In Ch. 3 Cohen continues to push the idea of Rawlsian ethics as personal morality.
The difference principle (DP) states that deviations from original equality are permitted if they improve the conditions of the worst-off. But if inequality is thus justified, then so is equality. We may assume that in society D2 the more talented earn higher incomes. Why then shouldn’t these high flyers donate all their money to the government to be distributed equally to all, thus bringing about D3? Surely, this would help the worse-off even more.
An objection crops up. If the market is destroyed, then how will we know which jobs are more urgently in demand than others? Without market prices for labor, what shall signal job-seekers to allocate scarce labor to its most important uses? Cohen has a ready reply. The nominal wages will remain at their laissez-faire levels, but everything above the amount due equally to all will be taxed away. Thus, Smith may contract to receive 50K per year, Jones, 80K, and Robinson, 110K. In fact, all three will receive only 20K after taxes. Cohen dares to suggest that “that way of achieving equality seeks to preserve the information function of the market while extinguishing its motivational function.” (122n) Well, the market is not a game. It doesn’t work this way. Again, people act for ends. They work to achieve specific goals in their consumption during their leisure. In their striving, they will ignore completely the nominal wage and look solely at the real wage. Then there is the point of view of the business firm. Why would it offer higher nominal wages if all real wages must be identical? What does it gain by doing that other than an unpaid government-imposed duty to withhold taxes from its employees’ paychecks?
Still, a libertarian might not be able to condemn a society in which the economic regime was laissez-faire capitalism, but where many people voluntarily donated or tithed a large percentage of their wages to the “minimal” government that then distributed the cash so as to equalize as much as possible incomes. Such a society seems implausible, however.
It seems that Cohen has proven too much. If the Rawlsian DP, after Cohen is through with it, does after all require complete equality and with it, complete economic and social collapse, then it must be either jettisoned entirely or seriously reworked. But I have felt that the DP does state an important truth. Let’s see therefore how it can be fixed.
The original and primordial question is, under which system of economic organization are human pursuits of happiness harmonious at least in the longer run? In particular:
How shall an individual find a place in the economic order and “integrate himself into the totality of society,” in Mises’ phrase, where he can render the most valuable service to society?
How to ensure that society, in turn, shall serve each individual increasingly better with time? How to enable and promote economic improvement and creative advance?
How can humans, each with his unique life and plans, avoid getting into each other’s way as they seek their own pleasures?
- How to coordinate human productive activities and labors to ensure that within all factories, farms, etc. all novel projects commence only when the complementary factors of production are found and cheerfully snap into place?
It turns out that the answer to all these questions is the same: implement laissez-faire capitalism. It’s not “inequalities” that “should be permitted if they improve the welfare of the worst-off”; rather, freedom to pursue happiness is granted to all if it tends to be in the interest of society as a whole, of the “masses,” with the free individual himself being squarely part of society, such that his welfare counts, too. Call this the freedom principle, FP. It is indeed true that such freedom does not guarantee success in this pursuit. Some people will fail to reach their goals; others will succeed; different people will succeed differently. Considerable inequality will obtain thereupon. But it’s not our focus of concern.
Sufficiently deeply anti-social acts — murder, theft, and so on, are obviously to be repressed. But the liberty to improve one’s own life does not entail any duty of the more talented to sacrifice for the sake of the worst-off. Unhampered capitalism does not suffer from the Cohenian absurdity whereby the best sort of folks that humanity has to offer, who are already spectacularly serving the people via the free market, are allegedly “morally” commanded to give away their wealth or income.
It may be that one reads Mt 19:21, “If you want to be perfect, go, sell your possessions and give to the poor, and you will have treasure in heaven. Then come, follow me,” and, through grace, becomes firmly convinced that this is his vocation. But there is no natural duty to do this.
We show respect to the human nature by allowing people to seek their self-interest but structure the legal system so as to harmonize and coordinate this search. Perhaps we ought to thank God for designing us capable of social cooperation. There is no overarching end to aid only the worst-off at all costs, including by brainwashing people into imagining themselves “just” for slaving away for the sake of the poor. The standard of living of the general public does improve continuously and quickly under laissez faire, but no inappropriate and scandalous sacrifices are required of the more gifted individuals.
We can see that the DP and FP are identical in their first part: the welfare of the masses (which should be the same as Rawls’ worst-off if he is to make sense) is our desideratum. But DP does, and FP does not, entail a perverse second part, namely, that the economic elite are to labor altruistically for the sake of the community. And this is a distinct advantage of FP.
Cohen thinks that elimination of inequalities can be “willed.” If only the more talented were more “moral” in their “daily lives”! I condemn Cohen as morally perverse, and the difference principle as outlined by Rawls as badly thought out.