulling others down. He claims that here justice demands equal distribution of primary goods. Perhaps. Let me make a weaker claim: there is a reason 1) to outlaw competition between members of such a society as producing a net loss for everyone and because of that, 2) to maintain a very rigid social hierarchy. On the one hand, envy would be natural in such a society and could not be constructively dealt with. On the other hand, envious feelings might not arise at all to the extent that each member feels that his place in the scheme of things is assigned to him from birth until death as if by fate and that he is not expected to justify himself anew every day. He resigns himself to the will of the gods. He cannot improve his own position, but neither can he, in the process of trying to improve it, fail. Envy is checked at the source.
The horror of envy is shown in a different scenario: prolonged failure injures my self-respect and sense of self-worth so much that I don't care if I suffer a loss, if only the better-off suffer an even bigger loss. Thus, if Smith and Jones have utilities A = (50, 100), then Smith's envy can be manifested in his desire to obtain B = (40, 70).
Smith can then try to justify his envy by claiming that B is more equal than A and that this equality is in the interest of justice itself. Perhaps Smith is deluded, and his mind is clouded by envy, but I agree with Rawls that Smith's concept of justice must be evaluated on its own merits. Only if his version of egalitarianism is unjust can we condemn him of the sin of envy.
Even Rawls, I think, would judge this type of envy as contrary to the difference principle and to his system as a whole.
Another possibility is simply that Smith wants to loot Jones, to steal money from him, and justifies his crime by saying that the "transfer," whether initiated by Smith personally or through a political process, will make him and his victim more equal which will be just.
Once again, Smith's defense needs to be given careful attention; only if it does not work can we say that Smith is a thief.
It's the essence of "gay rights" and of the civil rights movement in general.
Suppose Smith assaults and beats up Jones.
Insofar as Smith commits a sin, he wounds his own soul. There is only one party with a problem: Smith. The state cannot save Smith from himself and does not punish Smith as a form of involuntary penance to grant him forgiveness and restoration.
Insofar as Smith does unjust harm to Jones, there are two parties to the dispute. Smith tears the proper relations between himself and Jones, as in, the bonds of civic friendship and brotherhood of men. If Jones sues Smith, then the state may help him to obtain restitution, but once again the state has no power to reforge or repair these bonds. As Jesus says,
Settle matters quickly with your adversary who is taking you to court.
Do it while you are still together on the way, or your adversary may hand you over to the judge, and the judge may hand you over to the officer, and you may be thrown into prison.
Truly I tell you, you will not get out until you have paid the last penny. (Mt 5:25-26)
How can both Smith and Jones exist together in the communion of saints marked by both superior charity and justice, when Smith's debt to Jones has not been paid? The state can in turn beat up Smith, but that alone cannot reconcile Smith and Jones.
Finally, insofar as Smith damages social cooperation and the smooth functioning of the market process, there are three parties involved in the ugly situation: Smith, Jones, and the rest of society. Smith can't be allowed to disrupt the thread-fine symbiotic harmony that thrives within the market economy. It would only encourage him and other like miscreants to continue to terrorize the citizens, thereby undermining their sense of security of their property rights. Deterring aggression by punishing Smith is now fully within the power of the state. Since Smith, too, is a citizen, his punishment should not be excessive but such that the marginal cost to him of an extra beating or month in prison is just outweighed by the benefit to society of the extra crime deterred.
All deviations from initial equality must benefit the worse- (or worst-) off, according to the "difference principle" outlined by Rawls.
But who are these miserable sons of bitches? We can only find that out by examining an actual society. Let's have a laissez-faire free market operate in some country for a long period of time, say, 100 years. At some point we take a snapshot of the economy. We locate the rich people and call them the "better-off" and the poor people and call them the "worse-off."
Question: does it make sense at that precise moment immediately to invest the government with massive new powers to begin expropriating, confiscating, and transferring wealth and incomes from the better-off to the worse-off?
Obviously, "distributive justice" must occur on the level of social institutions. A poor man who robs a rich man on the street at gunpoint does not by this criminal act demonstrate the workings of the difference principle.
Neither do paroxysms of theft by government seem to have the requisite permanence and generality. The just tax regime must always exist; it can't be turned on and off like a spigot to deliver "justice" to the populace. It seems like mob justice to me.
But in that case, identifying the worse-off becomes problematic. A system that features large numbers of people on government dole will have different people as the worse-off and better-off. For example, let a certain man perceive an opportunity to make a great investment that under freedom would make him a millionaire and one of the better-off; as things actually are, he is deterred from investing by the taxes that preserve the risk of the investment but diminish the reward. By missing this unique chance, he remains poor all his life and thus is one of the worse-off. Another man is born not especially bright but with a great talent for sports. Under taxes, he vegetates on welfare all his life. Under unhampered capitalism, he takes his destiny into his own hands, rises to the top, becomes champion, and earns a lot of money, thereby raising himself into the ranks of the better-off.
It seems therefore, that no "objective" determination can be made of who "won" and who "lost" in the "natural lottery." The people who win and lose will only be revealed once we exit the original position and watch them, empirically, in action, hustling and fighting, scratching and biting. The choice of the principles of justice changes who will be high and who, lowly.
As a result, Rawls is tasked with comparing the utilities of the worse off in different societies, such as in order to actuate the difference principle, interpersonally. I am not 100% sure this point explodes the principle, but it's food for thought.
The stages of economic development are each characterized by its own key social / ideological innovation.
Thus, the first innovation, the state, puts an end to autarkic total war. The isolated families come together to form a tribe. The state (perhaps exemplified by the entire community) is more powerful than any individual or identifiable subgroup within the tribe, and each is deterred through fear of punishment from inflicting unjust harms on fellow men. Tribal wars persist, but the foundation for peace is laid. Everyone is equal before the "law" and alive, though everyone is still equally a loser mired in abject poverty.
With slavery comes division of productive activities. In our primitive tribe there were no business firms of any sort; there were no economic differences between members at all. Now some men offer to their fellows to work for them as slaves, receiving subsistence -- but still higher than autarkic -- wages, thereby organizing an enterprise to produce something. They also may acquire the ability to capture and guard many unwilling slaves obtained through raids upon neighboring nations. Prisoners of wars between tribes are no longer murdered outright but are enslaved and put to work. Each slave-owner produces different things and trades with other slave-owners. Wealth creation for a few skyrockets.
The problem is that slave labor is deeply unproductive. The third innovation inaugurates the transition to feudalism and serfdom: division of labor. Each serf pays a tax to the tax-lord but is free to specialize and work wherever he pleases and accumulate as much wealth as he can, subject to the taxes. Each worker now has an incentive to be as productive and competent as he can. The great variety of individual talents and natural environments ensures that labor will be minutely divided within firms and factories. The spectacular efficiency of this device brings vastly increased prosperity to many.
Capitalism is marked by the final improvement: freedom of entrepreneurship. With it, all productive and creative forces of society are finally fully unleashed to the enormous benefit of all members who now enjoy fast improvement in their standard of living, whatever (temporary) positions within social cooperation they hold.
This has bearing on Rawls' theory of justice. Once again I wondered, where do the goods to be distributed equally in the original position come from, such that any deviation from this equality shall then be permitted only if it is in the interest of the worse-off?
Perhaps our stage 2, a tribe with a state qualifies. Let's say every week the men venture out to hunt a mammoth whose meat is then divided equally among the households. How should this society evolve?
The answer has been suggested: it should implement the foregoing innovations step by step or even all at once. But each innovation greatly increases the speed at which the standard of living grows for some, and the last one, entrepreneurial capitalism, maximizes this speed for everyone, both worse-off, medium-off, and better-off.
Rawls' fanatical and preposterous interventionism to "correct" capitalism simply is not in the picture according to this interpretation of the choices extant in the original position.
There is a form of prisoner's dilemma here: if Smith is just, then it pays Jones to be unjust in order to take advantage of Smith's pathetic naïveté and gullibility; if Smith is unjust, then Jones can best protect himself from Smith's wickedness and rapacity again by being unjust himself. And vice versa. As a result, both end up unjust and nipping social cooperation in the bud, whereas their collective well-being would be far greater if both were just.
|Smith Just||Smith Unjust|
|Jones Just||(10, 10)||(-50, 50)|
|Jones Unjust||(50, -50)||(-10, -10)|
Hence the need for a state that would punish an individual for his own injustices. The punishments, like certain luxury taxes, are meant to be avoided by all members of society in order to shift the equilibrium to everyone's benefit to (10, 10).
What a strange thing for the Pope to inveigh against! I walk around town, and I don't see "normal" people who are (vainly) pouring time, money, and effort into honing their physiques.
I see large numbers of morbidly obese people who are uninterested in improving their bodies at all!
There is a chick working at my nearby CVS. I contemplated asking her, as I was paying for my purchase, "Why are you so fat? You're hideous; I wouldn't have sex with you even if you were the last woman on earth! In addition, you're going to have huge health problems. Don't these things bother you?" Only politeness prevented me from carrying out this experiment. (Would she be "offended"? Or answer truthfully?)
In addition, surely, health and physical beauty are great goods. Of what direct use is ugliness to either God or men?
Pope Francis follows the pattern of condemning temporal goods as insignificant or unseemly without explaining how spiritual goods are supposed to arise in their absence.
... is that it keeps the fanatics (or those who would be without her strictures) in check.
Rawls posits a lexical ordering in which liberty has priority over welfare: as a general rule, no amount of liberty can be sacrificed for the sake of any amount of welfare.
Jefferson had a better ordering: "life, liberty, and property." It does seem that life has priority over liberty if only in the sense that liberty is of no use to a corpse.
According to this, was the American Revolution impermissible by Jefferson's own standards, because it bought liberty at the expense of lives lost in the war?
For nature, the state is relations, and the acts are duties.
For character, the state is virtues; the acts consist in cultivation of the best self.
For narrow happiness, the state is arts; and acts are "human actions," executions of plans to satisfy desires.
All states are habits (from Latin habēre, to have), but in different directions.
Relations have you (you are in relationships, literally); virtues are you; and you have arts and techniques.
The reason to love something is that it is in some sense good.
Now God is good in the fundamental and quintessential way: He creates, in all 3 of the divine persons, things out of nothing. These creatures can then be called good each after its own manner, but none are, as God is, goodness itself.
Thus, the Father creates likewise the heaven and earth out of no preexisting matter.
The Son overcomes Original Sin and saves us from hell through forgiveness of actual sins, another undeniable act of creation ex nihilo, as hell is spiritual death.
And the Holy Spirit soul-makes the saints and saves them from physical death and cessation of consciousness. Even if human souls are naturally immortal, without grace, they would end up sleeping in Limbo. This was the case before the Incarnation; why do you think Samuel's ghost, when summoned by the witch of Endor, asks, "Why have you disturbed me by bringing me up?" This grant of eternal life to each soul in its own manner, too, is full-fledged creation, no less amazing than the Father's and the Son's.
There are in nature animal parasites who feed on others. Some humans may be so constituted that they do best for themselves when they prey on producers. It's certainly not universal, because there cannot be a society consisting entirely of parasites; in fact, the parasites must be a relatively small minority; but there can be a society consisting only of producers. But it is "natural." True, no animal creature routinely preys on its own kind. But perhaps if it could or were smart enough to realize the benefits of such predation, it would. What reason is there, then, to declare parasites unjust aggressors?
The parasite needs the host, but the host would be happy if the parasite just dropped dead. Now on the market there is a certain benevolence or good will between a businessmen and his customers who exchange for mutual benefit. Of course, in giving up my good or money I am motivated by what you are giving me, so the exchange is self-interested on both sides. Yet both of us benefit from each other's existence in a most visceral and basic sense, whereas the "political" exchange between the parasite and the host who (say) by surrendering his goods avoids the parasite's violence is not beneficial to the host.
Regarding business competition, it is true that several applicants for the same lucrative job may view each other with hostility. Several mousetrap businessmen competing in the same market have every reason to dislike each other and desire that the competitors make some mistake. They, too, want each other to drop dead. Therefore, either an exchange benefits both parties, or in the case of competition where one wins and the other loses, this competition has been via the cunning of the economists turned to serve the greater good or directed to increase the general happiness.
In other words, Intel would be happy if AMD just up and disappeared and vice versa. However, their competition is in the interest of the whole, whereas the strife between the parasite and host, though their interests are also opposed to each other, does not result in any greater prosperity, in fact it lessens overall prosperity as compared with laissez-faire.
Parasite-host is a permanent relation, and it is unjust from both standpoints. "You disgusting creature," we are liable to say, "How dare you exist? You suck the lifeforce from your victim, you filth!" Relations should be such that people benefit from each other's existence and actions. Any Smith should be able to say to any Jones: "I am glad that you exist / were born. Without you, our society would not be as pleasant." Even with market competition, it proceeds by initial appropriation of unowned goods, production, and mutually beneficial exchange. And of course, it redounds to the greater good.
Cooperation then proceeds by strict libertarian law. No unjust violence is permitted. Competition within the market fulfills the utilitarian strictures and so is also justified. Parasitism, such as tax serfdom or regulationism, ought not to exist.
Remember the Rothbardian test for the permissibility of using a gun: can it or can it not be pinpointed against the bad guys (i.e., the identifiable aggressor) in self-defense?
An automatic submachine gun certainly can be so pinpointed if only upon proper training.
The gun below is on the edge. It's pretty hard to use it in self-defense in civil society:
However, while using a rotary cannon like this is ill-advised, owning one is perfectly innocuous. Maybe my neighbor who has such a thing is an eccentric collector. I wouldn't have a problem with that.
A grenade, on the other hand, seems to be both a weapon of mass murder and inherently dangerous. I'm not sure I'd want to live near a guy who had them in his garage.
And bombs, on the other extreme, are monstrous WMDs and should be totally banned.
Suppose Smith owns an apple, and Jones, an orange. They feel like exchanging them. So they make a contract.
As soon as the contract is signed, Smith no longer owns the apple but owns the orange instead, and vice versa for Jones. The only complicating factor is that the delivery of the goods may be scheduled to occur on a future date.
Ownership has been transferred; control, perhaps not yet.
Smith therefore cannot change his mind and refuse to deliver; in such a case, Jones, perhaps armed with a court order, would be perfectly justified in forcing his way into Smith's house and taking control of his rightful property, the apple.
Promises are different. In promising to exchange his apple for Jones' orange, Smith may indeed be creating "expectations" in Jones' mind. For example, Jones may, upon hearing the promise, take steps to acquire an orange. But the apple remains Smith's property! If he changes his mind and breaks his promise, then no unjust violence is performed and Jones has no recourse other than perhaps to publicly label Smith an oath breaker.
The reason to keep contracts different from promises is to be able to describe and intelligibly deal with both types of situations.
It is possible that "democratic equality" is just a fairly meaningless name picked by Rawls for the combination of "equality of fair opportunity" and "difference principle." It might as well be called "blue paperclip."
Then my attempt to defend liberty by contrasting it with first, democracy and second, equality is as seemingly ineffective as trying to argue that liberty is superior both to the color blue and to paperclips.
I spoke too soon! In §47, "The Precepts of Justice," Rawls shows himself perfectly well aware that in equilibrium, the market grants to each worker income equal to his marginal productivity, "that is, the net value of the contribution of a unit of labor measured by the sale price of the commodities that it produces. ... This fact explains and gives weight to the precept to each according to his contribution... In this sense, a worker is paid the full value of the results of his labor, no more and no less. Offhand this strikes us as fair. It appeals to a traditional idea of the natural right of property in the fruits of our labor. Therefore to some writers the precept of contribution has seemed satisfactory as a principle of justice."
How does our author demur? I think Rawls would agree that social cooperation under pure free market satisfies the utilitarian demands, but point out that his theory is not utilitarian at all. Perhaps people ought to structure the institutions of the economy on Rawls' principles of justice. Then the allegedly common sense precepts of justice will either be confirmed by his theory (good for them) or rejected by it (no big deal).
Each of these common sense injunctions is "subordinate" and cannot "be plausibly raised to a first principle." In practice, they will be given "different weight" by different systems. "The overall weighting of the many precepts is done by the whole system. Thus the precept of need is left to the transfer branch; it does not serve as a precept of wages at all. To assess the justice of distributive shares, we must note the total working of the background arrangements, the proportion of income and wealth deriving from each branch."
The "branches" are part of Rawls' rather fantastic and incredible design of government: they are given names like the allocation branch, the stabilization branch, and so on, making up an at least 5-horned chimera. For Rawls, there are other concerns beside "to each according to his contribution." Even if this principle is given some weight, other precepts, derived from Rawls' own scheme, will clamor for consideration, as well.
(I don't think the grotesquerie of the "branches" of government and garbled mishmash of Econ 101 and Keynesism follow from Rawls' theory of justice. At this point, he seems to be making stuff up as he goes along, having run out of philosophical things to say.)
I wanted to write a post on how the market distributes income, but after reading Rawls' interventionist phantasmagoria in §43, "Background Institutions for Distributive Justice" in A Theory of Justice, I fear he may be too far gone to be reached by my arguments. Perhaps his followers are not, though. To that end, here it is.
In the free market people are paid according to their marginal productivity, not equally. This has nothing immediately to do with "efficiency" as such; it's just how market allocates income to labor, due allowance being made for 1) entrepreneurial money profit and 2) bargaining abilities of the firm and applicant within narrow limits.
Since the market and its "economic" freedoms are non-negotiable, the initial position is or can be pure free market where the distribution of primary goods occurs according to productivity. (Then we can take a look at egalitarian measures that would adulterate the market and consider the societies / economies generated thereby.) Is productivity irrelevant from the moral point of view? There are two reasons to suggest that it is not.
First, informally and imprecisely, almost all modern production is mass production, so a person who is rich must have created a massive amount of value for other people. We can't compare utilities interpersonally in this case, but something like this can be affirmed. Why then shouldn't one who contributes to society more receive more from society?
Second, a worker deserves his wages, as in it is the most basic justice in buying and selling to get what is mutually agreed upon. How can one therefore be taxed and how can Rawls pay someone for doing no work? In other words, why should low-productivity workers receive any subsidies? Why should they get more than they put into social cooperation? Why should some receive less than they gave and other receive more?
"By their fruit you will recognize them." (Mt 7:16) To do otherwise seems straightforwardly unjust.
In any attempt at discovering human natural law, the crucial question is in any given case whether equality or on the contrary inequality is natural.
There is an easy example here of wealth and income. Is Crusoe's wealth and Friday's relative poverty an unnatural and therefore unjust inequality?
No, because there is no relation that holds between their respective net worths or incomes. It's not as if Crusoe gains wealth at the expense of Friday: the richer Crusoe is, the poorer Friday is: WealthF = 100 - WealthC, where 100 is the total "wealth" to be presumably just "found" out there, a zero-sum game.
Crusoe and Friday can in fact cooperate and grow richer together though unequally. Wealth has to be produced, and even if Crusoe is a superior worker, his riches do not come at the expense of Friday. Under free markets men like Crusoe are implicitly conscripted into service of the masses of the representative common man Friday.
Since Crusoe's and Friday's respective prosperities are unrelated by any permanent formula, Friday cannot be distressed or offended that Crusoe has any or particular or unequal or greater than his wealth. Crusoe's net worth has no impact on Friday's net worth.
As a result, since no relation exists between their wealths, no particular relation prevailing at any point is unnatural (or natural for that matter). Thus, wealth inequalities are not unnatural.
Now rename "natural" to "just according to Rawls" and "unnatural" to "unjust." We can see that inequalities in the distribution of primary goods cannot be called unjust in Rawls' (or anyone's) theory.