From Kantoos Economics by Henry Kaspar:
Mark Schieritz‘ and Kantoos‘ posts about what constitutes a left-wing economist demonstrate how difficult—if not impossible—it is to separate economic analysis from general world views. Economics claims to be a technical science free of value judgments - and it has to. But people are interested in economics because they are interested in how societies should be organized, and the latter is very much a political philosophy issue. As a result, the general world view often determines adherence to a school of economic thought—after all, what one considers just ought to be economically sensible too. Very roughly: leftwingers tend to be Keynesians, libertarians believe in laissez-faire, conservatives like ordo-liberalism. The technical-economic debate suffers though when participants fear that conceding a technical argument would force them to give up their general world views too.
In the following I will clarify my point of view, sketch what political-philosophical principles I consider appropriate, and discuss what this implies for how I argue in economic debates.
To be clear: this here is an experiment, and I am well aware that it can go wrong. While I have pursued an interest in political philosophy throughout my life, I claim no expertise whatsoever. However, the question how Kant or Rawls are best understood and applied is at least as disputed among experts as it is how to correctly interpret Keynes – and I am a layman. But I am curious how the readers of this blog perceive my thoughts—people with similar interests, albeit not necessarily identical views.
With all these caveats:
I am a Rawlsian. John Rawls (1921-2002) was for 30 years professor for philosophy at Harvard and is known as one of the most important, if not the most important, political philosophers of the 20th century. His most famous work is the „Theory of Justice“, published in 1971.
The basis of Rawls’ political philosophy is—at least in my prefered interpretation—Kant’s moral philosophy (most Rawlsians are also Kantians). There is no space here to elaborate on the latter, however, according to Kant an act has moral quality if occurs out of a sense of „duty“, and not because the acting person pursues its interests or inclinations. A dutiful act is consistent with the moral law that Kant calls „categorical imperative“. There are several formulations of the categorical imperative, they follow (according to Kant) directly from the claim of the moral law to be generally valid. The best known is „act only according to that maxim whereby you can at the same time will that it should become a universal law“, another is „act in such a way that you treat humanity, whether in your own person or in the person of any other, never merely as a means to an end, but always at the same time as an end“ (both from Kant’s „Groundwork to a Metaphysics of Morals“).
The categorical imperative provides a yardstick to assess individual acts or decisions—but it does not suffice to identify just organizational principles of society. To address this question, Rawls employs a method he calls „Kantian constructivism“ (or at least did so during a phase of his life as a philosopher —„Kantian Constructivism in Moral Theory“, 1980). In analogy to the Kantian concept of a moral act, just organizational principles of society are those that people would choose if they would abstract from their personal interests. Rawls simulates such a choice by means of the „veil of ignorance“: i.e., people choose the principles of justice without possessing information about their talents and abilities, their social status, ethnicity, gender, religion, etc. etc.—in short, all attributes that could give rise to personal interests.
(1) Each person has an equal right to the most extensive liberties compatible with similar liberties for all.
(2) Social and economic inequalities should be arranged so that they are both (a) attached to offices and positions open to all under conditions of equality of opportunity; and (b) to the greatest benefit of the least advantaged persons.
(1) is therefore lexically prior to (2), (2a) prior to (2b). The intuition for (2b) is that behind the veil of ignorance the concern for the most disadvantaged would prevail: after all, once the veil is lifted, everyone could find himself in the position of the least advantaged.
There has been a lot of debate about these principles, especially (2b).* Overall, however, I find Rawls’ reasoning deeply satisfying, with respect to both the derivation of his principles and the result.
- The principles of social justice are based explcitly on a concept of morality: the concept of Kant, which is the only convincing, universal, non-traditional concept of morality that I know
- The organizational principles of society are derived from—and therefore legitimized by—the choice of individuals. Thus, the individual prevails over society, there is no such thing as „interests of society“ to which individuals would have to submit. This said, the choice is qualified: it obtains its moral quality from the idealized conditions under which the choice takes place, and that assure that individuals choose in line with their moral duty.
- Liberty comes before equality. Totalitarianism or patriarchism are incompatible with justice. Equality of opportunity also comes before (social or economic) equality.
- However, as long as the basic liberties are assured, how just—or human—a society is depends on how it treats its most disadvantaged members.
In my understanding this means that neither an extremely unequal society with a high average level of wealth nor an egalitarian society with a low level of wealth are just: in both societies the situation of the most disadvantaged could be improved if society was organized differently. Thus, redistribution—and therefore the limitation of private property rights—is not only legitimate but necessary. But redistribution has its limits where it significantly impedes a society’s ability to generate wealth.
Another important aspect: anti-social behavior—such as the intentional abuse of welfare systems—is not admissible. Rawls does not discuss this explicitly, but it seems clear to me that behind the veil of ignorance people would rule out subsidizing people who are not in need.
But independent of my personal sympathies, it seems to me that the public policy debate often follows implicitly Rawlsian lines. No political party wins themoral high ground by emphasizing how much its policies help the wealthy. But all parties claim that their policies are good for the needy. They differ of course in what they claim would help the needy: more social transfers, activating welfare policies, or strict means-testing of social benefits to assure that the latter target the „really“ needy. Even libertarians argue often that the poor would benefit from laissez-faire via trickle-down economics.
Who is right? This is a technical question to which Rawls does not provide an answer. But Rawls makes clear against what yardstick economic and social policies need to be measured.
This said, also with Rawls many questions remain open. An important question is where to draw the limits of the society in which the principles of justice are to be applied. Kant’s moral law is universal, thus, it would suggest itself not to draw limits. But in reality humans are organized in states, and define their organizational principles within the latter. Who then is part of „our“ society—for the just organization of which we are responsible? Only citizens, or also foreigners who live in our state? What about asylum applicants whose application is still under consideration?
[P.S.: in this context an interesting question is whether Europe or the U.S. are more just societies. While Europe tends to have more generous welfare systems, the U.S. allow a couple of million people from disadvantaged backgrounds to immigrate each year, thus contributing to reducing global poverty]
Another unclear case is Europe: has European integration advanced to a degree that the fate of disadvantaged Greeks or Irishmen should be as important to us as the fate of disadvantaged countrymen?
Now back to the original question: what does Rawls imply for the economic policy debate? In the end, rather little. Sure, no Rawlsian would openly advocate anti-growth or socially harmful policies—but who does. This apart, Rawls can be married with many conceptions of economic policy; all depends on how one assesses their economic and social impact. Whether Schieritz helps the most disadvantaged most by advocating bank bailouts, or Kantoos who wants to allow banks to go bust and have monetary policy clean up the mess thereafter—both is potentially consistent with Rawls‘ principles of justice.
In a nutshell: we’re all Rawlsians now—and who is the best Rawlsian depends on who is the best economist.
* A group of critics claimed that only a person from a Western-liberal society would think about choosing priciniples (1)-(2b). But (1)-(2b) were principles of a Western-liberal society, thus Rawls’ argument was to some degree circular. Rawls reacted to this criticism — to the chagrin of some of his supporters—by limiting the validity of his principles to Western-liberal societies. As regards (2b), some people, especially economists, criticized that it would imply an extreme degree of risk aversion. However, with a person choosing the entire circumstances of her life behind the veil of ignorance, this assumptions looks entirely appropriate to me.