The Argument for the Difference Principle
Rawls’s difference principle says:
Social and economic inequalities are to be arranged so that they are to the greatest benefit of the least advantaged…(TJ 302/266 rev.)
"The principle addresses differences or inequalities in the distribution of the primary goods of income and wealth and powers and positions of office and responsibility. It basically requires that a society is to institute the economic system that would make the least advantaged class better off than they would be in any other feasible economic system, compatible with maintaining citizens equal basic liberties and fair equality of opportunity. Rawls defines “least advantaged” as “those belonging to the lowest income class with the least expectations” (JF 59). Initially in Theory these were either people with one-half of the median income, or those with the income and wealth of unskilled workers (TJ 82–83) who as a class presumably have the least share of the primary goods of income and wealth, and powers and positions of office. Subsequently Rawls emphasized that for purposes of the difference principle the least advantaged are “fully cooperating” (JF 179), and “full and active participants in society” whose “physical needs and psychological capacities are within the normal range” (CP, 259) and who do their fair share in contributing to economic activity and the joint social product. Rawls thus regards “distributive shares” under the difference principle as the benefits that accrue to persons for doing their part in socially productive cooperation. The class of unskilled workers receiving minimum income thus satisfies his definition of least advantaged (TJ 98/84 rev.). Those who are able but unwilling to work where there is much work available “must somehow support themselves” (JF 179; see also PL 182n).
Rawls has been widely criticized for defining the least advantaged in terms of their (minimum) share of primary social goods of income and wealth, since this does not account for the special needs and care required for those with serious disabilities. (Kittay 1999; Nussbaum 2006; Sen 2009) In response Rawls agrees that using the same index of primary social goods for people with serious disabilities as for normally functioning people would be unfair. He says “I agree with Sen that basic capabilities are of first importance and that the use of primary goods is always to be assessed in light of assumptions about those capabilities.” (PL 183). This is ambiguous, but it’s notable that the moral powers of practical reason are themselves capabilities which ground the primary social goods, and also define the parties’ fundamental interests and specify the basic liberties and their significance in the two fundamental cases. (PL ch.8) Rawls further maintains that disability care and payments to meet the needs of severely handicapped citizens, especially those permanently unable to work, are not ascertained by the difference principle; they are to be determined by principles of health care required by the fair equality of opportunity principle and other special assistance principles (including perhaps the basic needs principle), which he leaves unspecified (PL 272n). As a principle for structuring and regulating basic economic institutions on grounds of reciprocity and mutual respect among those who contribute to social and economic cooperation, the difference principle itself is not an appropriate or adequate principle for compensation and care for mental and physical handicaps and other serious disabilities.
Rawls contends it is an empirical question which economic system satisfies the difference principle. He claims however that under ideal conditions of a well-ordered society, where the principles of justice are generally accepted, either a “property-owning democracy” or liberal (market) socialism are most likely to satisfy the difference principle, to the exclusion of laissez-faire capitalism, command economy communism, and even the modern capitalist welfare state. Property-owning democracy (POD) differs from the capitalist welfare state mainly in that it is not marked by such broad discrepancies in income and wealth, but instead provides for widespread private ownership of productive wealth and means of production, including workers’ opportunities for greater freedom and control in the workplace. Thus, akin to market socialism, POD is not marked by sharp divisions between capital and labor but manifests broad distribution of economic powers and positions, as well as a more equal distribution of income and wealth (see JF 135–140, 158–162, 178). For these reasons, and since a property-owning democracy also secures the fair value of equal political liberties and fair equality of opportunities, Rawls contends a property-owning democracy provides a more secure basis for citizens’ sense of self-respect than does welfare-state capitalism (see Freeman 2007b, 219–235; Freeman 2013, 2018). Others reply that liberal socialism better realizes Rawls’ principles of justice. (See Edmundson 2017, contending that the fair value of equal political liberties cannot be sustained in a private property economy.)
Rawls relies on the maximin rule of choice to argue against the principle of utility. Since the maximin rule and the difference principle both require maximizing the minimum position, it seems natural to assume that the maximin choice rule leads directly to choice of the difference principle in the original position. Though Rawls might have conveyed this impression in Theory (§26), he later says that in fact the maximin rule alone cannot be used to justify the difference principle (JF, 43n, 94–95). For when the difference principle is compared with those “mixed conceptions” of economic justice that protect basic liberties and provide some form of equal opportunities and guarantee an adequate social minimum on grounds of restricted utility, then the third condition for applying maximin is not satisfied (see the section on The Argument from the Maximin Criterion in the main text). The third condition for the maximin rule implies that there can only be one acceptable alternative for choice. If there is a second alternative the consequences of which rational persons can live with and accept if they end up in the least advantaged position (for example it protects basic liberties and opportunities, and guarantees a social safety net adequate to “the fruitful exercise of basic liberties”), then the maximin rule is not a rational rule of decision. For then there is no likelihood of grave risks to one’s future prospects.
“Mixed conceptions” of justice (see TJ §49) protect the basic liberties, and some conception of fair equal opportunities, and guarantee a decent social minimum of income and wealth sufficient to meet basic needs and adequately exercise basic liberties. But they determine the social minimum in some way other than the difference principle. For example, the social minimum may be determined by balancing citizens’ moral intuitions regarding a decent minimum; or according to the rule that the adequate social minimum is one-third of the median market income in society; or the lowest minimum that meets basic needs essential to a decent human life and which assures that the strains of commitment are not excessive. (Waldron, 1986, discussed by Rawls, JF 127–128) Once the social minimum so defined is satisfied mixed conceptions then rely upon the principle of average utility (or some alternative) to decide economic policies and distributions. Rawls calls this the “principle of restricted utility,” (JF 120, 126) since the pursuit of maximum social utility is restricted by the basic liberties, fair opportunities, and a decent social minimum. This is one of several possible mixed conceptions that combine the first principle of justice with a principle of distributive justice with a social minimum other than the difference principle (TJ, 124/107 rev.). Rawls apparently regards the capitalist welfare state as based in mixed conceptions that incorporate such a principle of restricted utility (JF 120–130, 139–140) but do not otherwise impose restrictions on economic inequalities.
Rawls concedes that “mixed conceptions are much more difficult to argue against than the principle of utility,” since “the strong arguments from liberty cannot be used as before” (TJ, 316/278 rev.). He discusses mixed conceptions in Theory, §49, and devotes more attention to them later in Justice as Fairness: A Restatement (§§34–38). Rawls provides several grounds that should lead the parties in the original position to agree on the difference principle – primarily publicity, stability, and reciprocity – and he adds several more specific arguments that speak against choice of the principle of restricted utility (TJ 49; JF sect.38). Mention has already been made of his argument (TJ §29) that the difference principle affirms the sense of self-respect of the least advantaged since, unlike the principle of utility, it treats them as ends in themselves and not as means to the greater well-being of the more advantaged. The force of this argument from self-respect is perhaps not as strong when the difference principle is compared with a principle of restricted utility that guarantees equal basic liberties, fair opportunities, and a decent minimum meeting basic needs. Still Rawls contends that because a welfare state capitalist economy governed by restricted utility does not put any restrictions on inequalities, “there may develop a discouraged and depressed underclass many of whose members are chronically dependent on welfare. This underclass feels left out and does not participate in the public political culture” (JF §42.3). Their sense of self-respect is likely to be undermined since they feel that though they are in society they are not members of it.
The main argument in favor of the difference principle depends on a strong idea of reciprocity (JF §36). In a society structured by the difference principle gains to those more advantaged are never made at the expense of those less advantaged; instead, any gains to the more advantaged always conform to rules that benefit also the least advantaged, and do so more than any other alternative measure. By contrast restricted utility, even if it provides a social minimum, still permits disadvantages and losses to the worst off so that those better off may prosper. Any degree of inequality is allowed in the name of maximizing utility so long as it does not violate the social minimum. Such a situation, Rawls contends, would be morally unacceptable to free and equal persons in a well-ordered society since it does not evince “reciprocity at the deepest level,” and is hence rationally unacceptable to the parties in the original position.
There are different ways to conceive of an economic system based in reciprocity. Even a laissez-faire entitlement system of free transfer and exchange that satisfies Pareto efficiency satisfies reciprocity in a very weak sense assuming no one is made worse off than some baseline since everyone is presumably made better off by the exchanges and transfers they make. But the Pareto principle and laissez-faire entitlement principles are compatible with enormous gains to the more advantaged while the least advantaged gain only minimally, if at all. This is “trickle-down,” where the poor in effect cannot advance unless the rich substantially benefit, and where benefits to the rich need not benefit the poor at all. The kind of reciprocity provided by the principle of restricted utility is more robust than laissez-faire and the Pareto principle since it guarantees a social minimum meeting basic needs and allowing for the “fruitful exercise” of the basic liberties. Everyone has a stake in the economic system at least to the degree that it meets these conditions. But, beyond this point wealth and income are generated and distributed so as to maximize overall wealth and therewith (presumably) overall utility. Further gains to those better off need not advance the position of the least advantaged, and indeed sometimes may come at their expense so long as the social minimum is maintained''.
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